In 2008, government authorities fought a losing battle against the campaign of misinformation about mad cow disease and Creutzfeldt-Jacob Disease that fueled demonstrations against U.S. beef imports. Blogs and mobile phone text messages were widely used by the protesters. Two and a half years later, opposition parties and leftist civic groups have even more effective weapon in their fight against the Korea-U.S. free trade agreement.
They are liberally using social networking services, which have developed explosively during the intervening years, to convey claims about the alleged harms of the bilateral trade pact with the United States. Again, the technologically retarded authorities find themselves heavily disadvantaged in this information war.
Oppositionists have circulated a variety of unfounded rumors about the effects of an FTA with the United States, taking fictitious examples of other countries. Their messages claimed that gambling, pornography and pyramid schemes will make swift inroads into Korea, rice farming here will be wiped out, mad cow disease will again rise to epidemic proportions and Korean streets will turn into the Wild West with the lifting of firearms controls once the KORUS FTA takes effect.
The Democratic Labor Party made a more sophisticated approach with the claim of “12 toxic clauses,” although they were also based mostly on distortions and speculations. As lies and half-truths were exposed, objectors chose the ISD clause ― allowing a foreign investor in a dispute with the trading partner government to seek arbitration by an international panel ― as the last stand in their anti-FTA struggle.
They argued that the ISD provision would be greatly unfavorable to Korea because the International Center for Settlement of Investment Disputes is an institution of the World Bank and the World Bank president, always from the United States, is ex officio chairman of the ICSID who can exercise significant influence on arbitration proceedings. Yet, anyone who had a chance to take a look at the ICSID Convention will instantly realize how groundless such an allegation is.
The ICSID Convention has detailed provisions to ensure neutrality in the appointment of arbitrators in the event of no agreement between the two parties; the ICSID chairman shall appoint arbitrator(s) who are not nationals of the states involved, and the majority of the arbitrators shall be nationals of states other than the two states involved. Therefore, non-U.S. and non-Korean arbitrators will be the majority in any arbitral tribunal.
Each of the 147 member states of the ICSID has appointed four experts for arbitration and four others for conciliation proceedings. Tribunals formed with these appointees conduct arbitration on the basis of the domestic laws of the two parties and international law. Prime Minister Kim Hwang-sik told the National Assembly last week that rejecting the Korea-U.S. FTA because of the ISD clause was an “affront” to the international system of business.
ICSID tribunals have handled a total of 123 cases involving U.S. investors or the U.S. government: Of the 108 arbitration cases so far requested by U.S. businesses, 15 ended in favor of the applicants, 22 against them, 23 reached conciliation or other forms of settlement and 48 are pending; of the 15 cases against the U.S. government, six were turned down and nine are pending, according to Yonhap News.
The U.S. government looks somewhat strong in ISD cases against it, but the small number does not provide an answer to questions about the trustworthiness of the whole dispute settlement system. Anyhow, truth is becoming increasingly hard to come by in the ever-changing communication environment ― especially when new technology is used to hide it.
