hankyoreh

A proposal for a free trade agreement (FTA) between Korea and the United States has been signed amid intense controversy. If it is ratified as it stands by the National Assembly, it will be Korea 's biggest market opening since 1997, when the Asian financial crisis hit.

As had been the concern, however, little was gained for Korea in the negotiations, and the final draft reflects mostly an acceptance of American demands. We cannot support the draft because it is inconsistent with the principles set forth by the government, namely that it would put the highest priority on Korea 's national interest. The Korean government should especially be criticized for one-sidedly yielding in areas where Korea lacks competitiveness, such as agriculture and the entertainment industry, without being ready for what could happen next.

The only thing one can see that we won for Korea was an earlier date for the removal of American automobile tariffs, and even that is in exchange for the immediate removal of Korean automobile import tariffs, the lowering of the "special consumer tax" on autos, and a reorganization of the Korean tax schedule for engine displacement. The effect of removing tariffs on industrial products like plastics and machinery will mean little gain or loss for either side. The country had hoped to have the U.S. open its textiles market, but it is only going to be opened slightly. Korea won nothing in the area of trade remedies such as anti-dumping tariffs, and since state governments are going to be excluded from stipulations regarding the procurement market, Korea isn't gaining anything there, either. Other than the symbolic importance of having an FTA in place, there isn't much in the way of substantial benefit.

Korea is giving up far too much in exchange. The markets for almost all agricultural markets other than rice are going to be opened completely, and most tariffs on private farm and agricultural products such as beef, oranges, pork, and chicken are going to be removed in seven to 15 years. Korea is even promising to allow bone-in beef even though that was not going to be part of the agreement. The entertainment industry is a fine example of how things are being given one-sidedly to the Americans. Korea will not be allowed to increase its "screen quota," in which theaters are required to show domestic films, beyond 73 days. The market for pay cable channels for film and sports is essentially being completely liberalized as well. The intellectual copyright protection period will be increased from 50 to 70 years, as demanded by the U.S.

That's not all. Extending the patent period and recognizing exclusive rights to documentation will mean domestic pharmaceutical companies making the same medicines will not survive, and there is inevitably going to be damage done in the legal services market, too. Korea 's negotiating team failed to push through Korean demands about anything other than taxation and real estate in investor-to-state dispute (ISD) cases. Big business manufacturing (automobiles, etc.) will benefit in exchange for losses in agriculture, entertainment, finance, pharmaceuticals, and other areas where Korea is not as competitive. You are even left to wonder if agriculture isn't going to be surrendered over the long run.

Let's go back to where this all started. When president Roh Moo-hyun began pursuing this FTA, he told the country that it would "make us one of the top ten economies" in the world, that Korea would be "ready to meet the challenge of providing services you see in advanced nations," and that it "will be more about elevating the way we do things to American levels instead of just selling things." The idea is that through this FTA with the U.S. , Korea would reform her services and systems and strengthen her industrial competitiveness to become an economic powerhouse in the top ten. Seeing what has been agreed upon, however, you wonder if it will actually lead to any change of that nature. Instead, you worry that it is going to result in ruin for the agricultural and entertainment industries. Competitiveness doesn't just happen simply because you open markets. It comes only from bone-grinding hard work and consistent government support. Such is the case with agriculture, for example. For around ten years, the government has called for more competitiveness, saying the inevitable trend is towards market opening. Yet Korean agriculture hasn't become the slightest bit more competitive. How many domestically produced agricultural products are going to still be around ten years hence, when the market is essentially opened completely?

You also worry about a deepening of socioeconomic disparities. The draft of the document will lead to better times for big business-based export industries, but small to medium-sized companies such as those that produce pharmaceuticals - and low-income markets such as agriculture will have less room to maneuver in. Sacrificing certain industries to grow a few strategic ones is not the answer. It must be realized how effectively the FTA will fan the current flames of socioeconomic disparity.

The biggest issue of all is actually the fact that people in the nation still do not understand why Korea has to establish an FTA with the U.S. right now. The negotiations began without the Korean public's understanding or agreement, and that is what led to the lack of standards and principles for negotiation that were based on the public's consent. It was always going to be a one-sided, American-led agreement because of this. Korea commenced on the negotiations after first resolving the "four prerequisites" ahead of any further deal, and Korea worked to meet a negotiation deadline set by the U.S. The U.S. made it clear it had no intention of changing any of its domestic laws, yet Korea is about to have to revise dozens of its laws. It is so serious you cannot call this an agreement between equal nations.

The draft is full of problems. There are many things about it that are unacceptable in its current form, including the lack of principles, unilateral concessions, and a lack of any protections for industries that are going to suffer damage because of the deal.

The FTA is not a done deal just because the government agreed to the current draft. There first need to be cool-headed decision-making on the part of the people. An agreement with the U.S. doesn't mean anything if it is about opening markets without a plan, or if it brings no economic benefit. Let's rid ourselves of the rosy-colored and baseless illusion that an FTA with the U.S. is going to be a new motivating force for growth. Instead, it is going to bring sad results for individual members of the Korean public.



Please direct questions or comments to [englishhani@hani.co.kr]