The Free Trade Agreements (FTA) that the US signed with Korea 4 years ago, and recently ratified the US Congress, came to a halt in Korea due to the political gridlock.
The opposition argues that some provisions in the FTA, like the ISD (Investor-State Dispute), is "poisonous" and "bias", serving only the US' interests and position. I did some personal research on this matter and it boils down to this (overt simplification):
1. FTA enables private companies and individuals in each country to start business and investments in the other country with no or relatively less government regulations.
2. ISD is basically designed to protect the interests of foreign investors (private companies) by establishing a mechanism for the settlement of investment disputes in an impartial tribunal.
For example, if Company A is investing in Country B, and the Country B enacts a law that inadvertently hinders the business activities of the Company A, then ISD enables Company A to bring suit against Country B in ICSID (International Centre for Settlement of Investment Disputes) which is an impartial tribunal. ICSID is consisted of 3 impartial jurors - 1 introduced by each party and 3rd person, an independent juror agreed by both parties.
Now, the opposition party argues that this provision - ISD - is tantamount to turning over Korea's sovereignty to the US, as there's no such thing as an impartial tribunal (contending that ICSID is technically under US control) and that all these evil US private companies will abuse this provision to bring multiple lawsuits against the Korean government to disable its legislations and regulations that protect the safety, health, and property of Korean citizens.
Unfortunately, all these contentions are wrong on facts. Let me just name a few:
Second, more notably, when there WERE lawsuits initiated by US companies (investors) against foreign governments, they lost more cases (22) than actually have won (15). So no, ICSID doesn't work for the sole benefit of US investors.
Third, regulations on public health, pension plans, employment, taxation, currency, insurances, real estate, and a variety of "essential" and "critical" areas pertaining to the safety, health and well-being of Korean citizens, are not within the scope of ISD. In other words, if Korean government enacts a law or regulation on any of the above areas to protect the interests of Korean people whereby a US business or investment is negatively affected, that business or investor may not bring suit on that ground because he has no standing (inapplicable, basically).
Fourth, it is a customary practice for countries to include ISD in Free Trade Agreements. That is, ISD is not a novel or "biased" concept pertaining only to the US-Korea FTA. As of 2010, out of 2676 International trade agreements signed around the globe, 2100 of them contain ISD. In fact, in all Trade Agreements - some 81 - Korea signed with other nations, including ones with China and Japan as well as European Union, there is an ISD provision (or its equivalent).
Fifth, unlike what the opposition party argues, if US investors or companies violate Korea's domestic law, they are subject to the Korean jurisdiction and tried in Korean court.
Lastly, ironically, ISD can just as well serve Korean business and investors' interest as that of the US. This is common sense. Korea heavily relies its economy on exports. Facts tell us that from 2006-10 Korea's investment in the US amount to $20 Billion whereas US investment in Korea was $8.8 Billion. As much as the US investors can take advantage of a loose regulation and initiate a suit against the Korean government should they choose to, so can Korean investors against the US government on the same grounds that the US' regulation severely and unjustly disadvantages their investment/business. (needless to say this is not the kind of outcome we hope to see).