FTA LABOR TEAM MEETS KCTU, OTHER LABOR GROUPS

UNCLAS SEOUL 002488 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 KCTU, OTHER LABOR GROUPS SENSITIVE BUT UNCLASSIFIED -- PLEASE HANDLE ACCORDINGLY SUMMARY -------------- ¶1. (SBU) Formally meeting with U.S. officials in Seoul for the first time, the Korean Confederation of Trade Unions (KCTU),the more radical of the ROK's two major labor federations, welcomed the U.S. FTA labor negotiators to their headquarters on July 13. In a professional and business-like meeting, KCTU officers outlined their objections to the FTA, criticized the ROKG for its lack of transparency, and suggested an open meeting among representatives of the and USTR and members of U.S. and Korean labor groups. The U.S. negotiators also met with leaders of the Federation of Korean Trade Unions (FKTU),the other major trade federation, who voiced similar concerns. Finally, the negotiators met with an AFL-CIO Solidarity Center representative, who said that a divide was opening between the U.S. labor movement, which was firmly opposed to the Kaesong Industrial Complex (KIC),and the Korean labor movement, which believed the promise of KIC as a path towards unification trumped any inclination to voice concern over worker rights in the DPRK. END SUMMARY. FIRST MEETING AT KCTU HEADQUARTERS -------------- ¶2. (SBU) On July 13, KCTU Vice President Heo Young-koo welcomed A/USTR for Labor Lewis Karesh, USTR Senior Director for Korea Scott Ki, Department of Labor International Economist Carlos Romero, and Poloff to a "historic" first meeting at KCTU headquarters. The economically-powerful KCTU, a labor group with a deep anti-American streak and a propensity for violence, has for years refused all meeting requests from U.S. officials in Seoul. (NOTE: We understand through informal channels that KCTU leadership always believed that formal talks with Embassy officials would undermine their credibility with the KCTU rank-and-file. Obviously anxious to keep this meeting low-profile, KCTU officials ushered us quickly into the building to avoid media attention. END NOTE.) ¶3. (SBU) Heo had both procedural and substantive objections to the KORUS FTA. He criticized the ROKG for being too secretive about the negotiating process and, in particular, SIPDIS failing to make public the documents under discussion. Heo said that increased transparency and public input would increase the chances that an FTA's benefits would be equally distributed. Negotiations should stop, he said, until the ROKG fulfilled its obligation to engage in dialogue with civil society. Karesh responded that it was standard in all FTA negotiations for governments to enter into a confidentiality agreement in order to facilitate full and SIPDIS frank discussions during negotiations. Explaining the U.S. system of public advisers and Congressional oversight, Karesh said that it was up to each government to decide how to interact with constituent groups while protecting the confidentiality of the negotiations. SIPDIS ¶4. (SBU) Pressed for information about the KORUS FTA labor chapter, Karesh referred Heo to the labor chapters of previous FTAs and their protections for internationally recognized labor rights. Karesh emphasized that the U.S. has a strong commitment to labor and that the U.S. Congress has provided clear direction that all FTAs must include labor protections and the commitment of each country to effectively enforce its labor laws. ¶5. (SBU) Heo's substantive concern was that the FTA would do little to protect worker rights. Heo said that the essence of all FTAs was to strengthen foreign investor rights and benefit companies and investors, often to the detriment of workers. The issue was of such concern to the KCTU, that the Confederation organized only for the second time a mass rally outside the U.S. Embassy. According to Heo, the KCTU's goal was to organize a 100,000-person demonstration for Round Two of negotiations, but because of rain, only 50,000 gathered. KCTU intended to build on the allegedly growing opposition to the FTA to organize a one million-person demonstration for Round Four, which will also be in the ROK. (NOTE: Seoul authorities said that about 24,000 people gathered for the July 12 demonstration. Heo's claim that the demonstration was only the second major demonstration outside the Embassy is dubious. KCTU and its affiliated groups demonstrate for various reasons outside the U.S. Embassy with such regularity that most embassy officers with street-side offices can readily hum KCTU protest anthems, which are curiously able to pierce the reinforced concrete of our Chancery. END NOTE.) ¶6. (SBU) Heo cited NAFTA as an example of an FTA that promised worker protections but in fact did little to protect worker interests. Not one labor case has been brought to arbitration, he said. Karesh parried that there have been over thirty labor submissions under NAFTA, variously brought in the U.S. regarding Mexico or Canada or in Mexico regarding the U.S. Most have involved allegations concerning freedom of association, collective bargaining or migrant worker rights and, in each case, the parties have resolved the issues without having to resort to the adversarial process. The issues were thoroughly reviewed by the governments in a transparent process that involved public hearings and input. There were even, on occasion, direct cabinet-level consultations. That submissions have not proceeded to arbitration should not be seen as a failure of the system; rather, a non-adversarial, cooperative resolution of a grievance is usually the best outcome. ¶7. (SBU) Moreover, Karesh explained, labor provisions in U.S. FTAs have evolved since the 1994 NAFTA. Unlike the NAFTA, the more recent FTAs include more extensive labor protections, incorporate labor rights into the main body of the Agreement, and allow labor issues to be adjudicated through the conflict resolution process applicable to commercial and other disputes. An important element in all the FTAs has been the creation of government-to-government institutions and mechanisms. This has created contacts and dialogue that simply did not exist before and can be used to address issues before they turn into more severe disputes. KCTU PROPOSES OPEN MEETING ON LABOR -------------- ¶8. (SBU) Heo proposed having an "open" meeting where labor organizations from both countries and the USTR could have a public discussion of an FTA's impact on labor interests. The meeting would take place in the U.S. in connection with Round Three of the negotiations in September. It would be important to have a "collective meeting with as many members present as possible," added KCTU Director Lee Chang-geun. Karesh said that the USTR was always willing to listen to the public's concerns, though he said that we would have to consider further the details of the meeting. As two "open" meetings in the ROK regarding the FTA disintegrated into labor-led violence, there may be concerns regarding safety and security. Lee Chang-geun explained that the meetings "broke up" because the government had invited a disproportionate number of FTA proponents and distributed different amounts of information to the various representatives. WRITTEN DEMANDS AND GRIEVANCES -------------- ¶9. (SBU) The KCTU prepared written objections to the FTA, which included the following main points: -- the FTA negotiations are illegitimate because the ROKG has not opened up the process to public comment and input; -- an FTA would destroy the Korean agricultural industry; -- an FTA would destroy Korea's social welfare for the benefit of U.S. investors; -- the FTA labor chapter would be unenforceable because it would only commit parties to "strive" to achieve the ILO labor standards; -- FTA negotiations should end because the KORUS FTA, like NAFTA, would result in suffering by the majority of ordinary people in both the U.S. and ROK. FKTU WANTS TRANSPARENCY, FEARS LABOR MARKET IMPACT -------------- -------------- ¶10. (SBU) In a separate meeting, representatives of the more moderate Federation of Korean Trade Unions (FKTU) made similar procedural and substantive objections, and also expressed support for the open meeting proposal described above. Lee Young-deuk, President of the Federation of Korean Trade Unions (FKTU),said the ROKG's lack of transparency during negotiations has caused the Korean public to lose confidence in the government. He thought it was noteworthy that the ROKG negotiators had never met with FKTU, but that the USG negotiators had met with them twice. Lee worried that the Korean negotiators were ill-prepared and had created a negotiating position without seeking labor's input. National Assembly members, who have demonstrated a lack of interest and expertise in trade negotiations, could not be relied upon to provide effective oversight. In addition, Lee expressed concern that although the FTA might initially protect certain labor rights, it would lead to reforms that could diminish existing protections for Korean workers. ¶11. (SBU) Deputy Secretary General Jeong Kwang-ho added that, although it was difficult to discuss FTA provisions that they had not seen, NAFTA proved that FTAs were limited in their ability to resolve labor issues. Jeong also feared that the FTA was being negotiated too hastily and would lead to a worsening of the economy and widespread job losses. ¶12. (SBU) Karesh said the U.S. tried to be as open and transparent as possible and encouraged FTA partners to do the same. However, he assured the FKTU representatives that the confidentiality provisions in place for the KORUS FTA were SIPDIS not unusual and were necessary to facilitate free and candid negotiations. Karesh noted that the ROK negotiators were exceptionally well prepared. ¶13. (SBU) On worker protections, Karesh explained that respect for core labor standards was a key point of all FTAs, and for many Members of Congress, it was the fundamental point. Karesh also explained that the FTA would respect not only each nation's sovereignty, but also ensure that each nation would strive to meet ILO core labor standards. Although the KORUS FTA documents were protected by a confidentiality agreement, the labor chapter was consistent SIPDIS with other FTAs that focused on the protection of core labor standards and carried the philosophy that worker rights must be respected regardless of differing cultures or legal systems. FKTU DEMANDS AND GRIEVANCES -------------- ¶14. (SBU) The FKTU provided us with a written list of demands and grievances, including the following points: -- the parties should prepare an evaluation of how the KORUS FTA would influence labor rights; -- the parties should make public all documents subject to negotiation; -- the KORUS FTA should not track the NAFTA, Korea-Chile FTA or any other existing FTA; -- the parties should adopt ILO standards; -- the ROKG has not allowed the public sufficient opportunity to comment on the FTA; -- the FTA would force the ROK to meet U.S. standards in finance, law, consulting, insurance, investment, labor, environment, intellectual property rights and other areas of ROK public policy; -- the KORUS FTA would cause the current economic situation in the ROK to deteriorate; -- previous FTA labor chapters do not protect ILO core labor standards because they require parties only to "strive" to meet the standards; -- previous labor chapters did not include the right to strike because the U.S. sees labor disputes as a barrier to free trade; and -- opening the agriculture market would demolish the sovereignty of the ROK. AFL-CIO NOTES DIVIDE OVER KAESONG -------------- ¶15. (SBU) Solidarity Center Program Director for Asia and Europe Tim Ryan, who was in Korea to lend support to Korean anti-FTA activists, told us on July 12 that the AFL-CIO was not anti-globalization or anti-free trade. However, its position was to advocate for the inclusion of enforceable labor and environmental provisions in all FTAs. Ryan said that the AFL-CIO parted company with its ROK counterparts on the issue of the Kaesong Industrial Complex (KIC). In a series of meetings with the KCTU and FKTU, Ryan said that ROK unionists refused to discuss KIC as a worker rights issue. Rather, the promise of KIC as a precursor to unification trumped any inclination to fight for worker rights in the KIC. Korean unions would never come out against KIC based on worker rights, Ryan said. Beyond the KIC, Ryan said that he has been trying to get the Korean unions more involved in worker rights issues outside the ROK, such as the treatment of workers in Korean-owned factories in Central America, Southeast Asia and elsewhere. It has been a "long slog," he said, as Korean unions have shown little interest. COMMENT -------------- ¶16. (SBU) KCTU's decision to meet with us was probably based more on exasperation with the ROKG than on any fundamental change in position. The KCTU representatives, and their more moderate brethren at the FKTU, are clearly skeptical that any FTA would truly enhance worker rights. Nevertheless, the KCTU meeting itself was an important breakthrough and has already led to follow-up discussions between the Embassy and the KCTU. ¶17. (SBU) The proposed meeting among all labor groups is worthy of careful consideration. Korean labor unions seem to have only an elementary understanding of FTA labor provisions, and more information might help allay some of their misgivings. That said, we are wary about the proposed "open" format. Despite our good experience on July 13 -- the armored vehicles and security guards we brought with us turned out to be an overabundance of caution -- the KCTU is a volatile group and any uncontrolled meeting with them has the potential to degenerate into violence. If the labor meeting takes place, and we think it could be useful, the meeting should be kept to a manageable number of union representatives. VERSHBOW