KORUS Frozen in South Korean Parliament

By Viola Tang, BASC Research Assistant

After the U.S. Congress’s ratification of the KORUS FTA, the agreement has met staunch opposition in the South Korean National Assembly. While the ruling Grand National Party (GNP) is pushing for ratification, the Democratic Party (DP) has colluded with four smaller, liberal parties to oppose the bill. Despite four years of negotiations, last week’s developments highlight two key issues that remain unresolved: the lack of interest aggregation for the trade agreement domestically in South Korea, and the foreign policy costs of delayed trade negotiations.

Discussion on the bill coincided with a Seoul mayoral bi-election won by independent opposition candidate Park Won-soon over ruling party candidate Na Kyung. The election is the key political factor that puts to question whether South Korea’s parliament will be able to successfully ratify the agreement. Such an election result introduces political incentives for the opposition parties to prevent KORUS from passing by forcing the ruling party into ratifying the agreement with unilateral legislation, which would lower their popularity with the masses. This conflict is a byproduct of the GNP’s failure to aggregate interests among constituents and political parties, which would minimize domestic tension over KORUS.

The long delay in ratification has resulted in the foreign policy costs of mistrust and reduced enthusiasm for engaging in trade agreements with the U.S. On KORUS, the main point of contention in South Korea’s National Assembly is the investor dispute settlement (ISD) clause, which the DP argues would give large American firms undue room to bully small and medium-sized Korean enterprises. A similar issue caused tension during the ratification of NAFTA, under Chapter 11, which allowed companies making foreign investments that have lost money in a domestic court to sue that country’s government through an international body. This debate highlights a foundational element of distrust in U.S.-South Korea relations.

Outside, police fired water cannon on 2,300 demonstrators who attempted to physically break into parliament on November 3rd. Opposition lawmakers took to the streets and organized sit-ins in Seoul. While parliament was in session, South Korean authorities detained at least 15 people after a clash between police and protestors. Demonstrators claimed that the pact would endanger their country’s agriculture industry by flooding the market with cheaper imported goods from the U.S. This public pressure forced the GNP to delay voting on the bill until at least November 10th. For the GNP, forcing a vote could lead to voter backlash before next year’s general and presidential elections – a situation that epitomizes the dynamics that remain to be resolved with the KORUS FTA.

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