RPT-FACTBOX-Why S.Korea's Lee won't overturn U.S. beef deal
09 Jun 2008 00:10:52 GMT Source: Reuters
(Repeats item first issued on June 8 with no changes to text) By Jack Kim SEOUL, June 9 (Reuters) - South Korean President Lee Myung-bak has seen his support plummet below 20 percent and faced thousands of protesters taking to the streets but he has refused to scrap an unpopular deal to resume imports of U.S. beef. An angry crowd clashed with police in an all-night rally demanding the repeal of the beef deal and Lee's ouster before riot police moved in to break it up at daybreak on Sunday. The public anger over the beef deal, which critics say might expose South Korean consumers to U.S. beef possibly infected with mad cow disease, has put Lee's plan to push through economic reforms on hold. Following is a look at why Lee might be refusing to bend to immense political pressure despite the political damage it is causing his new government. LUCRATIVE TRADE DEAL AT STAKE - South Korea's refusal to open its market to U.S. beef has been a major political hurdle to U.S. Congress approval of a sweeping free-trade deal between the two countries. U.S. lawmakers have threatened to block the trade pact, signed over a year ago but yet to be approved by either country's legislature, unless American beef flows freely into South Korea. If South Korea seeks a renegotiation of the beef deal to reflect its public safety concerns, it could trigger calls in the United States for changes to the free-trade pact related to the auto sector, which has the potential to sway U.S. elections. Detroit is concerned that South Korean cars and parts will surge into the U.S. market, risking even more U.S. auto industry jobs. Studies have shown the bilateral trade deal could boost two-way trade by $20 billion annually. TURNING A BAD DEAL INTO A WORSE ONE? - It is not technically impossible to renegotiate the deal, which is designed to resume imports of U.S. beef from cattle of all ages. But analysts point out South Korea cannot win U.S. concessions in a renegotiated deal unless it gives up something in return. The result, they say, would be a worse deal. LOATH TO FIGHT A TRADE WAR - President Lee said South Korea, a largely export-dependent economy, has everything to lose by fighting a trade war, which he said repealing the beef deal could trigger. South Korea has in the past rushed to sign a deal and later try to take steps to neutralise its impact in the face of sharp criticism back home, only to see the move backfire. In 2000, it was forced to admit defeat and drop a safeguard import ban on Chinese garlic after Beijing slammed the door on South Korean electronic and chemical products in retaliation. NO HONEYMOON BUT 1,700 DAYS LEFT IN OFFICE - Lee has been clearly scarred by the beef outcry and earlier policy blunders following a landslide victory. But he still has nearly five years left in office and a lot of time to recover and push his pro-business agenda, analysts said. Policy initiatives on hold in the meantime include a massive privatisation plan that would free up tens of billions of dollars to stimulate the economy, an ambitious tax reform package, and deregulation of the financial services sector. (Reporting by Jack Kim; Editing by David Fogarty)
A man, wearing a mask to protect himself from yellow dust, rides a bicycle at a riverside of Han river in Seoul May 30, 2008. South Korean National Assembly building is ...
