The government and the ruling Grand National Party are at odds over how to minimize the damage that the pending free trade deal with the European Union would inflict on the domestic livestock farm business.
The GNP said Saturday that the party and the government failed to close the gap on tax exemptions for the stockbreeders who shift to another trade.
The government explained that it was set to disclose next month a 10-trillion-won ($9.2-billion) scheme for the advancement of the livestock industry that includes increased compensation to hog farmers for switching to different businesses.
The GNP found the government plan unsatisfactory and demanded that stockbreeders be exempted from capital gains taxes when selling their ranches or farms, said Shim Jae-chul, chief of the party’s policy coordination committee.
The government, however, was reluctant to talk about tax issues, Shim said.
The discussions came during a high-profile meeting of nine policymakers and lawmakers including Prime Minister Kim Hwang-sik, Finance Minister Yoon Jeung-hyun, Presidential Chief-of-Staff Yim Tae-hee, GNP floor leader Kim Moo-sung and other senior party officials.
Yoon said that tax cuts for hog raisers could give the wrong signal that the government will solve any controversial problem with tax benefits.
GNP floor leader Kim insisted that the FTA with the world’s biggest economic bloc should not be put at risk.
They also discussed the possibility of the FTA running against an existing law that regulates large supermarkets run by retail giants.
The government downplayed the concerns, saying that it would not be a problem unless the EU raises the issue first.
The government and the ruling party plan to discuss the FTA with EU again Monday.
The European Parliament ratified the FTA by an overwhelming majority in February, leaving it up to the Seoul government to have the deal take effect by July 1 as previously agreed.
The FTA calls for an elimination of 98 percent of import duties and other trade barriers applied to manufactured goods and agricultural products between the two sides within the next five years. It is a change opposition parties say would require sufficient protection for the local hog and dairy industries.
The controversial trade bill was rejected by the six-person subpanel under the National Assembly’s Foreign Affairs, Trade and Unification Committee Friday as the ruling party failed to secure the four votes necessary for majority approval. Among six legislators who took part in the vote, three approved of the bill, two rejected and one cast a blank ballot.
By Kim So-hyun (email@example.com