Rival parties differ on Kaesong in Korea-U.S. FTA

Kim Hyun

South Korea’s major opposition Grand National Party showed flexibility Wednesday in dealing with the United States over an inter-Korean industrial park in North Korea as negotiations for a free trade agreement (FTA) go down to the wire.

The Kaesong industrial complex is one of the sensitive issues dividing Seoul and Washington in their final negotiations, which end Friday. Seoul wants to have goods produced in the joint industrial complex treated as South Korean-made products, but Washington is against it.

The pro-government Uri Party has been prioritizing the country of origin issue in the talks, while its conservative rival, the Grand National Party (GNP) says the dispute over the Kaesong project “is not a big problem.”

The made-in-Kaesong label will make its way abroad when North Korea earns its international credit, and should not be treated as crucially as the issues of rice or beef in the negotiations, the GNP said.

“When inter-Korean relations get on a normal track, it will naturally become much easier (for the South) to operate the Kaesong industrial complex,” Rep. Yun Kun-young, the leader of the party’s special committee on the free trade talks, told reporters.

In a tougher stance, the pro-government Uri Party has put the inter-Korean project as the No. 1 item on its must-have list. In a letter to the main U.S. representative in the talks, Susan Schwab, on Tuesday, the liberal party asked Washington to accept the Kaesong complex in the deal, along with other key demands, such as the exclusion of rice.

“We stress that ratification of the Korea-U.S. FTA in the National Assembly will be determined by the manner that the above demands are integrated into the agreement,” the party said in the letter.

The Kaesong complex, just a few kilometers north of the inter-Korean border, is one of two flagship projects the South operates in the spirit of reconciliation with the North following their historic summit in 2000. Over 11,000 North Korean workers are employed by dozens of South Korean companies producing garments, utensils and other labor-intensive goods. Another reconciliation project is the operation of tours to the North’s scenic Mount Geumgang.

South Korean companies operating in Kaesong say the inclusion of the goods in the FTA is crucial, as this will open the doors for their exports to the world’s largest market and will also affect future trade deals with other countries.

The Assembly is expected to vote on ratifying the deal in August or September if it is signed as scheduled this week. Currently, a majority of lawmakers support the proposed deal.

Sources say the South Korean government has agreed with the U.S. to include the Kaesong complex in a “built-in agenda” in the deal, allowing both sides to hold further negotiations on the issue after reaching a deal.

The issues that the two biggest parties agree are not open to negotiation in the FTA deal are the exclusion of rice, the immediate and complete lifting of tariffs on South Korea’s key exports, such as cars, and the assurance of customers’ rights in medicine and sanitary areas.

Aside from the main parties, however, dissenters and members of minor parties are protesting the FTA. A group of liberal lawmakers, including some presidential hopefuls, have gone on a hunger strike against the deal.

“I cannot possibly sit by idly watching the government unilaterally push for the negotiations and ignore the national interest,” said Rep. Kim Geun-tae, a former health minister and a presidential contender from the pro-government Uri Party, launching his hunger strike at the parliament on Tuesday.

Moon Sung-hyun, chairman of the progressive Democratic Labor Party, continued a hunger strike Wednesday in front of the presidential office that has entered its 21st day.


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