January 31, 2005
ROK-Japan Economic Partnership Agreement Plot Twist
The joint North-South Korean industrial park that began partial operations in Kaesong last December may prove to be yet another stumbling bloc along the road to completion for the economic partnership agreement (EPA) between Japan and South Korea, reports today’s Asahi. A small number of South Korean firms have already begun to produce household goods for sale south of the DMZ, and the park is expected to expand operations during the next 12 years to host some one thousand firms and employ over 100,000 North Koreans.
Needless to say, should this project ever get off the ground as envisioned it could provide huge and desperately needed stimulus to the North Korean economy. Of course, for the North Korean government there are as many potential dangers as benefits involved in this project. But for now the lure of growth seems to outweigh the risk of greater openness, and Pyongyang appears to be betting that this will somehow strengthen its hand. And therein lies the rub for the Japanese.
Since the North Korean government admitted to the abduction a number of Japanese citizens in September 2002 during a visit by Prime Minister Koizumi, relations between Tokyo and Pyongyang have steadily worsened. Although Japan has managed to secure the release of five of the abductees as well as their families, a number of Japanese remain unaccounted for. Included among them is Megumi Yokota, who was abducted 27 years ago at age 13, and who has become a magnet for sympathy for the Japanese public due to vigorous campaigning by her parents to publicize the issue. The North managed to pour fuel on the fire late last year when DNA testing revealed that remains believed to be those of Yokota-san belonged to two unidentifiable persons.
The North’s refusal to recognize the test results and intransigence in further discussing the matter has infuriated not only hard-liners within the Japanese government, but also an overwhelming majority of the Japanese public. One recent public opinion poll by the Yomiuri Shimbun showed three-quarters of respondents favoring the imposition of economic sanctions against the North, an action the North has declared it will consider an act of war.
Now the South Korean government is sending signals that under the terms of the economic partnership agreement, it might insist Japan to recognize goods produced in Kaesong as South Korean in origin. South Korea managed to gain such a concession from Singapore, with which it concluded an FTA last November. Although the Asahi quotes one South Korean trade official as saying that the same terms will be insisted upon with Japan, the Japanese foreign ministry is remaining coy on the issue and has refused to comment since the South Koreans have yet to make such a request formal.
It’s a little difficult at this point to read into the intentions of both sides based only on what was reported in the Asahi. However, if the South Korean government eventually does formalize this request it will unquestionably add yet another level of complication to already difficult negotiations (past problems include automobiles, agriculture, and even seaweed) by facing the Japanese with the extremely unpleasant proposition of indirectly subsidizing Kim Jong Il’s regime through its own trade policy.
And given present Japanese public sentiment towards North Korea this is a politically unpalatable option. Furthermore, asking the Japanese government to do so threatens to solidify opposition to the agreement within Japan. Protectionist interests already pressure LDP lawmakers against further trade liberalization, especially in sectors such as agriculture, which is a traditional support base for the party. A South Korean request that Japan treat Kaesong-produced goods as South Korean could have the effect of adding a new dimension to this pressure if conservative and nationalistelements take up the cause. And with the anti-North Korean sentiment among many LDP members, they probably wouldn’t have to push very hard.
Needless to say, should this project ever get off the ground as envisioned it could provide huge and desperately needed stimulus to the North Korean economy. Of course, for the North Korean government there are as many potential dangers as benefits involved in this project. But for now the lure of growth seems to outweigh the risk of greater openness, and Pyongyang appears to be betting that this will somehow strengthen its hand. And therein lies the rub for the Japanese.
Since the North Korean government admitted to the abduction a number of Japanese citizens in September 2002 during a visit by Prime Minister Koizumi, relations between Tokyo and Pyongyang have steadily worsened. Although Japan has managed to secure the release of five of the abductees as well as their families, a number of Japanese remain unaccounted for. Included among them is Megumi Yokota, who was abducted 27 years ago at age 13, and who has become a magnet for sympathy for the Japanese public due to vigorous campaigning by her parents to publicize the issue. The North managed to pour fuel on the fire late last year when DNA testing revealed that remains believed to be those of Yokota-san belonged to two unidentifiable persons.
The North’s refusal to recognize the test results and intransigence in further discussing the matter has infuriated not only hard-liners within the Japanese government, but also an overwhelming majority of the Japanese public. One recent public opinion poll by the Yomiuri Shimbun showed three-quarters of respondents favoring the imposition of economic sanctions against the North, an action the North has declared it will consider an act of war.
Now the South Korean government is sending signals that under the terms of the economic partnership agreement, it might insist Japan to recognize goods produced in Kaesong as South Korean in origin. South Korea managed to gain such a concession from Singapore, with which it concluded an FTA last November. Although the Asahi quotes one South Korean trade official as saying that the same terms will be insisted upon with Japan, the Japanese foreign ministry is remaining coy on the issue and has refused to comment since the South Koreans have yet to make such a request formal.
It’s a little difficult at this point to read into the intentions of both sides based only on what was reported in the Asahi. However, if the South Korean government eventually does formalize this request it will unquestionably add yet another level of complication to already difficult negotiations (past problems include automobiles, agriculture, and even seaweed) by facing the Japanese with the extremely unpleasant proposition of indirectly subsidizing Kim Jong Il’s regime through its own trade policy.
And given present Japanese public sentiment towards North Korea this is a politically unpalatable option. Furthermore, asking the Japanese government to do so threatens to solidify opposition to the agreement within Japan. Protectionist interests already pressure LDP lawmakers against further trade liberalization, especially in sectors such as agriculture, which is a traditional support base for the party. A South Korean request that Japan treat Kaesong-produced goods as South Korean could have the effect of adding a new dimension to this pressure if conservative and nationalistelements take up the cause. And with the anti-North Korean sentiment among many LDP members, they probably wouldn’t have to push very hard.
# posted by Saru : 4:58 PM
