Joint Statement of Korean lawmakers, labor unions, farmers and civil society groups on the proposed Korea – U.S. FTA

January 27, 2011

We, the Korean National Assembly members’ Caucus Against the Korea-US FTA and the Korean Alliance Against the Korea-US FTA, a coalition of over 300 labor unions and civil society groups, have organized a delegation to Washington, D.C. this week, January 24-28, 2011. We have come here to tell American policymakers and civil society that many Korean people oppose the proposed Korea-U.S. Free Trade Agreement (KorUS FTA). During our visit, we were shocked to hear that many U.S. politicians believe that the KorUS FTA is a gift to the Korean people and will be beneficial to the relationship between both countries. In reality, many Korean people consider that the KorUS FTA will be detrimental to the lives of the Korean people, is biased in favor of the narrow interests of multinational corporations and contains numerous damaging provisions that would destroy our jobs in both countries and undermine our rights as citizens, the environment and health, and the practice and principles of democratic governance.

We came to Washington to share our strong view that the proposed KorUS FTA should not enter into force for the following reasons:

First, the proposed KorUS FTA shrinks the policy space available to our governments to promote the public interest and endangers our governments’ ability to protect public services and advance public health, food safety, workers’ and small farmers’ rights, and environmental preservation. Numerous provisions contained in the KorUS FTA conflict with the public interest policies upon which the general public relies while providing new rights and powers to a narrow class of large multinational corporations in each of our countries. While there could be a good agreement between our countries, this agreement undermines the broad interests of the people of the U.S. and the people of Korea in favor of promoting the interests of a narrow band of big corporations. In particular, the investor-state dispute procedure allows private corporations, even third-party corporations doing business either in Korea or the U.S., to bring our government to the foreign arbitration tribunals to demand compensation over public policy standards, even those that apply to domestic and foreign corporations alike. We do not understand why such a provision would be included in the KorUS FTA, given both countries have well-established rules of law and well functioning courts. Such provisions were not included in the U.S.-Australia FTA.

Second, we do not support a deal that only encourages growth-without-employment in both countries. The proposed deal pursues the North American Free Trade Agreement (NAFTA)-plus model. Yet, the U.S.’s experience with NAFTA is instructive and should not be repeated. Since NAFTA went into effect, the U.S. has experienced massive job loss in the manufacturing sector and numerous laws were challenged before foreign tribunals. Provisions of the proposed FTA will weaken the social safety net in both countries and strip crucial safeguards in a time of global economic instability and high employment. In addition, the proposed KorUs FTA, with its low Rules-of-Origin standards, incentives the off-shoring of manufacturing and jobs. Up to 65 percents of products can be produced in foreign countries and exported as U.S. or Korean products, killing jobs and destabilizing the labor market in both countries.

Third, the proposed agreement promotes reckless deregulation. This agreement was negotiated prior to the financial crisis that hit the world several years ago. It promotes the very practices of financial deregulation that have so damaged the U.S. and Korean economy. The agreement conflicts with regulations that our two governments have put in place to stabilize their financial markets, posing a threat to our countries, our economic partners, and eventually to the global economy. In the aftermath of the global economic crisis, certainly we must ensure that all policies, including our “trade” agreements must preserve our governments’ authority to control and regulate investment and financial markets. However, both governments simply ignored the lessons we learnt a few years ago even when they re-negotiated the deal last year and did not alter these provisions to reflect the post-crisis lessons.

Finally, the proposed agreement has the potential to bring about an unintended harmful effect on the relationship between the U.S. and Korea. While proponents claim that the proposed agreement will strengthen our countries’ relationship, it carries the potential to have the opposite effect. The proposed deal is unlikely to improve our daily life and to create more jobs – as we have seen the detrimental effect of the NAFTA model in operation in North America. When a U.S. or Korea corporations attacks the other countries’ law in a foreign tribunal, the public in the target country will become enraged. If the FTA resulted in financial deregulation or limits our governments abilities to avoid future crisis, the anger over the damage will be directed at the other country. When this happens, the KorUS FTA would bring conflict rather than strengthening the sense of friendship towards the other country among the ordinary people of both countries. And even now, before any such problems arise, it is critical to understand that many in Korea view the agreement as having been pushed not only for economic relations. Geopolitics played a great role. The supplemental deal of the last year was struck when the military tension between the South and North Koreas was at its highest since the 1950s’ Korean War. The vast majority of Korean people believe that the outcome of the supplemental deal is an unacceptable humiliation and an overly high price to pay for the Americans’ role in providing national defense.

We appreciate the time and effort the citizens of both countries are giving to make this visit successful in preventing the negative consequences that the Korea-US FTA will have on both of our countries.