Critics say that local government chief excessively intervened in foreign affairs


The government on Tuesday rebuffed Seoul Mayor Park Won-soon’s concerns about the Korea-U.S. Free Trade Agreement, giving little credence to Park’s claims.

“Many exaggerated concerns with little basis in facts were found (in the Seoul mayor’s statement). Among Seoul City’s claims there were many distortions and misunderstandings about ISD,” Deputy Trade Minister for FTA negotiations Choi Seok-young said at a briefing conducted by five concerned ministries.

He added that under the Constitution, the central government has sole rights regarding foreign policy, defense and other policies that have nationwide implications, rejecting Park’s claims regarding the exclusion of regional governing bodies in discussing related matters.

Along with Choi, high-level officials from the Ministry of Knowledge Economy, Ministry of Strategy and Finance, Ministry of Justice and the Ministry of Public Administration and Security took part in the briefing.

On Monday, Park released a statement that in effect expressed his opposition to implementing the Korea-U.S. Free Trade Agreement. 

On Tuesday, Park revealed his intention to set up a civic-government collaborative group to handle related issues, raising further criticism that he was going beyond the boundaries of a regional government’s role.

In the statement, Park said that regional governments should be included in the central government’s committee on issues regarding the investor-state dispute or ISD clause and that it could bring significant financial costs for Seoul city government if its policies are found to have damaged investors’ interests.

The ISD settlement clause allows disputes between the Korean government and foreign investors to be settled under the mediation of an international third party such as the International Center for Settlement of Investment Disputes.

Choi, however, said that such claims were groundless.

“If a violation (of FTA clauses regarding investment) occurs, the investor can bring a case against the central government, so regional governments are not directly involved,” Choi said. He added that the case holds even if a violation of the pact is incurred by policies implemented by a regional government.

“The fact that there are a large number of cases where the ISD clause is invoked involving the U.S. is because a number of developing countries have many violations. Claiming that we (Korea) will also see an increase in the number of such cases is excessive speculation.”

Regarding the trade pact in general, Park said that its implementation would cause Seoul city’s tax revenues to drop, and that mechanisms to prevent utilities rates from being pushed up by foreign investors holding stakes in state-run electricity and gas providers are required.

The statement also calls for the central government to work with his office to analyze the effects of the pact on the lives of Seoul citizens and argues the central government should not process the pact without conferring with Seoul City.

Choi and other officials also dismissed such claims, saying that the Finance Ministry has already drawn up measures to provide additional subsidies to local governments to make up for reductions in their tax revenues, and that the Korea-U.S. FTA includes several layers of protection to guarantee Korea autonomy in public policy.

By Choi He-suk  (cheesuk@heraldcorp.com)