[A2k] Wall Street Journal: South Korea Clears U.S. Trade Deal

Thirukumaran Balasubramaniam thiru at keionline.org
Wed Nov 23 01:05:19 PST 2011

	• NOVEMBER 23, 2011

South Korea Clears U.S. Trade Deal


South Korean legislators scuffled and one opposition MP let off a teargas device, briefly clearing the chamber. South Korea's ruling conservatives pushed a controversial free trade deal with the United States through parliament.

SEOUL—South Korea's Parliament ratified a free-trade agreement with the U.S., as a five-year process often met by protests in Seoul ended with a vote that one lawmaker tried to stop by releasing tear gas in the legislative chamber.

Tuesday's ratification by Seoul was the final step after U.S. President Barack Obama signed the agreement into law last month. The pact, set to take effect early next year, is expected to expand the countries' $90 billion two-way trade relationship by 10% within five years.

Lawmaker Kim Sun-dong of the Democratic Labour Party detonates a tear -as canister at the National Assembly on Tuesday, in a bid to stop a ruling-party move to ratify the free-trade agreement with the U.S.

The vote came in a surprise session convened by the ruling conservative party, catching off-guard politicians from opposition parties who since May had vowed to physically block any attempt by Parliament's leaders to take up the free-trade pact.

Most of the ruling Grand National Party's members had arrived in the legislative chamber when the plenary session was announced, thwarting any attempt by opposition lawmakers to block entrance to the chamber. But just as the vote was about to begin, Kim Sun-dong, a member of the far-left Democratic Labor Party, set off a tear-gas canister on the dais. Lawmakers cleared the hall only briefly, as police removed Mr. Kim, who screamed at reporters as he was taken away.

The trade pact was then approved by the ruling party's large parliamentary majority.

The agreement eliminates most tariffs on goods between the two countries. Many will end immediately but some, particularly covering automobiles and fruits, will be reduced in steps lasting three to 10 years.

South Korean legislators opposing the ratification of a free-trade agreement with the U.S. resorted to using tear gas to express their anger. WSJ's Evan Ramstad reports from Seoul. Photo credit: AP.

South Korea has far higher tariffs than the U.S. and, as a result, will see bigger changes in the variety and cost of goods after the trade deal takes effect. South Korea also has long had a surplus in the trade relationship with the U.S., a cushion that, over the past five years, amounted to an average of $12 billion annually. Analysts estimate that the South Korea's surplus will continue but will become smaller, chiefly because it is likely to sharply increase its imports of U.S. agricultural products.

After the vote, Nam Kyung-pil, the chairman of the foreign-affairs committee in charge of the legislation, called the spectacle "pitiful" and said the ruling party tried to avoid railroading legislation past minority parties. "I struggled to come to a compromise and to ratify the FTA together, and I did my best to show a mature, developed Parliament, but failed," Mr. Nam said. "So I feel deeply sorry to the people."

Sohn Hak-kyu, chairman of the biggest opposition party, said the ruling party's surprise vote was an "act of violence." He said that if voters in next year's elections put his Democratic Party in power, "We will declare the agreement invalid."

Free-Trade Timeline

June 2006: Negotiations begin in Washington. 
April 1, 2007: Negotiators reach agreement after weekend of nonstop talks in Seoul. 
December 2007: Having vowed to complete deal, Lee Myung-bak is elected president of South Korea. 
November 2008: Having campaigned against free-trade deals, Barack Obama is elected president of U.S. 
August 2010: Obama administration seeks small changes in auto, labor-safety provisions. 
December 2010: The two sides agree on minor changes in auto tariffs; Mr. Obama promises ratification push. 
Oct. 12, 2011: U.S. Congress ratifies FTA. 
Nov. 22, 2011: South Korea National Assembly ratifies FTA

While the deal got relatively little attention in the U.S., it was considered hugely important in South Korea, where trade accounts for half the nation's economic output. South Korean leaders have used FTAs in part to force broader liberalization of the country's economy, which relied heavily on protectionist measures to fuel rapid development of industries from the 1960s onward.

The two countries negotiated the pact, nicknamed Korus, under previous presidents, Roh Moo-hyun in South Korea and George W. Bush in the U.S. The first round of formal talks began in June 2006 and culminated in late March 2007, with three days of nonstop talks before an April 1 deadline on the Bush administration's trade- negotiating authority.

Although the pact is comparable in scope to a free-trade deal South Korea forged and ratified with the EU earlier this year, the U.S. deal drew far media attention and political protests. South Korean media covered monthly negotiating sessions as if they were sports events or political conventions, with anchor booths set up outside the hotels where negotiators met and reporters providing regular updates on what were supposed to be secret talks. The negotiators from both countries became quasi-celebrities in South Korea, and the American delegation's arrival every other month was broadcast live from Seoul's international airport.

But South Korean farmers and labor unions led protests throughout the process, even though public-opinion polls showed broad support for the agreement. During the last negotiating round of the U.S. deal in 2007, one South Korean protester set himself on fire. And one attempt by the ruling-party lawmakers to begin the ratification process in late 2008 was met by opposition party members who tried to enter the locked committee room with hammers and chain saws.

The end came just as dramatically, with members of opposition parties raising objections over a dispute-resolution mechanism already used in other South Korean trade deals. Last week, South Korean President Lee Myung-bak offered to seek changes with the U.S. after the deal was ratified, but opponents didn't believe that would work and repeated their vow to physically prevent a vote.

A spokesman for Mr. Lee acknowledged the "difficult" ratification process but said it was "fortunate" the agreement was completed.

In the U.S., ratification was slowed by the objections of the Democrats and the Obama administration who worried about the impact that greater access for Korean manufacturers of autos and textiles would have on U.S. competitors and labor. The two countries in December last year renegotiated a portion of the automobile section of the deal, slowing the rate at which tariffs will be reduced for Korean car makers. Following that change, the Obama administration put the Korea FTA at the center of a broader effort to boost U.S. exports.

Write to Evan Ramstad at evan.ramstad at wsj.com


Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International (KEI)

thiru at keionline.org

Tel: +41 22 791 6727
Mobile: +41 76 508 0997

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