The Contradictions of Kaesong

Posted January 2, 2006

Categories: Articles, Korea

The Contradictions of Kaesong

John Feffer


I admit that the issue of North Korea has scrambled my political compass.  Ordinarily, I oppose nuclear power as an expensive, even dangerous source of energy.  But I support civilian nuclear power plants in North Korea as part of a deal to end the current standoff.  Usually I oppose engaging countries that have horrific human rights records.  But I support engaging North Korea because I don’t see any feasible alternative.


And I’m not a big fan of export processing zones that are competitive because of cheap workforces and unregulated workplaces.  But the two Koreas have created such a zone –the Kaesong Industrial District – that is a critical part of their slow-motion reunification efforts.


Kaesong is located in the North, just above the DMZ.  Today the dozen or so South Korean-run factories in the zone employ several thousand North Koreans to produce kitchenware, watches, and other consumer goods.  Sold in South Korea, these goods are very popular.  For South Koreans, buying Kaesong products is a concrete way to support the rehabilitation of the North Korean economy and the reunification of the two countries.  Did I mention that Kaesong is located along what had previously been a major military invasion route?  In what is still a very tense area of the world, Kaesong is a first step in the Korean version of beating swords into the modern equivalents of ploughshares.


Kaesong has recently become a major issue in Washington.  On the right side of the political spectrum, human rights envoy Jay Lefkowitz has charged that low wages and poor working conditions at Kaesong might constitute violations of North Korean human rights.  On the left, Thea Lee of the largest U.S. union, the AFL-CIO, has expressed concern that North Korean workers at Kaesong “have very few rights to organize independent unions, to exercise any rights at all.”


To a certain extent, both Lefkowitz and Lee are right.  North Korean workers at Kaesong receive very low wages, work under some challenging workplace conditions, and have absolutely no right to organize independent unions or bargain collectively.


But these are only partial truths.  Workers at Kaesong, from all reports, are better off than workers almost anywhere else in North Korea.  Their wages are higher and more consistent.  They have access to better food.  They are entitled to an annual two-week paid vacation.  The factories are cleaner and better regulated than North Korea’s deteriorating manufacturing centers.  And Kaesong is nothing like the Russian logging camps or the small sweatshops in Eastern Europe where North Koreans also labor.


The idea of an independent union is as distant from current political reality in North Korea as an independent political party or newspaper.  But when labor organizing comes to North Korea, it will likely appear first in places like Kaesong – just as labor organizing made initial gains in the export processing zones of south China.


Kaesong has become important in Washington because of the upcoming U.S.-South Korean Free Trade Agreement negotiations.  South Korea wants Kaesong included so that its products can enjoy easier access to the U.S. market.  But including Kaesong puts the issue of reunification squarely in the crosshairs of U.S. policy.  And that means that Kaesong has attracted increased attention from the left and the right.


The right, which has never cared much about workers rights anywhere else in the world, wants to undercut South Korean economic support of North Korea.  Current South Korean policy toward the North makes it difficult for U.S. hardliners to isolate Pyongyang completely.  Jay Lefkowitz has discovered the workers of North Korea not because he has suddenly become a socialist – though he can certainly ape the cold-war rhetoric of Lane Kirkland’s AFL-CIO when called upon to do so – but because Kaesong is one of the North Korean lifelines to the outside world that the hardliners want to sever.


The union movement, meanwhile, has latched onto Kaesong because it is looking for additional ammunition in its battle against free trade agreements.  Trade unionists, quite rightly, don’t want the strengthening of US-ROK trade relations to come at the expense of Korean workers north or south.  The approach is admirable.  But when it comes to Kaesong, I think it’s wrong.


Here again, I am forced to adopt an unusual political stance because of North Korea’s unique position.  Even though I don’t like free trade agreements – because they tend to drive down social and environmental standards to the lowest common denominator – I think that the United States should allow Kaesong to be part of the US-ROK FTA.  The success of Kaesong depends on its products enjoying easier access to global markets.  North Korean products are not globally competitive because they confront high tariff barriers.  Labeled as South Korean products, however, the pots and pans and watches produced in Kaesong could compete in markets throughout Asia, Europe, and the United States.  The Southeast Asian countries in ASEAN have already agreed to treat Kaesong products this way in their free trade agreement with South Korea.


Only if other countries follow ASEAN’s example will Kaesong be able to grow to its projected size of 26 square kilometers and workforce of nearly 1 million employees.  Only in this scenario will Kaesong become the third critical spoke, alongside Inchon and Seoul, in a new East Asian economic hub.


In the meantime, the only way for North Korea to grow its economy legitimately – and the only way for North Korean workers to get better paychecks under better working conditions – is through such fragile experiments as Kaesong.  A poor and desperate North Korea is more likely to rely on missile exports, drug sales, and other shady dealings to stay afloat.  And a poor and desperate North Korea is certainly not going to exert much effort to improve the human rights of its citizens, workers or otherwise.


South Koreans, in a spirit of patriotism, are willing to stand on line to buy Kaesong products.  But to survive and thrive, Kaesong needs more than just South Korean support.  Kaesong needs the backing of the United States.  As with so many things having to do with North Korea, I am ready to hold my nose and lend my support too.

ZNet, May 30, 2006

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