Stand in Solidarity with the 99% in Korea

Stand in Solidarity with the 99% in Korea

What: An international day of solidarity with the 99% in Korea against the US-Korea trade deal, the biggest job-killing agreement of its kind since NAFTA.

When: Tuesday, November 22, 2011. Day or Night.

How: Gather fellow fair trade activists. March, hold up signs, pass out flyers, and/or stand united with our Korean friends in a candle-light vigil.

Where: In front of the Korean Consulates in Boston, Chicago, Honolulu, Houston, Los Angeles, New York City, San Francisco, Seattle, and Washington, DC—or any place where you can gather all your fellow fair trade activists and raise your voices against the Korea trade deal.

Tell us your plans so we can promote your action.

Call for Solidarity and Action

Call for Solidarity and Action - The Korea-US FTA is not for the 99%

November 16, 2011

Free Trade Agreements have a long history of mass protests. The Korea-US FTA is no different. Its official negotiation was kicked off in 2006 and signed five years ago in June 2007. From the outset of the negotiations, thousands of people in both countries have opposed the deal. One Korean labor union member took his own life in protest against the negotiations, and several hundreds of activists have been arrested during peaceful and legitimate demonstrations. They know that the deal only benefits big corporations, not the people. Nonetheless, the U.S. Congress approved the deal last month. Now the ball is in the court of the Korean National Assembly.

Twelve Reasons Why We Should Oppose the Korea-US FTA

The 99% against the Korea-US FTA of the 1%.

<This is a text version of the leaflet we have been using for candlelight vigil taking place every night in Seoul. You can see PDF version of the original Korean leaflet here. Christian Park made this translation>

Without a doubt, the Korea-US FTA is an agreement only for the rich 1% and big businesses. It will increase the prices of medicines and medical fees jeopardizing the health care system. Once introduced, the Investor-State Dispute settlement (ISD) will prevent public regulators from curbing the corporate greed. The Korea-US FTA will privatize public corporations which will jack up the utility

fees. It is a one-way ticket to privatization. There is no turning back for privatized and unregulated public corporations even if prices go out of control. Any mechanism to protect small and medium businesses will be in violation of the Korea-US FTA and South Korea agriculture will collapse. The Korea-US FTA is good only for the rich 1% and the big businesses in the US and South Korea.

1. Skyrocketing prices of medicines and medical fees will threaten the health care system.

The Korea-US FTA will extend the patent delaying the introduction of low price generic drugs (approval-paten linkage). Moreover, it will allow multinational pharmaceutical companies to reject the price control by the government (independent review process). As a result, patients’ medical cost will go through the roof jeopardizing the health care budget. With the ratification of the Korea-US FTA, the conditional operation of for-profit hospitals in free economic zones in 20 cities will become permanent. The medical fees of for-profit hospitals are much more higher than that of not-for-profit hospitals. In the end, they will drive the entire medical cost up.

2. The Investor-State Dispute (ISD) will incapacitate public and welfare policies. 

They say the Korea-US FTA will not effect the public policies. Nothing could be farthest from the truth. According to the Korea-US FTA, multinational corporations can bring the South Korean government to the international arbitration tribunal to demand compensation. The South Korean government has no choice but to be dragged into a costly arbitration process. This is because of the automatic consent clause. The Canadian government was brought to the arbitration tribunal when it banned the disposal of hazardous wastes by designating green-belt zones.

The ISD system is not a universal mechanism. The current negotiation for the DDA at the WTO has rejected the adoption of ISD. If the ISD system is included in the Korea-US FTA, then the South Korean government has no choice but to accept the decision of the arbitration tribunal. If the government rejects the decision, then there will be trade retaliation. It would make the regulation

of corporations for public interest impossible. It will make a paradise for multinational corporations but greatly diminish the power of the South Korean government to implement public policies.

3. There will be a flood of privatizations and jack up the prices including utility fees.

In Cochabamba, Bolivia, a country with the minimum wage of $60, a monthly water bill skyrocketed to $20 after the privatization of the city water company.Residents of Cochabamba locked the water faucets in fear that children might use them and drank rainwater. One of the companies that belonged to the privatized water network, Bechtel, argued that even rain water should be charged since it belonged to them. During the crisis, the Bolivian government did not try to re-nationalize the water works in fear that it might be brought to the ISD system.

The South Korean government is planning to privatize railroads and gas. Once they are privatized, it is inevitable that the prices will rise. However, the government won’t be able to re-nationalize them once the Korea-US FTA is ratified because of ratchet mechanisms. South Korean ordinary working people are already suffering from high prices. Surely, the Korea-US FTA will further increase the utility fess.

4. There will be a massacre of local shops.

Even today, with one large retailer operated supermarket in the neighborhood most of local shops are forced to close. These so called super supermarkets like E-Mart and Homeplus compete with local shops and restaurants with low price products and foods. With the Korea-US FTA, these super supermarkets will thrive more with less regulations. What was once a dream for ordinary working people who are forced to retire early or lost jobs to opening a local shop or a pizzeria has become a nightmare.

5. Say goodbye to foreign currency control even in a time of foreign currency crisis.

When the 1997 Asian financial crisis hit South Korea foreign capitals quickly withdrew like an out-going tide. At such a time, a government can respond with financial safeguards like temporary limiting international transfers of foreign capitals. The Korea-US FTA make it clear that the pre-condition for any financial safeguard is that it will not harm commercial, economical, and financial interests of the US. Once in effect, the Korea-US FTA will make it impossible to control the flow of foreign currency even in a time of foreign currency crisis.

6. The Korea-US FTA will hurt South Korea’ trade balance.

What happened after the Korea-US FTA? South Korea’s trade surplus with the EU dropped by 3.7 billion dollars. They say that the Korea-US FTA will increase South Korea’s exports to the US. But the US is in an economic crisis. Millions of Americans are out of jobs and many lost their houses. The unemployment rate is stuck at 10%.

Even if we take the argument at face value, an increase of exports does not necessarily leads to more jobs or better life for ordinary working people. After the NAFTA, the US trade surplus increased but 700,000 jobs in the US were reduced. How about Mexico? Mexico’s exports increased also. However, the economic situations of ordinary working people worsened. Polarization increased to a point only 13 million out of the 40 million working age population

had full-time jobs. Big businesses and the rich got more rich while working people got poorer.

7. The Korea-US FTA destroys Korean agriculture.

Prices of US and EU agricultural products are the cheapest in the world. Simply, it is because the US and EU governments give the biggest subsidies in the world. The farmers in the US annually receive around 22 billion dollars from the US government in direct subsidies. This is incredible compared to the amount the Korean farmers are getting. Such huge subsidies help to keep the prices of US and EU agricultural products low making it impossible for others to follow. While this is the reality, the Korea-US FTA will force the reduction of agricultural tariffs. This will destroy Korean agriculture.

8. The Korea-US FTA destroys environment.

The US government stated four pre-conditions to the signing of the Korea-US FTA demanded. One of them is eliminating the tax levied to automobiles with high carbon dioxide emission. As a result, South Korea is forced to drop the environment protection policy that taxes automobiles with high carbon dioxide emission. This is going against the global efforts to stop global warming. One of the many deregulations is related to GMO foods.

9. The Korea-US FTA is an unfair and unequal agreement.

Article 102 of the US implementing bill on the Korea-US FTA makes it clear that US law comes first in cases where the Korea-US FTA comes into conflict with the former. In contrast, the Korea-US FTA comes first in cases of conflicts with Korean law. The Korea-US FTA is treated as a domestic law in South Korea. The

US implementing bill prohibits South Korean companies doing business in the US filing a legal suit in the US court in case of FTA related violation.

10. Integration of South Korea into the US-led world order will increase the regional tension in Northeast Asia.

The Korea-US FTA is not just an economic agreement. It will further integrate South Korea into the US-led world order politically and militarily. Northeast Asia is a highly volatile region where China and the US go head to head economically and militarily. The Korea-US FTA will only increase the tension. Will the strengthening of the military alliance between South Korea and the US bring peace in the region? Uncritical strengthening of the military alliance between South Korea and the US will bring more danger to the region and do harm to realizing peace in the Korean peninsula.

11. This FTA is only for the 1%.

The Korea-US FTA is not a battle between South Koreans and American. It is not only the US big businesses that are supporting the Korea-US FTA. Korean big businesses like jaebeols are welcoming it with open arms and actively promoting it in media advertisements. Why is this? Privatization of the public sector in

South Korea would bring huge profits not only to the US big businesses but also to the Korean big businesses. For example the privatization of healthcare would give profit-making opportunities to not only the US health insurance companies but also the Korean health insurance companies. Is this win-win for everyone?

What happens to the ordinary working people? Prices of all sorts of public sector goods like gas, electricity, railroad, etc. will increase. Prices of medicine and medical care will also go up jeopardizing the finance of the national health insurance. Mom and pop stores will go out of business. The number of precarious workers will increase. Free and organic school food service would be impossible. The Korea-US FTA will deepen the polarization giving more to the rich 1% while taking more from the 99%.

12. The 99% can stop the Korea-US FTA.

Should every country accept it unconditionally just because the US government is pushing for the FTA? The answer is no. The US government has already tried to sign an FTA with Latin America (FTAA). But it failed when confronted with the protests from the people of Latin America. Matter of fact, all the FTAs that the US

government initiated with countries in the Middle East, Africa and Asia failed or are not going anywhere. There is an exception though. It is the Korea-US FTA. It is still alive. South Korea successfully blocked the full lift of the ban on the import of US beefs from cattle aged 30 or more months with the massive candlelight protests. If everyone stands up and say no to FTA, we can stop the Korea-US FTA. The 99% can stop the Korea-US FTA which is only for the 1%.

Joint Statement of Korean lawmakers, labor unions, farmers and civil society groups on the proposed Korea-U.S. FTA

Korean National Assembly Members’ Caucus Against the Korea-US FTA
Korean Alliance Against the Korea-US FTA

For Immediate Release Jan. 27, 2011
Contact: Heesob Nam - +82-10-9981-1180, hurips@gmail.com
Mi-kyung Ryu - +82-10-9279-7106, inter@kctu.org

Joint Statement of Korean lawmakers, labor unions, farmers and civil society groups on the proposed Korea-U.S. FTA

We, the Korean National Assembly members’ Caucus Against the Korea-US FTA and the Korean Alliance Against the Korea-US FTA, a coalition of over 300 labor unions and civil society groups, have organized a delegation to Washington, D.C. this week, January 24-28, 2011. We have come here to tell American policymakers and civil society that many Korean people oppose the proposed Korea-U.S. Free Trade Agreement (KorUS FTA). During our visit, we were shocked to hear that many U.S. politicians believe that the KorUS FTA is a gift to the Korean people and will be beneficial to the relationship between both countries. In reality, many Korean people consider that the KorUS FTA will be detrimental to the lives of the Korean people, is biased in favor of the narrow interests of multinational corporations and contains numerous damaging provisions that would destroy our jobs in both countries and undermine our rights as citizens, the environment and health, and the practice and principles of democratic governance.

We came to Washington to share our strong view that the proposed KorUS FTA should not enter into force for the following reasons:

First, the proposed KorUS FTA shrinks the policy space available to our governments to promote the public interest and endangers our governments’ ability to protect public services and advance public health, food safety, workers’ and small farmers’ rights, and environmental preservation. Numerous provisions contained in the KorUS FTA conflict with the public interest policies upon which the general public relies while providing new rights and powers to a narrow class of large multinational corporations in each of our countries. While there could be a good agreement between our countries, this agreement undermines the broad interests of the people of the U.S. and the people of Korea in favor of promoting the interests of a narrow band of big corporations. In particular, the investor-state dispute procedure allows private corporations, even third-party corporations doing business either in Korea or the U.S., to bring our government to the foreign arbitration tribunals to demand compensation over public policy standards, even those that apply to domestic and foreign corporations alike. We do not understand why such a provision would be included in the KorUS FTA, given both countries have well-established rules of law and well functioning courts. Such provisions were not included in the U.S.-Australia FTA.

Second, we do not support a deal that only encourages growth-without-employment in both countries. The proposed deal pursues the North American Free Trade Agreement (NAFTA)-plus model. Yet, the U.S.’s experience with NAFTA is instructive and should not be repeated. Since NAFTA went into effect, the U.S. has experienced massive job loss in the manufacturing sector and numerous laws were challenged before foreign tribunals. Provisions of the proposed FTA will weaken the social safety net in both countries and strip crucial safeguards in a time of global economic instability and high unemployment. In addition, the proposed KorUS FTA, with its low Rules-of-Origin standards, incentivizes the off-shoring of manufacturing—and jobs. Up to 65% of products can be produced in foreign countries and exported as U.S. or Korean products, killing jobs and destabilizing the labor market in both countries.

Third, the proposed agreement promotes reckless deregulation. This agreement was negotiated prior to the financial crisis that hit the world several years ago. It promotes the very practices of financial deregulation that have so damaged the U.S. and Korean economy. The agreement conflicts with regulations that our two governments have put in place to stabilize their financial markets, posing a threat to our countries, our economic partners, and eventually to the global economy. In the aftermath of the global economic crisis, certainly we must ensure that all policies, including our “trade” agreements must preserve our governments’ authority to control and regulate investment and financial markets. However, both governments simply ignored the lessons we learnt a few years ago even when they re-negotiated the deal last year and did not alter these provisions to reflect the post-crisis lessons.

Finally, the proposed agreement has the potential to bring about an unintended harmful effect on the relationship between the U.S. and Korea. While proponents claim that the proposed agreement will strengthen our countries’ relationship, it carries the potential to have the opposite effect. Many in Korea view the agreement as having been pushed not only for economic relations. Geopolitics played a great role. The supplemental deal of the last year was struck when the military tension between the South and North Koreas was at its highest since the 1950s’ Korean War. The vast majority of Korean people believe that the outcome of the supplemental deal is an unacceptable humiliation and an overly high price to pay for the Americans’ role in providing national defense. Furthermore, if the KorUS FTA results in restricted to access to public service, job loss, deterioration of quality of life and intensified social polarization as we have seen the detrimental effect of the NAFTA model in operation in North America, the anger over the damage will be directed at the other country. When this happens, the KorUS FTA would bring conflict rather than strengthening the sense of friendship towards the other country among the ordinary people of both countries.

We appreciate the time and effort the citizens of both countries are giving to make this visit successful in preventing the negative consequences that the Korea-US FTA will have on both of our countries.

###

• Jung Bae Chun, Jong Kul Lee, and Ki Kab Kang, representing the Korean National Assembly Members’ Caucus Against the Korea-US FTA
• Heesob Nam, Hae-Young Lee, and Won Suk Park, representing the Korean Alliance Against the Korea-US FTA
• Hui-seong Jung, Mi-kyung Ryu, Ja-O Koo, Sang-je Kim, and Joo-ho Lee, representing the Korean Confederation of Trade Union
• Kwang Seok Lee and Hye Sook Kim, representing the Korean National Small Farmers’ Group

Labor Union's Position Paper on the Korea-US FTA

Why We Oppose the KORUS FTA - KCTU Position Paper on KORUS FTA

January, 2011 

General Principle 

1. Korean Confederation of Trade Union (KCTU) has great concerns about the bilateral and regional FTAs which are currently expanding in number across the world. We believe that the analysis that FTAs are bad for some industries while good for others is a somewhat narrow perspective. This is because they reduce or greatly remove the ability of governments from relatively less developed countries to pursue independent policies to meet economic and social needs and sustainable social and economic development. In addition while the provisions of FTAs systematically strengthen the rights and privileges of corporations they do not include provisions which support the democratic control of foreign investors. 

2. The KORUS FTA privilege the rights and benefits of transnational corporations over the rights of workers, consumers and the general public. We believe that the proposed KOR-US Free Trade Agreement is harmful not only for the Korean workers and working families, but for the workers and working families in the U.S. as well, since the KORUS FTA follows the ‘failed model’ of NAFTA. And it is highly likely that the agreement will have huge negative impacts on small and medium-sized manufacturing enterprises (SMEs) in the two countries, damaging the manufacturing base and worsening already unsecure employment. 

3. The KORUS FTA will systematically encourage offshoring, or global outsourcing. The “Rule-of-Origin” provisions of KORUS FTA allow up to 65% foreign content of the value of vehicles eligible for tariff-free treatment, using the Net-Cost- Method. Thus, the agreement will encourage transnational corporations(TNCs) to outsource their production to neighboring low-wage countries such as China and Mexico. This will eventually result in the breakdown of domestic manufacturing industry and unsecure employment. 

4. The experience of NAFTA demonstrates the negative impact of FTA on employment. We know that when NAFTA was being negotiated, the US, Canada and Mexican governments made many promises to their citizens - such as creation of jobs and better living standards, just as the Korean and US governments are promising today. However, 15 years of NAFTA has shown that the reality is far from what was promised. In the course of 15 years, NAFTA has eliminated more than 1 million jobs in just the US and increased irregular part-time jobs particularly in service sectors, which pay 23% to 77% less than the jobs that were replaced. 

5. Like the NAFTA, KORUS FTA also includes the notorious Investor-State Dispute provision in the Investment Chapter, which ensure private foreign investors to demand cash payment from governments for actions that could be seen to violate privileges endowed by the agreement. This is one representative example of the way KORUS FTA dramatically protect the rights of industries in a way that undermines the ability of governments to carry out policies for public interest including public services, the environment, public health and education. 

6. The American subprime mortgage crisis in 2007-09 demonstrates once more the danger of financial deregulation and urgent need of financial control. However, KORUS FTA allows all types of financial instruments including financial derivatives which are considered to trigger financial crisis in 2007-09. It will limit governments from prudently regulating financial sectors to avoid another economic crisis. 

7. The KORUS FTA will be also harmful for the sustainable relations between two nations. Many ordinary people in the South Korea believe that the US government put political pressure for getting more economic interests and concessions from the South Korean government during the FTA negotiations, even using very difficult times for South Korea when military tension of Korean peninsula highly increased in 2010. Therefore it will rise ‘anti-US sentiment’ and result in dealing negative impact on Korea US relations. We are also concerned that the agreement will promote confrontation between geographical forces and result in increasing military tension in our region between US-Japan-South Korea and China-North Korea-Russia. 

8. Therefore we call upon elected representatives, citizens and workers to oppose the KORUS FTA. We do not need NAFTA-style FTA. We need more equitable and fairer trade agreement to create decent jobs and ensure the authority of each government to carry out policies to meet social and economic needs. 

The Impact on the Manufacturing Industry and Employment 

KORUS FTA is a “Job-Killing” Pact, NOT a “Job-Creating” one. 

The KORUS FTA is advertised for the solution of employment crisis by both governments. The President Orbama announced that the Korea deal will create more than 70,000 jobs in the U.S. just after concluding supplemental agreement on December 3rd, 2010. Also, the Lee Myung-bak Government also argued that the Agreement will create around 335,000 jobs in South Korea for the next 10 years after its taking effect. However, in contrast to the expectation of both governments, the concluded KORUS FTA will not solve the employment crisis in both countries. The Korea US Free Trade Agreement(KORUS FTA) is meant to prioritize the protection of the rights and benefits of transnational corporations. Therefore, it is highly likely that the agreement will have huge negative impacts on small and medium-sized manufacturing enterprises (SMEs) in the two countries, damaging the manufacturing base and worsening already unsecure employment. FTA to Encourage Overseas Outsourcing and Damage Domestic Manufacturing Industry The KORUS FTA will systematically encourage offshoring, or global outsourcing. The “Rule-of-Origin” provisions of KORUS FTA allow up to 65% foreign content of the value of vehicles eligible for tariff-free treatment, using the Net-Cost- Method. Thus, the agreement will encourage TNCs to outsource their production to neighboring low-wage countries such as China and Mexico. This will eventually result in the breakdown of domestic manufacturing industry and unsecure employment. 

The majority of Korean manufacturing companies are small-scale businesses, and the subcontracting practices between small manufacturing companies and large conglomerates in Korea are disadvantageous to SMEs. Moreover, productivity gap between small and large companies is rising. In this context, the KORUS FTA is expected to aggravate already vulnerable Korean manufacturing sector, dealing damages to domestic small and medium-sized parts and materials manufacturers. Therefore, there is a high chance that small businesses become smaller, while resources are concentrated in a few large companies. The Agreement will cause not just a trade imbalance between the two countries in a short term, but also a devastating impact on the manufacturing basis, forcing small and medium-sized manufacturers to go bankruptcy and resulting in massive restructuring. 

In addition, the Investment Chapter of the KORUS FTA bans performance requirements. Examples of performance requirements include a technology transfer, obligation to use a certain percentage of local products, succession of employment, succession of collective agreements and obligation to hire a certain percentage of local people. This means that if the FTA increases foreign direct investment, the government cannot implement policies aimed at promoting domestic employment. Moreover, most of the global investment has recently been carried out via portfolio investment such as acquiring corporations or buying stocks. Therefore, foreign investment has come to have little to do with employment. In contrast, corporate acquisition is likely to result in massive restructuring, thus decreasing employment. 

Export Increase does not Guarantee Employment Increase 

So-called “Growth without Employment” is one of the distinctive features that characterize the era of financial globalization. The US and Korean governments have been arguing that the FTA will increase bilateral trade and create employment in both countries. However, it has already become a myth that increase in export and trade lead to a rise in employment. As for Korea, the added-value inducement coefficient of export has continuously decreased from 0.711 in 1993 to 0.600 in 2007. Meanwhile, the import inducement coefficient of export has risen from 0.367 in 2000 to 0.400 in 2007, as the Korean economy has become growingly dependent on imported parts and materials. This means that an increase in export leads to a rise in import, while employment remains relatively unchanged. The cause of this phenomenon is that large export companies have raised overseas outsourcing, while the inter-industrial effects of export industries have been reduced. As of 2005, export industries accounted for only 20 percent of overall jobs. The FTA provisions regarding Government Procurement, Rules of Origin and Investment will accelerate the trend of “Growth without Employment.” 

The U.S. is no exception for the trend of “Growth without Employment”. Under the North American Free Trade Agreement(NAFTA), more than a million U.S. jobs were displaced from 1993 to 2004. And according to Economic Policy Institute economist Rob Scott, the implementation of the KORUS FTA will eliminate around 159,000 American jobs.

In Conclusion, the KORUS FTA is not a “Job-Creating” FTA, but “Job-Killing” Pact. It should be emphasized that the experiences of NAFTA shows us that employment crisis cannot be solved through trade and export increase to overseas market. 

Basic Labor Rights Guaranteed Poorly in both Countries 

The guarantee of basic labor rights by the two governments is poor and many key international labor standards have not been observed. Even though stable, decent-wage jobs are replaced with temporary, precarious ones, the governments are overlooking these problems. Thus, working conditions for workers in the two countries are worsening. Workers are being forced to work more with less pay, and many of working families are thrown under the poverty line. Moreover, migrant workers are facing severe exploitation, as they are deprived of their rights. The two governments have not ratified the ILO Conventions Nos. 87 and 98, which are core international labor standards for the freedom of association. This shows that labor rights are poorly guaranteed in these countries. Labor laws of the US and Korea must be revised to guarantee workers basic labor rights widely, including right to collective bargaining and right to collective action, so that workers of both countries can equally enjoy the potential benefits of trade.

Joint Letter of the US and Korean Lawmakers

This letter was co-signed by 21 members of the U.S. Congress and 35 members of the Korean National Assembly, and sent to President Obama and President Lee on October 12, 2010. For PDF version of the original letter, click here.

Dear President Obama and President Lee:

As you begin negotiations on several outstanding issues related to the Korea-U.S. Free Trade Agreement (KORUS FTA), we ask that you take this opportunity to make meaningful changes to the underlying text. We believe that trade agreements should foster balanced and fair economic exchange between two countries. Moreover, they should be tools for alleviating poverty, advocating economic justice, promoting healthy communities, advancing human rights, and protecting the environment. We urge you to modify the agreement to reflect these ideals and craft the first, true 21st Century Free Trade Agreement.

An FTA between our two countries should not jeopardize our governments’ policies to protect public health, the environment, and public service. We ask that the language in this agreement state more explicitly our countries’ intention to maintain our high health, labor, and environmental standards. Doing so will minimize the risk of foreign corporations challenging these policies as burdensome on their businesses. In addition, it will underscore the notion that FTAs can help to advance public health, food safety, workers’ and farmers’ rights, and environmental preservation. In this regard, two particularly troubling provisions are the investor-state dispute settlement mechanism and the negative list system of services.

In the aftermath of this worldwide recession, we must preserve our governments’ right to prevent and respond to financial crises. Both of our countries took extraordinary measures to react to the current economic downturn, without which our financial systems could have collapsed and the recession made worse. We urge you to clarify explicitly that this agreement protects our governments’ ability to regulate investment or the financial markets in the event of another financial crisis.

Even without a free trade agreement, Korea and the U.S. have exchanged on average nearly $70 billion worth of goods and services each year of the last decade. Our FTA should build on this existing economic relationship and strive to make it stronger and more beneficial for both countries. We strongly support an FTA that harnesses these benefits without exposing our health, labor, and environmental standards to potential corporate challenges. Making substantive changes to the KORUS text to safeguard against these challenges will preserve the fundamental objective of the FTA – to promote economic exchange and growth in our two countries.

An FTA that prioritizes corporate interests over those of our constituents is not an agreement but a compromise of our countries’ ideals, and it is one we foresee working to defeat. We urge you to take advantage of this opportunity to improve the FTA and make KORUS the new global standard in trade agreements.

Sincerely,

Declaration of Opposition to the KOR-US FTA and Pledge to Participate in a Solidarity Hunger Strike

Join Korean Americans Against War and Neoliberalism (KAWAN)* and
the Korean Alliance Against the Korus FTA (KoA)

In Waging a Global Hunger Strike Against the Korea-United States Free Trade Agreement (KorUS FTA) and the Bush Free Trade Agenda

March 23, 2007

The United States and South Korean governments are frantically working around the clock to sign the Korea-U.S. Free Trade Agreement (KorUS FTA) by April 2, when it must be submitted to Congress for a vote by July 1. If signed, the KorUS FTA will be the second largest trade deal since the North American Free Trade Agreement (NAFTA).

In South Korea, tens of thousands of farmers, workers, and students are organizing for a massive demonstration on March 25, 2007. Since Monday, March 19, over 100 people have been waging a hunger strike in Seoul and other cities across the country.  On Monday March 26^th, the number of hunger strikers will grow to 1000.

We ask for your solidarity in stopping the KorUS FTA and all Bush FTAs.

The March 25 massive demonstration is organized by the Korean Alliance against Korea-US FTA (KoA), a coalition of over 300 organizations representing millions of trade unionists, peasants, students, environmental and public health advocates.  March  25 is the day of international action to stop the KorUS FTA, all Bush FTAs, and the spread of corporate-led globalization. The U.S. is now negotiating free trade deals with several countries, including Peru, Colombia, Panama, South Korea, and Malaysia.

In solidarity allies in the United States and around the world will wage a 36 hour global hunger strike to oppose the KorUS FTA and the free trade regime that is destroying our livelihoods, our communities, our human rights and our environment.  The hunger strike will be timed with South Korea?셲 3 pm, March 25 (the start of the mass mobilization) through 3 am, March 27 (just after the end of first day of the 1000 person hunger strike.)  For the reference of those in the U.S., this is 2 am, March 25 through 2 pm March 26 Eastern Standard Time and 11 pm, March 24 through 11 am March 26 Pacific Daylight Time.

March is the critical month in the fight to stop all pending U.S. FTAs from conclusion. Unfettered free trade has been directly responsible for the massive loss of jobs and erosion of hard-won benefits and rights for workers, farmers, and laws protecting our public health and environment. Wholly undemocratic, the only voices heard behind closed negotiation doors are that of corporate interests.

Join us for this 36-hour global hunger strike! We will send Korea the solidarity list by Saturday, March 24 for KoA to read at the March 25 mass demonstration. To sign-on go to:  http://www.gopetition.com/online/11558.html.  For more information, call: 718.335.0419 or email: yul-san@nodutdol.org.

*Founded in April 2006, KAWAN is a national coalition of progressive U.S.-based Korean organizations endorsed by hundreds of immigrant, people of color, LGBT, farmers?? workers?? women?셲, national liberation, anti-war and anti-globalization groups. For each of the eight rounds of negotiations between the U.S. and Korea, we have waged protests and resistance with our Korean allies. We have held forums, held direct action and civil disobedience and engaged in lobbying and advocacy efforts.

Declaration of Opposition to the KOR-US FTA and

Pledge to Participate in a Solidarity Hunger Strike

                                          

We, the undersigned, express our opposition to the Korea-U.S. Free Trade Agreement, which poses a serious threat to public interest in both South Korea and the United States. The Korea-U.S. FTA is based on a model of trade agreement that is designed to profit of transnational capital and big business at the expensive of workers, farmers and common people and has been negotiated through a secretive and undemocratic process. Such a trade agreement must not be implemented.

We are opposed to the secretive and undemocratic nature through which the Korea-U.S. FTA has been negotiated.

FTA talks have been held in remote places away from public view or in secrete outside of the official negotiations. The South Korean government has routinely withheld relevant information and documents from stakeholders, the National Assembly, and the general public. It has also closed off public debate through insufficient hearings and media censorship. Worse, it has severely suppressed anti-FTA sentiment, banning peaceful protests and arresting protest participants.

We are opposed to a trade agreement that will destroy the livelihood of South Korean farmers and harm the environment.

The Korea-U.S. FTA calls for unconditional opening of the South Korean agricultural market to cheap overproduced American-grown products. The consequent deterioration of Korean agriculture will have devastating social, cultural, and environmental effects: Statistics show that roughly half of South Korea?셲 farmers will be unable to maintain their farms and be forced to join the ranks of the urban poor. The resultant destruction of rural communities will mean the break-up of rural traditions that are the basis of Korean culture, and the deterioration of the rural environment. The Korea-U.S. FTA also threatens the environment by introducing mechanism through the lowering of environmental standards such as the Investor-State Claim Clause. 

We are opposed to a trade agreement that directly threatens vital public services such as health-care, energy provision and education. The Korea-U.S. FTA calls for higher pricing of pharmaceuticals- benefiting transnational pharmaceutical companies at the expense of access for common people. The FTA will also limit the Korean government?셲 ability to ensure equitable access to energy and water supply by fostering privatization in these sectors and diminish the validity of public education through the introduction of private U.S.-based testing services, which will increase the demand on students to seek private education programs

We are opposed to a trade agreement that threatens cultural diversity by allowing for harmful infringement on South Korea?셲 cultural industry.

Reduction of South Korea? 셲 screen quota, which protects the nation?셲 film industry, was made a prerequisite for beginning FTA negotiations. Further, the current Korea-U.S. FTA will require removal of similar protections for Korea?셲 broadcasting industry. These measures endanger the public function of the broadcasting industry and the uniqueness of South Korea?셲 audio-video language. The provisions of the Korea-U.S. FTA are inconsistent with the UNESCO Convention on the Protection and Promotion of the Diversity Cultural Expressions, which affirms the right of each member nation to formulate and implement regulations aimed at promoting domestic cultural expression.

We are opposed to a trade agreement that grants undue powers to investors at the expense of domestic development and public interest.

The unconditional investor-state claims clause included in the Korea-U.S. FTA affords greater privileges to foreign investors than those granted by domestic law, providing a mechanism through which investors??claims can place enormous monetary penalties on taxpayers and pressure the government to adopt lower environmental and labor standards to avoid future claims. The Korea-U.S. FTA also calls for a reduction in government procurement contracts in order to open these markets to foreign capital. In South Korea, procurement policy promotes the growth of thousands of small businesses in various regions, providing entrepreneurial opportunities to businesses that are conscious about environmental and labor issues. As such, they are vital to keeping public interest alive and maintaining community-government cooperation.

On March 25 at 3:00 PM (South Korea time), tens of thousands of farmers, workers, students and concerned persons will take to the streets throughout South Korea to protest the KorUS FTA.  The following day, 1000 South Koreans will engage in a hunger strike.  (Since March 19 over 100 have been fasting.) 

In order to demonstrate the sincerity of our opposition to the KorUS FTA and of our solidarity with the Korean people we pledge to conduct a United States-wide hunger strike to coincide with these activities.  Thus, we, the undersigned, pledge to fast from 2:00 AM, March 25 through 2:00 PM, March 26 (Eastern Standard Time).  Furthermore, we athorize Korean Americans Against War and Neoliberalism to send this statement of protest, with all signatures collected, to South Korean Consulates across the United States and the South Korea Embassy, the office of the United States Trade Representative and White House in Washington, DC.

We, the undersigned, stand in solidarity with the Korean people. We call for abrogation of the Korea-U.S. FTA negotiations to date and cancellation of all future talks and legislative processes.

###

Written Testimony of the Korean Alliance before the US Congress - February 2007

The Road to an Undesirable Deal 

Understanding the Korea-U.S. Free Trade Agreement 

A Report to the U.S. Congress 

February 9, 2007

Prepared by the Korean Alliance Against KorUS FTA

150-982 Daeyoung Building 3F

139 Youngdeungpo-dong 2-ga

Youngdeungpo-gu, Seoul, Republic of Korea

Tel: 82-2-775-2501 Email: nofta@hanmail.net

www.nofta.or.kr

The Korean Alliance against KorUS FTA (KoA) is made up of over 300 organizations, including trade unions, farmers’ groups, NGOs, and social movement groups. Formed on March 28, 2006, our goal is to bring awareness about the impact of FTAs on society, under the principle that all trade agreements must be democratic in process and respectful of both public interests and international standards on labor, environment, health, and safety.

 

Executive Summary

On February 2, 2006, South Korea and the U.S. announced that they would begin negotiations for a free trade agreement. However, the negotiation process and FTA content have shown troublesome signs from the start. Many labor, agriculture, and civil society sectors in both the U.S. and South Korea believe that, like NAFTA, the Korea-U.S. FTA will make living conditions more difficult for people living in both countries. This report covers seven main concerns and presents three individual cases. Our analysis shows that the proposed agreement will disproportionately hurt working families, widen the income gap, limit public services, and undermine culture and the environment in South Korea.

1. The Undemocratic Nature of the Negotiations Process

The South Korean government’s procedures have been inconsistent with democratic principles and Korean law before and while negotiating the Korea-U.S. FTA. It has withheld relevant information and documents from stakeholders, the National Assembly, and the general public. The government has also closed off public debate through insufficient hearings and media censorship. Furthermore it has stifled freedom of expression through a ban on protests and arrest of protest participants.

2. Limiting Access to Healthcare: Pharmaceuticals

The current FTA calls for a system that will reduce access to pharmaceuticals and place limitations on South Korea’s healthcare system. We have three main concerns: 1) A7 drug pricing on all innovative drugs will increase drug prices and raise insurance costs for the public, 2) application of expensive pricing on all innovative drugs on Korea’s positive list and installation of an independent review board will restrict the government authority to register and determine the price of drugs and 3) extension of patents will burden the insurance system and limit production of generics. The current trade deal is not in line with even the Doha Declaration on TRIPS Agreement and Public Health, which declares that the right to a healthy life is greater than intellectual property rights.

3. The Deterioration of Agricultural Life

The FTA requests the full opening of the South Korea’s agricultural market to American-grown products. This has wide social, cultural, and environmental implications: South Korean agricultural production will decrease by 45%, meaning that roughly half of South Korea’s farmers will lose their livelihoods. The destruction of rural communities will result in the break-up of rural traditions that are the basis of Korean culture, and the deterioration of the rural environment.

4. Public Services: Energy, Water, and Education

Implementation of the Korea-U.S. FTA will diminishthe government’s capacity to ensure equitable access to public services. Our concern is that the FTA will decrease government regulation on energy and water supply as a result of how its provisions interact with the processes of liberalization already underway. Of particular concern is the opening of South Korea’s energy maintenance industry, which will undermine that current existing infrastructure and create dependence of the energy industry as a whole on the private sector. The Korea-U.S. FTA also stands to diminish the validity of public education through the introduction of private U.S.-based testing services which will increase the demand on students to seek private education programs.

5. Meeting International Standards on Cultural Diversity

The Korea-U.S. FTA does not meet international standards set by the UNESCO Convention on the Protection and Promotion of the Diversity Cultural Expressions. The Convention affirms the right of each member nation to formulate and implement regulations aimed at promoting domestic cultural expression, implying the right of members to exclude their cultural industries from international trade agreements. We believe that the reduction of Korea’s screen quota as a preliminary measure to the FTA and the inclusion of South Korea’s audio-visual industry in the agreement are inconsistent with the aforementioned provisions. 
 
6. Meeting International Environmental Standards

Through such mechanisms as the investor-state claim clause, the Korea-U.S. FTA has the potential to lower environmental standards. In fact, the investor-state claim clause goes directly against the ‘precautionary principle’ of international environmental law. With the current FTA, we see the possibility of a tribunal intervention on South Korean environmental policies, particularly concerning genetically modified organisms (GMOs). Our position is that economic development should meet international standards on sustainable environment.

7. The Investor-State Claim (ISC) Clause and the Procurement Policy

The ISC clause in free trade agreements overburden governments and taxpayers with enormous monetary penalty and pressure nations to adopt lower environmental and labor standards. In order to diminish these negative consequences, South Korea has asked for certain revisions to this clause, such as the exclusion of claims on tax and real estate policies, but none have been accepted. The Korea-U.S. FTA also runs against public interests by requiring a reduction in procurement contracts. Procurement policies are necessary to the promotion of fair, domestic economic sustainability.

Table of Contents

Executive Summary…………………………………………………………...…1

Introduction…………………………………………………………………...….4

Part 1: Main Concerns in the Negotiations Process and Content

1. The Undemocratic Nature of the Negotiations Process……………………....5

2. Limiting Access to Healthcare: Pharmaceuticals…………………………..…8

3. The Deterioration of Agricultural Life………………………………………10

4. Public Services: Energy, Water, and Education……………………………..13

5. Meeting International Standards on Cultural Diversity……………………...15

6. Meeting International Environmental Standards…………………………….17

7. The Investor-State Claim (ISC) Clause and the Procurement Policy………..18

Part 2: Cases

Case 1: The Life and Death of a Farmer………………………………………...20

Case 2: Living with HIV/AIDS………………………………………………....21

Case 3: Living with Leukemia……………………………………………….….23

Tables

Table 1. Number of People Arrested, January 29, 2007…………………….……8

Table 2. Price of Gleevec in South Korea and the U.S.………………...…...…....9

Table 3. Comparison of Agriculture in South Korea and U.S.………………..…11

Table 4. South Korea’s Projected Annual Loss in Agriculture…………………..12

Introduction

On February 2, 2006, South Korea and the U.S. announced that they would begin negotiations for a free trade agreement. From the start, however, the negotiation process and the content of the FTA have caused great concerns in labor, agriculture, and civil society sectors in both the U.S. and South Korea. Despite provisions in South Korean law, which require the government to consult the general public before pursuing an FTA, only one public hearing was held just a day before the announcement was made. The hearing closed shortly after beginning due to angry responses from the audience. This event was representative of a negotiations process characterized by lack of disclosure and curtailment of public debate, for an agreement opposed by roughly half the South Korean population.

South Korea is U.S.’s 7^th largest goods trading partner, and this FTA would be the largest U.S. FTA since NAFTA. The South Korean government has been eager to conclude the deal, claiming that it is the country’s best path to economic growth. However, we believe that, as with NAFTA, the Korea-U.S. FTA will place a heavy burden on ordinary people and increase the income gap. We are keenly aware of NAFTA’s negative impact on the people of Canada, Mexico and the United States despite promises that the agreement would improve lives in all three countries. The proposed Korea-U.S. FTA, meant to be even more comprehensive than NAFTA, can but only point in the same direction.  

This report reviews seven major concerns within the Korea-U.S. FTA (Part 1) and presents three cases of individuals whose lives have been injured by global trade (Part 2). The first section covers the undemocratic nature of the negotiations process touched on above. The second and fourth sections treat the FTA’s negative effect on South Korea’s public services: the FTA will result in increased prices and decreased access in the areas of healthcare, energy and water provision, and education. The third section looks at the social and cultural consequences of the deterioration of South Korean rural communities due to opening of the agricultural market. The fifth and sixth sections look at the extent to which the proposed agreement is inconsistent with international standards for the protection of the environment and cultural diversity. The last section treats the danger to public interest posed by the Investor-State Claim clause and the procurement policy. The three cases which demonstrate the FTA’s potentially harmful effects through individual stories make up Part 2 of the report.

Our analysis shows that the proposed agreement will disproportionately hurt working and farming families in both countries by widening the income gap, limiting public services, and undermining international cultural and environmental standards.

Part 1: Main Concerns in the Negotiation Process and Content

1. The Undemocratic Nature of the Negotiations Process 

Like the United States, South Korea is proud of its democratic system, which was fought for and won through its citizens’ efforts to overcome military dictatorship. We are sure that members of Congress agree that all procedures followed in negotiating the Korea-U.S. FTA should be consistent with the democratic principles that both of our countries hold dear. Therefore, we here share our concerns that this has not been the case since even before the start of official negotiations.  

Four Preconditions

Before the opening of negotiations, South Korea committed to four preliminary measures as preconditions for the talks to begin. These included 1) suspension of regulations on pharmaceutical products, 2) easing of government regulations of gas emissions from imported U.S. cars, 3) resumption of U.S. beef imports, and 4) reduction of the quota which requires South Korean cinemas to screen South Korean films from 146 to 73 days per year. The actual implementation of each of these measures is in different stages, with the last two currently in effect. However what concerns us here is that the government has made a commitment to them with out public dialogue, and has reported about them deceitfully to South Korean citizens.

These preliminary measures have an impact not only on related industries but also in the areas of health and safety, the environment, and protection of cultural diversity. Principles of democracy would require that stakeholders and the general public be given adequate advance knowledge and a chance to voice concerns before the measures were agreed to, but this was not the case. In fact, for a long time government authorities denied the possibility that the preliminary measures would become preconditions for negotiations. For example, only two days before the screen quota reduction was announced, Trade Minister Hyun-chong Kim insisted that there was no plan for such a reduction, denying the need for further discussion with representatives of the film industry.

Access to Information and Public Debate

Lack of disclosure and insufficient public debate has been a trend throughout the negotiations, inconsistent not only with democratic spirit but also with South Korean law.  Article 12 of the Stipulations on the Procedures for Concluding a Free Trade Agreement (Presidential Directive 121) requires a public hearing be called before an FTA is pursued. Such hearings are meant to be forums for discussion through which the opinions of Korean civilians are taken into consideration.  

Steps taken to meet this directive were a pure formality: only one public hearing was called for February 2, 2006, just hours before the formal announcement was made that a Free Trade Agreement would be pursued. Given that the decision had already been reached, the hearing could not really have been a space for public discussion. The report that the official announcement would be made the following day understandably drew an angry reaction from the audience, resulting in a suspension of the hearing. 
Despite South Korean chief negotiator Jong-hoon Kim’s promise that greater effort would be made to seek public opinion, no further hearings have been held. Rather, the government has routinely ignored appeals from stakeholders and citizens who have criticisms of the FTA. Compared to the U.S. government, which has actively sought the advice of concerned groups, including industrial associations and agricultural and labor organizations, South Korea’s efforts are clearly lacking. In addition, the government has been reticent in disclosing relevant information including the draft of the agreement and the specific results of each round of negotiations. Even National Assembly members have had very limited access: the reports they receive are generally only as detailed as those released to the media, and the time allowed to review these English-language documents is restricted to the same length as that usually allocated for Korean-language materials.

On top of this, a good portion of the talks has taken place outside of the official process and removed from public view. Of recent, the senior-level meetings held in Hawaii without warning between the 5^th and 6^th official rounds have increased Korean citizens’ distrust for the negotiations process as a whole. Indeed, the secretive and undemocratic manner in which the government is moving forward is one of the important reasons behind opposition to the FTA. Needless to say, while we understand it is not possible to make all parts of the negotiations public, it is our position that at minimum, the government should disclose information necessary for adequate debate on matters of public interest. 

Restrictions on Freedom of Expression

Given the lack of effective channels for dialogue, those dissatisfied with the FTA have turned to media work, street outreach and protests to express their opinions. In clear disrespect of the right to freedom of expression, the government has actively sought to quell these activities. Riot police are routinely dispatched to restrict demonstrations, and it has been announced that access to government subsidies will be cut off for organizations that oppose the FTA.  

The extent to which the range of public discourse has been limited was plainly evident earlier this year, when farmers’ and filmmakers’ organizations attempted to run a television advertisement entitled, “A Letter from One’s Hometown” which included images of farmers expressing their opposition to the FTA. Upon reviewing the ad, the Korean Advertising Review Board (KARB) stipulated that the farmers’ comments had to be erased before broadcasting, effectively prohibiting the ad from screening. The KARB made its decision on the basis that the comments gave a “one-sided portrayal of a dispute involving a government agency.” Ironically, while “A Letter from One’s Hometown” was barred, a $3.8 million advertisement made by the President Noh’s Committee to Support the Conclusion of the Korea-U.S. FTA, has been aired. Public sentiment for and against the FTA is roughly split in half, but it is clear that the ad’s main statement—“the Korea-U.S. FTA is a new opportunity for South Korea to leap into the position of a great economic power”—does not capture the full range of perspectives. Further, while the content of “A Letter from One’s Hometown” is taken from the actual experiences and views of South Korean citizens, the government’s ad contains only a narrator’s voice against background imagery. However, as a government production, the latter was not reviewed by the KARB and therefore not required to meet their conditions on objectivity. 

The contradiction in the two cases has invoked criticisms from citizens groups and specialists in the field, even those within the national Korean Broadcasting Commission, who see the incident as an undue closure of public debate at a time when more is needed. We echo their opinion that the event exposes a fallacy in South Korean broadcasting law and represents a restriction on freedom of expression inconsistent with the standards of a modern democracy.    
 
Limits on the expression of anti-FTA sentiment have been especially intense since November 22, when clashes occurred between angered farmers and police during a protest.  Since then all demonstrations have been outlawed, with tens of thousands of riot police deployed to each demonstration and checkpoints set up on major roads leading to Seoul, to stop regional farmers and workers from entering the capital. The police have issued summons and warrants for over 170 people, raided the local offices of peasant and civil society organizations, made threatening phone calls to demonstration participants, entered their relatives’ houses seeking arrest, and detained 21 leaders of farmers and workers organization in an attempt to stop future opposition. 

Table 1. Number of People Arrested, January 29, 2007 

Under Search	Detained
8	21

The government says that these measures are necessary as a response to the clash on November 22. We agree that the events of that day were unfortunate, and we by no means condone violence as a solution to social dispute. However, it is not difficult to understand how the government’s lack of attention to the situation of the South Korean farmers has evoked in them the frustration which led to the conflict. 
Furthermore, the incident on November 22, which was neither wide-spread nor premeditated, does not warrant the extreme measures that have been taken in its wake. In particular, there is simply no way to justify the continued refusal of permits for clearly peaceful demonstrations made by groups other than the sponsors of the November 22 protest, especially after parties involved in the incidents of that day have already been penalized.  

The excessive imprisonment of civil society leaders and ban on peaceful protest is inconsistent with the rights to freedom of expression and assembly enshrined in both the South Korean and United States constitutions. This was confirmed by the National Human Rights Commission on December 5, which called for all possible measures to be taken to enable peaceful protests to go forward the following day, including the withdrawal of the demonstration ban. Yet, despite this statement, the government and police have continued their efforts to shut down protests and silence opposition.

We are gravely troubled by the secretive and anti-democratic nature of the FTA negotiations up to this point. We also believe that members of the Congress of a democratic nation would not want their country to be party to such a process, and would be highly suspicious of an agreement that was reached through such means. We ask that you reflect on this as you consider the Korea-U.S. FTA.  

2. Limiting Access to Healthcare: Pharmaceuticals 

For both U.S. and South Korea, healthcare is a key area of political and economic debate. After much controversy, Massachusetts launched a comprehensive healthcare plan in 2006, and other states such as Oregon and Ohio are pursuing a similar system. On the whole, peoples standpoints on the healthcare issue remain somewhat divided. 

In South Korea, a universal healthcare system (which began in 1987) provides relatively affordable healthcare to the public. But we are still in the process of making the system more comprehensive and efficient. 

With the Korea-U.S. FTA, however, we fear that South Korea’s healthcare system will become drastically limited. The current FTA unfortunately calls for a system that will seriously reduce the access to pharmaceuticals for a majority of people. It is of grave concern to us that the current trade deal poses to restrict South Korea’s healthcare system and may have adverse effects on the U.S. healthcare system as well. .
 
On November 4, 2001, the 4th WTO Ministerial Conference at Doha adopted the “Declaration on TRIPS Agreement and Public Health.” The Doha Declaration states that “the TRIPS Agreement does not and should not prevent Members from taking measures to protect public health.” The Doha Declaration makes it clear that on the occasion of a clash, the right to a healthy life is greater than intellectual property rights. It sets minimum criteria on global trade that public health must be protected from the often irresponsible effects of economic pursuit. The current trade deal promises to go directly against the Doha Declaration, and is contrary to U.S.’s principle objective to respect the Doha Declaration.

There are three main concerns related to pharmaceuticals in the Korea-U.S. FTA negotiations. First is drug pricing policy. Innovative new drug prices in South Korea are already in accordance with average factory prices in the 7 wealthiest countries (A7 countries: U.S., UK, Germany, France, Italy, Japan, and Switzerland). In some cases, average prices are much higher in South Korea: for instance, the price of leukemia treatment drug Gleevec is $23 in South Korea while $19 in the U.S. Moreover, the current FTA demands that all patented drugs be innovative drugs and all innovative drugs have A7 average prices. These conditions will inevitably raise the price of medicine to an unaffordable level for the public. Our ordinary people are still not ready to meet the drug cost of the wealthiest nations. We are concerned that the current FTA does not fully consider the different economic positions of people in the U.S. and South Korea.

Table 2. Price of Gleevec in South Korea and the U.S. 

South Korea	U.S.
$23	$19

A second concern is the implementation of a positive drug list system, which contains drugs that are proven to be efficacious, price-competitive, and covered by health insurance.

The USTR Office has partially accepted the introduction of South Korea’s positive list policy, but is requesting the inclusion of expensive pricing for innovative drugs and, furthermore, the installation of an independent review board, thereby restricting government authority to register drugs and determine its affordable price. The independent review board is likely to be unfamiliar with actual economic and social conditions of South Korea. We feel that such a review board will compromise the health of a population in the interest of corporate market access.

A third concern is the sensitive issue of drug patents. If the trade agreement is signed, it extends the current intellectual protection term on medicines by at least 5 years. In dollar amount, this would translate to 6 billion dollars of financial burden to the insurance system. The stronger protection of intellectual property would prevent fair competition of domestic generic drug industries. Moreover, the current agreement calls for a pharmaceutical company’s exclusive rights to drug data, on which drug companies all over the world depend for the production of generic drugs. The percentage of generic drugs under national insurance is increasing every year; generic drugs, needless to say, are crucial in providing affordable to medicine to the populations in the U.S. and South Korea. We cannot welcome measures that prevent public access to affordable medicine.

The current FTA’s demands on South Korea’s healthcare system indicate that this trade agreement does not uphold the public interest. It is clear that health policies that are beneficial to the people can be challenged by pharmaceutical companies through the investor-state claim clause. Moreover, we see the ‘Big Deal’ process—which demands the exchange between South Korea’s pharmaceuticals and automobiles, and U.S.’s trade remedies—as an unjust method of conducting trade negotiations. Pharmaceuticals, which provide an essential public service, should not be treated as a commodity similar to automobiles. Under the current FTA, we anticipate not only a rise in drug prices and treatment cost, but also a breakdown in South Korea’s healthcare system itself. We believe that access to affordable and comprehensive healthcare is a public right that must be protected, and has priority over commercial interests. We cannot accept a trade deal that restricts this right. 

3. The Deterioration of Agricultural Life

Along with pharmaceuticals and automobiles, agriculture has been one of the most contentious areas in the FTA negotiations. Since the beginning of the talks, the United States has consistently requested full opening of the South Korean market to American-grown products. This would require liberalization of trade in 235 sensitive items for which South Korea seeks to maintain some degree of protection. For Korean farmers, however, the issue at stake is much more than a mere loss in profits; it is a matter of the very survival of their livelihood and communities. Furthermore, the severe weakening of Korean agriculture has wide social, culture and environmental implications, which we believe must be taken into consideration.    

While most American agriculture is controlled by large corporations, all farming in South Korea is done by individual farmers with small to medium-size holdings. A brief look at statistics makes the inequity readily apparent: the total acreage of land under cultivation in the United States is 105 times as great as that in Korea (176 million ha to 1.7 million ha), the average farm-size 58 times greater (29ha to 0.48ha) and the average income of individual in agricultural business four times greater ($7,200 to $1,400). Like small farmers in the United States, South Korea’s farmers cannot compete with large agro-business, which mass produce cheaply-priced goods with the aid of heavy government subsidies. Due to this inequality in size and means of production, and because American agricultural subsidies will not be affected through the FTA, domestic agricultural products stand to loose their markets almost completely once the FTA is implemented.

Table 3. Comparison of Agriculture in South Korea and U.S.

	South Korea	U.S.
Land under Cultivation	1.7 Million ha	176 Million ha
Average Farm Size	.48 ha	29.0 ha
Average Income per Month	$1,400	$7,200

The effect is predicted to be devastating for South Korean farmers. Take for instance, the primarily citrus-producing population of Jeju Island: the opening of South Korea’s fruit market to powerful companies such as Sunkist and Dole is projected to cause a 59% drop in the price of Korean tangerines, Jeju’s primary product, and will result in an annual loss of over $200 million dollars. This, along with reductions in the sale of potato ($72 million), garlic (no statistics available), fish ($5 to $10 million) and meat and dairy ($23-$28 million) makes bankruptcy almost inevitable for farmers on Jeju. The yearly loss for South Korean agriculture nationwide is projected to be close to $9.3 billion. This translates to an average decrease in annual salary of nearly $8000 for farmers, the majority of whom now only make only a little over $10,000 a year. U.S. statistics shows that on the whole, South Korean agricultural production will decrease by 45% after the Korea-U.S. FTA has been implemented. This means that roughly half of Korea’s farmers will loose their livelihood and have no option but to give up their farms and join the ranks of the urban poor. It was the prospect of a similar situation brought on by the WTO’s impact on South Korean agriculture that prompted farmer Lee Kyung Hae to take his own life in protest at the Cancun Ministerial in 2003, crying “WTO kills farmers!”

Table 4. South Korea’s Projected Annual Loss in Agriculture

Jeju Region	-$200 Million
South Korea	-$9.8 Billion
South Korea's Decrease in Production	-45%
Decrease in Annual Salary	-$8,000

The vitality of South Korea’s domestic agrarian economy has significance well beyond the individual lives of Korean farmers. Its significance is social, cultural and environmental. Traditionally an agricultural society, Korean culture as a whole is based on customs that have developed around the cycle of cultivation kept alive today in farm villages. Unfortunately, the dissipation of these communities is rapidly underway. Due to rapid industrialization, the Korean farming population has dropped from 50% to less than 10% over the last thirty years. This decrease has occurred more than twice the pace of similar declines took place in the United States and Western Europe. This process has been accelerated in the last decade as a result of trade liberalization policies, forcing hundreds of thousands of farmers to migrate to already overcrowded cities where underemployment is a growing social problem. The flip-side of this over-urbanization is a breakdown of rural ways of life and destruction of the rural environment. In order to preserve South Korea’s countryside, local communities, and culture, it is necessary to have measures to support agriculture and maintain farming as a feasible occupation; the comprehensive opening of South Korea’s agricultural market is neither wise nor necessary at this time.  

Protective measures are not without precedent. The Swiss government, for example, has, since the first half of the 1990s, officially recognized that the importance of local agriculture goes beyond simple economics, to include preservation of the countryside and long-term sustainability of natural eco-systems. It has thus implemented a subsidy-system to protect and revitalize Swiss farming communities, now only 4% of the population. This goal was also one of the main reasons behind Switzerland’s decision to suspend FTA negotiations with the United States.       

We believe that the principles embodied in the Swiss case have important meaning for South Korea, especially now as it faces the deterioration of its rural villages and ways of life. Thus we feel these principles should be considered in relation to the Korea-U.S. FTA. Failure to do so will have grave negative impact on Korea socially, culturally and environmentally.

4. Public Services: Energy, Water, and Education

Public services such as the provision of energy, education and healthcare, are necessary to survival in modern society. As such, even when these sectors are liberalized, some measure of government involvement is necessary to assure that they are equally available irrespective of difference in class, income and neighborhood. We are concerned that implementation of the Korea-U.S. FTA will harmfully diminish the government’s capacity to protect public interest through ensuring equitable access to these vital services. While section 2 looked at this problem in relationship to healthcare, this section will deal with access to energy, water and education.

Energy and Water

For the past decade, South Korea has moved towards liberalization of energy supply through privatization of energy generation and distribution, as well as the opening of gas distribution to private corporations, increasingly relinquishing control of these services to market forces. Water supply is also on its way to becoming privatized through public-private partnerships. While both the United States and South Korea have stated that the public service sector will not be included in the Korea-U.S. FTA, our concern is that the FTA will further decrease government regulation on energy and water supply because of the way its provisions interact with the processes of liberalization already underway.

The services negotiations within the FTA follow the negative list rule, which enables the two governments to exclude those services which they want to protect. The Korean government has asked for the exclusion of sensitive public services such as electricity, water, education and healthcare, which should mean that these services will not be committed to liberalization rules. However, the problem is that liberalization and deregulation come through other means—such as investment clauses that enforces elimination of any kind of ‘discrimination’ against foreign investors particularly in relation to state-owned enterprises, competition rules that outlaw state monopoly and requirement of the reduction of government procurement contracts and the opening of this market to foreign investment, which will effectively lead to private control of contracted services. In short, by further relinquishing energy and water supply to market forces, implementation of the FTA will see the removal of government responsibility for these, as well as other services.  

Basic public services in any country are managed through state and/or public corporations precisely because this makes it possible to provide them in a safe, healthy and affordable manner. Subjecting them to market and trade rules undermines this goal. Without government regulation, the principle of supply will become based on profit rather than on public interest. The foreseeable result is greater inequality in access, heavier burdens on working families due to price increases, and decreased policy space for the government.

Of further concern is the request made by the United States during the 5^th round, for the opening of the design and maintenance of public services to U.S. corporations. South Korea has strived for the past thirty years to develop its power-plant and energy maintenance industry, investing several hundred millions of dollars and prioritizing it as the centerpiece of South Korea’s energy production. Due to this support and a constant focus on public interest, South Korea’s industry has reached world renowned levels of operation and efficiency. This groundwork will be compromised if the industry liberalized through the FTA. Although in the short run, energy production costs may fall due to the introduction of already developed products and technology, this opening of the maintenance industry will undermine that current existing infrastructure and create dependence of the energy industry as a whole on the private sector. With energy production and delivery still formally in the public sector and development and maintenance in the private sector, confusion and irrationality are likely to ensue. Maintenance systems and related technology will be updated frequently, and active plants relocated, in keeping with profitability. The resulting instability will mean an increased burden on the South Korean public.

Education

In the early years of its founding, South Korea sought to provide equal access to elementary, middle and high-school education through the implementation of extensive public school legislation, revolutionizing an education system traditionally based on social hierarchy. However, like other public services, South Korean education has been increasingly subjected to privatization in the last decade. The introduction of wide-spread private after-school and tutoring programs geared towards college admissions has created a growing inequality in access to higher education between students from families who can afford these services and those who cannot. This, in turn, has widened the discrepancy in job opportunity based on income and education level, completing a vicious cycle, which is helping to solidify the gap between rich and poor.   

      

The Korea-U.S. FTA stands to exacerbate this situation by further diminishing the validity of public education. If the FTA is implemented it will mean the introduction of private American-base testing services to the South Korean admissions processes. This can only but increase the demand on students to seek extra-curricular courses from private programs, deepening unequal access to higher education by greatly disadvantaging students from low-income families who cannot pay for these programs. U.S.-based testing and associated curricula may also drive more students who can afford it to seek education abroad rather than in South Korea. The FTA will also open university and adult education to private corporations. The collective result of these measures will be an overall devaluation of public education, ultimately undermining the system as a whole and the right to equal education which it represents.  

By leading to the reduction of government regulation over gas and water supply and the weakening of public education, the Korea-U.S. FTA stands to exacerbate current trends in South Korea which are placing increased burdens on low and middle-class families and widening the gap between rich and poor. Checking these trends requires greater, not less regulation and protection of public services, measures sincerely needed at this point in time. We hope that Congress members will respect this need as you consider the Korea-U.S. FTA.       

 

5. Meeting International Standards on Cultural Diversity

On 20 October 2005, the UNESCO General Conference adopted the Convention on the Protection and Promotion of the Diversity of Cultural Expressions, with 148 countries, including South Korea in support, two in opposition and four abstentions. The main objective of this agreement, which goes into effect on March 18, 2007, is to create, amidst the challenges presented by an increasingly interconnected world, an international environment in which all cultural expression is affirmed, given a chance to thrive and made accessible to all for the benefit of humanity.

The convention defines cultural diversity as, “the manifold ways in which the cultures of groups and societies find expression… made manifest not only through the varied ways in which cultural heritage and humanity is expressed… but also through diverse modes of artistic creation, production, dissemination, distribution and enjoyment,” and recognizes that “cultural diversity, flourishing within a framework of democracy, tolerance, social justice and mutual respect between peoples and cultures, is indispensable for peace and security at the local, national and international levels.” Further, it states that, “since culture is one of the mainsprings of development, the cultural aspects of development are as important as its economic aspects… (and) protection, promotion and maintenance of cultural diversity are essential requirements for sustainable development for the benefit of present and future generations.

We believe the Convention marks an important milestone in international law by recognizing cultural diversity as the collective heritage of humanity and setting common rules and guidelines for its protection at a global level. Further, its principles are of particular significance to South Korea, a country which has, by necessity, struggled to revive its national culture after years of colonization in the beginning of the 20^th century.  In particular, the Convention affirms the right of each member nation to formulate and implement cultural policy and protects their rights to enforce regulations aimed at promoting domestic cultural activities, goods and services, implying the right of members to exclude their cultural industries from international trade agreements. We are concerned that the Korea-U.S. FTA is inconsistent with these international standards. 

Firstly, we feel the negotiation process itself has been inconsistent with Convention principles widely upheld in the international community. We believe that the Convention, by affirming the distinction between ordinary commodities and those with cultural value and requiring that other international agreements be harmonized with protections for cultural diversity, implies the right of members to exclude their cultural industries from international trade agreements. This has, in fact, been the practice in many free trade negotiations, including those conducted between Canada and Israel, Canada and Chile, Canada and Costa Rica, the EU and Chile, the EU and Mexico and Australia and Singapore. The cultural industry was also exempted from the U.S.’s FTA negotiations with Canada in 1989, and in the negotiation of NAFTA. We, therefore, cannot but see a failure to exempt the cultural industry in the Korea-U.S. FTA negotiations as a step backwards in adherence to international standards. 

Even if we do not admit the full exclusion of the cultural industry from international agreements, the Convention clearly protects the right of nations to implement policy for the protection of their domestic cultural activities, goods and services. We believe the compulsory reduction of South Korea’s screen quota as a precondition to FTA talks is inconsistent with this right and harmful to the development of Korean cultural expression. The screen quota, which requires theaters to show Korean films for a certain number of days per year, was introduced in 1966 as a means to assist the development of South Korea’s nascent film industry. While, thanks to the quota and other supportive measures, South Korean film can now claim notable advancement, its progress, and South Korea’s film-culture with it, are likely to be damaged by a weakening of these protections. Other sectors of the cultural industry, particularly broadcasting, face the removal of similar protections with the implementation of the FTA. This will endanger the public function of the broadcasting industry and the uniqueness of South Korea’s audio-video language. While we are in full support of cross-cultural exchange between Korea and the U.S. (and other countries) in the case that it promotes mutual innovation and development, we fear that the provisions of the Korea-U.S. FTA represent an infringement on the independent development of Korea’s audio-video industry that would compromise it as distinctive form of national cultural expression.   
   
It is impossible to deny the important contribution the diversity of its people makes to the richness of American society. We trust that members of Congress are aware of and support the promotion of multi-culturalism within the Untied States and the free expression of cultures in all their variety internationally. We appeal to these sentiments in asking Congress to pay due attention to the points of concern laid out above, and to make a commitment to the protection of cultural diversity as it considers the Korea-U.S. FTA. 


6. Meeting International Environmental Standards

One area of concern that crosses all sectors in South Korea is the environment. Through such mechanisms as the investor-state claim clause, the current model of free trade has the grave potential to lower the environmental standards of signatory countries. As seen in the NAFTA case, national and provincial environmental laws can be challenged under investor rights rules. In fact, the investor-state claim clause goes directly against the ‘precautionary principle’ of international environmental law. The free trade agreement between the U.S. and South Korea thus undermines the growing environmental concerns faced by the international community, for example, the search for alternative fuel in the face of global warming.   

In South Korea, decades of economic development brought with them a vast number of environmental problems related to industrialization and urbanization. Recently, a great effort has been carried out in order to meet the international environmental standards of developed nations. (South Korea signed the Kyoto Protocol in 1998 and ratified it in 2002.) Our position is that economic development should meet international standards set to achieve a sustainable environment, but we fear that with the passing of the Korea-U.S. FTA, the public’s environmental interest will be overlooked and the environments in both countries will likely deteriorate. In December 2006, the USTR Office released the Interim Environmental Review, stating that harmful environmental effects in both countries due to the Korea-U.S. FTA will be small. This is a limited view, because through such mechanism as the investor-state claim clause, environmental policies in both nations can be adjusted by a foreign tribunal. 

In particular, an environmental issue that generates much debate is food safety in relation to genetically modified organisms (GMOs). Potential negative effects of GMOs on the environment, according to GMO-Free Europe, include gene mutation with harmful effects, interaction with native populations, and impact on birds, insects, and soil biota. In the Swiss-U.S. FTA negotiations, the difficulty of allowing GMOs into Switzerland became a crucial factor that led to the suspension of talks. In South Korea, GMO labeling is a requirement, but the U.S. is currently reluctant to make labeling mandatory for U.S. products. With the current FTA, we see the unfortunate possibility of a tribunal intervention on environmental policies under the investor-state claim clause. We know that many provisions related to GMOs come into conflict with market access, but the global community should move toward measures that can guarantee agricultural and food safety appropriate for different environments.

We are aware that the environment is an important issue in the U.S. Congress. The current trade model pursued by USTR, however, undermines its importance. We ask the members of the U.S. Congress to re-evaluate this trade agreement, under the principle that any trade agreement between democratic and developed nations can no longer ignore environmental issues in conjunction with the creation of a healthy market. We believe that the public has the right to a safe and clean environment and the food produced from it. We cannot agree with a trade agreement that hinders the environmental sustainability of signatory nations, as the current FTA is poised to do.

7. The Investor-State Claim (ISC) Clause and the Procurement Policy

The Investor-State Dispute Settlement

As one of the most intensely debated issues in current free trade negotiations, the investor-state dispute settlement (ISDS) rules are meant to only provide a protection of rights and privileges to foreign investors. However, in most cases, especially in relation to NAFTA, the investor-state claim clause has shown an unbalanced effect on signatory governments: ISDS overburden governments and taxpayers with enormous monetary penalties and pressure nations to adopt lower environmental and labor standards in order to prevent further claims. The undemocratic and closed character of tribunals, to which domestic courts have little say, further undermines the fairness of trade agreements. In almost all cases, foreign investors hold greater privileges than those defined by domestic law, including the U.S. Constitution.  

At the 3^rd round of Korea-U.S. FTA negotiations, the South Korean government requested that the provision of expropriation be excluded from international tribunals, but this request was denied. At the 5^th round of talks, a minimal request of excluding claims on tax and real estate policies was made, but this request is unlikely to be met. Recently, South Korea’s real estate market has seen highly vulnerable speculations and an uncontrolled rise in price. The housing speculation crisis is a national issue, and the real estate market is now undergoing policy changes that should make it more stable and safe. The request to exclude real estate policies from ISDS reflects the South Korean government’s effort to make housing more accessible, affordable, and environmentally conscious. Under the ISDS clause, however, investors can challenge such policies, inevitably restricting protective social measures set by the government on behalf of public interest.   

The negative financial impact of ISDS and international tribunals is large. Since the passing of NAFTA, 42 claims have been filed against the U.S., Canada, and Mexico in the amount of $28 billion, of which $35 million has already been claimed from the governments of Canada and Mexico. The U.S.-Australia FTA did not include the kind of ISC and tribunal mechanism proposed for the Korea-U.S. FTA. This demonstrates that the two governments see the problematic and unfair nature of the ISDS clause.  

Our assessment is that, first, the privilege given to investors and tribunals under the ISDS clause is outside the boundary of the South Korean and U.S. constitutions and therefore undemocratic in nature; second, the ISC clause and tribunals put enormous pressure on both governments to lower public standards in order to prevent future claims; and third, large claims against governments inevitably burden taxpayers and constrain their ability to participate in a healthy market. 

We believe that a fair and just trade deal must reflect public interests and respect domestic policies that uphold public standards. The ISDS clause, as one of the most problematic parts of the Korea-U.S. FTA, makes the entire trade framework unacceptable for the people in both countries. 

The Procurement Policy

For any democratic government, procurement policy is a necessity for the promotion of domestic economic development. In the U.S., procurement policy helps to prevent the offshoring of state jobs, promotes locally made products, prohibits products made by compromising human rights and labor standards, and gives preference for recycled content, renewable energy, and alternative fuel. However, procurement provisions have come under restraint by bilateral trade agreements as will NAFTA and CAFTA. Normally, procurement provisions are set by federal and state legislatures, but under bilateral trade agreements, they are determined by foreign tribunal rulings, which oblige the federal government to force state and local government compliance.

In South Korea, procurement policy promotes the growth of thousands of small businesses in various regions, providing entrepreneurial opportunities to businesses that are conscious about environmental and labor issues. Such a policy, in turn, keeps public interest alive and maintains community-government cooperation. With the Korea-U.S. FTA, however, the USTR is requesting that procurement contracts be reduced from $25 million a year to $8 million a year. Furthermore, although procurement policy regarding electricity and gas were originally exempted from the FTA negotiations, the USTR has been demanding their inclusion since the 5^th round of talks.

Procurement policies, both governments need to recognize, are an important mechanism through which governments protect public rights. We believe that decisions regarding procurement belong to the U.S. and South Korean legislatures and not to a tribunal that can easily dismiss environmental, labor, and human rights issues. The governments of both countries have a responsibility to promote sustainable economic development while resolving these issues. Therefore we believe that a free trade agreement that jeopardizes procurement measures is not only undemocratic for undermines nations’ legislative systems, but also a disservice to the hard-working people of both countries.

Part II: Cases 

Case 1: The Life and Death of a Farmer 

On September 10, 2003, the opening day of the Fifth WTO Ministerial in Cancun, a South Korean farmer, Lee Kyung Hae, climbed the fence which surrounded the negotiations site and plunged a knife into his heart in protest against the indiscriminant opening of Korea’s agriculture market. Below is an excerpt from a letter he wrote before he took his life.

I am a 56-year old Korean farmer. As a young man, after graduating from an agricultural college, I worked with my own hands to turn rough mountainous lands into a small dairy farm. While working on my farm, I also cultivated rice in fields in the valley below, which I had inherited from my father. This is how I lived—by farming.  While doing this precious work I came together with others like me to found an organization through which we could contribute to our local community and our country.     

After the WTO, our worst fears were realized as cheap imported products flooded our agricultural markets. We knew that no matter how hard we worked we could not match the prices of these imports. We also came to feel how very small we are: our farms (average size 1.3ha) are not even as big as 1/100 the size of those in large exporting countries. As cheap agricultural imports poured in all around us, my friends and I switched from growing one crop to another, trying to survive in the cracks between them. But, of course, there were those who got tired of living in these cracks and gave up farming altogether.      
After the Uruguay Rounds and South Korea’s agricultural structural readjustment, it is true that there were some individual cases of farmers whose productivity increased.  However, you must understand that it was also then that overproduced agricultural products flooded our markets at the lowest prices ever. Because of this there were times when the price of our goods would suddenly plunge to just 1/4 of their normal price. Think about it: if your salary was suddenly cut in half without you knowing why, how would you feel?    

Those who gave up early went to the city only to fall into urban poverty, and those who fought until the end trying to break this vicious cycle were thrown into bankruptcy by unimaginable debt. Of course, among them, those with good luck have been able to go on a bit longer, but we can only wonder how long it will be before they too meet a similar fate. 

As for me, I could not help but stay up at night looking around the faded and empty homes of friends who left, wishing for their return. Once I rushed to the house of a man who, despairing at his uncontrollable debt, took his own life by drinking a toxic chemical; I could do nothing but listen to the sound of his wife weeping.     

Today if you go to farming villages in Korea you will come across worn-out vacant houses and old people with bent backs and walking canes. The only way you can experience what was once called the “beauty of Korea’s countryside” is in a car flying by on the highway. In fact, those highways are attracting large buildings, apartments and factories. 

This land was once rice fields made by our ancestors and cultivated for hundreds of years; in the past it gave forth our daily food. In the modern society of today the healthy land and water maintained by our fields are even more important. Is there anyone who will protect our farmland, our traditional culture, our beautify scenery and our environment?  

Case 2: Living with HIV/AIDS 

My name is Han-ki Yoon, and I found out that I have AIDS nine years ago. Currently in South Korea, there are 13 kinds of AIDS treatment drugs, most of them developed in the 1990s. Theses drugs are covered by the national health insurance at no cost to the patient. However, since AIDS was first discovered in South Korea 20 years ago, the number of patients who have developed a resistance to these drugs is growing. I myself have developed a resistance to all 13 drugs. Since 2000, the FDA has approved 12 types of AIDS treatments, but only 3 are permitted to be sold in South Korea, with only 2 types actually on the market. The pharmaceutical company Roche has a permit to sell Fuzeon in South Korea but refuses to sell the drug, demanding a price that is in accordance with the price in the U.S. and Europe, which is $20,000 a year for one patient. Was not the high cost of Fuzeon also a problem in the U.S.? Furthermore, the cost for South Korea’s insurance system and government is increasing because all AIDS treatment drugs in Korea, except for one, are original drugs with patents.

I am now face to face with death as I wait for new AIDS treatments to be sold in South Korea. People living with HIV/AIDS (PLHA) all over the world suffer from prejudice and discrimination. Similarly, PLHA in Korea have difficulty holding a job. People like me, whose bodies are already weak, do not have an income because we cannot do manual labor. I am 40 years old, but my savings are less than a thousand dollars. It is impossible for me to pay $20,000 a year for Fuzeon. Only a few people in South Korea can pay $20,000 a year for any kind of treatment. Fortunately, I asked the organization AID for AIDS for help, and I am now able to get Fuzeon. However, I still need to buy the expensive drug Aptivus, made by Boehringer Ingelheim, for my drug cocktail. Treatment for various infections is also very expensive. Currently, I receive a treatment for cytomegalovirus (CMV), which costs $2000 a month. I cannot pay for this on my own, so I get help from my friends, but I don’t know how long I can keep this up. While waiting for new drugs, I lost sight in one eye, and it has become difficult to walk. I now live in a center for people with AIDS, the only option I have if I want to survive.

I know that drug inaccessibility is a problem for many. Since 2004, I have been active in the organization called Solidarity for HIV/AIDS Human Rights of Korea (NANURI+). I am its chairperson. When we heard early last year that the negotiations for Korea-U.S. FTA would begin, we were extremely worried. When South Korea’s Ministry of Health and Welfare announced a drug pricing policy (which would stabilize drug prices) in May 2006, the multinational group, Korean Research-based Pharmaceutical Industry Association (KRPIA), held a press conference opposing the drug pricing policy, which I attended. They said that they oppose the policy in order to protect patients’ access to new drugs, and that if the drug pricing policy is not repealed, all investment would be withdrawn. I know better than anyone that KRPIA’s notion of ‘access to new drugs’ is only possible when we pay their high price. They demand a high drug price without good reason. I asked them, “I’m an AIDS patient; why is Roche trying to sell Fuzeon at such a high price?” It was not easy for me to reveal to the media that I am an AIDS patient, but I wanted to ask if it makes sense to them that I have to face death because drug prices are too expensive. They did not answer. Their ‘access to new drugs’ was only a lie.

Wendy Cutler stopped the 2^nd round of Korea-U.S. FTA negotiations with the same reasoning as KRPIA. And the USTR formally accepted South Korea’s drug pricing policy but has demand 16 items; these 16 items would make the drug pricing policy an empty shell. At the moment, South Korea’s pharmaceuticals are about to be negotiated with U.S.’s trade remedies in a high-level ‘Big Deal’ meeting. Does it make sense that the lives of patients are exchanged in the hands of negotiators? If we look at U.S. FTAs with Chile, Singapore, Australia, and Central America, they contain clauses about extending patents and exclusive rights and restricting compulsory licensing and generic drugs. Also, the investor-state claim clause in included. The Korea-U.S. FTA will result in a rapid rise in drug and treatment costs, and the state will be susceptible to lawsuits whenever a policy benefiting patients is implemented.

Last August, I attended the International AIDS Conference. My friends tried to stop me from going because of my poor health, but I had to do something about the FTA and the abuse caused by pharmaceutical companies. I talked to people living with HIV/AIDS from Thailand, Malaysia, the Dominican Republic, the U.S., France, and South Africa. We held a rally opposing FTAs, which only benefit pharmaceutical companies, while shouting, “Life Over Profit!” It is unthinkable what would happen to Thailand’s 700,000 people living with HIV if the Thai-U.S. FTA is passed. Last November, the Thai government implemented compulsory licensing on AIDS drugs. Thailand’s national pharmaceutical company is able to distribute the AIDS treatment Efavirenz at 1/30^th of the cost of Bristol-Myers Squibb. Moreover, in last August, after a long struggle, Thailand’s people living with HIV/AIDS persuaded GlaxoSmithKline to give up its patent on Combid. I was very happy to hear such news, but I am very worried that everything would become worthless if the Thai-FTA is passed.

All over the world 8000 people die of HIV/AIDS each day because of patents and expensive drugs. For people living with HIV/AIDS, FTAs are a death sentence. I have a clear reason to oppose the Korea-U.S. FTA. The FTA will take away the chance for AIDS patients like me to receive treatment and will contribute to the spreading of AIDS. The FTA shall bring disaster upon the people living with HIV/AIDS all over the world.

Case 3: Living with Leukemia

I am Jung-ha Kim, the older sister of the deceased Jung-gyu Kim. My brother, who suffered from Leukemia, passed away on October 12, 2006.

My brother was diagnosed with Leukemia in August 2005. He was initially treated with the Leukemia drug Gleevec, but his body began to reject the treatment after only 6 months. He then tried to participate in the clinical trial for Tasigna, a new drug produced by Novartis Pharmaceutical, but was excluded from the study due to side effects. In the face of these two failures, a new drug called SPRYCEL that combats resistance to Gleevec became my brother’s last hope. SPRYCEL was developed by the U.S.-based transnational pharmaceutical company Bristol-Myers Squibb and received FDA approval on June 28, 2006.
Sadly, the clinical trail for SPRYCEL was already completed, and a month’s dose costs about $4500. My brother simply did not have the means to pay for the medicine so, instead, he left for a rest-center in the mountains where he could prepare to die.    

At the rest-center, my brother’s pain became very intense. Because it was not possible to get anesthesia or a blood transfusion there, we eventually sent him back to a college hospital where he began anti-cancer treatment. Thankfully, he took a turn for the better, but $4500 a month for the proper medicine was simply impossible for us to manage. So my brother had no choice but to wait for the day when the Korea Food and Drug Administration would approve SPRYCEL for its free provision program. Before that could happen, he relapsed. He started the anti-cancer treatment again, but it was not sufficient. My brother died on October 12 last year. 

Five years ago the “wonder drug” Gleevec shook the world of Leukemia suffers. Like a miracle from Heaven, it promised five more years of life to over 90% of all patients.  However there is still the 10% whose bodies reject the treatment and continue to deteriorate. For this 10% the drug SPRYCEL is equal to life. This is because SPRYCEL has been proven to extend the lives of over 80% of the patients who develop resistances to Gleevec.   

Anyone can get a terminal disease. Even the healthy die of disease in their old age. If you become ill you must take medicine, and you must pay the price of that medicine. You have to keep paying until you recover completely or until you die.
 
Today about 2,000 Leukemia patients in Korea are taking Gleevec, which costs the National Health Insurance Corporation over $31 million a year. In addition, the number of patients is increasing by over 200 people each year, so each year the drug expense goes up over $7.5 million. In 2013, the year the patent expires, the National Health Insurance Company will have to pay more than $85.7 million for Gleevec to treat 3,400 Leukemia patients.  

At first there was only Gleevec. Now-a-days there are more than ten “miracle drugs” including Gleevec, Velcade, and Temodal approved for national healthcare coverage at high prices and many other expensive drugs like Tasigna and SPRYCEL that are currently being clinically tested or waiting to be approved. 

The problem, not just with Gleevec, but with most miracle drugs, is that they do not provide complete cures, but rather only extend your life. And, for them to be effective, you have to take them everyday for the rest of your life until you die. The standard is that if you are a patient waiting for death, these drugs give you the gift of life and health, but in exchange, you have to pay exorbitant fees for the rest of you life. The National Health Care Corporation also has to put out huge amounts of money.
 
If the Korea-U.S. FTA is concluded it will mean the strengthening of patents and drug prices with skyrocket. The consequent depletion of funds for public healthcare will mean the destruction of the national health insurance system. 

In Korea, which currently provides universal healthcare for its people, protecting patients’ access to medicines is the basic premise of insurance. However, if, due to skyrocketing drug prices, the fund for public health insurance is drained, even drugs that are indispensable for the treatment of people like my brother will not be approved for coverage or will lose their approval. It will then become inevitable that some patients die because they don’t have money even though medicines that could treat them exist.

I believe we should not see pharmaceuticals as merely commodities. In reality they should be seen as public goods because they are directly related to people’s lives and health. Therefore, they should not be included in free trade agreements. 

Drugs which could cure you, but which you cannot take unless you have a lot of money are not really life-giving medicines. Rather, they are poisons that kill you two times over. This was the case with my brother. Please, I fervently pray that you will not make this historic mistake called the FTA, which will bring this sad misfortune to patients like my brother and all Korean people.

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