FTA-related legislation

Before and after the Korea-U.S. Free Trade Agreement is executed by the government in 2011, there took place FTA-related legislation. A good example is the Whole Amendment to the Special Act on Assistance to Farmers, Fishermen, etc. following the Conclusion of Free Trade Agreements (Alternative).

This Act came into force three months after promulgation. Provisions on the direct compensation for loss and the business abolishment subsidizing system are retroactively applied to the effectuation date of the Korea-EU FTA.

It should be noted there are a number of acts to implement KorUS FTA in a proper manner. The partially revised Acts, including the Act on Special Cases of Customs Act to Implement the FTA (자유무역협정의 이행을 위한 관세법의 특례에 관한 법률), were promulgated on December 2, 2011.

Key words
FTA, financial assistance, farmers, fishermen

Objective of the Amendment
The purpose of this whole amendment is to complement the existing assistance policy for farmers and fishermen.

For instance, according to the agreement reached on May 2, 2011 by the ruling, opposition parties and the government over the Korea-EU FTA, the criterion of the exercise of the direct compensation for loss is loosened from the product price less than 80% of the base price to less than 85%; the loss compensation rate is up from 80% to 90%; and the establishment of a comprehensive assistance plan for farmers and fishermen and a financing plan is made mandatory.

Main points of the Amendment

 * 1) The government shall establish comprehensive measures to support farmers and fishermen in the face of the implementation of the Korea-EU FTA, and when establishing or modifying the measures, it shall go through the deliberation of the assistance committee for farmers and fishermen affected by the implementation of the FTA and then report to the competent standing committee of the National Assembly (Paragraph 2 of Article 3).
 * 2) The name of the direct compensation for income shall be changed to the direct compensation for loss and its attendant assistance policy shall be carried out for ten years starting from the effectuation date of the Korea-EU FTA (Paragraph 1 of Article 5).
 * 3) The payment criterion for the direct compensation for loss shall be stipulated in the act, and the base price shall be defined as 85% of the average price of the past five years (with the maximum and minimum prices excluded) (Paragraph 2 of Article 5).
 * 4) The unit price of the direct compensation for loss shall be defined as 90% of the difference between the base price and the average price of the year (Paragraph 3 of Article 5).
 * 5) In the event that the government establishes comprehensive measures to support farmers and fishermen in the face of the implementation of a new agreement, it shall draw up a new funding plan which includes a funding plan of 1.2 trillion won for the FTA with the Republic of Chile (Paragraph 2 of Article 11).