Yehaaa! Begin the Third Round Round-up

by Dram_man on September 8, 2006

in ROK-US Issues, South Korea, South Korean Politics

The third round of the US ROK FTA talks are now underway, and with it a flood of news about what the Koreans are doing to “defend” Korea against the Americans in a agreement they “must” make that will cause Korea “pain and toil”. And the funny thing is this the language used by the Pro-FTA forces! Further more expect the anti-FTA forces to come out of the woodwork as the US makes further demands this round. More importantly the US’s head trade rep touches the third rail of Korean politics!

Speaking of pro and anti forces, something must said in passing about the protests in Seattle during the talks. An account from the Hani:

“I don’t understand why our government pushes ahead with the free trade talks with the U.S., because it would be no help for our national interest,” Kang Ki-gab, a South Korean opposition lawmaker, said at the rally.

Wearing South Korea’s traditional cotton robe and slippers, the farmer-turned lawmaker from the labor-friendly Democratic Labor Party claimed the proposed free trade deal would only help big businesses…

“America’s workers have too much experience with failed agreements like NAFTA,” said Thea Lee, a policy director of the American Federation of Labor and Congress of Industrial Organizations…”The promises are always the same: more jobs, more investment, more economic growth. But the reality is always the same: jobs lost and greater inequality,” she said.

Aehwa Kim, an official with the Korean Alliance Against the Korea-U.S. FTA, which organized the Seattle rally, said, “American workers will be just affected as well as Korean by low-paying jobs or unemployment, and the loss of benefits.”

That must have been some protest. One person with a sign that says “FTA Takes Korean Jobs” and the other “FTA Takes US Jobs”. One has to wonder where all those jobs went. Perhaps this what Ross Perot meant by the “giant sucking sound” of jobs leaving.

Meanwhile back in Korea members of the Assembly have protested in what could be described in new fashionable way in Seoul, claiming the whole FTA process is unconstitutional:

In Seoul yesterday, 23 lawmakers, including 13 from the Uri Party, filed a lawsuit at the Constitutional Court contending that the administration had violated the National Assembly’s right to ratify international treaties guaranteed by the Constitution — even though no treaty has been agreed to or signed.

The lawmakers complained that the administration was unilaterally and aggressively pushing the free trade deal without sharing information with the National Assembly or seeking its assent.

So in other words the lawmakers are saying because nobody is talking to them, their feelings are hurt, and that is unconstitutional somehow. I know it will not happen, but I hope the Constitutional Court throws the book at these guys. Any book, but preferably something big and heavy.

As expected, Korea is commenting over and over again on how rice will not be on the metaphorical table. This is part of a regime of 284 goods that they want to exclude from the treaty. As you can also expect these 248 goods happen to be exactly of the caliber that the US is eager to export, rice, beans, beef, pork, chicken, peppers, onions, garlic, fruit, etc. This impasse will likely either stall/end the talks, or if included in the pact will make it exceedingly difficult for the US senate to ratify the FTA (IMHO anyway).

Meanwhile, of the agricultural goods Korea is willing to lift the tariff on, Korea wants the tariffs lifted in 15 years not the US request of 10. All this looks somewhat silly given the Korean side also demands the US the speed up its lifting of textile tariffs to five years from the US proposed (reciprocal) proposal of 10 years.

The stalemates that hindered the first rounds, cars and drugs, are expected to continue. However, there may be a compromise in the offing in regards to drug pricing. The US recently at a side meeting in Singapore agreed to Korea’s positive list system, as long as additional steps are taken so as US drug companies are not discriminated against

(Personal note, frankly I think the US has given up the drug issue. The US proposals are laughable in that they require the cooperation of sectors of the Korean government who are not really use to cooperating with foreigners. I think it’s all a face saving measure by the US)

Remember the “Singapore plus” statement in the last round of talks? This was the Korean offer that said we will restrict 100 sectors plus a few more, same as the Korea Singapore FTA. What was outrageous about this was this was basically most of the things the US trades, services, agriculture, entertainment, etc. The issue of these services, ex. Agriculture, is finally boiling over. We start with the Dong-A:

Reports have it that Korea said it will exclude about 100 services, including electricity, postal service, legal service, accounting and medical service from opening up. Earlier, the U.S. said it has no interest in the opening up of the educational market, but U.S. chief negotiator Wendy Cutler said at the second round, “We are interested in access to Korea’s Internet education service market.”

Some of these are understandable. However it should be said that the Korean media’s ambiguity can lead to some drastic misunderstandings. For example take “postal service”, this is not get rid of the Korean Postal Service, nor allowing the US Postal Service to set up shop in Korea. It is about the domestic delivery of packages in Korea. Again from the Dong-A:

With regard to home-delivery service, whether U.S. companies such as FedEx could advance into Korea’s home-delivery service market, especially for small-sized items, is likely to be a hot issue.

This is actually a bigger issue than it may seem. One of the largest complaints about doing business in Korea, and not just by foreigners, is the cost of shipping and logistics in country. In my opinion, allowing foreign competition and with it certain amount of consolidation for efficiency sake will drastically alter the prices of most goods in Korea.

Among the other things the US wants to talk about is the media restrictions in Korea (from the Chosun):

When it comes to broadcasting, the government thinks Washington will not go as far as to demand privatization of state-run network KBS, allowing U.S. investors to buy shares in it, but the details remain to be seen…The U.S. reportedly wants Korean national TV networks to scrap or reduce a quota obliging them to fill 80 percent of their broadcasts with domestic content, and the government to lift regulations preventing cable TV channels from dubbing foreign broadcasts in Korean.

Wow, imagine the furor that will come from KBS after this. MBC may have done its chop piece on NAFTA. I expect the rest of the Korean media to pile on as more details of this comes out. All the major broadcasters have invested much money on TV production here, expect them to fight to protect that investment.

Another US requests you can read through the links in this post are change in the ownership rules of communication firms and openings of the Legal, Education, and Medical markets.

The biggest news though is Wendy Cutler, the head US Trade Rep, makes an admirable effort but ends up touching the third rail of Korean politics, the cheabols! From the Dong-A:

During the third round of FTA negotiations between Korea and the U.S. that started on September 6, local time, the U.S. required that trade related laws including fair trade laws should be strictly applied to the Korean companies including large conglomerates (known as Chae-bol) and this be clearly stated in an FTA agreement.

How about that for Cutler doing what I think would be diplomatic equivalent to nailing somebody’s balls to the wall. In other words Cutler is asking Korea to agree in writing to something everyone knows, the chaebols play by a different rules than everyone else.

Needless to say this does not sit will with Korean government (from the Korea Times):

In response, chief Korean negotiator Kim said, “The U.S. view toward chaebol is wrong,” citing the rules of investment ceiling on funding to subsidiaries.
Officials at the Ministry of Foreign Affairs and Trade also left no room for negotiation over the U.S. demand in consultation with the Fair Trade Commission (FTC), Korea’s anti-trust regulator.
“Their demand was worth no consideration,” a senior government official said on condition of anonymity.
“We are applying the competition law rigorously to all companies. We had ignored the demand involving a crackdown on chaebol.”

And that was just the government response mind you. While a FKI statement was somewhat restrained, one can only wonder what the reaction was in the boardrooms in Korea. In case you are wondering the whole position of the FKI and the government is “Some regulations are being strictly applied, you expect ALL the rules to be applied?”. As head Korean negotiator Kim Jong-hoon notes:

Korea’s Chief Negotiator Kim Jong-hoon responded to this issue by saying, “With regard to the regulation on large conglomerates, the U.S. perspective is clearly wrong. Large conglomerates in Korea are currently subject to reverse discrimination, in terms of Korea’s fair trade law and a law that puts limits on the total amount of corporate financing.

What is really puzzling about all this is the language in the FTA is simply something like “Both parties agree to apply competition laws equally among US and Korean corporations”. All they would be doing is agreeing to an existing fact (a fact on paper that is). What would be so wrong with both companies confirming their respect for the rule of law? I think we all know the answer to that question in relation to the chaebols.

Actually I see Cutler working here. Time to ask for things that Korea would really be against to get concessions elsewhere. Or so I hope.

Finally as part of my mission to point out things that can sell the FTA I would like to point out to this in the Chosun:

The prices of major foods including beef, pork, milk and potatoes in Korea are the fifth highest among 34 leading economies. The country has become one of the world’s most expensive nations, with consumer prices soaring about 20 percent since 2000.

A comparative study on consumer price growth in 30 OECD member countries from 2000 to the first six months of 2006 showed Korea experiencing a growth rate of 20.3 percent on average, the sixth highest after Turkey, Hungary, Mexico and Spain…When Korean consumer prices are set as the standard of 100, U.S. prices stood at 180 in 2000. But the figure dropped to 148 in 2002, 116 in 2005 and 110 in June 2006. In other words, U.S. consumer prices were 80 percent higher than in Korea in 2000 but only 10 percent higher this June. British and Swiss consumer prices were twice as high as Korea with 180 and 209 in 2000 but only at 126 and 159 June this year. In Japan, consumer prices were 1.38 times as expensive as in Korea in June, down from 2.64 times.

Hmm…what can Korea do to lower food prices? Anybody?

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kotaji 거타지 :: Back in Seattle :: September :: 2006
September 10, 2006 at 12:48 am

{ 38 comments… read them below or add one }

1 seouldout September 8, 2006 at 8:59 pm

Korea will do nothing to lower food prices until the domestic consumers demand so. Due to the scare tactics used to cast doubt about the safety of imported food and the sympathy most, if not all, Koreans have for farmers and fishermen, I don’t see consumers voicing complaints anytime soon. So we all get to pay 2500 won for one large peach. And experience the sticker shock of buying one potato in February…gadzooks.

2 R. Elgin September 8, 2006 at 9:01 pm

Dram, I really enjoyed your distillation of all that news:

So in other words the lawmakers are saying because nobody is talking to them, their feelings are hurt, and that is unconstitutional somehow. I know it will not happen, but I hope the Constitutional Court throws the book at these guys. Any book, but preferably something big and heavy.

Yes, indeed. Let me throw something at them as well, repeatedly.

Regarding broadcasting and its content, I would simply hope never, ever to see episodes of “Jackass” dubbed into Korean.

3 Brendon Carr September 8, 2006 at 9:14 pm

With respect to broadcasting, I surely hope — for the sake of English education here — that dubbing foreign content into Korean remains a restricted practice. One of the key problems with Koreans’ speaking and understanding spoken English is that very few Koreans, least of all not the kids who “learn” English with the aid of cribbed pronunciation guides written in hangul, know what the language actually sounds like. But the constant broadcasting of American content on the CSI Channel OCN means that for the first time, Koreans nationwide have the opportunity to hear English used in a natural context. This is going to pay dividends in the future — anyone ever notice how the Dutch, Norwegians, and Danes speak better English than the Germans? Germany’s market is large enough to make it economically feasible to dub television programs into German, while in smaller European markets things are simply subtitled.

4 MorgolKing September 8, 2006 at 9:24 pm

What is the purpose of the ban on dubbing foreign tv shows in korean??

5 slim September 8, 2006 at 9:39 pm

Isn’t there a line in the ROK constitution that says “South Korea” and “free trade” can NEVER be mentioned in the same sentence?

6 Brendon Carr September 8, 2006 at 9:39 pm

What is the purpose of the ban on dubbing foreign tv shows in korean??

To screw the foreigner, of course! (Screwing the ordinary Korean citizen is merely a happy by-product.)

There’s no ban on dubbing foreign TV programs into Korean. Remington Steele is one of my favorites among the dubbed programs. There does exist a ban on cable channels dubbing their programs into Korean (which is why the cable channels are more accessible to us foreigners); the share ownership restrictions on cable channels allow foreign shareholders to take a minority stake of up to 49% of the equity (in cable, satellite, and other delivery means for television), whereas they can own no shares in terrestrial broadcasters. To make share ownership in Korean non-broadcast channels less attractive, while at the same time being able to pretend to have made a significant liberalization, the “dubbing ban” was adopted — so that the imported content on foreign-owned Korean cable television would be less accessible and therefore less popular.

You can buy shares in Korean cable channels, Mr. Foreigner, but we will place restrictions on you designed to help you fail.

Never let it be said that Koreans are not lateral thinkers. Expect more of this B.S. if the “Free Trade Agreement” bamboozle is successful. Once it’s the law of the land in the United States, Korea will be able to take advantage of the concessions gained by enforcement in US courts if necessary. Meanwhile Korea doesn’t have to worry much about strict application of Korean law by state apparatuses here, if “national interest” may be implied or inferred; also, the non-tariff trade barriers like the dubbing ban will assist in the charade. (This is why, incidentally, Wendy Cutler is asking for strict application of the Monopoly Regulation and Fair Trade Act and other laws to Korean conglomerates, and why the Korean government is howling about how unfair her “demand” is.)

To get a real, reciprocal FTA with Korea, the United States should first adopt a “Jack Ryan Fair Trade Policy” mirroring Korea’s barriers to US goods and services (this was originally proposed in respect of Japan, but as Korea faithfully apes any Japanese policy it is applicable here too). Then, after having had a taste of their own medicine, and not liking it, the Koreans may be ready to discuss genuine fair trade.

If this sounds conflicted in view of my earlier comment, it is. As a lawyer, I abhor the non-tariff trade barriers like the dubbing ban. Yet as a businessman, I like the (unintended, no doubt) benefit of improved language skill which may stem from watching David Caruso posture and preen 10 hours a week on OCN. Plus, as a television viewer I get to enjoy the fine films of master auteur Zalman King every night in their original language, my native English.

7 snow September 8, 2006 at 9:58 pm

““America’s workers have too much experience with failed agreements like NAFTA,” said Thea Lee, a policy director of the American Federation of Labor and Congress of Industrial Organizations…”The promises are always the same: more jobs, more investment, more economic growth. But the reality is always the same: jobs lost and greater inequality,” she said.”

Trust someone who works for a labor organization to get it all wrong (or deliberately hand out plates of bs)on free trade. Canada’s unemployment rate is lower than its been in a long time and its obvious that the benefits of free trade have outweighed the disadvantages. Canada has definitely done better since signing the FTA (not sure the same could be said about Mexico, but the problems their stem from non-free trade issues).

8 snow September 8, 2006 at 10:00 pm

“To get a real, reciprocal FTA with Korea, the United States should first adopt a “Jack Ryan Fair Trade Policy” mirroring Korea’s barriers to US goods and services. Then, after having had a taste of their own medicine, and not liking it, the Koreans may be ready to discuss genuine fair trade.”

Great idea, Brendon.

9 cm September 8, 2006 at 10:35 pm

Hmm…what can Korea do to lower food prices? Anybody?

Ho hum..hmmm.. what could that be? hmmmm…. not eat?

10 Mizar5 September 8, 2006 at 10:52 pm

Brendon is on the money here. The US has a history of trade agreements that grant concessions contrary to its own interests. This hypothetical FTA (I say so because it will NOT come to pass) is no different. The benefits would acrue in S.K.\’s favor largely to the detriment of the US. The S.K.consumer would benefit tremendously from a reduction in artifically inflated prices of nearly all domestic goods which are easily double the prices US consumers pay. The Korean business environment would become more competitve. While certain sectors would be hurt, they should be since they are sustained up by political entitlement rather than market forces.

Of course, certain U.S. sectors (financial services) are pushing for an agreement. But whie they might benefit, the balance of trade would continue to favor S.K. greatly.

Final analysis: FTA would be a windfall for S.K. (though not for the powers-that-be) and mostly negative for the US. But distorted S.K. nationalism (traditional isolationism) will make it unpallatable to the populist Korean government; U.S. Democrats will oppose it; and the time limit for negotiation will simply run out. Therefore, the FTA is doomed.

11 Mizar5 September 8, 2006 at 11:10 pm

cm:

Hmm…what can Korea do to lower food prices? Anybody?

Ho hum..hmmm.. what could that be? hmmmm…. not eat?

For anyone who is not aware, that already is the case. Have you seen the undernourished, underfed skinny people walking around? In fact, good (nutritious) food is the main area Koreans skimp to fuel their spendthift consumption habits.

Not that there isn’t an abundance of healthful, nutritious food – it’s just that Koreans don’t often eat it.

The typical Korean meal is an unhealthful carbohydrate-based dish like rice or noodles. Typically, meat and vegetables are rarely offered in the affordable restaraunt meals that constitute lunch and dinner. As for breakfast, maybe kimpop on the run or bread. Take kal kuksu often mixed with sujaebi(knife-cut noodles in thin broth, mixed with pieces of dough) – that’s a virtual prescription for diabetes type 2, which is reaching new heights.

So much for the hollow “well-being” trend.

12 Brendon Carr September 8, 2006 at 11:20 pm

Really? Diabetes is a major problem here in Korea? I would not have guessed that. Stomach cancer, yes, but diabetes — that seems like an American’s fat-ass problem. It would be very surprising if Koreans were experiencing an increase in diabetes. My most recent franchise matters were ice cream and fried foods — I feel a little bit guilty.

13 Dram_man September 9, 2006 at 1:10 am

Mea Culpa all, the links did not work in the orginal. I think they are in order now.

14 Dram_man September 9, 2006 at 1:13 am

Oh since you all have latched on to this a bit, the following is from the recent US Trade Rep report on Korea:

Foreign Content Quota for Broadcast Television

Korea restricts foreign activities in broadcast television by limiting the percentage of monthly
broadcasting time (not to exceed 20 percent) that may be devoted to foreign programs. Annual
quotas also limit broadcasts of foreign programming to a maximum of 75 percent for motion
pictures, 55 percent for animation, and 40 percent for popular music. Foreign investment is not
permitted for broadcast television operations.

Foreign Content Quota for Cable Television

Korea restricts foreign participation in the cable television sector by limiting per channel airtime
for most foreign programming to 50 percent. Annual quotas limit foreign broadcast motion
pictures to 70 percent and 60 percent for foreign animation. The Korean government also
restricts foreign ownership of cable television-related system operators, network operators, and
program providers to 49 percent. For satellite broadcasts, foreign participation is limited to 33
percent.

Satellite Re-Transmission

The Integrated Broadcast Law mandates that Korean firms that wish to re-broadcast satellite
transmissions of foreign programmers must have a contract with the foreign program provider in
order to obtain approval from the Korean Broadcasting Commission (KBC). Foreign
re-transmission channels are limited to 20 percent of the total number of operating channels.
This artificial restriction limits the amount of international broadcasting which could otherwise
be made available to Korean consumers and limits foreign investment in the broadcasting sector.

Restrictions on Voice-overs and Local Advertisements

Presently, the Korean Broadcasting Commission’s guidelines for implementation of the
Broadcasting Act contain restrictions on voice-overs (dubbing) and local advertising for foreign
re-transmission channels. Allowing Korean language voice-overs would make broadcasts more
accessible to Korean consumers (especially for breaking news and children’s cartoons); it would
also benefit the Korean economy by creating more studio-production jobs and attracting foreign
investment. The prohibition on local advertising for foreign re-transmission channels restricts
the long-term viability of these channels in the Korean market

15 Haisan September 9, 2006 at 2:55 am

Hasn’t the US side brought up KOBACO? That is the single-worst bureaucracy in the entire entertainment industry, totally keeping the entire TV biz bass-ackward. Not to mention that it was started by the old military governments to help control the media. Get rid of KOBACO and you would have so much more money in the industry, it really would help everyone.

In a close second for terrible government body, I would nominate the Korea Broadcasting Commission. They are a bunch of arrogant idiots who care not one bit about the Korean consumers. Not allowing local advertising on retransmissions is pretty dumb (I believe that is a KBC policy).

16 Hyalucent September 9, 2006 at 3:29 am

… Canada’s unemployment rate is lower than its been in a long time and its obvious that the benefits of free trade have outweighed the disadvantages…

A couple of points: Canada’s unemployment rate is a useless statistic since it only counts “jobseekers”, i.e. people collecting unemployment insurance (now called “employment insurance”). If you don’t qualify for EI, you aren’t counted among the jobless statistics by the government as you are deemed to be no longer searching for work. Much of the drop in unemployment level can thus be attributed to the tightening of EI restrictions. Fewer people qualify under current rules, ergo the unemployment rate is calculated as dropping.

…and as for the benefits of free trade under NAFTA, they largely only work when both sides stick to the agreement. Court challenges are apparently useless since a steady stream of favourable judgements for Canada would have solved the softwood lumber dispute ages ago, had the US respected their decisions.

Throw in a few other loopy loopholes and it’s a mess. There was a case out west of an American fuel company that challenged environmental laws governing its product as being unfair under NAFTA, since their US product didn’t meet the established Canadian standards and was prevented from being sold.

It may be beneficial overall. I won’t debate that, but I just wanted to throw in a couple of points of concern here.

17 LeoStrauss September 9, 2006 at 3:52 am

“The prices of major foods including beef, pork, milk and potatoes in Korea are the fifth highest among 34 leading economies. The country has become one of the world’s most expensive nations, with consumer prices soaring about 20 percent since 2000.”

Government farm subsidies and taxes will have to be taken into account to make some reasonable conclusions on this.

I would rather pay 2500원 for a large peach WHEN I buy it than have 100원 peaches around that became so cheap because of the tax I pay.

18 bluejives September 9, 2006 at 4:23 am

Remington Steele is one of my favorites among the dubbed programs.

Eh? The last time I saw that show, the Apple Macintosh had just come out. How old are you really?

19 bluejives September 9, 2006 at 4:34 am

To get a real, reciprocal FTA with Korea, the United States should first adopt a “Jack Ryan Fair Trade Policy”

The problem with that is our current US president looks nothing like Harrison Ford, and neither does Wendy Cutler, for that matter.

20 Zonath September 9, 2006 at 4:47 am

Government farm subsidies and taxes will have to be taken into account to make some reasonable conclusions on this.

Correct me if I’m wrong, but doesn’t Korea subsidize the rice market by buying large amounts of rice in order to keep the price artificially high? So basically, the South Korean consumer gets screwed over on the price of rice twice — once in the taxes they pay, and then again when they actually buy the rice.

21 kimchipig September 9, 2006 at 6:07 am

I mean, really, an FTA between Korea and the USA? What are these people smoking? It will never happen. Koreans are conditioned to paying $3.00 for a tasteless tomato because it is a Korea tomato. It is not a dirty they have tried to screw us for 50000 years tamato, so they pay, no questions asked.

I was always flabbergasted what I paid for groceries in Korea, at least double what I pay here in Vancouver. That is partially made up for by the fact practically everything else (utilities excepted) costs at least 30% more.

22 LeoStrauss September 9, 2006 at 6:10 am

You could be right.
That is why I said that data are needed.
We could not just take what the newspapers say hook line and sinker.

As a start, let us take a look at united states farm subsidies:

from here:
http://www.ewg.org/farm/region.....mp;yr=2004

For the year 2004
Top programs in the united states (subsidies in USD)
1. corn $4,501,951,045
2. conservation reserve prog $1,816,629,500
3. cotton $1,649,366,720
4. wheat $1,215,411,553
5. soybean $913,345,172
6. rice $636,205,504
7. disaster payments $547,616,747
8. sorghum $313,220,331
9. environmental quality incentive prog $223,663,678
10 peanut $213,046,953

now if we could only find data for the Korean subsidies

then data for taxes in the united states and Korea

(I heard that income taxes in Korea are very low. According to what I heard, this is one of the reasons why teaching in Korea is attractive to americans)

23 Mizar5 September 9, 2006 at 9:07 am

Brendon: Really? Diabetes is a major problem here in Korea? I would not have guessed that. Stomach cancer, yes, but diabetes — that seems like an American’s fat-ass problem. It would be very surprising if Koreans were experiencing an increase in diabetes. My most recent franchise matters were ice cream and fried foods — I feel a little bit guilty.

http://times.hankooki.com/lpag.....311950.htm

excerpt: “One in seven South Koreans are expected to be diagnosed with diabetes in 2030…”

Who knows? Dramman will tell you that Korean statistics are always questionable. Of course, nothing is more questionable than the type of commentary that passes as “news reporting” in Korea. Take the final statement of the article:

“The cause of diabetes remains a mystery, while obesity and a lack of exercise are known to play roles.”

Wouldn’t a reporter worth his salt know about insulin resistence causing diabetes type 2?

24 Dram_man September 9, 2006 at 9:08 am

Snow & Hyalucent> At the risk of stumbling into a mind field, I want to point out a couple things. In my view in reading stories and even scholarly articles about the “impact of free trade” two problems always appear. First, and perhaps most obvious, is free trade is such a huge thing it is easy to get lost in details (eg one market, or statistic). Second is many “analysese” suffer from the “post hoc er go hoc” fallicy. Just because something came before (free trade agreement) that explains the current result (unemployment up/down).

A third problem in the political dialouge is the tendancy to point at one case (US/Canada, NAFTA, etc.) and assume it is applicable to every case. Let me explain this the following way.

In Dram man’s veiw has the FTA been good for Canada and the US? Personly I think its non-starter of a question. The pre-FTA realationship was already marked with realitivly low tariffs and fluidity between borders. So frankly I do not think the FTA much practicaly speaking, rather it was more a political statement that committed both parties to open markets betweent he two. As I recall, the US approved the whole thing with a shrug, while Canada had a very contentious debate not on the economic but politcal ramifications of the pact (whethe or not you loose your canidian-ness).

So to get back to the question, can you argue the effects of the US/Canadian trade agreement are applicable to others? Well you can do anything you want, but I will have to closely investigate any claims of a huge impact either way given the fact that economicaly speaking the impact of the FTA was rather minimal.

This brings me to why the US ROK FTA is so exciting to me. Up until now most FTA’s concerned agreements between countries that were already pretty open to each other, or rather substiatnal trade barriers were never erected in the first place (NAFTA, EU, etc.). In other words this has the potentinal to either prove or disprove the arguements about free trade due to the volume and complexity of the trade and the correspondingly complex trade barriers. (That is why despite calling them “dead as a doornail”, I still pay attention and blog. Its like a B grade action movie you know the plot, dialouge, and ending but its kinda fun to see it all play out before your eyes.)

However part of this problem looking at things is that “post hoc er go hoc”. For example one can really point to Chilie’s economic taking off in light FTA’s. However at the same time Chilie has taken great strides in stablity, democracy, and trasparency. So what did what?

Equaly on the Korean side, with the US leaving and the security siutation getting worse (at least in the headlines) and a newly minted FTA. An cause of an economic collapes maybe difficult to diagonse. Alterentively if the Economy flatlines (ie the down turn in one is counteracted by the upturn in the other), it will be even harder to make a case either way.

25 dogbertt September 9, 2006 at 10:08 am

There does exist a ban on cable channels dubbing their programs into Korean

I take it there is an exception for children’s programming.

26 Dram_man September 9, 2006 at 10:29 am

Haisan>Sorry I missed the comment. The USTR on the KOBACO:

Advertising
Korea is among the world’s top twelve largest advertising markets; however, the market remains
highly restricted. Because broadcast advertising time is still sold exclusively through the
state-sponsored Korea Broadcast Advertising Corporation (KOBACO), advertisers and their
agencies must work through KOBACO to advertise on broadcast television. Further, U.S. industry has noted its concerns with Korean restrictions on broadcast advertising of beverage
alcohol products containing 17 percent or greater alcohol by volume.

As for worst Gov’t office I am sorry but the KFDA has to take that prize.

27 michael September 9, 2006 at 10:48 am

With USFK downsizing/leaving and a possible collapse of the FTA talks it looks like a “perfect storm” is heading for the S. Korean economy. It will all be a very big “no confidence” vote for S.K. to lose its biggest benefactor and trade partner (and I doubt China trade will come close to filling the gap).

The chaebol are dinosaurs, they’ve made their (family) fortunes, and now they’re an impediment to entrepreneurship and a truly diverse economy. It’s expected that they’d try to derail the FTA. Unfortunately the next presumably conservative S.K. president will most likely not tackle the reforms that Roh bungled so badly.

28 Hyalucent September 9, 2006 at 12:00 pm

Dram_man: Very true. That’s why I don’t want to go on the record either way as saying it’s better or worse. It’s really so hard to tell here, at least from where I sit. Negative impacts make news while positive impacts get obscured in minor price point changes and small statistical blips. Who knows? Maybe free trade is also one of the reasons that Canadian auto factories seemed to take less of a hit than American ones in the recent lay offs over the last few months.

I’m also in agreement that the Korea US FTA will have far more noticeable consequences. That’s what make threads like this must-reads. :)

29 Brendon Carr September 9, 2006 at 3:00 pm

Michael, China is already Korea’s biggest trading partner, having supplanted the United States in that position in 2003.

30 montclaire September 9, 2006 at 5:55 pm

Asians and blacks are proven to be more vulnerable (if not necessarily more prone) to diabetes, no? Whenever you’re asked about your diabetes risk in the US they ask what ethnicity you are. They don’t need to get as fat in order to get it.

31 LeoStrauss September 10, 2006 at 5:04 am

From Internal Medicine
Vol. 135 No. 6, June 1, 1975

Major factors in the development of diabetes mellitus in 10,000 men

J. H. Medalie, C. M. Papier, U. Goldbourt and J. B. Herman

The average annual incidence of diabetes among 8,688 adult men followed up for five years was 8.0/1,000 with Asian, African and Israeli-born having higher rates than European-born. Multivariate analysis of the findings suggested the following: the most significant variables associated with the development of diabetes are overweight and peripheral vascular disease; the high incidence of diabetes in immigrants from Asia and Africa might be an example of Neel’s “thrifty genotype” or failure of adaptation to relatively rapid environmental changes; serum cholesterol level, blood pressure, uric acid level, and education were important also; and the probability of developing diabetes within five years rises from 17/1,000 (when the major variables are low or absent) to 450/1,000 (when they are high and present). This has important clinical implications.

In Korea, changing diet must be the culprit, not “kal kuksu often mixed with sujaebi” that the Koreans must have been eating for a long time.

It would be fun if there were data on american franchises in Korea through the years…

32 Mizar5 September 10, 2006 at 5:24 am

Leo, changing diets, for better or worse, are not to blame per se – and diets are better today than a few years back when nutritious foods were scarce. High carbohydrate diets with little exercise are the culprit. Korean junk foods include ramyeon, white rice, kal kuksu, kim pop, duk bokki, etc. etc. All high in carbohydrates and low in nutrition. Add to this heavy drinking and smoking.

Body composition is another significant problem. Koreans have relatively little muscle and the extra weight they pack on is fat.

33 baduk September 10, 2006 at 6:11 am

Brendon is right. Even if the FTA gets ratified in both countries, individual trials will determine if those regulations are carried out and Korean legal system is run on bribes.

Trials, for example, are determined by three judges. No jury system, here. Just three judges who passed bar exams and “educated” within legal training center. The head of the judicial branch is appointed by the president. Therefore, these judges basically supports the president. No separation of powers in Korea.

These judges do not adhere strictly by laws either. They are allowed to use “common” judgement and, as a result, the Oriental logic of emotional compensation doused by nationalism will prevail.

The US companies will not win in Korean court.

I like the FTA to go through. The real winners will be KoreanAmericans. I like to open up a store in Seoul selling Maruchan Noodles(10 cents in States) and Bumblebee Tuna (50 cents per can). I rake in $10,000 per month.

34 baduk September 10, 2006 at 6:16 am

I heard that in Japan Yakuza play an important role in blocking western goods. If a store owner displays some western products, Yakuza boys show up to beat up the store owner.

I think Korea may adopt this strategy. However, Koreans are less nationalistic and more progressive than the Japanese, and do not have strong national hoodlum organization. I don’t think that strategy will work in Korea.

35 Sonagi September 10, 2006 at 7:03 am

Wouldn’t a reporter worth his salt know about insulin resistence causing diabetes type 2?

Insulin resistance alone does not cause type-2 diabetes, as not everyone with IR develops the disease. Insulin resistance doesn’t just appear out of the blue. It usually arises in genetically susceptible people who are overweight and/or do not exercise. Full fat cells do not respond to insulin, so that is why diabetes is associated with obesity. Muscle cells drink in glucose without the aid of insulin and that is why sustained physical activity is arguably more important than weight. Insulin production is triggered by high glucose levels. A person who exercises regularly and has a muscular body will have less glucose floating around the bloodstream and thus less need for insulin than a sedintary person. Genes play a role in two ways: first, people with ‘thrifty genes’ conserve more calories as fat, and fat cells are by nature insulin-resistant; and second, churning out large amounts of insulin over time wears out beta cells in the pancreas. People’s bodies may vary in their ability to manufacture new beta cells to replace burned out ones, which may explain why a majority of overweight people do not become diabetic.

In Korea, changing diet must be the culprit, not “kal kuksu often mixed with sujaebi” that the Koreans must have been eating for a long time.

I believe that humble, healthy grains like millet and barley were the main staples in the Korean diet prior to the 20th century. A changing diet is the culprit: the refined white rice found at every meal is nutrient-deprived and because it is high in carbs and digested rapidly, it spikes glucose levels. The Korean/Chinese traditional custom of eating rice or noodles at the end of meal makes digestive sense: refined carbs are digested quickly and the partially digested fats and proteins in the stomach will slow down the absorbtion of the carbs once the chyme (digested stuff in the stomach) moves into the small intestine.

Type-2 diabetes runs rampant on my dad’s side of the family, and I don’t have the luxury of letting myself get overweight or out of shape. The best quote I’ve ever heard about the relationship between genes and disease is this: Genes load the gun and lifestyle pulls the trigger.”

36 Sonagi September 10, 2006 at 7:39 am

As a start, let us take a look at united states farm subsidies:

Right on, Leo!

While I support free trade, I share Korean concerns about imported food. I believe in buying locally produced food grown and raised through sustainable farming methods. Consumers should have a choice and need clear and accurate labeling in order to make choices. American factory farm meats, eggs, grains, and produce are of low nutritional quality. Cows, pigs, and chickens are fed an unhealthy, unnatural grain diet designed to fatten them very quickly; animals fed this fattening diet yield meat and eggs that are high in fat, especially saturated fat, and a high omega 6 to omega 3 essential fatty acid ratio. GMO corn and soybeans are bred to be resistant to the poisonous effects of heavy pesticides, but we human beings are not. GMO foods are more heavily sprayed and that is why foods made with GMO ingredients should be labeled clearly, something the US agricultural industry is fighting. Most US-grown fruit, with the exception of grapes, is contaminated with high pesticide residues even after washing and peeling.

I would be very interested to know how Korean farming methods compare to US factory farming methods.

37 LeoStrauss September 10, 2006 at 8:34 am

Sonagi

“I believe that humble, healthy grains like millet and barley were the main staples in the Korean diet prior to the 20th century. A changing diet is the culprit: the refined white rice found at every meal is nutrient-deprived and because it is high in carbs and digested rapidly, it spikes glucose levels.”

Type 2 diabetes is traced to increasing intake of REFINED CARBOHYDRATE. And aside from processed grains, corn syrup is one example of refined carbohydrate that is increasingly finding its way into the Korean diet (think Baskins and soda).

American Journal of Clinical Nutrition, Vol. 79, No. 5, 774-779, May 2004

Increased consumption of refined carbohydrates and the epidemic of type 2 diabetes in the United States: an ecologic assessment

Background: Type 2 diabetes is an epidemic that is affecting an ever-increasing proportion of the US population. Although consumption of refined carbohydrates has increased and is thought to be related to the increased risk of type 2 diabetes, the ecologic effect of changes in the quality of carbohydrates in the food supply on the risk of type 2 diabetes remains to be quantified.

Objective: The objective was to examine the correlation between consumption of refined carbohydrates and the prevalence of type 2 diabetes in the United States.

Methods: In this ecologic correlation study, the per capita nutrient consumption in the United States between 1909 and 1997 obtained from the US Department of Agriculture was compared with the prevalence of type 2 diabetes obtained from the Centers for Disease Control and Prevention.

Conclusions: Increasing intakes of refined carbohydrate (corn syrup) concomitant with decreasing intakes of fiber paralleled the upward trend in the prevalence of type 2 diabetes observed in the United States during the 20th century.

Changes in diet is wreaking havoc not only in Korea but also in China.

BMJ 2006;333:362-363 (19 August), doi:10.1136/bmj.333.7564.362

Overweight and obesity in China

About one fifth of the one billion overweight or obese people in the world are Chinese. China was once considered to have one of the leanest populations,1 but it is fast catching up with the West in terms of the prevalence of overweight and obesity; disturbingly, this transition has occurred in a remarkably short time.

The explanations of China’s recent epidemic of overweight and obesity include changes to the traditional diet, reduced levels of physical activity, and increased sedentary lifestyles.

Energy intake from animal sources has increased from 8% in 1982 to 25% in 2002,3 and the average energy intake from dietary fat among urban Chinese increased from 25% to 35%,9 which is above the upper limit of 30% recommended by the WHO.

Some of these dietary changes must be traceable to some global fastfood companies, no?

38 Sonagi September 10, 2006 at 11:08 am

There is no disputing that heavily processed fast food and junk food are worse for the human body than refined white rice. Corn syrup as an ingredient in so many everyday food products from cereal to bread to spaghetti sauce is definitely a factor. From what I understand, the body processes high fructose corn syrup very differently from other ordinary sweeteners and that high fructose corn syrup is more harmful than table sugar. I did a little googling and found this excellent article explaining the health dangers of HFCS:

http://www.menstuff.org/issues.....ctose.html

Global fastfood companies indeed. Most of the junk food consumed in Korea and China were processed and sold by domestic food manufacturers like Cheil Jedang.

Rising obesity and related chronic illnesses like diabetes and heart disease are diseases of affluence. American food processors began refining and bleaching flour 100 years ago and canning salted meat in order to feed a growing urban population. The whole idea behind processed food is convenience and modern Asians seek convenience as much as Westerners do.

As much as I hate the US agricultural and food manufacturing oligopolies, I avoid blaming them. We choose what we put in our shopping carts, what we order in restaurants,and most importantly, what we feed our children. The key is to educate the public about food and to have clear, accurate labeling. The USDA has watered down the organic label under pressure from food producing giants, who want market share in a growing industry. My mom is starting a diet under the guidance of a registered dietician. She asked me about organic cage-free eggs she had seen in the store. I told her not to waste $3 since the minimum requirement for “cage-free” labeling is that chickens have access to fresh air for one hour a day, a requirement that can be met simply by propping open the door to the chicken coop. At the farmers’ market this morning, I paid $2 directly to the farmer for a dozen nutritious eggs laid by chickens that forage in the barnyard and snack on old vegetable scraps, not grain cocktails engineered to make them obese.

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