Local business lobbies again called for the quick ratification of the Korea-U.S. Free Trade Agreement on Tuesday, saying that the investor-state dispute settlement system is one that has become a global standard.

In opposing ratification of the accord with the U.S., opposition parties have focused on the ISD clause, which allows disputes between investors and the state to be settled under the mediation of a third party.

According to the coalition of opposition parties that seek to prevent the Grand National Party from approving the deal, the ISD system could interfere with Korean government policies, as disputed issues are viewed only in terms of investor protection.

In a statement released by the FTA Industry Alliance, local businesses said that ISD clauses were included in more than 2,500 international agreements in place today, and that postponing the ratification of the pact with the U.S. based on claims regarding the clause is an act that “completely misunderstands the country’s situation and global trends.”

Saying that the ISD clause is the means to providing “neutral and logical” resolutions to disputes between concerned parties, members of the FTA Industry Alliance said that the claim the clause infringes upon Korea’s legal independence arose from a misunderstanding of its purpose.

The FTA Industry Alliance added that with respect to flow of capital between the two countries since 2005, the clause may in fact be necessary for Korean concerns.

According to the organization, Korean concerns invested $21.7 billion in the U.S. between 2005 and 2010, while U.S.-based parties invested $11.5 billion in Korea over the same period.

FTA Industry Alliance is an umbrella group representing business interests with regards to free trade agreements established in 2006.

The group represents 42 business lobbies, industry associations and research institutions including Korea International Trade Association, Federation of Korean Industries, Korea Chamber of Commerce and Industry, Korea Federation of Small and Medium Businesses and the Korea Federation of Banks.

By Choi He-suk  (cheesuk@heraldcorp.com)