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What is FTA?

F-killer, Nicolas


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Hello, this is Nicolas Rousseau from FTA Killer News.

In our last bulletin, we have mentioned that we did not trust the Korean government as it announced that second round of negotiations FTA with USA had suspended because of a complete disaggrement regarding Korea’s supposed intention to establish and maintain a subsidized drug price policy. The Korean gov claimed it as a proof that it would not compromise on its citizens’ health.

Well, according to Yonhap news agency this week, Washinton and Seoul have completed negotiations concerning drugs!
The goverment's announcement of the suspension in the last round of nego is a deception.

FTA Killer News is taking a close look at Korea-US FTA, because it seems that we are facing a liar, the government.

Make it widely know why we should stop the Korea-US FTA, how disastrous it would be to our common future.


Take a close look!
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We have changed our format. In addition to providing you an update of developments of the social movements in Korea as they oppose neo-liiberalism and the FTA agenda, we will present you each week our analysis and opinions on an aspect of this problem. We start this week with a historical and general overview of FTAs.

That is because, more than anyone else, it is ourselves who should know how our lives are decided.

For the purpose of our discussion, we will define FTA as an agreement between some countries that aims at increasing trade between them and making it easier by removing policies that discriminates between domestic and foreign products, such as importation tariffs. Trade could also be “promoted” by eliminating the differences in regulation between the countries. However, this progressive elimination of regulation differences has been sometimes (could we say “often”?) done by an elimination of regulation itself, a process and ideology called neo-liberalism, which promotes the power of the market over all other social institutions. This process has been developing historically, its earlier form not necessarily comparable with more recent ones. That is what we will present here.

But before, to illustrate, let’s mention recent examples of FTAs: in the 90s, the US, Canada and Mexico (through what is called NAFTA), or the countries of the EU. Even more recently, the USA has been very active in concluding FTAs (Chili, Jordan, Israel). By the way, Korea also has a FTA with Chili.

Looking back in history…
After the WW2, the Allied Powers launched GATT system (general agreement on tariffs and trade).

Its stated goals were to overcome protectionism, which was criticised as a cause of war, to increase interdependence and to use the benefits of trade for development, in particular the reconstruction of Europe.

However, at that time, agreements between only some member countries of GATT (such as we see these years with new FTAs) were only allowed as an exception. In other words, GATT system is a multilateral one (all, or at least many, countries negotiating a common system), whereas recent FTAs are bilateral (a negotiation concerning only some countries).

Why didn’t the original GATT system approve bilateral FTAs?

Let's take an example. If countries A and B conclude FTA, it means that, in country A, the products from country B can get a advantage when compared with products from country C or D. It creates a discrimination against country C, or D’s products, and thus a division in the system made of countries A, B, C, D.

It is conceivable that in a system where the rules are equal for all countries, a hegemonic country will get the upper hand on weaker countries. In that way, under the old GATT system, bilateral agreements could be said to have been a sort of counterbalance provision against the hegemony of US-led free trade.
The United States were then not active in making bilateral FTAs. However, for some reason, the USA have recently, begin to be very active in contracting FTAs.

Before examining more recent trends, let’s just stop a moment to think about the affirmation often heard in Korean corporate media like Chosen, Donga, Joongang :
"If we don't contract FTA agreement, it means we are excluding ourselves from the world."

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In 1994, the World Trade Organization (WTO) was established, based on a revised GATT. The way GATT has been revised, and the kind of FTAs that have been proposed since then, is quite significant. Under the WTO system and the GATS (General….) it established, trade is not limited to goods in narrow meaning of physical objects, but now include services, basically all economic activities. However, GATS included positive list of services. New FTAs like NAFTA have negative lists: all economic activities are subjected to free-trade unless specifically mentioned.

FTAs increasingly touches on sensitive aspects of societies: investment, intellectual properties rights, culture, agricultural products, and all fields which used to be part of public sector, such as medical systems, even water and electricity, become or can possibly become trade objects and thus be possessed by private interests, and the logic of the capital. This is often done despite great opposition in some major sectors of society (like the peasants, the industrial workers, etc.).

In contrast the former liberal GATT system, limited to goods, this recent trade system which makes globally tradable every aspect of our lives connected by capital, which becomes tradable in an increasingly fast way due to communication technology, is called "neo-liberal globalization". As capital can thus be globally traded, so our lives become vulnerable to global capital forces.

Koreans have experienced the impact of stock market crisis, susceptible to price manipulation, affecting their whole country. They have witnessed the exorbitant plot of the Lonestar scandal: a corrupted official falsify some documents to allow the sell of the government’s share in a domestic bank at an undervalued price. The USA Lonestar corporation immediately buys, and re-sell the bank in Korea, making billions of profits. The scandal discovered, the Korean government tries to recuperate some money by taxing specially Lonestar’s profit. Within a FTA like is expected between K n USA, such a special taxation would be impossible, called discriminatory. And such sale of public assets would be much more likely.

There is also the probability of the natural environment being more easily exploited by the capital following a short term logic.

In the NAFTA (North Am) case, we have seem corporations like Metalclad successfully suing the government that passed a new environmental law after it discovering that this corporation’s activities were so polluting that a whole village got cancer. Through such FTAs, foreign investors gain the right to intend court case against governments, in a court established through the FTA. How are such courts established? Is there a democratic control? And what will be their fundamental rules: public good or investors’ rights? From experience, we fear it might be the former.

When all aspects of our lives become subject to trade and venture capital, its is our lives themselves that become trade objects that can be ventured.

That's why FTA is not a simple economic agreement,

If investor rights are to be over public good, final decisions to be taken in trade courts, if there is nothing outside the reach of trade, then there is no such thing as a good and advantageous FTA.
But, don't forget 'No to FTA' doesn't mean 'No to trades'. We are just against the trade which destructs life.

As an alternative to consider, there might be the kind of agreement for trade and cooperation that Venezuela, Bolivia, Cuba made. Recently, people in Bolivia stop the process towards a FTA with USA. Instead, Cuba, where there is an advanced universal free medical system, proposed to aid in education and medical sectors, and Venezuela decided to purchase agricultural products from Bolivia, aiding in technology Bolivia. And Bolivia, proposed to offer hydrocarbon to these countries, and to cooperate in developing natural drugs.

It seems an agreement of countries in solidarity for their people's lives. Be curious.

Solidarity economics is also expressed in fair trade schemes.

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Trade and investment should create benefit all the people's, not just make profits for the big corporations.

Human rights to enjoy basic services such as water, electricity, and medical care should gain the upper hand on the multi-national corporations' rights.

However, it seems the FTA sacrifices all these goods for the sake of the multinational companies.

Look who is getting richer and who is getting poorer these days.

Whether to contract FTA or not is the matter of choosing our lives.

'No to FTA' is not just an objection, rather dreaming and seeking alternative lives.

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Be with the friends who are dreaming a different life!

In Korea, we hold a candlelight vigil every Thursday against the US military base in Daechuri, Pyountaek, Kyunngy Province.
And we have cultural event every Tuesday night opposing Korea-US FTA.

We really hope more and more candlelight would be lit on. Thank you.