Text Fwd: Free Trade Kills Korean Farmers

* Text fwd from Steve Zeltzer on Feb. 21, 2011

Korea Policy Institute
Free Trade Kills Korean Farmers
Christine Ahn* and Albie Miles February 18, 2011
[Originally published in Foreign Policy in Focus, February 15, 2011]

The Korea-U.S. Free Trade Agreement (Korea FTA), which the Obama administration is promising to send to Congress for ratification in the next weeks, would be the largest international trade deal since the North American Free Trade Agreement (NAFTA). Korea is the seventh largest U.S. trading partner and the United States is Korea's third largest trading partner. Commerce between the two countries is estimated at $86 billion annually. The Korea FTA was originally signed in April 2007 by President Bush and later amended by the Obama administration in December 2010. But neither the U.S. Congress nor the South Korean parliament has yet to sign it.

The Korea FTA contains many frightening provisions, particularly the investment chapter, which threatens both U.S. and South Korean public interest laws. According to a flyer prepared by the Citizens Trade Campaign, the investment chapter of the Korea FTA is more potent than past FTAs and grants Korean investors "extraordinary new rights to challenge U.S. laws, regulations and even court decisions as 'regulatory takings' in international tribunals that circumvent the U.S. judicial system." Not only is the Korea FTA expected to displace 888,000 U.S. jobs within seven years, it explicitly omits any reference to the International Labor Organization (ILO) conventions, which is significant given that over half of South Korea's workforce are irregular workers without adequate protections.

Like many previous international trade agreements, the Korea FTA is benignly presented as "reducing barriers to trade" and "improving market access" for U.S. and Korean products. The simplicity of such language belies the anticipated and far-reaching social and environmental impacts should this agreement be ratified.

Forceful Opening of Korea

In the past century, the United States has played a very heavy hand in Korea. One of its first interactions with Korea took place in 1866, when the heavily armed USS General Sherman sailed up the Taepodong River to force open trade with Korea. In 1882, the United States became the first Western nation to open Korea through a treaty, paving the way for American companies to "develop" Korea's gold mines, railroads, electrical and telephone systems. Many South Korean opponents of the Korea FTA have likened the trade deal to the 1905 Taft-Katsura Agreement when the United States agreed to allow Japan to colonize Korea in exchange for its takeover of Hawaii and the Philippines. At the end of WWII and Japan's surrender, the United States played a central role in dividing the Korean peninsula, installing a military government led by Koreans who collaborated with Japanese colonizers and brutally quashing a vibrant grassroots pro-democracy movement. Then came the Korean War, the first Cold War the U.S. fought, which claimed four million lives, separated millions of Korean families, and formalized the division between North and South Korea.

As a strategic U.S. front in the Cold War, South Korea received significant amounts of military, development, and food aid. From 1956 to 1970, under PL 480, Korea received $800 million worth of aid commodities, largely in the form of wheat and cotton. The abundant supply of grains kept food prices and wages low, which provided a continuous supply of cheap labor to fuel Korea's rapidly growing export manufacturing economy. But food aid devastated Korean agriculture. In the 1940s, approximately 583,000 acres were used for wheat production, whereas by 1968, due to the depressing effect of U.S. food aid, only 39,000 acres were used for wheat production. U.S. food aid lowered the prices of other grains, such as barley and rice. By the 1960s, agriculture was no longer the dominant economic sector.

"After the Korean War, the United States sent flour, sugar, and milk under PL 480, and the farmers and people of Korea received it gratefully," said Lee Kwang Seok of the Korean Peasants League in a recent interview. "However, as time went by, we saw that those sectors of the agricultural economy were destroyed. And now with the FTA, the policies are aimed at further destroying agriculture in Korea."

Aggressive U.S. trade policies starting in the 1980s sealed the fate of Korean farmers. During the Reagan administration, the United States began using Section 301 of U.S. trade law to break down South Korean tariffs that helped develop its domestic industries. Korea caved in and lifted tariffs on U.S. beef, wine, rice, and tobacco. Then came the World Trade Organization (WTO) and the push by rich, developed nations to include agriculture in trade negotiations. This proved devastating for small-scale Korean farmers (and other farmers around the world).

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