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Is the South Korea-US Korus Heading for a Chilly Autumn?

Thursday, May 3rd, 2012

For proponents of expanded trade relations with the United States, if the South Korea’s left wing opposition parties win the presidential election in late 2012, the political atmosphere will be as cold as Korea’s recent winter, the coldest in 65 years. The cause of the big freeze will be the Democratic United and Unified Progressive Parties’ (UDP and UPP) icy resolve to scupper the Korea–US free trade agreement (KORUS FTA). On February 8th party leaders warned that this is their ambition when they publicly read a letter addressed to US President Barak Obama that 96 national assemblymen signed as a show of resolve. “If we win the presidential election and if our demands for renegotiations are not met by that time, the KORUS FTA will be terminated by Clause 2, Article 24.5 of the agreement.” That section provides that after six months, the accord will end if one side opts out in writing.

True, Korea-watchers might point out that the left wing Roh Moo-hyun administration negotiated on nine out of ten sections that incense the critics as “poisonous.” Also, one of the most vociferous rejectionists is none other than Democratic United Party Chairwoman Han Myeong-sook. She was the prime minister when the two allies talked out the original pact, only to then strike the post of a nationalist as the next election looms.

One alleged weakness of the KORUS, alleges her side, is the Investor-State Dispute Settlement (ISD) that is supposedly unfair to Korea. Enter Gordon Flake, the executive director of the Mike and Maureen Mansfield Foundation created in 1983 “to promote understanding and cooperation in US–Asia relations.” It is named in honor of Mike Mansfield, the American ambassador to Tokyo during the Reagan years who became controversial among trade hawks in his own country who accused him of appeasing a mercantilist Japan. Therefore, Flake’s pointed, candid rejection of the South Korean oppositions’ machinations stands out in bold relief. In his public rebuttal, Flake meets the critics’ points head on – and adds more. To start, he finds that “ROK trade agreements, including the one with the European Union” contain that same measure.

Veteran students of South Korea might also chime in that left leaning civic groups and politicians additionally bemoan the “unfairness” of the Status of Forces Agreement (SOFA) that covers the legal aspects of the American soldiers positioned in country under the 1954 mutual security pact. In fact, Seoul negotiates similar or more restrictive terms when it deploys its troops abroad. However, a sense of grievance runs deep in Korean society. Flake asserts that whatever the Korean misgivings, they can address them through “the normal course of diplomacy.” He flayed Han for exaggeratingly denouncing KORUS as a “treacherous deal,” as if the US had schemed to stab Korea in the back when in fact the terms of the accord are transparent and the negotiations that begat them widely covered by the media and conducted in good faith. Flake charges her and her like minded politicians as posturing in public and creating an issue for domestic consumption that “will negatively impact US-ROK relations.”

After all, the Korus won the endorsement of a wide swath of US officials and policy wonks and most South Koreans too. It took five years of effort to land the final deal. Also, scores on both sides of the Pacific “viewed [it] as more than just a trade arrangement. It was and is a strategic agreement intended to strengthen and deepen the US-ROK relationship.” Washington has ratified the deal, and therefore, intones Flake, for the opposition to threaten it resort to any tactic to kill it off “is a clear indication that they do not understand or do not value the strategic importance of the deal....their sweeping and hyperbolic denunciations risk being interpreted as anti-American.” Of course, Flake might consider for the militant left in Korea, that is exactly the intention.

In any event, he attempts to appeal to the opposition’s political self interest. Flake reminds them that “individuals and institutions...most vested in KORUS as a strategic initiative [are] the primary prism through which a new government in Korea will be viewed.”

Furthermore, are the critics foolish enough to discount regional and global opinion? Flipping aside the KORUS will alarm its trade partners and investors, who will wonder if the RoK is a reliable partner. As Flake forsees it, “there would be real economic costs and missed opportunities for the ROK [plus] damage to its soft power, and since Seoul has never before repealed an international treaty [it] would cause the ROK’s international position and reputation to suffer.”

There would be no primary or collateral damage to the American reputation because, “Regardless of whether the ROK decides to back out, the US strategic mandate and its credibility in leading a trade and investment liberalization agenda in Asia have been secured” through the Senate’s stamping its approval. Its members, says Flake, realized that Washington had to demonstrate leadership on trade or risk undermining its credibility in the Asia Pacific Economic Conference (APEC) and the ongoing talks for the Trans Pacific Partnership trade dialogue. In fact, if the south does back out, “it is hard to imagine other members of the TPP being interested in including South Korea if it is attempting to repeal a similar trade deal with the United States,” by far its most significant ally.

Flake has much advice for South Korea. First, it should reflect upon its own positive record in boosting world trade and investment. Plus, the country has been “a leader in the G20 [and] successfully negotiated and ratified in KORUS a prototype for the “21st Century” that should eventuate in the TPP. So Seoul “could be a leading voice” for more liberal trade instead of a spoiler that angers others – and isolates itself.

He concludes by asserting that it is “dangerous, short-sighted and unrealistic” for the left wing parties to continue to court confrontation. It remains to be seen if the South Korean–US relationship is heading for an autumn of grievance – and a winter of discontent.

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