Support the FTA Deal With the U.S.

Kim Geun-tae and Chung Dong-young, former chairmen of the ruling Uri Party, expressed their firm opposition to a free trade agreement (FTA) between South Korea and America recently.

Kim said last weekend, “A deal will be reached by the end of March over my dead body,” while objecting to approving prime minister nominee Han Deuk-soo, who chaired a committee to support the free trade deal. Thirty-eight members of the National Assembly, including all nine lawmakers of the Democratic Labor Party, issued a statement calling for the negotiations to be stopped. Among them is Chun Jeong-bae, who recently defected from the ruling party.

Kim Geun-tae, Chung Dong-young and Chun Jeong-bae, former political allies of President Roh, are calling on forces for integration, improved life of people, reform, better future, progress and peace to rally while trying to distance themselves from the president by opposing the FTA deal. However, many countries around the world are pursuing national interests with FTAs and are far ahead of South Korea in striking FTA deals. South Korea, in which external trade accounts for nearly 70 percent of its GDP, cannot expect a bright future if it refuses to open its door because of anti-globalization sentiment. Under these circumstances, one cannot help but wonder whether the three lawmakers have taken a good look at what is being negotiated in the deal.

The “Compassionate market economy” and “Powerful economy with strong small businesses” that Kim and Chung have advocated, respectively, are possible only when trade and investment increase, and a Korea-U.S. FTA deal is expected to serve as a springboard for this. Chun even issued a statement as Minister of Justice last May when protests against WTO were waged. The statement said, “Let’s renew our efforts to develop our country by searching for a new growth engine in the FTA deal between Korea and the U.S.”

South Korea’s economic growth rates have stood at just about four percent since the Roh administration took office. South Korea is squeezed between Japan, which it can’t catch up with in terms of high value-added products, and China armed with low labor costs. While Japan’s and China’s exports to the U.S. are increasing at a rapid pace, those of Korea are slowing. The best way for South Korea to reverse this situation is to conclude an FTA deal with the U.S.

The deal is also needed in order to lift living standards of the Koreans. The deal would bring cheap and quality products and services to Korea. Furthermore, foreign direct investment (FDI) would lower prices of necessities, which will benefit the low-income class. The service trade deficit would decline as overseas spending by Koreans decreases. Striking the deal seems like taking medicine that is too bitter to swallow at the moment, especially for agriculture and some manufacturing sectors. However, South Korea’s productivity and competitiveness can be boosted only when it accepts global standards and is willing to compete against other countries. Restructuring, education, job training and the social safety net can be used to cushion the effects of a deal that would hurt some sectors.

If a deal is not concluded by the end of March, it is not likely that an FTA will be renegotiated in the next five to six years. To oppose the deal unconditionally is anti-progressive, anti-reformative, anti-future and harms Korea’s national interests.