Would exploiting slave labor be excused if it meant the end of Kim Jong-Il's totalitarian rule in North Korea?
The United States and South Korea announced that Monday marked the kickoff for official negotiations on a bilateral free trade agreement. The process is expected to be lengthy and contentious. The usual suspects are involved -- U.S. pharmaceutical companies want tighter intellectual property protections; Korean rice farmers are dead set against further liberalization of their agricultural markets. But a comprehensive breakdown of the likely obstacles to the treaty published in the Asian Times highlighted one area of disagreement I didn't know about: whether products manufactured at the Kaesong Industrial Park would be considered as "made" in South Korea, or North Korea.
Located just across the Demilitarized Zone in North Korea, the Kaesong Industrial Park is a joint venture putting together South Korean capital with North Korean labor. At the moment, only a few thousand North Korean workers are sweating away making textiles, pots and pans and assorted other gewgaws, but expansion plans are ambitious, with hundreds of thousands of workers envisioned in a huge industrial city of state-of-the-art factories within just a few years.
The U.S. position is that Kaesong products are North Korean, and thus should be excluded from preferential access to U.S. markets. Anything else would undermine U.S. attempts to restrict North Korean access to foreign currency. (As a side benefit, intransigence on the issue covers the U.S. flank against U.S. labor unions that will complain that South Korean capital is exploiting cheap labor to gain an unfair trade advantage. But it will take some chutzpah for U.S. trade negotiators to argue that the South Koreans should be condemned for such a practice when that has been one of the core operating principles for U.S. manufacturers for many decades.)
The U.S. position sidesteps a critical issue. From the South Korean point of view, Kaesong is more than just a source of cheap labor; it's a flagship example of President Roh Moo-hyun's "sunshine policy": the hope that engagement with North Korea will lead to a drawdown of tension between the two states, and perhaps ultimately some form of economic or even political unification.
But then again, North Korea is not your typical developing nation. Not only will North Korean workers be paid a mere $57.50 per month -- just 3 percent of the prevailing wage down south -- but that money goes directly to the state, which then reimburses the workers. No one really knows how much the workers end up getting, and you sure won't find out by asking them directly. Press reports say there is no socializing between workers and management, and very little opportunity for the North Koreans to do anything but, uh, work. Needless to say, there's no need to worry about the threat of organized labor actions, either. In a world where the phrase "slave labor" gets thrown around a little too often as a rhetorical point-scoring gambit, here's a case where the charge strikes close to home.
The question of whether engagement between South and North will lead to more openness, even as southern capital exploits northern labor, touches squarely on one of the thornier questions about the interrelationship between globalization and development. Taiwan and South Korea, two countries that were once military dictatorships but embraced the global economy and are now flourishing democracies, are perhaps the two most spectacular examples of nations that succeeded in developing into modern states on the back of their own sweatshop labor. The world is waiting with bated breath to see if China follows their example. But could prospects be any bleaker for a similar transformation in North Korea?
We may never get a starker choice: If Kaesong turns out to be the thin end of the wedge of South Korean "spiritual pollution" that begins the long-overdue process of underming Kim Jong-Il's rule, and ultimately defuses nuclear tensions on the Korean peninsula, would that justify some brutal short-term sweatshop exploitation? Or is even phrasing the choice in such a way a cop-out to South Korean capitalist propaganda?