I read an interesting article on the US-Korea free trade agreement. The possible future agreement is being viewed as "the biggest U.S. free-trade deal since the North American Free Tree Agreement and the most important development in U.S.-South Korean relations since the two countries signed their military alliance in 1953." There is no question as to the economic impact of the deal on the US-Korea bilateral trade. What really caught my attention was the issue of North Korea and the Kaesong industrial park. I googled Kaesong to find more information on the project. According to wikipedia, North Korean government designated part of Kaesong as an industrial zone which would allow foreign investment. It seems similar to that of the Chinese special economic zones that were established in China, which played a significant role in the Chinese economic development. In Kaesong industrial park, the wages are set at around 50$ a month, a great economic incentive for south Korean investors. 50$/month is artificially low wage, and a great bargain compared to the rising labor prices in South Korea. In addition, the workers are educated and there is no language barrier. North Koreans seem to finally understand the changing times of the global economy and seem ready to embrace certain elements of market economy. In my opinion, it seems like a win win situation for both South and North Korea, and signals the beginning of economic integration.
The US government does not seem to be pleased with the Kaesong Industrial Park, and the increase in trade between the two Koreas. Many lawmakers in the US congress believe the industrial park goes against the strict economic sanctions placed against north Korea.
Rather than criticizing the recent economic reforms like the Kaesong Industrial park, the US interest may be best served by encouraging economic integration. China is an example of how economic development can positively influence bilateral diplomatic relations. Other critics believe north Korean economic development will only help sustain the north Korean authoritarian regime. I believe economic integration will smoothen the political transition and with the ultimate goal of unification. The European Union comes to mind when thinking about how economic integration can lead to political integration. The EU originally was formed as the European Coal and Steel Community. The economic integration over the years led to political integration with the creation of the European parliament, and other supranational political bodies. If the US have it their way, North Korean regime may topple in the future, but it will most likely incur a heavy cost. Instead of letting the north Korea fall further deep into poverty, the most effective policy is to show a positive example and encourage change through moral suasion, an element of Confucianism.
What are your opinions on this issue?
Reference:
http://news.yahoo.com/s/nm/20060604/pl_nm/trade_korea_usa_dc_2
http://en.wikipedia.org/wiki/Kaesong_Industrial_Region
http://today.reuters.com/News/CrisesArticle.aspx?storyId=SEO131951
2 comments:
I suppose you could say that acts of economic integration, such as the Kaesong industrial complex, will "smoothen" the transition.
It seems to me that the South Korean government is doing all it can to prop up the Northern regime. They are willing to let millions of people, who are constitutionally considered citizens of their country, suffer brutality and death under one of the most oppressive regimes in recent history.
The South Korean reunification ministry's goal isn't to reunify with the North, it is to prevent it. By ignoring all wrongs North of the DMZ and giving economic aid to the North Korean regime they are prolonging its existence. Reunification would be an economic disaster for South Korea, and the South Korean government is determined to prevent it, regardless of the human costs.
While China turns a friendly shoulder to the US and it's allies it is also increasing it's military strength at an alarming rate. It is a well known fact that they understate their military spending each year. In the near future they will have a blue water navy. Do not forget that they are a Communist government. Just because they have opened up their markets does not mean that they have the same ideals as we do. They suppress in thier people every freedom that we hold dear. They adjusted thier economy profile just to increase their own military might and thusly their status as a world power. If the same is done with North Korea then the free world would only only be shoring up the strength of our enemies whether anyone wants to beleive it or not. The best thing for North Korea is a regime change to a truely democratic country and not one in name only. If I may quote the words of Ronald Reagan “No arsenal, or no weapon in the arsenals of the world, is so formidable as the will and moral courage of free men and women.”
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