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In South Korea, the antics of the DP opposition in the National Assembly have finally backfired; the GNP appears poised to use its majority to bring the KORUS to a floor vote on November 24. We consulted with one of our students who has served in government, Yongha Son, and he provided some insight into why the process has proven so contentious.
The main substantive sticking point is DP opposition to the Investor-State Dispute (ISD) provisions; J. J. Grimmet provides a detailed analysis for the Congressional Research Service. These dispute settlement measures permit US investors in Korea (as well as Korean investors in the US) to file arbitral claims against the government for violations of obligations under the investment chapter (Chapter 11) of the agreement. These claims may involve not only federal policies, but also state and local measures as well. DP politicians see this as a violation of sovereignty and have claimed that it could undermine protections of various sorts.
The recent EU-Korea FTA did not have a common ISD provision, although Korea has already signed bilateral investment treaties (BITs) with 22 European countries that include ISD arrangements. You have to wonder whether there is an anti-American angle to this, or simply fear that American firms might be more aggressive in exercising their rights under the ISD provisions. The US has certainly had plenty of investment-related conflicts in the past. Indeed, a central purpose of the KORUS was to address them.
President Lee tried to defuse the issue by going to the National Assembly and claiming he would renegotiate the ISD provisions within three months of passage of the agreement. Not only is this a bad idea--it simply won't happen--but it didn’t serve to quell the opposition either. A Hankyoreh editorial outlines some of the issues for the left.
Given that the GNP has a majority in the National Assembly, why hasn’t it just pushed the issue through? The first consideration has been electoral, as Scott Snyder has also argued over on his CFR blog. The victory of Park Won Soon in the Seoul mayoral election shows a growing disaffection with establishment politicians of both parties. An independent candidate, Park has picked up the endorsement of the DP and is popular among the "2040 generation": voters in their 20s, 30s and 40s. A significant faction of the GNP—including particularly first-term back-benchers—have favored more negotiation to hammer out a compromise with the DP. When the GNP pushed the budget through the National Assembly last year, it got a poor reception.
It now appears that cracks are showing in the DP as well, however, which could favor passage of the KORUS; Hankyoreh provides the details. A group of “ultras” favors unconditional opposition to the KORUS—which was initiated under the Roh Moo Hyun government—and another faction that supports continued negotiation.
Kim Chi-wook of Ulsan University has a great piece on public opinion on the KORUS, also on the Council on Foreign Relations website. His data shows that overall views of the KORUS remain overwhelmingly positive (57-34, with the remainder undecided) but that support for ratification is much narrower (40-31, with a higher share undecided). His explanation: the KORUS ratification has been associated with a narrow focus on growth while the electorate has shifted left, demanding greater attention to distributional issues.
A second interesting institutional detail is that despite the GNP’s overall legislative majority it does not control the chairmanships of all committees, as is the case in the US. Key committees dealing with the FTA, including the committee on legislation and the judiciary and the committee on the knowledge economy, are in the hands of opposition legislators and have used their power to bottle up the measure in committee. Part of the parliamentary maneuver to get the bill through requires working with the trade committee, which the GNP does control.
An interesting issue to watch: will this fight be replayed, or die out? The LMB administration needs to pass implementing legislation for a number of measures in the FTA; this is not a one-shot vote that resolves everything. Stay tuned.
