SEOUL, SOUTH KOREA: Korea is on the front lines of the world economy. Lying between China and Japan, South Korea is also sandwiched between the communist North and American-style free trade that many resent. Yesterday, I stumbled into a storm of protestors at the center of these tensions.
My local host and I couldn’t figure it out at first. In one direction, hordes of people poured down the streets of downtown Seoul with flags and megaphones. In the other direction, a ten-lane thoroughfare was completely barren, except for a phalanx of police buses and officers wearing reflective vests and riot gear.
We saw only one small sign, which said in English, “NO FTA.”
This agitation against the US-Korea Free Trade Agreement seems a bit too late, as the United States and the Republic of Korea (as the South is known, versus the North’s Democratic People’s Republic of Korea) signed the deal in June.
U.S. Trade Representative Susan Schwab called it at the time “the most commercially significant free trade agreement the United States has concluded in the past 20 years.”
More important than NAFTA?
KORUS, in DC shorthand, is set to phase out trade barriers, especially for agricultural products, leaving Korea’s ports wide open to U.S. agricultural products with minimal or no tariffs to get in the way. Korea’s trillion-dollar economy–the tenth largest in the world–will be swarming with American grain, beef, and even automobiles.
That’s in addition to the 28,000 soldiers here, just about the number of Koreans who marched in favor of stifling the young FTA on Sunday. The Department of Defense and the Korean government are this very week set to initiate a $12 billion relocation of these U.S. troops out of central Seoul’s Itaewon area and its Yongsan base to rural Pyongtaek, but the groundbreaking is a political process as much as a military move.
The kind of Koreans I encountered yesterday seemed to have little patience for our presence, commercially or militarily. Police buses had their windows smashed, and the smell of burning plastic in the streets mingled with the horrendous odor of warm silkworm pupae served up to the protesters as they rallied.
Down the street, I beheld the most Dunkin Donuts franchises I’ve ever seen, which is perhaps fitting for Seoul, being one of the most densely populated urban centers in the world. As in many foreign countries, KFC restaurants outnumber McDonald’s locations here.
With drumsticks and doughnuts as well as radar installations and crew cuts, the Yankee presence is strong.
I asked about taking a trip up to the DMZ, the famous demilitarized zone on the 38th parallel that represents the Korean Peninsula’s state of geopolitical limbo. This month seems like an opportune time, since the defense ministers of the DPRK and the ROK are set to meet November 27-29 in the northern capital of Pyongyang.
But you have to take a special bus up there if you’re a tourist, and they only run once a month.
For leaders, however, the traffic seems to be flowing nicely in both directions these days.
This Wednesday, South Korean Prime Minister Han Duck-soo and his North Korean counterpart, Kim Yong Il, will meet here in Seoul, and last month a series of accords were inked at a summit in Pyongyang between presidents Kim Jong Il and Roh Moo-hyun.
All of this gets Korea closer to a true close to the war that ended, kind of, over fifty years ago. Tops on Wednesday’s meeting will be the development of a joint industrial park in the North and another economic zone on the west coast near China, proving the essential role of economics to peace on the Peninsula and in the regional scenario of growing prosperity.
P.S. Korea’s economic unification isn’t abstract. Korean companies have a ton to offer, not only to the North but to Wall Street as well. Tomorrow I’ll be meeting with a company that’s key to Korea’s future consumer dynamics, and giving that play exclusively to my Orbus Investor subscribers.
The Japanese company I added to the Orbus portfolio last week after a face-to-face meeting in downtown Tokyo is already a winner!
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