NO FTA!

I've put a few of the pictures from what I saw
of the anti-FTA rally throughout this entry, like
the one below...

Since arriving in Korea, I've seen flags and banners everywhere denouncing the FTA. I didn't know at first what these were about, since the letters 'FTA' - and occasionally 'NO' - are the only english letters on them. I guessed at first that they might stand for 'Free The Army' from the American movement against the war in Vietnam, but that didn't make much sense. After seeing some signs with NO-FTA next to an enraged looking bull, I figured this was probably against the Free Trade Agreement and the importing of foreign foods. After my experience with the riot police yesterday, I spent some time this morning researching the issue. I found that the U.S. and South Korea are close to signing a Free Trade Agreement that would drop tarriffs between the two countries.

There were five days of talks last week that ended without moving forward in any significant way, but such an agreement has been in the making for three years and the two countries are beyond many of the disagreements that have held them at a standstill thus far. The main issue at hand is Korea's reluctance to drop its agricultural tariffs on rice, beef and oranges. It has agreed to drop all other tariffs, but America insists that the agreement include these products as well. Korea stands to benefit most from America agreeing to drop tariffs on all industrial goods, including most notably automobiles, textiles and electronics. This would give Korean electronics even more of an edge on a market in which they already have a good foothold. On the other hand, Korean farmers who currently enjoy the protection of heavy tariffs on foreign imported foods would face competition from cheaper imported produce.

While America and the major media presents this agreement as an opportunity to provide a more healthy free market environment, there are some alarming issues at stake here. The farmers are not worried about protecting a margin of their profits, but about defending their livelihood as they know it. Little more than a hundred years ago, Korea was an agrarian society with little to speak of larger industry. After World War 2, the dictatorship government put into place a program to rapidly industrialize and urbanize the country. Korea has come a long way from its cultural roots tied strongly to agriculture, but farmers still comprise a large portion of Korean society. These farmers sell their produce in venues ranging from stalls on the street to local grocery stores to fresh produce wagons that drive around advertising on loudspeakers to, I can only imagine, exporting them to the cities. There is plenty of competition between these local vendors and the system seems to work fine and prices for produce is fair. What these farmers fear is that this system will be uprooted by the new opportunity of importing fruit and vegetables from other countries; whose unbalanced and undeveloped economies make it possible for them to offer goods at much lower prices. Koreans who criticize the proposed FTA believe that the media is pushing only the positive benefits of the agreement; claiming that "the government is attributing farmers’ objection to FTA to group egoism, arguing farmers must tolerate losses for national benefit." Anyone who looks clearly at the agricultural industries in North America can see what happens when the government fails to protect them from these dangers. The government ends up subsidizing lost crops and paying farmers to plough under fields in order to keep these farmers from starving and being forced into another business. These subsidies discourage and dishearten those people who work very hard to provide the most essential service to our society. The dignity of Korean farmers has so far been protected from this "freedom of industry" and do not want to be pushed into a position of relying on welfare from the state.

As I see it, there is another issue involved here that isn't receiving direct focus. The farms that exist here are not the larger corporate farms that have gradually been getting the upper hand in places like North America, but small family-owned businesses. In fact, from my limited experiences so far, it seems that the local economies in general are still based on such a small business model rather than the 'superstore' model that I've grown accustomed to. The largest grocery store that I know of in Naju is smaller than any I can think of in the city of equal population where my family lives in Canada. People here shop at many smaller stores rather than a few big ones for everything from food to clothes to anything else. Fresh produce can be bought at any number of the few dozen stores that are within a half-mile of my apartment. If imported foods could be sold at a lower price than these domestic products, it would not be an advantage accessible to these smaller stores but to larger ones that could more easily manage the importing of products in bulk.

So the debate is about the dangers of big business and in this case the threat posed by transnational corporations to Korean agricultural stability. As we have seen happen in North America, the companies that can afford to buy in larger scale tend to be able to undercut smaller businesses by selling at lower prices. The more that importing and exporting becomes a part of this picture, the more true that this becomes. Smaller companies cannot afford the costs or manage the difficulties of shipping goods from overseas with the same ease as can larger companies. Bigger companies can create branches in both countries that better regulate those imports, keeping supplies steady and costs managable in a way that smaller companies cannot hope to achieve. South Korea has its fair share of these transnational corporations - LG, Samsung, Hyundai, etc - and so its government is probably correct in suggesting that the nation's economy would benefit overall from a Free Trade Agreement. The real question is whether the increased profit margins of these companies is worth exposing the farmers to market instability and possible destruction of their livelihoods.

Can the profits of large companies ever be measured on the same level as the subsistence of people and families? This leads me to an issue that I have been passionate about since I started studying the nature of economic changes in the Philippines over the last century or so; through the Spanish-American war, the subjugation of the Filipino economy to American economic interests and through to the Marcos regime that ruled in the middle of the century. Throughout this time, extremely influential families held monopolies over various Filipino industries in ways that can be compared to big businesses. Without going into too much detail, what I noticed was that the greater the wealth that these families held, the more that their investments and interests went away from the regional economies. These families often had property and investments in America and were willing to restructure their local economies in ways that would benefit Americans rather than the Filipinos who were their countrymen. The problem with this, as I saw it, lie in the fact that their interests were moving away from regional interests the more that wealth gave them access to global markets. The same can be seen in the Banana Republics and many other 'third world' countries, where the people who do the work see little of those profits funneled back into local economies.

Transnational companies do not owe their allegiance to any one region, but to the interests of their shareholders. Those interests are unfailingly to maximize profits. When problems arise and these companies are forced to adapt to more competitive markets, local economies can be all but abandoned and people left to rot. I see the costs of this manifest in places like Michigan (etc), with crises in the automotive industry leading to extremely high unemployment in certain areas that relied too heavily on these transnational companies. Individual people and communities in general are not always saved by measures taken to restabilize the GDP. The increased profits of companies like LG, Samsung, Hyundai, etc, will not help in any practical way to support the farmers who would bear the costs, or even their local economies. These corporations would not even be obliged to put these increased profits back into the Korean economy.

From my perspective, the agricultural industry seems to work well the way it is right now here in Korea. The sale of produce is competitive in ways that are unparalleled anywhere that I have lived before. I don't think that any person would trade the health and stability of this system for cheaper bananas and shame on the media for keeping the people from hearing such a perspective.