SKFTA Impacts – Financial Crisis Internal

SKFTA Impacts – Financial Crisis Internal

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.

Internal Link Turn: Soko/North

SKFTA causes increasing military tension between the United States and Korea and further tensions in the Korea region

Korean Confederation of Trade Unions’11(Why We Oppose the KORUS FTA-KCTU Position, http://kctu.org/9928, July 26, 2011)

The KORUS FTA will be also harmful for the sustainable relations between the 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.

Internal Link Turn: WTO

Passage of SKFTA could potentially affect Doha, which would lead to bleak consequences.

Hennessy’11, Journalist for Irish Times.com (Mark, Why 10 Years of Doha Talks must end with free trade agreement, http://www.irishtimes.com/newspaper/world/2011/0526/1224297787031.html, July 26, 2011)

The Doha talks, if they can be brought over the line, offer “the most far-ranging and substantial package of trade liberalisation ever put within reach”, locking in and making “irreversible” the changes of the last decade. However, if they fail, the consequences could be bleak. Already, the United States has several bilateral trade agreements with Colombia and South Korea before Congress. Imagine the chaos, Sutherland warns, if one- to-one negotiations become the order of the day. The isolationist tendency in Washington, never far from the centre, is now reviving, he fears, leading some there to put their faith in a free-trade deal with smaller countries in the Pacific Rim, “even though they do as much trade with the US as the Netherlands”. Scathing about the lack of political leadership shown by the United States, Brazil, India and China, Sutherland says he is “for once” not critical of the European Union, saying that it had “gone as far as it could” on agricultural subsidies. Bilateral deals, he believes, will exploit the poor, since the richer nations can always push for unfair advantage, but the practice is spreading. Last year, the EU signed a deal with South Korea. Others are in the works with Colombia and Peru. Heads of state must become involved, he and Bhagwati now urge. “The Doha Round will die without explicit political leadership. Negotiators do not have the authority or legitimacy to make the final political compromises that are now required.” Usually, such reports are dry affairs, but Sutherland and Bhagwati’s language reflects an almost missionary zeal and belief in free trade, mirroring the arguments made in the 19th century that it would promote “justice, fairness and peace”. “Our leaders too often abandon the higher moral ground to the critics of free trade who arrogate to themselves the greater virtue when their opposition to free trade ought to cloak them instead in a mantle of unwitting wickedness.”

Doha is key to WTO functioning

Van der Merwe 11 (Christy Van der Merwe, July 28, 2011, Engineering News Online, “Lamy says Doha failure threatens WTO’s negotiation function”, http://www.engineeringnews.co.za/article/lamy-says-doha-failure-threatens-wtos-negotiating-function-2011-07-26)

World Trade Organisation (WTO) director-general Pascal Lamy has called on members to think about ‘what’s next’ for the Doha round and the global trade body, after they failed to agree on a package of achievable outcomes for the December Ministerial meeting. “What we are seeing today is the paralysis in the negotiating function of the WTO, whether it is on market access or on the rule making. What we are facing is the inability of the WTO to adapt and adjust to emerging global trade priorities, those you cannot solve through bilateral deals,” he said. The Doha Development Agenda was initiated to deliver trade improvements, in particular, for developing countries, and the negotiations started in 2001. Since then, the 153 WTO member states of have not been able to reach agreement on the Doha round. “This [Doha impasse] risks overshadowing the achievements in other parts of the WTO functions, such as monitoring, surveillance, dispute settlement or even Aid for Trade. There is, therefore, an urgent need to develop a shared diagnosis over the current impasse and what went wrong, as a means to prepare a discussion over possible solutions, as well as over emerging issues,” added Lamy. While some member states continued to urge for an agreement with regard to the Doha round, a number of commentators have said that the Doha round is dead. Following the recognition that big decisions on the major sticking points of the round – namely agriculture and nonagricultural market access – would not be forthcoming at the December conference, talk of a ‘plan B’ or ‘Doha-lite’ were suggested. This alternative would have likely included a duty-free quota-free access agreement – an aid-for-trade package opening markets to least developed countries (LDCs) – which could facilitate the elimination of nontariff barriers in LDCs and a resolution of the ‘cotton dossier’, putting a stop to subsidies for cotton farmers in the US. “We all knew that this was not going to be the final package, but rather, a step forward to demonstrate that we could deliver some results on the Doha Development Agenda, while waiting to finalise the full Doha package,” said Lamy. He added that it was clear from the start that LDC issues were a priority. However, some members felt that the LDC component alone would not address their constituency requirements and that there had to be a “plus” element in addition to the LDC part of the package. “The LDC-Plus package as we framed it in May is not taking shape as we would have wished. Unfortunate and frustrating as this situation may be, the question on all of your minds, then, is what next?” said Lamy. He said there were two main positions on ‘what next’. The first was to concentrate on non-Doha round Ministerial issues, and abandon the pursuit of a ‘Doha-lite’ package of agreements. Lamy said that proponents of this position argued that to keep on working for such a package would “suck oxygen from the other two tracks and would endanger the preparations for the ministerial”. They also argued that maintaining expectations for an LDC-Plus package that did not look doable by the time of the conference would put the credibility of the WTO at risk. The second position was that of members who urged that LDC Doha-related issues remain a focus for the Ministerial meeting, and the possibility of delivering on these should not be foreclosed. Lamy said that, in his view, and in light of the current political environment, it appeared that the most realistic and practical way forward was to work on the two tracks of non-Doha issues of the WTO, and the Doha Agenda post-Ministerial meeting in December. Lamy said that his aim after the summer vacation in the Northern hemisphere was to intensify consultations on Doha work that could be undertaken after December.

Bilateral trade agreements such as SKFTA undermine multilateral agendas

Bhagwati 7/24/11 (Jagdish N., New York Times, “The Wrong Way to Free Trade”, http://www.nytimes.com/2011/07/25/opinion/25bhagwati.html) Accessed 7/26/11

Bilateral trade agreements are not the same as free trade. Yes, they liberalize trade for the parties involved, but outsiders then face a handicap. The discrimination comes in the form of barriers like tariffs and antidumping charges, which countries impose on imports that they believe are priced artificially low. When the United States negotiates bilateral deals with other countries, the unbalanced nature of the one-on-one negotiations also opens the way for all manner of lobbies to ram their self-serving demands into the agreements. For example, when Washington negotiated free trade deals with Chile and Singapore, Wall Street lobbied to curtail those countries’ right to impose restrictions on capital flows at times of crisis — even though the International Monetary Fund now admits that such restrictions often make sense. Business lobbies have also pressed for excessively favorable treatment on intellectual property rights. American labor unions have learned these same tricks, urging Democratic legislators and administrations to block bilateral trade deals unless their demands for labor protections are met, as they did with the three long-delayed agreements now pending. But larger countries with more clout, like India and Brazil, will allow no such provisions. They correctly see these labor provisions as a form of anticompetitive protectionism. And they point out that it takes chutzpah for the United States to argue for labor rights abroad that often exceed those at home. Moreover, when powerful business and labor interests can extract concessions in those bilateral deals, they have no reason to support a multilateral trade agenda. Mr. Obama’s trade representative, Ron Kirk, points out that business leaders press bilateral trade deals, not the Doha round. The proponents of bilateral deals always complain that multilateralism is too slow. This surely confuses cause and effect.

**USE DOHA IMPACTS IF YOU NEED THEM HERESuspension of Doha would have various detrimental effects on US trade.

HKTDC’06, a society of over 120000 verified Hong Kong & China manufacturers & suppliers (U.S. Seeks to Revive Doha Round; Suspension Could Affect U.S. Trade Policy, http://www.hktdc.com/info/mi/a/baus/en/1X00ADS5/1/Business-Alert-–-US/U-S--Seeks-to-Revive-Doha-Round--Suspension-Could-Affect-U-S--Trade-Policy.htm, 7/26/11)

The suspension of the Doha Round is likely to have a number of significant effects. The most direct result is that the many trade liberalisation initiatives associated with the Doha Round will be put on hold for the time being. Benefits such as duty-free/quota-free treatment for least-developed countries, the elimination of agricultural export subsidies and increases in aid for trade assistance had been agreed upon but were dependent on the implementation of a final agreement. Efforts to further reduce tariffs and non-tariff barriers for consumer, industrial and farm goods, and to improve market access for services, will be delayed. And WTO talks on issues like reforming trade remedy laws and improving customs processes and other trade facilitation measures will come to a halt. Trade policy in the United States and other countries could also be affected. In the U.S., the Bush administration is seeking to move FTAs with Colombia and Peru through Congress and may accelerate its efforts to conclude bi-lateral FTAs before the expiration of TPA. FTA talks are in various states of play with Ecuador, Malaysia, Panama, South Korea, Thailand and the United Arab Emirates, and it is possible that additional FTA negotiations will be announced. Other countries, as well as blocs such as the EU, Mercosur and ASEAN, may turn their attention to bi-lateral or regional FTAs as well if it seems apparent that the WTO process will not move forward for some time. For example, ASEAN is likely to accelerate the pace of internal economic integration and enhance its relationship with China, the EU and MERCOSUR could finalise a bi-lateral FTA within the next year and the EU could pursue a number of bi-lateral FTAs in South East Asia. The suspension of the Doha Round could also intensify the use of the WTO dispute settlement mechanism to settle bi-lateral quarrels, particularly in the area of agricultural subsidies. Such a development could sour the mood for an eventual resumption of multi-lateral talks. Additionally, any large-scale attacks against U.S. farm subsidies would unquestionably be received with contempt by many U.S. lawmakers, which could dangerously strengthen anti-WTO postures in Congress.

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