FTA LABOR TEAM MEETS ROKG OFFICIALS

UNCLAS SEOUL 001327

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EAP/K AND EB/TPP/BTA
PASS USTR FOR CUTLER, KARESH, ANGEROT AND KI

E.O. 12958: N/A
TAGS: ECON ELAB ETRD KS PGOV
SUBJECT: FTA LABOR TEAM MEETS ROKG OFFICIALS

REF: A. SEOUL 507


B. SEOUL 548

C. SEOUL 549

SENSITIVE BUT UNCLASSIFIED -- PLEASE HANDLE ACCORDINGLY


1. (SBU) SUMMARY: U.S. FTA labor negotiators visited Seoul
April 4 through 7 to meet with Korean government, management,
and labor representatives; explain the FTA process; and
conduct background research on Korean labor law and
practices. Below, we report on the delegation's meetings
with the ROKG, including representatives of the Ministry of
Foreign Affairs and Trade, the Ministry of Labor, the
National Assembly, the Tripartite Commission, and the Korea
Labor Institute. In general, the ROKG officials were
well-prepared, cooperative, and hopeful that an FTA would be
successfully concluded. Labor and management meetings will
be reported septel. END SUMMARY.

DELEGATION IN LISTENING MODE
--------------


2. (SBU) FTA lead negotiator AUSTR Lewis Karesh told all
interlocutors that the purpose of his trip to the ROK was not
to negotiate but to learn. According to the Trade Promotion
Authority (TPA),signatory countries to an FTA must have laws
that respect fundamental labor rights and are effectively
enforced. To ensure that this provision is fulfilled,
Congress will require the Secretary of Labor to submit a
"meaningful" report on the ROK's labor practices. Karesh was
accompanied by Department of Labor (DOL) International
Economist Carlos Romero and DRL Acting Deputy Director of
International Labor Affairs Joseph De Maria.


3. (SBU) Much of the discussion centered on temporary,
part-time, or other "irregular" workers and the
Labor-Management Roadmap. (These issues are discussed
in-depth in Reftels A, B, and C.) Briefly, the irregular
worker issue refers to pending legislation that would
prohibit discrimination against irregular workers and turn
them into regular workers after two years of employment. The
government intends to pass the bill, which is opposed by both
labor and management, in April. The Roadmap, meanwhile, is a
schedule of labor reforms, most of which were suggested by
the OECD or ILO in the late 1990s. The Roadmap includes
measures that would help manage the January 2007 introduction
of multiple trade unions at the enterprise level and the
cessation of corporate payments to full-time union workers.
Controversy over the irregular worker bill has prevented
in-depth consideration of the Roadmap.

MOFAT ASKS PROBING QUESTIONS
--------------


4. (SBU) Kwon Yong-seok, Director of the FTA Bureau, said
MOFAT was concerned that perceptions in the U.S. Congress
about the Korean labor situation could differ from reality.
Kwon said the ROK Ambassador to the U.S. has been visiting
with Members of Congress to correct misperceptions and assure
them that Korea has become a totally different country over
the past 20 years.


5. (SBU) In the ROK, Kwon said that there was confusion
regarding the intention of the labor provisions. Many people
did not understand why American companies asked for increased
labor flexibility while FTA negotiators asked for increased
labor protections. There was a perception, he said, that an
FTA would reduce labor rights. In explaining the FTA to the
public, the Team pointed out that under an FTA a party could
not weaken its labor protections to attract investment.


6. (SBU) Kwon asked which previous FTA was the model for the
ROK FTA. When Karesh noted that we were not yet negotiating,
Kwon proceeded to differentiate the ROK situation from Oman
and Bahrain and to note differences between earlier and later
U.S. FTAs. In response to a specific comment concerning the
provisions on procedural guaranties, Karesh said that most of
the fundamental requirements, drawn from the NAFTA labor
chapter, remained the same. Kwon suggested that because ROK
labor law could satisfy all international requirements, the
ROK agreement would not need to be as complicated as some of
the other labor agreements.


7. (SBU) Kwon asked whether labor regulations in Special
Economic Zones (SEZ) that deviated from domestic laws but
still met international standards would be permissible under
an FTA. Karesh said that treatment of foreign companies in
SEZs would require further consideration. Asking about labor
practices in the United States, Kwon inquired whether the
federal government could intervene if a state failed to
enforce its labor laws. If not, he asked, what was the
remedy for ineffective enforcement of state laws? Karesh
explained that the labor laws within the scope of the FTA are
covered by federal law in the United States and invited Kwon
and the labor negotiating team to visit the United States to
learn more about federal and state labor practices.


8. (SBU) Kwon also asked whether, under an FTA, U.S. trade
unions could request ROKG investigations into labor
practices. Karesh said that FTAs established points of
contact in the respective governments and require the points
of contact to establish procedures for reviewing
communications from the public. Depending on the final
agreement, the U.S. government could alert the Ministry of
Labor (MOL) or Ministry of Trade to a situation or inquiry.
The governments would then determine how to move forward.
The Agreements promoted transparency and communication; they
did not interfere with a government's decision on how to
respond to those communications.


9. (SBU) Finally, Kwon asked about the scope of
consultations under FTAs, the frequency of consultations,
enforcement mechanisms in other FTAs, the ability of the
public to participate during the FTA negotiation process, the
extent of cooperative activities, AFL-CIO and public
objections to an FTA, and administrative issues regarding
upcoming negotiations. Kwon expressed interest in
cooperative programs on labor issues between the United
States and Korea.

MOL SEEKS JOB CREATION AND LABOR REFORM
--------------


10. (SBU) Jung Chul-gyun, Director of the MOL Labor
Relations Policy Bureau, said job creation was the Labor
Ministry's highest priority. The government wanted to foster
cooperation among provinces, industry and labor and provide
retraining and life-long vocational development. Increasing
the employment of women and the elderly was also a priority.


11. (SBU) Jung said that in February 2006, there were
361,000 foreign workers, including 183,000 illegal aliens.
Foreign workers had the same rights as local workers and
organizations, mostly organized by the private sector,
existed to help them. If there were industrial accidents or
wage disputes, government policy was to deal with the problem
and then send the employee home.


12. (SBU) Choi Jong-seok, Labor Relations Policy Bureau
Deputy Director, said the illegal worker bill, if passed,
would narrow the wage disparity between regular and irregular
workers, limit the use of fixed-term workers and, in the long
term, reduce the total number of irregular workers.


13. (SBU) Choi said labor leaders were not detained for
union activities. He said there were cases where workers
were arrested because of violence, destroying facilities, or
occupying workplaces. These persons were arrested under the
criminal law for criminal activities. Sometimes these acts
occurred during collective action, but they were arrested for
violating the criminal law. There were no recent cases of
unionists being arrested just for striking, even if the
strike was illegal. Choi denied instances of "paper unions."
He said that it would be an unfair labor practice if an
employer tried to dominate or control its unions.

LAWMAKERS LISTENING TO DISTRICTS, NOT PARTIES
--------------


14. (SBU) Chairman of the Labor and Environment Committee
Lee Kyeong-jae (GNP) hosted lunch for the delegation. Reps.
Bae Il-do (GNP),Je Jong-geel (Uri),Chung Do-eun (GNP),Gong
sung-jin (GNP),Chang Bok-sim(Uri) were also in attendance.
(NOTE: As reported septel, the Delegation also met with
Democratic Labor Party (DLR) Representative Dan Byung-ho. END
NOTE).


15. (SBU) Lee said that passing the ROK-Chile FTA was a
painful process that led to physical confrontation in the
Assembly. Generally, said Lee, lawmakers from urban
districts would support the FTA while those from rural
districts, like himself, "might find the Agreement more
difficult to support." Rep. Jae concurred, stating that a
lawmaker's district, not party, would determine his or her
position. Lee said that the "anti-American" Korean
Confederation of Trade Unions (KCTU, the more radical of the
ROK's two major trade confederations) and the Democratic
Labor Party (DLP) would also pose a significant obstacle to
passage of an FTA. Lee believed that KCTU would
fundamentally object to the FTA because it would promote the
U.S.-ROK alliance.


16. (SBU) Bae said that it would be critical to explain the
objectives of an FTA to the Korean public. The public needed
to know why labor mattered and that mechanisms were in place
to protect workers. Karesh replied that the U.S. would try
to make the process as transparent as possible and would be
pleased to reach out to the public and labor groups.


17. (SBU) Lee pointed out that there were many differences
between U.S. and ROK labor laws and that, pointing to laws
protecting women and minorities, ROK law in some areas
provided higher protections for workers. Problems with
irregular workers would be alleviated upon passage of pending
legislation and other remaining labor issues would be soon be
dealt with in the Roadmap. Lee said that all efforts were
being made to comply with international standards.


18. (SBU) Karesh said he hoped that the lawmakers would help
their constituents understand that the U.S. was committed to
respecting worker rights and that issues regarding working
conditions would be handled responsibly. The point of an FTA
was not to harmonize labor laws. Rather, the intention was
to make sure that whatever laws the countries had respected
basic labor rights and were properly enforced.

KLI EXPERTS ASSESS PUBLIC SERVANTS, OTHER CURRENT ISSUES
-------------- --------------


19. (SBU) At the Korean Labor Institute (KLI),the
delegation met with President Choi Young-ku, Lim Song-hoon,
Hur Jai-joon, and Kim Na-young. Choi thought that the
chances of getting some parts of the Roadmap legislated by
the end of the year were "about fifty-fifty." He said the
package stalled because of the dispute over the irregular
worker bill, which the government wanted to pass in the April
National Assembly session. Most issues regarding civil
servants had been resolved, although legislation passed in
January 2006 applied only to lower level officials and
"excluded more officials than expected." Civil servants had
alienated many supporters when they tried to launch a major
strike in early 2005. Hur said the failure of the civil
servants union to register under the new public servants law
was simply a negotiating tactic. Lim observed that the KCTU
controlled the civil servants union and that the KCTU's
formative principle was not to comply with any "illegal" law.
"They will struggle until they get what they want," he said.
Choi thought there was no chance that the government would
give public servants the right to take collective action;
however, the ROKG might expand the scope of the law through a
Presidential decree or expansive interpretation of current
law.


20. (SBU) Lim said the two biggest issues with labor were
addressing the emergence of multiple trade unions at the
enterprise level and the cessation of payments for full-time
workers, both of which are scheduled to occur in January

2007. Choi said that the government wanted to unify the
negotiating channel, a step that would require National
Assembly legislation because it could limit some unions'
right to bargain collectively. Labor insisted on having
multiple parties at the table. "There are some concerns
about how this will be worked out," Lim said. Choi said that
these were such sensitive issues, the parties appeared to be
postponing debate, at least until after the irregular worker
issue was resolved.


21. (SBU) On irregular workers, Hur said that the strictness
of Korean termination laws led employers to hire irregular
workers. Choi pointed out that not only was it expensive to
lay off regular workers, but there were non-pecuniary costs
as well. For example, employers had to consult with unions
far in advance of any terminations. Thus, most employers
attempted instead to induce resignations through drawn out
negotiations over severance pay. "It's a tedious process,"
conceded Choi. He explained that the government wanted to
prohibit discrimination for irregular workers, but expand the
types of work they could be employed to perform. Labor
wanted to prohibit discrimination and also strictly limit the
types of work they could do.


22. (SBU) Lim said that in Special Economic Zones (SEZs),
foreign companies were exempt from certain provisions of the
labor law. For example, unlike regular employers outside the
SEZs, they were not required to grant menstruation leave to
women or hire a certain percentage of disabled persons.
Workers had the same union rights that are available outside
SEZs.

TRIPARTITE COMMISSION SEES ROADMAP AND TEMPS AS KEY ISSUES
-------------- --------------


23. (SBU) Tripartite Commission (TPC) Chairman Kim Geum-soo
said he hoped an FTA would be successfully concluded. Kim
identified the Roadmap and irregular workers as the biggest
issues of concern. He said that after two years of
discussion the TPC submitted the Roadmap to the government in

2005. Both labor and management resisted many of the
provisions. However, the government believed the Roadmap was
crucial to advancement of industrial relations and compliance
with international standards. Further, failure to regulate
the imminent emergence of multiple unions at the enterprise
level could lead to chaos.


24. (SBU) The government first wanted to pass the irregular
worker bill, which had been discussed for two years in the
TPC. He said that the government's objectives were to
eliminate discrimination, prevent abuse, and decrease the
wage gap between regular and irregular workers. Labor,
however, wanted to turn all workers into regular workers.
The employers objected that the labor force would become too
rigid.
VERSHBOW