Editor's note:

Neoliberal-style free trade agreements and regional integration such as the WTO and FTAs, which disproportionately favor big capital and big conglomerates and harm the livelihoods of ordinary people, have already drawn criticism and resistance from grassroots people around the world. Yet the Taiwan government still uses the argument that "if the Cross-Strait Service Trade Agreement and other free trade agreements are not signed, Taiwan's international competitiveness will suffer" to keep cajoling the public into believing that the Cross-Strait Service Trade Agreement must be reviewed and brought into force as quickly as possible.

In his remarks at the international press conference on 3/23, Ma Ying-jeou went even further in ignoring the strong backlash among the Korean people against the FTA negotiations with the US and with China, deliberately claiming that South Korea, with the unanimous support of both ruling and opposition parties, had already signed free trade agreements with many countries and that Taiwan would be unable to compete with South Korea, in an attempt to mislead the people of Taiwan into supporting the swift passage of the Cross-Strait Service Trade Agreement.

The Taiwan Rural Front and the Alliance for Victims of Urban Renewal jointly believe that this claim is a despicable tactic by the government to fool the people of Taiwan, and that it also insults those Korean people who are fighting hard against free trade. So we each sent the press release from Ma Ying-jeou's international press conference to international anti-free-trade groups, asking them to provide letters of solidarity and concrete evidence of how people have been harmed by free trade agreements, in order to refute the Ma administration's false claims and to let both those who oppose and those who support the Cross-Strait Service Trade Agreement understand the truth about free trade.

The first wave consists of letters of solidarity from South Korea and Canada. At his 3/23 press conference, President Ma cited the South Korea-Canada FTA as a positive example of free trade. Let us see how friends from Canada and South Korea respond in their letters.

Letter of Solidarity from the Council of Canadians in Support of the Anti-Service Trade Movement

Translation: Xu Jing-min, Chen Si-ying, Chen Hong-ying, Xu Bo-ren

Hello everyone,

I am the National Chairperson of the Council of Canadians, a Canadian social movement group with 100,000 members, and I am also a long-time participant in the water justice movement and the author of several books on water and human rights.

We have lived with the "Investor-State Dispute Settlement" mechanism of the North American Free Trade Agreement for many years, and we have witnessed its inherently undemocratic nature. In many cases brought by Canada under NAFTA, our environment and human rights have always been the loser.

The "Investor-State Dispute Settlement" mechanism gives transnational corporations more rights than democratically elected governments, preventing governments from introducing new health, safety and environmental rules because they fear being sued for millions of Canadian dollars in compensation. Anything a government does to protect its workers, families and resources can be deemed a violation of the corporate right to profit, yet it is the corporations that get to play the game of fair competition.

Governments in Europe, Australia and Latin America are challenging the entire "Investor-State Dispute Settlement" mechanism, so all countries currently discussing trade agreements that include such corporate rights should think twice.

On behalf of our members and team, I express solidarity with Taiwan's student movement. We are on the right side of history. If we need governments to protect the people and this planet, now is the time! We must never surrender the rights of all citizens to democracy for the interests of big conglomerates.

In solidarity!

Maude Barlow
Council of Canadians http://www.canadians.org/

Letter of Solidarity from Dr. Kim Taein of South Korea in Support of the Anti-Taiwan Service Trade Movement:

Kim Taein / PhD in International Trade, Kangwon National University, South Korea
*The author has participated in expert consultation meetings for the China-Korea FTA negotiations

Translation: Xu Jing-min, Chen Si-ying, Chen Hong-ying, Xu Bo-ren

I am certain that after the Korea-China FTA takes effect, total economic output will grow. But I am also certain that these gains will go to large companies, not to small and medium-sized business owners and farmers. I am certain that for small and medium-sized businesses and farmers, output will decline.

Recently I attended an FTA expert meeting, and a Chinese expert present said to me privately: "We must stop the China-Korea FTA!" He said he had already analyzed the text of the Korea-China FTA and its impact on the South Korean economy over the next 20 years. He said that according to his analysis, large companies would indeed profit from it, but for small and medium-sized businesses and farmers (including fishermen and all those working in the agricultural sector), the consequences would be terrible, and it would also be unfavorable for South Korea as a whole. He said South Koreans would lose their jobs because big companies would move their headquarters and factories to China.

This Chinese expert concluded that 90 percent of South Korean small and medium-sized businesses would be destroyed by the Korea-China FTA, which would only widen South Korea's wealth gap. This also means that South Korea will become more dependent on China, and many ordinary South Koreans will lose their jobs. Jobs will go to China, not to South Korea.

A free trade agreement with China will inevitably sacrifice South Korean jobs and destroy small and medium-sized businesses and agriculture. It will make South Korea dependent on China and widen South Korea's wealth gap.

The impact of the Korea-US FTA and the Korea-EU FTA is different, because South Korea, the US and the EU are all OECD countries. In the Korea-China FTA, South Korea is at a disadvantage because China's strength lies in primary industries such as mining and agriculture. Therefore, the real threat of the Korea-China FTA lies in South Korea's primary industries, and the negative effects will be twice those of the Korea-US and Korea-EU FTAs.

"Free Trade Mini-Encyclopedia":

1.Investor-State Dispute Settlement
(Investor-State Dispute Settlement, abbreviated as ISDS):
The ISDS mechanism grants investors the right to initiate arbitration, allowing international investors to directly bring investment disputes to international arbitration with the host country government as the other party. It first appeared in the North American Free Trade Agreement (NAFTA). In short, it is a mechanism that gives foreign investors the right to directly sue and seek compensation from the host country when they believe that the host country's policies violate the free trade agreement and obstruct investment.

Those who support ISDS argue that giving investors the right to directly submit to arbitration strengthens the protection of investors' rights and interests, thereby preventing capital outflow, promoting investment and achieving economic growth. But after many years of actual implementation of ISDS, many problems have gradually surfaced. Among them, disputes between investors and states involve a balance between private interests and public interests, which should fall under the power of domestic courts as granted by the host country's constitution, yet it is replaced by international arbitration tribunals. Some tribunals can even issue injunctions prohibiting the enforcement of domestic judgments, which is considered to violate the spirit of the separation of constitutional powers in the host country.

The even more controversial aspect of ISDS is that it may infringe on the host country government's authority to make laws and regulations, along with the accompanying chilling effect. Because when a host country formulates social welfare and environmental policies, it may be taken to arbitration and sued for compensation by foreign investors on the grounds of infringing investment rights. The compensation amounts are often enormous, and to avoid litigation and compensation, the host country may abandon such policies, creating a chilling effect. Therefore, ISDS is considered to infringe on the democracy of the host country and to deprive the host country government of its authority, based on sovereignty, to regulate enterprises within its territory. Environmental policy is the most affected; of the cases brought against the Canadian government under NAFTA, one quarter were related to environmental policy.

Sources:

"Reflections on the Investor-State Dispute Settlement Mechanism," Li Yi-fang, Trade and Economic Law Newsletter, Issue 146, 2013/04/25.
http://www.tradelaw.nccu.edu.tw/success.htm
2.The Korea-China Free Trade Agreement
(The Korea-China Free Trade Agreement, abbreviated as China-Korea FTA):

In January 2012, the Lee Myung-bak government announced the launch of negotiations with China on the Korea-China FTA, and the first round of negotiations was to begin in May of the same year, after the South Korean government completed procedures such as domestic consultation and assessment reports. On March 21 of this year (2014), the two sides held the tenth round of consultations in Beijing, but due to China's disagreement with South Korea's request for tariff reductions on petrochemicals and steel, and South Korea's dissatisfaction with China's request to further open its domestic agricultural and livestock market, the consultations made no progress.

Civil society perspective:

Under the wave of globalization in the 1990s, South Korea accelerated the opening of its domestic market and successively signed free trade agreements with Chile, the United States, the European Union and others. Under successive waves of liberalization policies, the domestic industrial and agricultural populations were severely affected, and farmers' and workers' groups thus became one of the largest civil society forces of opposition. In addition to linking up with one another and mobilizing local farmers and unions to protest in Seoul (or at the negotiation venue), they also sought support from social movement groups abroad.

The Korean Peasant League (KPL) has repeatedly mentioned, at meetings related to La Via Campesina (an international peasant movement organization), the impact of the FTA contents between South Korea and other countries on domestic agricultural and fishery industries. Taking the Korea-US FTA, against which domestic protests lasted nearly 4 years, as an example, because of the reduction of import tariffs and trade barriers on US agricultural products, the domestic agricultural product market would lose 2 trillion US dollars in output value each year, severely impacting their livelihoods. However, they also mentioned that, by comparison, they were more worried about the signing of the Korea-China FTA. Because South Korea and China are neighboring regions, the characteristics and types of agricultural products are more similar, and by then farmers will lose competitiveness due to the dumping of cheap Chinese agricultural products. Therefore, for example, when the two sides held the second round of negotiations on Jeju Island in 2012, groups such as the Korean Peasant League and the Korean Women Peasant Association (KWPA) marched, demonstrated and protested outside the venue, and representatives of the Women Peasant Association even broke into the venue, unfurled banners and shouted slogans. Farmers' groups believe that during negotiations the government did not let the public fully understand the content of the agreement, its impact and the negotiation process, and that much of the information was not made public; as for the so-called benefits, they do not exist in disadvantaged sectors like agriculture, and the beneficiaries the government speaks of are not the agricultural population but the big conglomerates that, under free trade, control capital and various preferential tax rates.

Sources:

YonhapNews Agency. 2014. "Negotiations for S. Korea-China FTA close with little progress." March 21, in http://english.yonhapnews.co.kr/national/2014/03/21/8/0301000000AEN20140321001651320F.html

KOA. 2007. "The struggle against neoliberalism in South Korea: history and lessons" July, in http://www.bilaterals.org/?the-struggle-against-neoliberalism&lang=en

LVC. 2012. "South Korea, conclusions from Regional Strategy Meeting against FTAs." July 30, in http://viacampesina.org/en/index.php/actions-and-events-mainmenu-26/stop-free-trade-agreements-mainmenu-61/1283-south-korea-conclusions-from-regional-strategic-meeting-against-ftas

Original text of the Council of Canadians' letter of solidarity:

Hello,

I am the National Chairperson of the Council of Canadians, a large social moment in Canada supported by 100,000 Canadians. I am also deeply involved in the fight for water justice everywhere and the author of several books on the human right to water.

We have lived with the investor state provisions of the North American Free Trade Agreement for many years now and can attest to their undemocratic nature. Canada has been on the losing end of many NAFTA challenges that have negatively affected our environment and human rights.

Investor state deals give transnational corporations more rights than governments and the people who elected them. They prevent governments from introducing new health, safety and environmental rules out of fear of being sued for millions of dollars in compensation. Anything a government does in order to protect its workers, families and resources that is seen as a violation of the corporate right to profit is fair game for these companies.

Governments in Europe, Australia and Latin America are challenging the whole concept of investor state and so it is imperative that countries now contemplating trade deals that include those rights of corporations think again.

On behalf of all our members and team, we send solidarity and strength. You are on the right side of history. If ever we need governments to step in to protect people and the planet, this is the time! We must not turn over our democratic rights to large corporate interests.

In solidarity
Maude Barlow

The Council of Canadians

http://www.canadians.org/

Original text by Kim Taein:
Kim Taein, PhD, International Trade, Kangwon National University

After implementation of the Korea-China FTA, total economic volume will increase. I am sure. But these gains will go to large companies, not to small and medium sized employers and not to people working in the agricultural sector. For small and medium sized businesses, and for farmers, volume will decrease. I am sure.

At a recent meeting of FTA experts which I attended, a seminar attendee who is an expert on China said to me privately, “We have to stop the China-Korea FTA.” It’s true that big companies will benefit but, he said that he had made an analysis of the Korea-China FTA and its effects on the Korean economy over the next two decades. He said that the result for Korea would be terrible for small and medium sized businesses and for farmers (and fishermen, all those in the agricultural sector) and bad for Korea as a whole. He said that the Korean people will lose jobs because big companies offices and factories will all move to China.

He (the China expert) is sure of this. He is certain that 90% of Korean small and medium sized businesses will be destroyed by the FTA. This will only increase the wealth gap in Korea. It also means means that Korea will depend heavily on China. And that many ordinary Koreans will lose their jobs. Jobs will go to China, not to Korea.

The FTA with China will absolutely cost Korea jobs, and destroy small and medium sized business and agriculture. It will make Korea dependent on China and will increase Korea’s wealth gap.

In the case of the Korea-US, and Korea-EU FTAs, the effect was different because all countries involved are OECD nations. In a Korea-China FTA, Korea is disadvantaged because China’s strengths lie in primary industries such as mining and agriculture. So, the real danger in the Korea-China FTA is for Korean primary industries. And the negative effects for Korea will be double those of the Korea-US or Korea-EU FTAs.