South Korea parliament impasse stymies Lee reforms
(Recasts with parliamentary boycott)
By Jack Kim
SEOUL, June 5 (Reuters) - A boycott by opposition parties scuttled the opening session South Korea's new parliament on Thursday, dealing a fresh blow to an unpopular new president who was hoping to pass sweeping business-friendly reforms.
The boycott called by left-of centre MPs to protest a deal conservative President Lee Myung-bak struck with Washington to fully open local markets to U.S. beef, will delay tax reform measures and could threaten a trade pact with the United States.
The boycott was the latest blow to Lee and his Grand National Party (GNP) after it suffered a crushing defeat in Wednesday's local by-elections that despite their limited scope, were seen as the latest indication of plummeting support for him.
"We had no choice but to postpone the opening of parliament so that we could have the re-negotiation of the (U.S.) beef deal," opposition United Democrat floor leader Won Hye-young said.
The impasse put on hold Lee's legislative agenda that also includes massive privatisation plans for state enterprises, which could free up tens of billions of dollars for stimulus spending.
The opening of the new parliament, which sits for four years, was supposed to be a high water mark for Lee. His GNP won control of the body from liberals in an April election and was expected to help him reshape the world's 13th largest economy.
Instead, the impasse marks yet another step in reversal of fortune for Lee, a former CEO of Hyundai construction and Seoul mayor who won a landslide victory in last year's presidential election.
Lee, whose support rate is at about 20 percent, stumbled in his first 100 days in office, with an apology last month for the government's handling of the sensitive U.S. beef import deal.
Thousands at daily protests, worried about mad cow disease, accused Lee of kowtowing to Washington with the beef deal and ignoring safety concerns.
To calm public anger, the government has said it would not allow imports of meat from older U.S. cattle, which the public sees as more dangerous, and asked Washington for help in securing a deal from U.S. exporters not to send such beef.
The United States has said it was willing to work with its Asian ally, but there was no need to renegotiate the deal.
On Wednesday, GNP candidates managed to pick up just nine of the 52 seats that were contested in regional by-elections, losing heavily to opposition and independent candidates even in its traditional stronghold of the country's southeast.
"We humbly accept the will of the people shown through the June 4 by-elections," GNP spokeswoman Cho Yoon-sun said.
Analysts said that even when the conservative party is able to open parliament and exercise its majority, Lee has little hope of pushing through his pro-business reforms unless he wins back public support.
Polls show that the opposition United Democratic Party has not benefited from Lee's misfortunes, as its support rate has stayed at about 10 percent.
Some of Lee's planned policy moves, which include opening the country more to foreign investors, privatising government assets and getting tough on labour unions, have long been sensitive issues capable of igniting furious protests.
Global economic woes have only added to Lee's troubles, making it all but impossible to reach the 6 percent economic growth his government had promised this year. Most analysts believe growth is unlikely to exceed 5 percent. (Editing by Jon Herskovitz)
