S. Korea to hold talks with U.S. over ISD clause in free trade pact
SEOUL, March 9 (Yonhap) -- South Korea plans to hold talks with the United States to rework the investor-state dispute (ISD) clause in their two-year-old free trade pact that has long been cited by critics as being unfair, a government source said Sunday.
The insider, who did not wish to be identified, said Seoul will call for the service investment committee of the South Korea-U.S. free trade agreement (FTA) to touch on the ISD issue within the year.
"Details on when the committee will meet need to be worked out with Washington," the Ministry of Trade, Industry and Energy official said.
The ISD clause permits private companies to take governments to an independent international tribunal to arbitrate disputes if they feel measures taken by authorities conflict with the spirit of the FTA and cause damages.
At the time of the FTA's signing, Seoul said such provisions are included in most free trade deals to ensure protection of business investments, but many progressive civic groups and the main opposition party argued the ISD could adversely affect state policy.
To receive parliamentary approval, Seoul forwarded a proposal to lawmakers that promised a "reevaluation" of the ISD clause down the line.
The government first brought up the need to review the dispute settlement procedure last year at the joint service investment committee meeting held in June, and commissioned a study to be conducted on the impact of the clause.
Seoul has maintained that ISD is an integral part of the FTA and can also protect South Korean investment and businesses in the United States.
It said any revisions will be centered on making the clause clearer and better outlining what conditions can permit a company to take a government to an international tribunal.
In addition to the ISD, Seoul will seek to have products made at Kaesong Industrial Complex in North Korea to be considered as goods made in South Korea to take advantage of lower tariff rates when they are exported to the United States.
Official sources said the matter could be touched on at the committee for offshore processing, but added that headway is unlikely as little progress has been made in halting Pyongyang's nuclear programs.