[NYTr] US-Korean Food Fight: A NAFTA Made for Asia

[All the News That Doesn't Fit]

Foreign Policy in Focus - Aug 24, 2007
http://www.fpif.org/fpiftxt/4496

U.S.-Korean Food Fight

by Christine Ahn

Whether measured in terms of farmers markets, growing memberships in
the Slow Food movement, or supermarkets like Wal-Mart selling locally
grown produce, the eat-local phenomenon is exploding across the United
States. Americans are increasingly concerned with what they put in
their bodies and where their food comes from. They can point to good
reasons: the obesity epidemic, food contamination, mad cow disease and
avian influenza, the survival of small farmers, oil shortages and the
massive amounts of energy used to ship food around the planet.

But as this healthy trend spreads across America's heartland, the U.S.
government is working to deny South Koreans the right to local food and
to undermine their domestic food safety laws through the Korea-U.S.
Free Trade Agreement (FTA). On June 30, 2007, one day before President
Bush's "fast-track authority" expired, U.S. and South Korean
negotiators signed the FTA. It now awaits ratification by Congress
through an up-or down vote without amendment. So far, the Democratic
leadership has said that the FTA is "dead in the water," but on the
unenlightened grounds that the FTA did not go far enough in prying open
South Korea's auto and beef markets.

If enacted, the FTA will become the most economically significant trade
deal since the North American Free Trade Agreement (NAFTA). Financial
transactions between the two countries surpass $74 billion annually.
The United States also intends to use it as a model to expand trade
liberalization throughout Asia. Like NAFTA, the FTA will forever change
Korea's agricultural economy. 

The Fate of Korean Farms

"In 1990, South Korea had 10 million farmers. Today, there are 3.5
million," said Sin Moon Hee of the Korean Women Peasants' Alliance.
"This is what unfettered trade has done to us and to the Korean
countryside."

In 2006, the United States exported $3.4 billion worth of agricultural,
fish, and forest products to South Korea, the sixth largest U.S. export
market. U.S. agribusinesses are salivating at the opportunity to reach
South Korea's 49 million consumers and the $12 billion agricultural
market through the FTA.[1]

Pro-business interests argue that the FTA will make South Korean
farmers more competitive, especially in cultivating rice, Korea's most
economically and culturally significant crop. But Korean farmers have
already undergone severe competition through market-opening reforms
over the last two decades. The costs? Over 6.5 million farmers have
been displaced and many traditional Korean crops, such as barley,
wheat, corn, fruits, and cotton have virtually faded from the Korean
countryside.

Korean peasants, so militant on the frontlines against the FTA, view
the agreement as the final straw in a string of domestic and
international policies systematically designed for their demise. During
the 1960s and 1970s, South Korean peasants essentially subsidized the
country's export-led industrial development. Then-dictator Park
Chung-Hee intentionally depressed agricultural prices in order to
acquire a steady flow of cheap labor to work in export factories. But
this export-industrialization policy, which drove millions of farmers
off the land, was mitigated by South Korean trade policies that limited
imports with high tariffs and quotas. Farmers' incomes diverged
considerably from those of urban workers in 1995 when the South Korean
government joined the WTO and signed on to the Agreement on Agriculture
(AOA).

Under the veil of making agriculture more competitive, the AOA forced
developing countries to eliminate quotas and forced governments to
import a minimum amount of agricultural commodities at a low tariff.
While developing countries were shredding the safety net for their
farmers, by the early 2000s, the United States and European Union (EU)
were spending $9-10 billion more on subsidies than they spent a decade
earlier, with the bulk of subsidies going to larger, corporate farms.
Small-scale farmers in the South were surviving off less than $400 a
year, while U.S. and EU farmers received on average $16,000 to $21,000
a year in subsidies. In 2003, the United States dumped on the global
market five commodities at 10 to 47 percent below the cost of
production.[2]

Korean farmers get a fraction of what U.S. farms receive, but there is
no comparison when it comes to scale. In the United States, the average
rice farm is 397 acres, compared with South Korea's average rice farm
of 3.5 acres. Approximately 8,000 of America's two million farms grow
rice, compared with South Korea where over 787,000 farms -- or 57
percent -- cultivate rice. From 1995 to 2005, the U.S. rice industry
received over $10.5 billion in government subsidies, of which 25% went
to the top 1%.[3]

"It doesn't even matter that rice wasn't included in the text of the
agreement," said Young-Koo Heo, Vice President of the Korean
Confederation of Trade Unions. "By 2014, Korea's rice market will be
opened," said Heo, referring to the AOA, "And that is the reason why
rice does not have to be included in these negotiations."

Going the Way of NAFTA

According to Korea's National Policy Institute[4], when tariffs on 20 or
more sensitive agricultural products are eliminated, within 10 to 15
years, the decline in production by Korean farms means the loss of $1
to $2 billion annually. Korea's agriculture could disappear in 10 to 15
years.

For example, tangerines account for up to 70 percent of Jeju Island's
agricultural production. It is estimated that opening South Korea's
citrus market to powerful U.S. companies like Dole and Sunkist will
force a 59% drop in the price of tangerines and result in the loss to
Korean farmers of over $200 million. Seeing how the FTA will seal their
fate, during the fourth round of FTA negotiations on Jeju Island,
thousands of peasant farmers swam 50 miles off the southern coast to
confront more than 10,000 Korean riot police to make clear that they
weren't going down without a fight.

President Roh has promised to set aside $119 billion to aid farmers
hurt by the FTA, but according to Cheehyung Kim of the Korean Alliance
Against the FTA, this "is the 10-year sum of what the government
already spends annually, and only a small portion of that amount
translates into actual income." Current subsidies haven't offset the
negative impacts of liberalizing Korean agriculture, so peasant farmers
are highly skeptical of this promised arrangement.

Korean farmers may have felt the weight of the WTO, but they can see
from Mexico's experience what a bilateral trade agreement with the
United States will mean. Under NAFTA, approximately1.5 million Mexican
farmers were forced to give up farming because they were unable to meet
the price of corn produced by massively subsidized U.S. agribusinesses.
"Before NAFTA, our lives were not easy," said Norberto Jimenez, once a
subsistence farmer in Oaxaca, Mexico and now a farmworker in Florida,
"but we had enough food for ourselves and our families." Jimenez, like
millions of Mexican farmers and peasants, were forced to migrate to
other cities to find work in factories or risk their lives crossing the
border for low-wage work.

Small-scale family farmers in the United States also took a hit from
NAFTA and other trade liberalization policies. From 1997 to 2002, over
90,000 farms with under 2,000 acres disappeared in the United States.
"Someone is benefiting from NAFTA and the FTAs," said Bill Christensen,
a fourth-generation family farmer from Missouri, "but not family
farmers." In the first year of NAFTA, Christensen says the profits of
agribusiness giants Archer Daniels Midland skyrocketed from $110 to
$300 million, and Cargill from $468 to $827 million. NAFTA advocates
promised American consumers lower food costs, but since NAFTA, the
price of food has jumped by 27 percent and money paid to farmers per
dollar dropped from $0.32 to $0.19. What's kept our food costs
relatively low then? "Immigrants," says Christensen. "They are the ones
growing our food."

Dismantling Korea's Food Safety Laws

Not only will the FTA force the extinction of Korean farmers, it is
working to undermine, and already has, South Korea's domestic food
safety laws. As a precondition to even begin talks, South Korea agreed
to re-import U.S. beef, which it banned since 2003 after the discovery
of mad cow disease in the United States. U.S. boneless beef and from
cattle under 30 months -- considered a lower risk of containing bovine
spongiform encephalopathy (BSE) -- can now enter South Korea.

But since the ban was lifted last December U.S. beef shipments have
been routinely returned because they contained bone fragments. Last
month, South Korea received a shipment from the United States of a
complete cattle spine, which has prompted South Korea to halt beef
imports pending an explanation from the U.S. Department of Agriculture.

In response Max Baucus (D-MT), chair of the Senate Finance Committee,
is threatening to block passage of the FTA unless South Korea changes
its domestic food safety laws. To South Koreans, U.S. beef is not just
a matter of trade. It has become the measuring stick of public health
and food safety in Korea.

U.S. biotech companies, running out of places to export agricultural
products containing genetically modified organisms (GMOs) due to
worldwide opposition, have turned to the FTA as a way to undermine the
Cartagena Protocol of the Convention on Biological Diversity[5], a
multilateral treaty that imposes labeling rules on agricultural and
food exports. According to media reports, the United States and South
Korea allegedly signed a Memorandum of Understanding that stipulates
that when Korea ratifies the Cartagena Protocol, it will not apply the
labeling rules to agricultural and food imports from the United States,
which is not a party to the treaty.[6]

Even an April 17 press release from the Biotechnology Industry
Organization (BIO) [7] refers to a "separate understanding" on
agricultural biotechnology. The United States and Canada, also not a
signatory, put this waiver into place with Mexico under NAFTA.
According to the Korean Alliance Against the Korus FTA, the side deal
will drastically weaken South Korea's legislative authority to
implement the Cartagena Protocol on Biosafety.

FTA's Future

In 20 years, will Korean meals consist of rice from Arkansas, beef from
Montana, and fruit from California? If global food trends are any
indication, this scenario has a high probability of coming true. But
the costs will be enormous, not just for Korea's diminishing
agricultural biodiversity, but the peoples' general sense of security,
as they will be beholden to U.S-dominated agribusinesses for food
imports.

Millions of Korean farmers -- most of them in the 60s -- will either
die in poverty or seek work in an already saturated urban job market.
More than 50 percent of South Korea's workforce are "irregular"
workers, meaning they don't have the same rights as workers with
benefits, including the right to unionize. "The fight against the FTA
is a class struggle, and who wins in this fight will determine the
outcome," says Jun-Sub Seo of the Korean Alliance,

President Roh is seeking ratification of the FTA before the end of his
term this year. In the United States, the Korea FTA may come up for a
vote in Congress this year, but it all depends on how the Peru and
Panama FTAs fare. So far, presidential candidates Hillary Clinton and
John Edwards have come out against the Korea FTA, siding with the auto
bloc led by Sander Levin (D-MI). But the alliance of agribusinesses,
biotech firms, pharmaceutical giants, and financial services firms
might be too powerful in the end.

It may all come down to the resistance of Korean peasants and trade
unionists against the WTO and now the FTA. Whether leading the
procession of thousands to tear down the metal barricades in Cancun or
swimming across freezing waters at the WTO meeting in Hong Kong, South
Koreans have been at the forefront of dismantling the perception that
these global trade institutions are beyond the peoples' reach.

Locavores in the United States can and must help. In an act of global
solidarity and recognizing our interdependence, the local food movement
in the United States should demand a moratorium on "free trade"
agreements to save the world's farmers and our right to have locally
grown food free of corporate control.


End Notes

[1]http://www.fas.usda.gov/info/factsheets/korea.asp

[2]http://www.tradeobservatory.org/library.cfm?RefID=48532

[3]http://www.kpolicy.org/documents/policy/070131thomaskimusskfta.pdf

[4]http://kaft.org/resources/KoA_Report_June_Visit.pdf

[5]http://www.grain.org/briefings/?id=199

[6]http://english.hani.co.kr/arti/english_edition/e_business/200534.html

[7]http://www.bio.org/news/newsitem.asp?id=2007_0417_01


[Christine Ahn is a policy analyst with the Korea Policy Institute at
http://www.kpolicy.org/ and a contributor to Foreign Policy In Focus.]