DUP's Plans to Scrap Korea-U.S. FTA Are Irresponsible

      January 17, 2012 14:30

      The newly-elected leadership of the main opposition Democratic United Party has begun to demand that the Korea-U.S. free trade agreement is scrapped and renegotiated. DUP leader Han Myeong-sook said, "If we win a majority of National Assembly seats in the April general elections, we will try our best to scrap the Korea-U.S. FTA and renegotiate the pact." Moon Sung-keun, a member of the DUP's supreme committee, said, "If we win the general elections, we will first demand a renegotiation and if we win the presidential election, we will scrap the FTA."

      It looks like the DUP is staking everything on popular opposition to the Korea-U.S. FTA.

      Korean and U.S. lawmakers have ratified the FTA and the two governments are now conducting a final review to see whether both sides have made the necessary legal changes to accommodate the deal. Working-level negotiations are almost over and the FTA could go into effect as early as February. But the DUP is seeking to either scrap the deal or to renegotiate it.

      It takes just a simple process to scrap the FTA. One side simply needs to notify the other in writing of its intention to abolish the trade pact and the FTA automatically becomes null and void 180 days later. But there is some controversy whether the president's decision requires parliamentary approval. The National Assembly could vote to scrap the FTA first and then the president could notify the U.S. to justify the decision.

      Korea's dependence on trade is over 90 percent, ranking it among the most reliant country in the world on cross-border commerce aside from the Netherlands, Singapore and other nations that serve as intermediaries. Exports accounted for 3.9 percent of Korea's GDP growth rate of 6.2 percent in 2010, while 80 percent of its 4.03 million manufacturing jobs are associated with exports. If exports slow, Korea's economic growth and jobs are also at risk.

      Korea faces the threats of both the lowest birthrate and the most rapidly aging population in the world. The cost of supporting and caring for the elderly is snowballing, while the widening income gap between rich and poor is straining the fabric of society. Solutions to each of these problems cost tens of trillions of won in government spending. If the country is unable to raise that money through exports, it has no choice but to follow in the footsteps of Greece and Spain, which are on the brink of sovereign default. Moreover, what country would trust an ally that seeks to scrap an FTA immediately after it goes into effect?

      Just after Seoul and Washington successfully concluded FTA talks in 2007, former president Roh Moo-hyun said, "The FTA is not about ideology but about how we make a living." The DUP's leadership should first come up with some clear ideas about how it will be able to help people make a living before it starts talking about scrapping the FTA.

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