Opposition to the BIT, clone of the MAI!
Korean government is trying to conclude the BITs with U.S. and Japan. The
government proposed firstly the BIT to the U.S. in June, last year. And the
BIT between Korea and Japan is also being negotiated 'secretly' aiming at
concluding within this year. Since the IMF bail-out, the government has
focused how to introduce Foreign
Direct Investment(FDI). For the purpose of FDI, the government allowed
'hostile' M&A(Merger & Acquisition), enacted the law of FDI Encouragement,
and propelled the privatization of major public enterprise such as Korea
Telecom, Pohang Steel Coporation,
and Korea Heavy Industry Co. However, the government should show stronger
message to the transnational capital than the above 'domestic' policies, that
FDI is sure to be protected under any situations. In conclusion, the BIT is
designed as a 'safety net' of
transnational capital's investment.
Korean big companies, so-called Chaebol, also have pursued the liberalization
& deregulation of Korean economy since the early 90s. Because they couldn't
maintain the profit accumulation structure of so-called 'long-working hours &
low-wages' anymore, because of the Labor Grand Struggle in 1987. Overseas
investment of Chaebol has increased at the average rate of 50% a year since
the late 1980s, especially in ASEAN, China, Eastern Europe, and Latin
America. The FDI by Chaebol amounted to 13.7 billion dollars, 2.9% of the
GNP, in the late of 1996. According to the World Investment Report 1997 by
UNCTAD, there are 4,806 multi-national companies based on Korea -
comparing with 3967(Japan), 3470(U.S.)-, in 1996, even though the size of
them is smaller than U.S.'s and Japan's. In conclusion, Chaebol has pursued
to obtain freeer access to global financial
& goods market since the early 90s. For its freeer access to global market,
Chaebol had to give up the advantages in 'domestic market' to a certain
extent. That's why, Chaebol have admitted the
stream of liberalization & deregulation propelled by the government &
transnational capital. And also, Chaebol take advantage of this trends of
liberalization & deregulation in achieving its aims. Chaebol has two
'political' aims, one is to destroy the trade union and the other is to free
its management & operation from the government's intervention. Chaebol seems
to be successful in achieving the above aims, now.
Under these backgrounds, the government & Chaebol are trying to conclude the
BIT with U.S. and Japan, in order to encourage the process of liberalization
and deregulation. The BITs have the same negative impacts on the workers and
people as the MAI.
Especially, according to the prototype of BIT proposed by U.S. in 1998, the
following problems are expected.
1) 'Investment' has broad meaning even including 'short-term speculation'.
This will make more possibilites that financial crisis occurs.
2) 'National Treatment' and 'Most-Favoured Nation' clauses shall be applied
to 'pre- establishment' as well as 'establishment' of investment.
3) 'Performance requirement' should not be mandated or enforced as a
condition of any types of 'investment'. It includes 'to achieve a particular
level or percentage of local content, or to give preference to products or
services of domestic origin', 'to limit
imports by the investment of products or services in relation to a particular
volume', and 'to export a particular type, level or percentage', and 'to
transfer technology, a production process or other proprietary knowledge to a
national or company'. Because of
this clause, 'Screen Quota' system which enforces the movie theater to show
national movies at least for 146 days a year, shall be abolished or
diminished and the obligation of Korea Tobacco & Ginseng Corporation which
should buy the whole products of tobacco produced by domestic farmers shall
also be abolished.
4) The meaning of 'expropriation' is defined broadly like the case of MAI. It
covers both direct and indirect one. It means the government couldn't mandate
or enforce the certain standards of labor & environment to the foreign
investors. If the government do so, foreign investors can claim the
compensation of damages caused by the enforced standards against the
government.
Korean economy has changed 'government-controlled structure' into
'neo-liberal deregulated structure' since 1987, especially while passing the
IMF-managed regime.
The BITs will serve as the last phase of liberalization & deregulation. They
only mean 'disater' as for people and workers. Therefore, we oppose the BITs,
the clone of MAI, and also against the transfer the negociation of the MAI to
the Millenium Round of WTO. Because all of them have the same problems for
people.
by KoPA(Sep. 1999)
