High noon for Korea’s NAFTA
Guerrilla News Network | 4 Sep 2006
High noon for Korea’s NAFTA
Szamko
Underneath the radar of the mainstream media, the U.S. and South Korea are negotiating a “free trade agreement” that, if signed, will be the largest such agreement since NAFTA was passed in 1994. Hence, it’s a massive issue for U.S. and Korean workers, and has been arousing massive opposition.
This is something I wrote a while back, but it is directly relevant at this moment, with the resumption of trade talks in Seattle. On “labor day”, it might be worth reflecting on the possible consequences for what is left of the U.S. auto and parts industry if the deal is signed, as well as the probably decimating effects on Korean agriculture and food sovereignty.
East Asia is changing. South Korea has been trying to move towards reconciliation and trade with North Korea - setting up an industrial zone across the border, backing troop reductions and multi-party talks over the North Korean nuclear program. At the same time, South Korean trade with China has been rapidly increasing, cementing regional economic relationships.
To some, East Asia is slipping from the American orbit.
This process is presenting challenges to foreign investors who would prefer Asian economies to export to or import from American or European markets (on favourable terms of course). Hence, moves towards regionalization are being opposed by the U.S. business elite, which stands to gain massively by continuing to secure cheap Chinese imports and a ready export market in South Korea for pharmeceutical goods, GM seeds or the products of U.S. based agribusiness corporations. Food Sovereignty, or even regional food partnerships, are therefore frequently challenged by bilaterial Free Trade Agreements (FTAs). Money that stays within regional economies is money that doesn’t reach the pockets of shareholders in New York or Dubai. The Empire doesn’t like that.
Within this context the U.S. is pursuing an aggressive FTA with South Korea. It may not be coincidental that at the same time that negotiations over the FTA are reaching a critical stage, tensions with North Korea have flared up again. Washington can hold the specter of North Korean missiles over South Korean heads and by doing so, extract key concessions on behalf of U.S. corporations. Whatever the case, the more North Korea can be isolated, the closer South Korea becomes to America, relatively speaking. The more dependent South Korea is on the U.S., the greater the access U.S. corporations can gain to South Korean markets. That way leads to super-profits, as NAFTA has shown but, as the North American experience has also demonstrated, it also leads to social conflict, dispossession and massive inequality.
South Korea’s NAFTA
An FTA with South Korea is a top priority for the Bush administration. Speaking to the Korean Importers Association in June 2006, U.S. ambassador to South Korea, Alexander Vershbow called it “one of the most important developments in U.S.-Korea relations in the 52 years since the signing of our Mutual Defense Treaty.” Speaking in February this year to an audience at the Korea International Trade Association, Vershbow also said that “This FTA is our most ambitious FTA undertaking since we began negotiations with Canada and Mexico 15 years ago” whilst he told his audience “I think that 2006 will really be the “Year of the FTA” in U.S.-Korea relations, and I personally intend to make the success of these negotiations a very high priority. These talks are an immense opportunity for the business communities of both our countries. It is an opportunity that we cannot afford to miss.”
We, for Vershbow and the U.S. government means American exporters - big pharma, big farmers, weapons manufacturers (another beneficiary of regional tensions) and retailers in Korea (the “service industry”). Those excluded, including small Korean farmers, consumers of government regulated medicines in Korea, workers in the American automobile industry, trade unionists and environmentalists in Korea, will have to make adjustments.
Critics of the FTA are keen to make comparisons between it and the NAFTA treaty, which has opened up Mexican, Canadian and U.S. markets to international capital (whilst leaving the matter of human mobility for another day). ANSWER, an alliance of Korean trade unions and environmentalists commented in a July 13 press release that:
“We witnessed tremendous job losses under the NAFTA. Meanwhile, farmers in Mexico were wiped out by corn and other U.S. agricultural products. Faced with literal starvation 8 to 10 million Mexican emigrated to the United States where they are super-exploited and treated as criminals subjected to mass arrests and deportations if they dare organize unions. U.S. corporations moved into Mexico, sold products at very low prices, forced Mexican farmers and industries into bankruptcy when they could not sell their products, and then turned around and raised prices after the Mexican “competition” was destroyed. The Korean people cannot truly desire this outcome since it benefits only U.S. transnational corporations and banks.”
Many Koreans fear that further opening up of their agricultural and pharmaceutical markets to transnational corporations will drive millions of small farmers from their lands into overcrowded cities as millions more see their access to medicines restricted by higher prices. As ANSWER state, “No one should listen to the U.S. government when it comes to health care policy since 46 million Americans cannot go to the doctor when they are sick because they are workers who have no health care insurance. Forty six million is three million more than when Bush took office in 2001. It is also no less than the entire population of South Korea.” Their caricature may be crude, but the fact remains; when it comes to providing equitable health care, the U.S. is not the global nation to imitate.
Preparing for the kill
They are, however, an excellent role model for those seeking to bully nations into signing exploitative deals.
Since the Asian financial crisis in 1997, the South Korean government has found itself with much less room for manouver. After that crisis, and the restructuring that was forced on South Korea as a result, large sections of the Korean banking sector were ‘liberalized’ and opened up to international capital. State assets were sold off at low prices. For example, the Korean Exchange Bank was sold for $1.2 billion to a group of Texans called the Lonestar Hedge Fund. That same bank was put up for sale recently for $6.7 billion prompting a government investigation. This process of liberalization has meant that it has become harder for the government to intervene and impose controls to prevent capital flight. Like many countries around the world, South Korea is - to an extent - held hostage by international financial flows.
Leveraging their strong position due to the 1997 crisis and emboldened by the Bush administration’s aggressive stance on securing foreign markets for U.S. capital, U.S. negotiators have extracted a series of ‘concessions’ from the South Korean government. Hollywood has secured a big reduction in the ‘screen quota,’ a system that was imposed by the Korean government to support the national film industry. Agribusiness has benefited from steady increases in the foreign rice quota - which has also stimulated impassioned resistance from Korean rice farmers. The Korean government has also acted to restrict the rights of temporary workers, the number of whom has swelled in recent years. Pharmaceutical price regulation has been relaxed to appease big pharma while U.S. beef has been waved through despite public objections in the wake of BSE being detected in American herds. U.S. automobile manufacturers have benefited from a relaxation of government regulations concerning maximum emissions levels (measures that hit gas guzzling American models particularly hard).
All of this has been demanded of South Korean politicians as part of the preparations for the South Korea-U.S.A. FTA, in exchange for improved access to the U.S. market of South Korean cars or hi-fis. The unequal position of South Korea is illustrated by the measures that they have taken to reassure the U.S. that they are serious about “free trade” and the lack of similar measures taken by the U.S. in return.
U.S. rice subsidies, a key commodity in Korean agriculture, amounted to $1.3 billion in 2003, according to Oxfam. This rice is then sold off at well below the cost of production in struggling economies. Korean rice farmers fear that they will be the next sacrifices to corporate agribusiness. They fear a repeat of what happened to Haiti where when rice import tariffs were reduced from thirty-five to three percent, domestic rice farmers lost out to American corporate farmers leading to a situation where three out of every four plates of rice consumed in Haiti come from the U.S.A.
As for what is at stake in broader terms, at the moment trade between South Korea and the U.S. amounts to about $78 billion per year. Asian Development Bank statistics from 2004 show that South Korea exported $43 billion worth of goods to the U.S. that year and received $28 billion in return - a ratio that has probably not changed greatly in the interim. South Korea, a nation that ran a $29 billion trade surplus in 2004, presents an opportunity to turn that sensible economic management into a consumer boom, and to turn the South Korean economy as a whole into a market for U.S. goods.
Resistance in the other South Korea
In December 2005, Korean farmers led protesters in assaulting the barricades around WTO negotiations in Hong Kong, going as far as swimming Hong Kong harbour to reach delegates. It has often been the Koreans who have provided the music and spirit to embolden other activists and to resist police tactics. Korean farmers, labor movement and environmentalists have also mobilized this spirit in response to the FTA, as well as being at the forefront of actions against the WTO and G8.
Strikes and protests have been a constant accompaniment to FTA negotiations in Korea, but their intensity has grown over recent weeks. On June 27, activists penetrated the FTA negotiations in Seoul, challenging negotiators to release the minutes of their discussions and to listen to the voices of social movements. This then led to calls for a mass demonstration and the gathering of more than 60,000 people in Seoul on July 12 to express their opposition to continuing negotiations at a hotel in the capital. Movie actors have demonstrated at Cannes and on the streets of Seoul against the withdrawal of protections for Korean cinema.
This activism is routinely dismissed as either archaic protectionism or rabid anti-Americanism by foreign commentators. As quoted above, South Korean labor unions have set out reasonable, challenging positions on economic issues which are simply ignored. South Korean internal politics are submerged beneath a focus on North Korea, while for the State Department negotiating the FTA is arguably a far more important strategic goal. After all, there is far less profit in removing Kim Jong Il, than in erasing the South Korean rice farmers or forcing open its pharmaceuticals industry. Opening up North Korea to investment comes later, when, like South Korea, the North has improved its infrastructure and remodelled its economy to suit foreign investors.
In the meantime, the Bush administration will try to keep South and North divided, in order to achieve its goals in both. By doing so, they risk inciting nationalist sentiment in South Korea as economic polarization bites. Presumably, in the quest for ever expanding profits for Cargill or Monsanto, that is a price worth paying. Social movements in Korea have shown an ability to mobilize resistance that might just make this impossible.
Seattle redux
Since June, the stakes have been raised. The Doha round of WTO talks seems to have collapsed and the institution is in turmoil, which is not a problem for the U.S. as long as it can continue to negotiate favorable bilateral trade agreements, which is exactly what the Bush administration is doing.
Korean negotiators will be flying into Seattle this week to begin a new (third) round of negotiations - along with at least 100 protesters - farmers and unionists mainly - who will continue the momentum from June. This has prompted preemptive moves by the Seattle police force to “request” good behavior from the notoriously committed Koreans.
Let’s hope they ignore this generous advice. Anyone in the area should get down and support them if you can. This really is a massive issue.
