Sometimes the demagogues are right: Gaeseong and the USA-ROK Free Trade Agreement

AFL-CIO may use the Gaeseong Industrial Complex to fight against a free trade agreement with Korea:  The Korean government is seeking to justify their fears.

Thea Lee, assistant director of the AFL-CIO had this to say at a congressional hearing yesterday (Yonhap):

(T)he working conditions of the North Korean workers "seem to us a little bit worrisome," especially in terms of protection and the conditions that they work under.

"Certainly, the wages are extremely low by South Korean standards, and we expect that the workers there have very few rights to organize independent unions, to exercise any rights at all."

Does the AFL-CIO plan to organize workers in Gaeseong?  Not really.  This is just a bit of positioning ahead of organized labor's latest fight against free trade.  Lee let the committee know the organization's real concern:

"We have a lot of concerns about what the impact of that would be, if we were to enter into an FTA with South Korea," she said.

I can promise you that you will hear this 'concern' again in the months ahead as the AFL-CIO and other anti-FTA groups use the restrictive labor conditions at Gaeseong to make it look like Americans workers would have to compete with (let's not use a loaded term like "slave") unfree labor.

At first, I thought that the AFL-CIO is putting up a red herring.  After all, most (all?) products made in North Korea are banned from the United States.  But it seems that their fears might be justified if the Korean government has its way (Bloomberg):

"The free-trade agreement must be expanded to include Gaeseong products," said Kim Dong Keun, chairman of the park's management committee, in Gaeseong. "The matter is still up for negotiation."

It might be up for negotiation but that doesn't mean its going to happen, as a US Trade representative spokesman said:

"This is a negotiation between the United States and the Republic of Korea," Christin Baker, Portman's spokeswoman, said Thursday. "Its provisions will apply to goods originating within the territories of the two parties."

I would think that the logic is pretty simple.  Gaeseong is North Korean territory.  The free trade agreement would be between the United States and South Korea.  Therefore, goods made in Gaeseong would not be included.  Would products made by American-owned companies in China be included?

Of course, if the Korean government wants to have products made by North Korean workers included in the FTA, they can always let them work in the south.

Comments

[Sperwer]

I would think that the logic is pretty simple.

This is Korea we're talking about.

To paraphrase Tina, "What's logic got to do with it?" or principle for that matter?

Korea is going to approach the FTA purely as a horse-trading session - which is why the negotiations will - and should -- fail.

[octaviuz]

While a basis in fact is clearly not particularly important to boosters of the Kaesong project, a devil's advocate might mention that it has traditionally been the view of both Korean governments that their territory included the entire peninsula.

[Andy]

Octaviuz,

That is true. However, North Korea has 'effective control' of Gaeseong/Kaesong (I use the updated spelling).