[Lee Jae-min] Racing against the clock

By Korea Herald
  • Published : Sept 2, 2014 - 20:14
  • Updated : Sept 2, 2014 - 20:14
It is everybody’s nightmare when the deadline for a project is approaching but progress is slow. A deadline, if well managed, works as a catalyst for a positive outcome ― we all experience last-minute creativity and efficiency sparks under extreme time pressure.

When, however, a deadline is imposed but the task is unrealistic, this positive last-minute drive does not work. People just have to let the chips fall where they may.

Ever since a deadline was set as the end of this year at the July summit meeting in Seoul, the Korea-China FTA negotiations have intensified on all fronts to meet it. It is now being mentioned that a summit meeting on the sidelines the November APEC meeting in Beijing may declare the completion of the negotiations.

For this to happen, some miraculous strides need to be made to narrow the gaps between the two countries’ positions in the next two months in key sectors such as industrial goods and agricultural products. It is theoretically feasible but stars must align first.

The pressure of meeting the deadline is already pushing Korea to reduce its ambitions and kick the can down the road. In the 12th round of negotiations held in Daegu in July, the two countries reached a compromise on services. One of the critical differences between the two sides was whether to adopt a “negative” listing system in services trade as suggested by Korea or a “positive” system championed by China. In the negotiation held right after the summit, Korea agreed to accept a “positive” listing approach in exchange for a promise that the two sides will seek to amend the agreement in the future to adopt a negative scheme after the agreement enters into force.

Once concluded, any treaty is difficult to amend. Particularly so, in the early stage of implementation, and more so if the issue has been one of the key pillars of the negotiation. Today’s complacency can be tomorrow’s headache.

What has been put on the backburner in the heat of the Korea-China FTA negotiations is the mega-FTA that stands to affect Korea’s interest significantly in the long run ― the Trans Pacific Partnership. In an effort to find a breakthrough, 12 TPP negotiating countries are having meetings in Hanoi this week. Interestingly, they also have the same deadline in mind ― the November APEC meeting. Wide gaps in views between the United States and Japan, and the upcoming U.S. mid-term election in November still make it quite challenging to meet the deadline.

If TPP participants miss the November deadline, it might prolong the entire negotiation and this may open up a small but new window of opportunity for Korea to join the TPP as an original member. If Korea’s ultimate plan is to join the TPP at some point, doing so as an original member would make more sense. Once a trade agreement is concluded, membership fees for newcomers are usually high.

Noting the importance of a mega-FTA as a venue of new rule-making in many areas of trade, a country’s accession to the agreement after all deals are completed would mean losing an opportunity to have its voice heard in the rule formulation stage. If Korea has strong interest in TPP, this fall and winter may provide the last chance to get on the bandwagon. The benefits to be flowing from a prospective FTA between Korea and China are obvious and undeniable, but meeting the deadline for deadline’s sake should not blind Seoul to other important developments in the trade front.

As much as a prospective Korea-China FTA is important, every step and decision should be carefully made. If the bilateral FTA, in practical sense, cannot be reached by the desired deadline or can only meet the deadline in a hollowed-out form, the approach should be shifted to account for other pending issues such as the TPP. There is no need to put all eggs in one basket. 

By Lee Jae-min

Lee Jae-min is an associate professor of law at Seoul National University. ― Ed.