The Korea-US FTA and
                  Korean Workers                                                              

                                                        Nam-ho CHA (Policy director at KCTU)

1. Development of Korea-U.S. FTA

* Serious problems related to Korea-U.S. FTA have been revealed one after another.

Recently TV investigative current-affairs programs including ?쁊BS Special??and ?쁏D note??made them public, causing a big controversy in society.

Korea Alliance Against Korea US FTA-affiliated civic organizations, consumer groups, an army of economists, even former presidential officials and researchers at state think-tanks asked for suspension of negotiations and reviewing the issue from start.

The government, which has been drumbeating by saying ?쏿 majority of Korean people are in favor of the FTA?? was dealt severe blows.

After the TV programs were aired the Government Information Agency is at the forefront in wining over the public opinions by counterattacking.

The agency denies the charges by carrying the full-page ads in the newspapers with 3.7 billion won in reserve fund for promotion of the FTA.

Although the government pours 3.7 billion won or multi-billion won for propaganda campaign the truth can?셳 be covered. Seoul went ahead with the talks without thorough preparations and even broke the law in collecting the public opinions.

The Korean administration unilaterally pushed for the negotiations and neglected the public calls for revealing the contents of the talks, which only fans the suspicions about the justification of the talks.

The lapses are found in other areas than the procedure.

The government doesn?셳 provide convincing answers in response to numerous concerns about the ill effects of the Korea-U.S. FTA.

Seoul simply repeats the justifications by saying that ?쁎pening the market is inevitable in the age of globalization??and ?쁗e have to be ahead of our rivals in grabbing American market, the world?셲 largest.??span style="mso-spacerun: yes">   Even the ?쁯rospective beneficiaries??from the FTA complain that several expected effects put forward by the government prove to be unfounded.   Initially the government was busy in exaggerating the projected effects but now it (or proponents) shifts the gear by arguing that we should think hard about the external shock effects instead of losses and benefits. In other words, the government emphasizes taking this opportunity for restructuring and reform efforts.

2. For what purpose is Korea-U.S. FTA pushed?

The heart of the issue is not about loss and benefit at hand.

From this viewpoint we can?셳 help but posing the underlying question: ?쁣or purpose and for whom does the government push for Korea-U.S. FTA?

Well, the conventional wisdom is ?쁣or the sake of enhancing the public welfare??

The justification of all economic activities including overseas trade and commerce can be guaranteed only if they ultimately lead to improving the quality of public life.

And the government and proponents can?셳 deny this proposition.

And then can the expected ?쁱estructuring efforts??advocated by the government indeed result in enhancing the public welfare?    Regrettably, we came to an opposite conclusion after reviewing and analyzing the arguments made by the government and proponents.   On the contrary, the pact would highly likely put the public in unprecedented disaster.   We need to scrutinize more the aftermaths of the ?쁱estructuring efforts??but in a nutshell, it means nothing but ?쁭eo-liberal restructuring??

Concerning whether the Korea-U.S. FTA will give ?쁞enefits??or ?쁥arms??to the Korean people the most important thing is its influence on the workers because the working class is not only closely related to the transformation of economic environments but also makes up large portions of population.  Labor chapter in the agreement is commonly known as being deeply related to the laborers, but it is far from true.

3. Korea-U.S. FTA and the worker?셲 rights

If the labor chapter is looked at on the surface internationally recognized workers??rights (rights of assembly, association and collective bargaining, prohibition of forceful or mandatory labor and child labor, insurance of minimum wages, labor hours and occupational safety and health) are observed so that labor standards shouldn?셳 be compromised in order to attract and promote trade and investment.

Washington and Seoul base the chapter on the argument that workers??rights will not be harmed at any case.   Definitely it is false.

What?셲 clear is Korea-U.S. FTA is not ?쁫abor rights-ensuring pact??at all.

In the agreement labor-related issues are not mandatory but simply secondary as the words of ?쁲trive to??in it implies.

Indeed, there aren?셳 any examples showing that the labor chapter in the agreement reached by between the U.S. and other countries was used to make the substantial protection of the workers??rights.

And it comes no surprise judging from the nature of FTA the U.S. seeks to clinch.

?쁀mericanized??FTA, as it implies, doesn?셳 evolve around the ?쁳rade??

It virtually seeks economic integration encompassing product trade, service, finance and intellectual property rights, in particular, matters about BIT (Bilateral Investment Treaty).

Therefore, most elements of the FTA have much to do with investment treaty.

And the essence of the treaty is ensuring investment and investor other than anything else, especially investors by giving them and their capital preferential treatment and advantages.  Of course, the gains from the capital are not legitimate and they are the outcome of the sacrifice made by the public at large as well as workers.

Labor chapter is a sort of formality designed to alleviate the growing complaints of the workers.  The basic workers??rights in the labor chapter cover the most basic human rights, the God-given rights automatically guaranteed seen in any agreements in the world, not to mention the Korea-U.S. FTA.    

However, the two governments tried to patronize workers by drumbeating the insurance of basic workers??rights but only to drive them into corners in every segment of their lives such as jobs, working conditions, social welfare and labor management relations.

4. How does the Korea-U.S. FTA threaten the workers??lives?

Nowadays nobody makes the case for the Korea-U.S FTA by citing trade improvement since even supporters acknowledge trade liberalization can?셳 make positive contributions to the Korean economy.

So here at issue is investment liberalization.

In the first round of talks the two sides reportedly reached the consensus in investment agenda, giving investment money a ?쁲anctified??status.

Elements and tools such as treatment of nationals, prohibition of expropriation and enforcement of duties and procedures of dispute settlement are in place to maximize the investors??interests.

If there is anything harmful to the investors??interests, so-called such ?쁦nvestment barriers??as public interest, environment protection and people?셲 rights to survive are abandoned.

Workers can?셳 be exceptional.   In late February ahead of negotiations the head of USTR gave the note to the U.S Congress saying ?쐗e will come up with investment protection mechanisms in Korea equivalent of U.S. laws.??span style="mso-spacerun: yes">    It clearly demonstrates Washington?셲 intention to implant ?쁳he American business environment??into Korea. 

?쁀merican business environment??means the principles of neo-liberalism based on the ?쁬arket order.??o:p>

In fact, as the Korean society went through the foreign currency crisis it opened up considerably the foreign investment market and put the interests of investors (capitalists) a priority.

Under the circumstances, foreign direct investment took place in the form of M&A, buying mostly cash-strapped local companies.  Foreign investors didn?셳 build up factories for job creation and expand the investment for stable growth but focused on pocketing short-term profits. Under the banner of ?쁟ost-saving??they made massive lay-offs or substituted regular workers with irregular recruitments.  In this grim situation can we afford to improve labor conditions?

The harsh reality we are facing is undeniable.

In its ??/font>trade barrier report??span lang="EN-US">, the head of USTR defines ?쁥iring workers and inflexibility of lay-offs??as investment barriers.  The report evaluates establishment of economic free zones where labor conditions are poor and unpaid weekly ?뱈enstrual leave, abolition of monthly leave and expansion of dispatched labor are highly praised as a ?쁲ignificant progress.    The Korea-U.S FTA urges introduction of market principles in the medical and education areas in the name of ?쁤uaranteeing investors??interests??although there areas are public by nature and should be protected by the basic social safety net.

As a result, the lives of workers will be seriously worsened.

Once the Korea-U.S FTA is signed, the above-mentioned poisonous provisions will be used as leverage by investors enjoying the freedom of exploitation while workers suffer more devastating pains.

So we should stand up to them and protect our rights by uniting and fighting.

It is a pity that right of collective action, one of the important rights due to workers, is missing in the Labor chapter.     What?셲 worse, in its ??/font>trade barrier report??/font>the head of USTR defines ?쁋abor dispute??as one of investment barriers.

5. The Korea-U.S FTA is ?쁞eneficial??to transnational capital and ?쁥armful??to workers.

Nobody can dispute the Korea-U.S FTA can?셳 deliver improvement of public interests and as well as betterment of quality of life for workers.

The facts are not confined to Korean workers alone.

The experience of American society after the NAFTA was reached vividly shows that American workers will also share the price of the free trade deal with Korea.

The pain will also inflict upon American workers.

Of course everyone in both countries will suffer in pain.

For people with transnational capital so freely swaggering the whole new world in hunt for profits the Korea-U.S FTA is more than a blessing.

The evangelists advocating the philosophy of transnational capital and neo-liberal globalization say in a whisper ?쐔he bigger the economy, the larger the benefit.   And ultimately the economic pie will be shared to everyone. So let??make small sacrifices for the greater causes.??

However, this future is only contradictory to the principles of neo-liberalism.

The Korea-U.S FTA is anything but our alternative solution.   It will bring about the disastrous consequences. We don?셳 need the Americanized FTA but the reciprocal and labor-friendly economic cooperation model.