Tensions in Korea are still mounting over the US-Korea trade deal. The agreement passed in the US Congress despite the vast majority of Democrats voting against the bill. Now all eyes turn to Korea as Korea’s Democratic Party opposition leaders and the ruling Grand National Party come to a standstill over the Investor-State Dispute clause in the trade pact.
While Korean corporate groups are pushing for speedy ratification of the trade pact, opposition is mounting over what the opposition party sees as a threat to its domestic laws. The Investor State Dispute clause has become a point of contention. The Korea FTA Industry Alliance claims, “It is necessary to protect the $21.7 billion that it has invested in the United States over the past 5 years.” Yet, the opposition party sees the investor state claims as an affront to Korean sovereignty and its ability to enforce domestic policies.
Public Citizen also raised the investor state dispute settlement clause as one of the fundamental flaws in the Korea deal. The Investor state clause would allow for Korean and US multinational investors to have disputes heard before foreign tribunals, despite the fact that both countries have strong domestic court systems. These clauses allow investors to be awarded taxpayer-funded cash compensation if environmental or health policies get in the way of their expected future profits.
In order to ease tensions, President Lee, in a rare move, addressed parliament and has agreed to renegotiate the investor state clause with the US three months after the agreement is ratified. The Democratic opposition party is not backing down and is echoing the sentiment of the thousands of daily protestors that have gathered in Seoul to protest the trade deal. Party spokesman Lee Yong Sup stated that the party will not agree to ratification of the FTA before the investor state clause is renegotiated.