[Editorial] Time to act on U.S. FTA

With the important Seoul mayoral by-election over, rival parties are now required to tackle a still more important issue without further delay ― the ratification of the Korea-U.S. free trade agreement.

To thrash out the differences among the parties, the National Assembly’s Foreign Affairs, Trade and Unification Committee organized four rounds of intensive debate from Oct. 20-24. Lawmakers and experts from the government and academia discussed the merits and demerits of the trade deal for more than 30 hours.

The discussion was useful in the sense that it showed the capability of Korean lawmakers to engage in a level-headed debate on such a divisive issue for so many hours without becoming overly emotional and exploding into a fight.

Yet it failed to bring the two sides any closer. Despite the rare marathon debate, the ruling Grand National Party and the main opposition Democratic Party remain as far apart as ever.

The DP, however, showed some flexibility. It retracted its demand for renegotiations with Washington for rectification of “toxic” clauses in the revised trade pact and instead came up with “three priorities” that should be addressed before any action is taken on it.

The three preconditions are the revision of laws related to small and medium-sized merchants to better protect them from big retailers; more budgetary allocation for compensation for the agricultural industry; and the U.S. recognition of products originating from the Gaeseong Industrial Complex in North Korea as made in South Korea.

In addition, the DP called for parliamentary supervision of the government’s negotiations on trade pacts with foreign countries and increasing trade adjustment assistance, a government program designed to support firms hurt by free trade deals.

The DP has raised some valid issues. For instance, it is necessary to strengthen protective measures for small merchants as they would be exposed to an onslaught from big retailers when the trade pact goes into effect.

Expanding direct payments to farmers, fishers and livestock raisers would also be necessary to compensate for a drop in their income as a result of cheap imports from the United States.

But the ruling GNP and the government have already taken measures to address these concerns. The GNP has also accepted other DP demands. For example, on Tuesday, the Foreign Affairs, Trade and Unification Committee passed a bill to oblige the administration to report its negotiations on trade pacts with foreign countries to the Assembly. The GNP accepted the bill as demanded by the DP, despite the administration’s objection.

The government is also set to revise the law on trade adjustment assistance to expand the scope of the companies that can benefit from the support program.

But DP lawmakers say the government is still not prepared to implement the KORUS FTA. For example, they point to the investor-state dispute settlement provision, one of the 10 “toxic” items that they say need to be rectified.

This provision allows a foreign investor to bring his dispute with the government of the host country to an international panel of arbitrators without seeking the resolution of the dispute in the courts of the country concerned.

The DP believes this dispute settlement mechanism would confer greater legal rights on foreign businesses than those available to domestic businesses and therefore could inhibit the Korean government’s capacity to protect small firms and retailers. This possibility cannot be ruled out, although the government does not think so.

But it was the Roh Moo-hyun government that allowed the toxic clause to be included in the original trade pact concluded in 2007. If the provision is really harmful, it is none other than the DP itself who should get the blame.

Anyhow, the exhaustive parliamentary debate is over and it is time for the Assembly to act. We hope the main opposition party behaves in a rational way. On Monday, President Lee Myung-bak sought a chance to deliver an address at the Assembly. But the DP rejected his request. It should not have done so.

On Tuesday, major business organizations unanimously called on the opposition party to pass the FTA with the United States as it would benefit Korean companies. If the trade deal hurts local firms, why should they welcome it? DP lawmakers should no longer turn a deaf ear to their call for action.