Seoul plans safety net for free trade victims
Chosun Ilbo, Korea
Seoul Plans Safety Net for Free Trade Victims
3 June 2005
Seoul on Friday decided to support workers and businesses that fall victim to trade liberalization, even as APEC ministers in Jeju pledged to back a formula that would drastically slash tariffs in non-agricultural sectors.
A meeting presided over by Finance Minister Han Duck-soo agreed that workers who lose, or are likely to lose, their jobs as a direct consequence of market opening will get financial help to find another job.
Companies that fall victim to free trade agreements and other liberalization measures will also get subsidies and tax benefits if they restructure.
The move comes ahead of possible damage to Korea’s auto, electric and electronic, and garment industries from free trade agreements with Japan, China and ASEAN countries.
The government decided to draft legislation creating a safety net for manufacturers after it tailored a special law to the effects on farmers of an FTA with Chile. The draft will be ready by the end of the month and be submitted to the National Assembly in October after a public hearing.
The U.S and Europe also have similar systems to minimize the fallout from open markets. However, some experts worry the safety net could prove a waste of public money or encourage businesses to produce deliberately poor results so as to qualify for subsidies.
