The Government and Anti-Free Trade Protesters: Two Conflicting Positions
The Government and Anti-Free Trade Protesters: Two Conflicting Positions
  • 구남희
  • 승인 2007.07.26 14:17
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  Korea and the United States of America have had problems with each others' positions with regard to establishing a Free Trade Agreement (FTA). The difficulties with regard to the practicalities inherent in actually achieving a settled FTA, however, are not only foreign in origin, but also domestic. On the domestic front, differences have emerged between the Korean government, which desires to achieve an FTA, and many citizens who object to it. This conflict has made it difficult to negotiate an FTA with the USA. Let's take a look at Korean foreign economics to do with FTAs, and then consider the contrary positions of the government and anti-FTA workers.

Korean Economics in the World: Trade - Centralization for America and Asia
  In the early 1990s, the structure of the Korean export market pointed to a rapidly developing country. Exportto North Atlantic Free Trade (NAFTA) was a total of nearly 30%, Japan was 17% and the European Union (EU) were approximately 15%. But, our export structure rapidly changed under the extension of economic cooperation with China and a high degree of growth in the Association of Southeast Asian Nations (ASEAN) economy. In 2000, it was America that was the biggest export market for Korea. The second market was Japan and three countries of the Chinese bloc - China, Taiwan, and Hong Kong - came after. This seems to suggest that export to China and ASEAN presents an alternative possible relationship to export to NAFTA and that Korean trade focuses too much on America and Asia.

The Korean Government Position on FTA

A group of supporters for KORUS FTA marches through the street in Seoul
On an international level, the government want  to push an FTA to help cope with deterioration in the export market which has occurred in part due to FTAs concluded between other countries. If Korean primary markets conclude FTAs with other countries or regions, export of Korean goods to those markets will be placed in relative difficulty. As customs areremoved between countries concluding FTA with one another, and if Korea still has to pay high levels of customs tax to sell goods made locally, this difficulty of competing makes itself all the more obvious.
  On a national level, the government refers to economic restructuring. Despite various attempts to encourage development, the business environment has not improved locally and so investment has declined. For example, there has been a rise in production, but according to studies conducted by the Japan External Trade Organization (JETRO), the monthly mean wage for a productionassistant in Korea is much higher than in China and Taiwan. Perhaps due to such factors, new investment in the Korean labor market is seeing a relatively low rate of growth.
  Furthermore, the first thing which the government can generally expect from an FTA is a trade extension between the two countries. An FTA is expected to improve consumer welfare levels. The government expects that the Gross Domestic Product (GDP) will increase by 7.21% and welfare will increase by 6.6% due to any FTA between Korea and America (excepting rice from initial items). What is more, due to an increase in domestic production, employment levels are also expected to rise. Also, an FTA between Korea and America will bring development and a lot of profit to the service industry.
  An FTA is expected to bring more than simply economic benefit to this country. If Korea and America conclude an FTA, the two countries will be able to intensify not only economic but also security relationships.

FTA Equals Killer 

Farmers & NGO members against KORUS FTA make a loud demonstration in Seoul
People who take a position opposed to the government also claim a valid opinion. Typically these include farmers, labor organizations and Nongovernmental Organizations (NGOs).
  It is expected that our country won't gain economic profit from any FTA. The level of imports is expected to outgrow exports, as claimed by anti-FTA workers. They predict that the Korean trade surplus with America will decrease from $9.8 billion to $0.9 billion four years after negotiating an FTA. They also expect that export of industrial products won't decrease greatly. The tariffs on automobiles are only 2%, so, when removing the tariff, the effect would be low. What is more, exports of Korean-produced automobiles would be negatively affected due to the competing of local production of American owned products.
  People who take the anti-government position also insist that an FTA would create an agricultural collapse within Korea, caused by a reduction in earnings. They predict that if Korea and America conclude an FTA, current agricultural production levels will be reduced about 50%, from 20 trillion won to 9 trillion won. Put simply, this means that agricultural earnings during one year, perhaps of 50 million won, would be reduced to 25 million won. When agricultural conditions develop in this way, many farmers cannot help having to desert their traditional lives. The number of farmers emigrating to a city will grow every year, and because of this phenomenon, the differences between an average city and a farm village will increase. Farmers will become irregular workers in temporary jobs in cities.
  People objecting to FTAs also claim that if Korea and America conclude negotiations on an FTA, our country will have a lot of problems beyond simply the agricultural, including such as the challenge of gainingpersonal insurance within the medical insurance system, increasing competition between irregular workers, and a sudden rise in the basic cost of essential necessities like electricity and water supply.
  So far, we have looked at criticism of FTAs in the domestic sphere. Where did this criticism originate? Originally, anti-FTA workers sought to evoke national sympathy. So far, the government has one-sidedly proclaimed the greatness of FTAs to the nation without announcing specific benefits, and has managed to encourage interest within the nation. Now and in the future, the government should inform the nation about the kind of FTA sought, and what are expected to be its merits and drawbacks.
In addition, the government should reward groups suffering potential or immediate losses as a result of any FTA. Farmers, labor organizations and NGOs face the possibility of suffering loss. As to agricultural collapse, the government should help farmers predict demand for various markets throughout the world. Subsequently, with regard to the unemployment problem caused by restructuring, the government has to strengthen social services to aid workers in finding new jobs quickly and should present workers with accurate information on demand and supply of work. Also, if the government guarantees consumers' rights to know and helps provide a large number of goods to select, legislates for the labeling of the place of origin and a production date for all goods, health issues which NGOs are concerned about will be resolved.
  When the abovementioned issues are dealt with effectively, the government will be able to gain the sympathy of the nation and successfully negotiate an FTA.

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