FTA LABOR TEAM MEETS KCTU, OTHER LABOR GROUPS

UNCLAS SEOUL 002488

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SENSITIVE
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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
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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
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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,

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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

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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.

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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
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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
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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
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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

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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

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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
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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
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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
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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