VZCZCXYZ0001
PP RUEHWEB

DE RUEHUL #1327/01 1110927
ZNR UUUUU ZZH
P 210927Z APR 06
FM AMEMBASSY SEOUL
TO RUEHC/SECSTATE WASHDC PRIORITY 7452
INFO RUEHBJ/AMEMBASSY BEIJING 0511
RUEHKO/AMEMBASSY TOKYO 0590
RHMFISS/COMUSKOREA J2 SEOUL KOR
RHMFIUU/COMUSKOREA SCJS SEOUL KOR
RUEHC/DEPT OF LABOR WASHINGTON DC
RHMFISS/COMUSKOREA J5 SEOUL KOR
RUCPDOC/DEPT OF COMMERCE WASHDC 1407

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