In the News (South Korea): [Letters] Free trade is not always beneficial
Free trade is not always beneficial
Korea’s middle class is in danger. Each round of new statistics reports more Koreans falling into the lower classes. With unemployment on a persistent rise, households are struggling to get by. At the same time, the country’s conglomerates are reporting record profits. Incomes at the top are growing while opportunities for job seekers are shrinking. The gap between rich and poor is growing. If some factions of the Korean government and business community have their way, this growing in inequality may accelerate to an unprecedented level.
A high ranking Korean diplomat told the Chinese press that the two countries will likely begin negotiations on a free trade agreement in 2011. Korea wants a free trade agreement to compete for the Chinese market in semi-conductors and electronics with Taiwan, after the Taiwanese signed the Economic Cooperation Framework Agreement with the mainland in June.
The bill will face opposition from small and medium-sized manufacturing firms, as well as farmers and fishermen. A free trade agreement that would expose Korean firms to low Chinese labor costs. Cheap imports would be disastrous for domestic industry. If workers in these sectors lose their ability to compete, they will struggle to earn a living in an economy that demands education and specialized skills. Even well educated candidates are struggling in the current job market.