President Lee Myung-bak is meeting Rep. Sohn Hak-kyu, leader of the main opposition Democratic Party, on Monday morning. They are set to discuss six agenda items at the breakfast talks, which their aides expect to last for about two hours.
The agenda items are: a cut in university tuition fees, a corruption scandal involving savings banks, an early ratification of the Korean-U.S. free trade agreement, job creation, and a proposal for a supplementary budget and putting household debt under control. With each being an issue of great magnitude, it is doubtful that all of them will be appropriately addressed in two hours.
Moreover, Lee and Sohn are so wide apart on key issues ― tuition fees, the free trade agreement and a supplementary budget ― that it will demand a Herculean task to strike an accord on any of them. The dim prospects are a cause for concern that the talks may end up with nothing but a photo op, as their earlier meeting, held in May 2008, did.
Sohn’s demand for a 6 trillion won supplementary budget is related to his proposal to cut tuition fees by half at an early date, if not in September, and his call for a job-creating program. But Lee is said to be firm in his belief that the budget surplus should be spent on defraying the national debt, which has ballooned in the wake of the global financial crisis.
On the issue of half-priced tuition, Lee believes a reform in higher education must come before any action is taken to cut tuition fees. Lee is apparently irked by the ruling Grand National Party’s latest proposal to secure 1.5 trillion won from the 2012 budget plan, spend it on scholarships and double the government’s subsidies to 3 trillion won by 2014 to cut tuition fees up to 30 percent. His office has made it clear that it is opposed to the proposal.
Another issue that sets Lee and Sohn wide apart is the scandal involving several savings banks. Lee believes their near insolvency can be traced back to the previous administrations’ lapse in policy ― permitting mutual savings and credit unions to turn into savings banks and raising the maximum coverage of deposit insurance from 20 million won to 50 million won. But Sohn claims that the Lee administration’s inadequate supervision is responsible for their problems and the lobbying and corruption scandal involving them.
Nonetheless, Lee and Sohn are likely to agree on an inquiry by independent counsel into the case. They are under mounting pressure in this regard, given the public opinion that the investigation by prosecutors has been inadequate.
Another area in which they can be easily pull off an agreement is the snowballing household debt, which has surpassed the 800 trillion won mark. Lee’s administration is already working on a package designed to put it under control.
But one of the thorniest problems is posed by Lee’s proposal to ratify the Korean-U.S. trade agreement no later than in August. Sohn demands it be renegotiated again, claiming that the agreement, which had been concluded by the previous Korean and American administrations, was rewritten in favor of the United States in recent renegotiations.
Sohn’s allegations cannot be brushed aside as groundless. He has a point, given that American demands with regard to auto trade were accommodated during the renegotiations. Nevertheless, Sohn will have to determine whether Korea will be better off with the allegedly flawed accord or without it.
But remarks by Kim Hyun-jong, the former trade minister who negotiated the original agreement, should help Sohn make a final decision. At a forum hosted by Washington-based Brookings Institution earlier this month, Kim said it should be ratified in a “macro framework,” given Korea’s fierce competition with China and Japan in the U.S. market.
For his part, Lee will do well to go the extra mile to persuade Sohn to come around and endorse the free trade agreement. If necessary, he should offer concessions in other areas in exchange for Sohn’s commitment to ratifying the accord by the August deadline. Lee, in the fourth year of his five-year presidency, should be reminded that he needs the opposition’s help more now than three years ago.