New Seoul mayor speaks out against FTA with US

 

Seoul Mayor Park Won-soon has submitted an official opinion that the city opposes the Korea-U.S. free trade agreement on Monday, the Dong-a Ilbo reported on Nov. 08, 2011. The city said the mayor tendered a "written opinion" on the deal to the Foreign Affairs and Trade Ministry and the Public Administration and Security Ministry. According to Park`s opinion, the accord`s clause on the investor-state dispute settlement should be revisited just as opposition parties claim and the central government should protect small business owners to prepare for large American retailers (called super supermarkets or SSM in Korea) entering the Korean market. Experts say Park, who was elected with help from the main opposition Democratic Party and the progressive Democratic Labor Party, has begun to be at odds with the central government. He has a different take with Gyeonggi Province Gov. Kim Moon-soo, a ruling party member, on the transportation sector, which urgently requires an increase in fares. Park has made four requests to the central government: revisit the investor-state dispute clause; prepare measures for reduced tax revenues worth 26 billion won (23.1 million U.S. dollars) as a result of a cut in the automotive tax; protect small business owners against the entry of foreign super supermarkets; and allow municipal and provincial governments to get involved in the investor-state dispute working-level committee. In the written opinion, the mayor said, “If the free trade agreement takes effect, American companies and the U.S. government can seek international arbitration against the Korean central and provincial governments, which is worrisome,” adding, “Given another suspicion over an error in translation following numerous other mistranslations, an in-depth review is needed to find any conflict between the agreement and municipal and provincial government regulations." The Korean government denied his claims immediately. “What Park said is similar to what opposition parties have groundlessly claimed and is not logical,” said a high-ranking official of the Office of the Minister for Trade, adding, “It`s only an argument close to a political attack.” Korean investment in the U.S. reached 20.3 billion dollars from 2006 to 2010, more than double the amount of U.S. investment in Korea of 8.8 billion dollars. The central government said that if a Korean company in the U.S. is harmed, it can seek international instead of U.S. arbitration through the investor-state dispute settlement system, which puts Korea in a more advantageous position. The Korean government also said the system has been effective since the Korea-European Union free trade agreement was signed, adding America`s largest retailer Wal-Mart, which pulled out of the Korean market after failing there, will not return to Korea. “The tax revenue of municipal and provincial governments was cut by 138.8 billion won (123.7 million dollars) per year as a result of the free trade agreement. The central government decided to make up for the loss and noticed this to municipal and provincial governments, including that of Seoul,” said the Public Administration and Security Ministry. “(Mayor Park) doesn`t seem to know this well. If he wants to express his opinion on important national policies, he should be more cautious and accurate.” Lee Ju-hee, an adviser at the Korean Association of Local Government Studies, said, “It is good that a local government head tries to communicate with the central government and is allowed to do so,” adding, “If there is any misunderstanding, the central government should explain it to him and ask for understanding.” Others are not so sure, however. Jeon Yeong-han, a professor of the Graduate School of Public Administration at Seoul National University, said, “(Mayor Park) did something that he can do as an elected politician, but it is doubtful whether his action against the free trade agreement, which is necessary for job creation, is desirable for him given that he is an administrative manager representing Seoul City.”