By Christine Ahn
The Korea-US Free Trade Agreement (FTA), signed on June 30, awaits ratification by the US Congress through an up-or-down vote without amendment. So far, the Democratic leadership has said that FTA is dead in the water, but only on the unenlightened grounds that the FTA did not go far enough in prying open South Korea's automobile and beef markets.
If enacted, the FTA will become the most economically significant trade deal since the North American Free Trade Agreement
(NAFTA). Financial transactions between the United States and South Korea surpass US$74 billion annually. The US also intends to use it as a model to expand trade liberalization throughout Asia.
Like NAFTA, the FTA will forever change South Korea's agricultural economy. For this reason, the deal has been furiously opposed by Korean farmers who believe it will force thousands of their dwindling numbers into poverty, seriously inhibit South Koreans' right to buy local food, and undermine domestic food-safety laws.
"In 1990, South Korea had 10 million farmers. Today, there are 3.5 million," said Sin Moon-hee, of the Korean Women Peasants' Alliance. "This is what unfettered trade has done to us and to the Korean countryside."
In 2006, the United States exported $3.4 billion worth of agricultural, fish and forest products to South Korea, the sixth-largest US export market. US agribusinesses are salivating at the opportunity to reach more of South Korea's 49 million consumers and the $12 billion agricultural market through the FTA.
Pro-business interests in South Korea argue that the FTA will make Korean farmers more competitive, especially in cultivating rice, the country's most economically and culturally significant crop. But Korean farmers have already undergone severe competition through market-opening reforms over the past two decades. The costs? More than 6.5 million farmers have been displaced and many traditional Korean crops, such as barley, wheat, corn, fruits and cotton, have virtually faded from the Korean countryside.
Korean peasants, militant on the front lines against the FTA, view the agreement as the final straw in a string of domestic and international policies systematically designed for their demise. During the 1960s and 1970s, South Korean peasants in essence subsidized the country's export-led industrial development. Then-dictator Park Chung-hee intentionally depressed agricultural prices to acquire a steady flow of cheap labor for export factories.
But this export-industrialization policy, which drove millions of farmers off the land, was mitigated by South Korean trade policies that limited imports with high tariffs and quotas. Farmers' incomes diverged considerably from those of urban workers in 1995 when the South Korean government joined the World Trade Organization (WTO) and signed on to the Agreement on Agriculture (AOA).
Under the veil of making agriculture more competitive, the AOA forced developing countries to eliminate quotas and forced governments to import a minimum amount of agricultural commodities at a low tariff. While developing countries were shredding the safety net for their farmers, by the early 2000s, the US and the European Union were spending $9 billion to $10 billion more on subsidies than they had spent a decade earlier, with the bulk of subsidies going to large corporate farms.
Small-scale farmers in the global South were surviving on less than $400 a year, while US and EU farmers received on average $16,000-$21,000 a year in subsidies. In 2003, the US dumped on the global market five commodities at 10-47% below the cost of production.
In the US, the average rice farm is 160.7 hectares, compared with South Korea's average rice farm of 1.4 hectares. About 8,000 of the United States' 2 million farms grow rice, compared with South Korea, where more than 787,000 farms - or 57% - cultivate rice. From 1995 to 2005, the US rice industry received more than $10.5 billion in government subsidies, of which 25% went to the top 1%.
"It doesn't even matter that rice wasn't included in the text of the agreement," said Heo Young-keo, vice president of the Korean Confederation of Trade Unions. "By 2014, Korea's rice market will be opened," said Heo, referring to the AOA, "and that is the reason why rice does not have to be included in these negotiations."
Going the way of NAFTA
According to South Korea's National Policy Institute, when tariffs on 20 or more sensitive agricultural products are eliminated, within 10-15 years, the decline in production by Korean farms will mean the loss of $1 billion to $2 billion annually. South Korea's agriculture could disappear in 10-15 years.
For example, tangerines account for up to 70% of Jeju (also spelled Cheju) island's agricultural production. It is estimated that opening South Korea's citrus market to powerful US companies such as Dole and Sunkist will force a 59% drop in the price of tangerines and result in a loss to Korean farmers of more than $200 million.
Seeing how the FTA will seal their fate, thousands of peasant farmers swam 80 kilometers off the south coast to confront more than 10,000 Korean riot police to make clear that they weren't going down without a fight.
President Roh Moo-hyun has promised to set aside $119 billion to aid farmers hurt by the FTA, but according to Kim Chee-hyung of the Korean Alliance Against the FTA, this "is the 10-year sum of what the government already spends annually, and only a small portion of that amount translates into actual income". Current subsidies haven't offset the negative impacts of liberalizing Korean agriculture, so peasant farmers are highly skeptical of this promised arrangement.
Dismantling Korea's food safety laws
Not only will the FTA force the extinction of South Korean farmers, it is working to undermine, and already has, the country's food-safety laws. As a precondition even to begin talks, Seoul agreed to re-import US beef, which it banned in 2003 after the discovery of mad-cow disease in the United States. US boneless beef and beef from cattle under 30 months old - considered a lower risk of containing bovine spongiform encephalopathy (BSE) - can now enter South Korea.
But since the ban was lifted last December, US beef shipments have been routinely returned because they contained bone fragments. Last month, South Korea received a shipment from the US of a complete cattle spine, which has prompted Seoul to halt beef imports pending an explanation from the US Department of Agriculture. In response, Democrat Max Baucus, chairman of the US Senate Finance Committee, is threatening to block passage of the FTA unless South Korea changes its food-safety laws. To South Koreans, US beef is not just a matter of trade. It has become the measuring stick of public health and food safety in Korea.
US biotech companies, running out of places to which to export agricultural products containing genetically modified organisms because of worldwide opposition, have turned to the FTA as a way to undermine the Cartagena Protocol of the Convention on Biological Diversity, a multilateral treaty that imposes labeling rules on agricultural and food exports.
According to media reports, the US and South Korea signed a memorandum of understanding that stipulates that when Korea ratifies the Cartagena Protocol, it will not apply the labeling rules to agricultural and food imports from the US, which is not a party to the treaty.
Even an April 17 press release from the Biotechnology Industry Organization refers to a "separate understanding" on agricultural biotechnology. The US and Canada, also not a signatory, put this waiver into place with Mexico under NAFTA. According to the Korean Alliance against the Korus FTA, the side deal will drastically weaken South Korea's legislative authority to implement the Cartagena Protocol on Biosafety.
FTA's future
In 20 years, will Korean meals consist of rice from Arkansas, beef from Montana and fruit from California? If global food trends are any indication, this scenario has a high probability of coming true. But the costs will be enormous, not just for South Korea's diminishing agricultural biodiversity, but in terms of the people's general sense of security, as they will be beholden to US-dominated agribusinesses for food imports.
Millions of South Korean farmers - most of them in their 60s - will either die in poverty or seek work in an already saturated urban job market. More than 50% of South Korea's workforce consists of "irregular" workers, meaning they don't have the same rights as workers with benefits, including the right to unionize.
"The fight against the FTA is a class struggle, and who wins in this fight will determine the outcome," said Seo Jun-sub of the Korean Alliance.
Roh is seeking ratification of the FTA before the end of his term this year. In the US, the Korea FTA may come up for a vote in Congress this year, but it all depends on how the Peru and Panama FTAs fare. So far, Democratic Party presidential candidates Hillary Clinton and John Edwards have come out against the Korea FTA, siding with the automobile bloc led by Democratic Senator Carl Levin. But the alliance of agribusinesses, biotech firms, pharmaceutical giants, and financial-services firms might be too powerful in the end.
It may all come down to the resistance of Korean peasants and trade unionists against the WTO and now the FTA. Whether leading the procession of thousands to tear down the metal barricades in Cancun, Mexico, or swimming across freezing waters at the WTO meeting in Hong Kong, South Koreans have been at the forefront of dismantling the perception that these global trade institutions are beyond the people's reach.
Christine Ahn is a policy analyst with the Korea Policy Institute and a contributor to Foreign Policy In Focus.
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