By Tong Kim

When the initial version of the KORUS FTA was signed in 2007, it was hailed as a viable win-win trade policy to increase exports, induce investment, create jobs, and improve competitiveness in the increasingly interdependent global economy.

It took the United States more than four years to renegotiate and readdress its complaints especially in the areas of autos and agriculture before the Congress passed a final FTA version in October 2011.

In the course of fighting over FTA ratification at the Korean National Assembly, the economic argument that originally supported the FTA seems to have given in to a political argument that the agreement’s provision on Investor-State Dispute Settlement (ISD) conflicts with the Korean constitution and infringes upon South Korea’s economic sovereignty. The government’s security argument that the FTA would reinforce the ROK-U.S. alliance is not even heard nowadays, as it was a far-fetched notion from the beginning.

Even after the legislatures in Washington and Seoul took substantive measures to support those industries likely to be hurt by the trade agreement, there is still strong opposition against the FTA in Korea. Optimistic projections of growth and job creation are being questioned as they vary depending on the sources and as shown by the negative results of the earlier FTAs with Chile and the EU that have so far produced trade deficits in billions of dollars for South Korea.

The last few decades of free trade based on neo-liberalism has contributed to growth and investment as well as to economic polarizations between and within trading countries. It also made the rich richer and the poor poorer in Korea. The country as a whole can benefit from free trade in terms of growth, but if the benefit of growth is not shared with most of the people, it creates a political problem.

The issue of FTA ratification at the Korean Assembly came up at a time when some thinkers are wondering whether neo-liberal market economy has reached its limit in the wake of the 2008 financial crisis, which was interpreted as a consequence of unlimited human greed innate to deregulated capitalism. Although the Republicans in America still oppose government intervention, there are emerging views that a carefully mixed system of government and market should be invented to control the negative aspects of unbridled market economy.

At this writing, the only way to pass the KORUS FTA appears to be by railroading the ratification bill by the governing Grand National Party by force with a likely physical collision. President Lee Myung-bak’s belated effort to solicit the support of the opposition parties would not be successful, unless he has something new to offer to the opposition Democratic Party, which demands an assurance that the administrations of Korea and the United States would undertake negotiation of the ISD clause for abolishment after effectuation of the FTA.

The difficulty of FTA ratification is compounded by the lack of political leadership on the part of President Lee and the GNP, which have suffered a devastating defeat in the recent mayoral election for Seoul. President Lee is yet to make a convincing case on the FTA in a direct appeal to the people. Due to the effective opposition’s campaign against FTA and the government’s inconsistent policy statements, more people are puzzled and neutralized between the pros and cons of FTA.

In number, the GNP has 168 seats, a comfortable majority to railroad the ratification only if it is to withstand the opposition parties’ likeliness to block the entrances of the chamber or occupy the podium, from which the speaker must preside over a session. It is also possible that members and their staffers of both sides physically clash, by shoving, pulling, shouting, and even exchanging fists.

The GNP members are concerned if they pass the FTA by force making another ugly scene, it will hurt their chances of reelection in the next general election in April 2012. Twenty GNP members publically pledged not to participate in railroading of any bill. After the defeat in the mayoral election, 25 GNP members demanded President Lee apologize to the people for his failures in leadership and policy. The president’s approval rate has declined to below 30 percent.

One thing the GNP members agree is that their party will have to change, but they don’t seem to know how. More of them, including their former party chair Park Geun-hye, are distancing themselves from President Lee, because they believe the administration’s performance would not be helpful to them in 2012.

The DP and other opposition parties are also going through a contentious realignment trial. They all know that either they should be regrouped into a single opposition party or at least produce unified single candidates to win in next year’s big elections. The DP also knows if it supports FTA ratification, it would lose a rare opportunity to consolidate the other progressive parties and civil groups.

Ironically, several opposition members who had supported the FTA in 2007 now oppose it. President Obama opposed it during his presidential campaign, calling it ``badly flawed” but last month he pushed for its ratification. The truth is while economic projections are debatable, political perception is real. It is all political. What’s your take?

The writer is a visiting research professor at Korea University and a visiting professor at the University of North Korean Studies. He is also an adjunct professor at Johns Hopkins University School of Advanced International Studies and can be reached at tong.kim8@yahoo.com.