Canada-Korea Free Trade Agreement is a bad deal for workers

KCTU members protesting the U.S.-Korea FTA in November 2011

By Gerard Di Trolio

Thomas Mulcair would have you believe that free-trade agreements (FTAs) between developed countries are a good idea.

“I don’t mind being beaten out by a competitor on the manufacture of steel if they have labour rights, environmental rights and we’re on an even playing field,” Mulcair told The Record in Kitchener-Waterloo this past March.

The NDP, to its credit, has opposed FTAs with Colombia and Honduras over human rights concerns. But this concern with the well-documented human rights violations in these countries obscures how globalization, through FTAs, works to undermine labour standards even in advanced economies.

The South Korean situation is a perfect example of continuing pressures of globalization on labour rights. The labour movement in South Korea has a reputation for militancy dating back to the 1980s. It played a major role in working alongside civil society groups and students to bring an end to the U.S.-backed dictatorship that had ruled South Korea since the end of World War II.

Coming out of the dictatorship and into the 1990s, Korean workers made many gains and enjoyed low-income inequality while maintaining economic growth. The benefits to workers included pay based on seniority, and jobs for life.

Owing to global competitive pressure, South Korean companies sought to reform labour laws in late 1996, making it easier to lay off workers and make “non-regular” (precarious and contract employees) workers a larger part of the South Korean labour market. This was all done in the name of “flexibility.” Korea’s two major trade union centres – Korean Confederation of Trade Unions (KCTU) and Federation of Korean Trade Unions (FKTU), led the largest strike in South Korea’s history lasting from late December 1996 to the end of January 1997.

While the government withdrew the reforms, the Asian Financial Crisis of 1997 finally allowed neoliberal restructuring of South Korea’s labour market. Unemployment spiked to over seven per cent, from two per cent during the crisis badly damaging labour’s bargaining power. South Korea would eventually accept an IMF bailout package in 1998 that called for austerity and privatizations.

Here are some stark statistics that show the toll of neoliberal restructuring on the South Korean working class:

Using the U.S.-South Korea FTA as an example, we know what to expect when Canada joins one. Unifor is estimating 33,000 jobs to be lost as a result of the Canada Korea Free Trade Agreement (CKFTA). However, some unions such as the UFCW, are supporting the CKFTA. UFCW claims it will increase exports of Canadian agricultural goods, which will benefit UFCW members in Canada. This view ignores the impacts this will have on Korean agricultural workers as well as the broader negative impact it will have for Canadian workers.

Signing new FTAs remain a bad deal for both sides, even if they are advanced economies. These deals do nothing to reverse the trend of increased precarious work, stagnant wages, and growing income inequality. FTAs simply bind nations into the global neoliberal order ever so tighter.


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