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A Recap of Mark Minton's Interview on Korea Business Central - "Helping the World Understand Modern Korea and Korea’s Place in Asia"

Author_book_mm Understanding Korea and Koreans from the wider geopolitical context yields important insights into the newly confident nation we find today. Anyone doing business in this dynamic economy can expect to increase their effectiveness by learning about recent Korean history and its position in the region.

Mark Minton boasts of a long history in E. Asia, as a US diplomat in Japan and Korea, and later in Mongolia as US Ambassador. In this discussion with KBC host Tom Tucker, Ambassador Minton shares deep insights about modern Korea and doing business there.

Click here to listen to the interview, download the .mp3, subscribe in iTunes, read the transcript and or discuss this interview and this topic with other members of Korea Business Central visit the English-language discussion link.

Click here for the full list of interviews in the 2011 Korea Business Interview Series, or here for the 2010 interviews.

I also tried something new this time, which was to prepare my own short video synopsis of the interview:

 

Main Points of the Interview

Topic #1 - Ambassador Mark Minton and The Korea Society, An Overview

  • In between stints in Asia, Ambassador Minton also spent long periods of his career in New York City, with the Foreign Service, as well as the US Mission to the United Nations, and now with the Korea Society. He notes that in the short period of time between his previous time in NYC and now, the profile of Korean culture films and arts has risen dramatically.
  • The Korea Society is the foremost and oldest non-profit private organization in the US dedicated to expanding understanding of Korea in the US and promoting exchange between the American and Korean people. It was established by General Van Fleet, who had been a US general in the Korean War. The Society has grown along with the increasing success of Korea.
  • Lately the Society has been active in promoting Korean film with the Museum of the Moving Image in New York though a large, annual film festival.

Topic #2 - The Korea-Japan Relationship

  • The relationship between Korea and Japan has been difficult, perhaps because the two countries are so close in proximity but have distinct cultures. This historical friction is dissipating quickly with the younger generations in each country extremely interested in each other. Tourism is rising fast.
  • The interests of the two countries, being successful economies and democracies, are converging in the modern era. The current administration of Korean President Lee Myung-bak has handled relations with Japan with a mature, sophisticated and sensitive approach.
  • The Japanese have looked at the Korean achievements of the last 25-30 years and truly respect it and have been impressed by it. 
  • Japan was the first East Asian country to successfully modernize and as Korea was a late-comer to this development, Korean President Park Chung-hee, explicitly folled Japanese models, though he used them with Korean characteristics. Today, Korea is increasingly innovating on its own.
  • It is clear that there's still a symbiotic relationship between Japan and Korea, but Koreans will expand even further to take on other partners, especially as Korea signs FTAs with more and more other countries and sells its products around the world.

Topic #3 - The Korea-Mongolia Relationship

  • Ambassador Minton served as US Ambassador to Mongolia from September 2006 until September 2009. 
  • Mongolia is the only true democracy in central Asia, making it politically and culturally unique in the region. It is located between China and Russia and so its foreign policy is to reach out to the broader world, economically, policically and diplomatically, so that it has options beyond just China and Russia.
  • Mongolians consider Koreans to be the closest people in the world to them. History shows there has been some migratory connection between Mongolia and Korea in the past, and the two countries share cultural characteristics, which makes Mongolians feel comfortable dealing with Koreans.
  • Going forward, we will be hearing more and more about Mongolia as world-class mineral assets in uranium, coal, copper, gold and others come online. Major mining companies are just now beginning to develop these assets, which are some of the largest undeveloped deposits in the world. It is expected that the Mongolian economy will start growing at around 10% per year over the next decade.
  • Korea is looking to Mongolia as a source of raw materials, but Korean construction companies are also well-placed to build the infrastructure that Mongolia is going to need for its new economy.
  • Mongolia may also become an attractive tourist destination for Koreans, as it's only two and a half hours by plane from Seoul. There is a lot of open space and beautiful scenery.
  • China is the 800-pound gorilla in the living room for Mongolia, which dictates that China will be the major customer for Mongolian resources. But Mongolia is also looking to develop other partnerships, and Korea has a major role to play in this.

Topic #4 - Significant Events in Modern Korean History

  • The Korea Society recently held a seminar to discuss the new book "The Park Chung Hee Era". President Park is the modern figure who transformed the Korean economy and created the foundation for what the Korean economy has become today.
  • There is a lot of debate even today about the extent to which the policies of the Park era may have retarded political developments of the country. 
  • Looking at the major events of modern Korean history, we can see that each led to the next. The Park Chung Hee coup d'etat of 1961 fired the trigger, but its success in raising the living standards of Koreans lead to protests for more freedoms with the Gwangju Uprising in 1980 and the June Democracy Movement of 1987, and ultimately to democracy.

Topic #5 - Korean Viewpoint on the Signing of FTAs

  • By signing FTAs with the US and with the EU, as well as other countries, Korea is looking to draw itself closer to these major Western economies, which will have all sorts of positive payoffs and benefits for the relationship as a whole, including as a counterweight to China as Korea's trade with China increases.
  • In addition, the US-Korea FTA is so complex and well-considered that it reaches into so many regulations, laws and practices, that when it is implemented, it will have an effect of enhancing the efficiency and transparency of the Korean domestic economy and the way it is managed, bringing Korean activities up to international norms.

Topic #6 - "The Hub of Korea"

  • Korea has considerable assets to become a hub. It is geographically positioned this way in northeast Asia and is complemented by the marvelous Incheon Airport, as well as Songdo city, which is an attempt to create virtually a complete new city oriented towards international commerce and business.
  • Korea also has a role to play as a hub in the politcal dimension, too. As host of the G20 meeting last year, as of the Nuclear Nonproliferation Summit next year, Korea is increasingly becoming a kind of honest broker in international politics, as well as diplomacy. This is reinforced by the symbolism of the re-election of Korean Ban Ki-moon as Secretary General of the United Nations.

Topic #7 - Wrap-Up

  • When we think of "Korea" these days, we inevitably think of something contemporary first. A good keyword to use to describe Korea would be "successful innovation", not only in economics, but also in political, cultural and international diplomacy, too.
  • Going forward, The Korea Society is looking to capitalize on "Hallyu", or the Korean Wave, which is beginning to take hold in the United States as well. There's a growing awareness of the world of arts and design in Korea, particularly Korean film and literature. 

A Recap of Tom Pinansky's Exclusive Interview on Korea Business Central - "Understanding Korea's Legal Industry: Opportunities and Challenges"

Author_book_tp Tom Pinansky is Senior Foreign Attorney at Barun Law, as well as "Of Counsel" to US firm Prety, Flaherty, Beliveau & Pachios. Mr. Pinansky is active with various chambers of commerce in Asia, as well as international arbitration. He's lived and worked in Korea for over 20 years.

To listen to the interview, download the .mp3, subscribe in iTunes, read the transcript and/or discuss this interview and this topic with other members of Korea Business Central, visit the following discussion link: http://www.koreabusinesscentral.com/forum/topics/korea-business-central-56

The full list of interviews in the Korea Business Interview Series is maintained here: http://www.koreabusinesscentral.com/page/interviews-2

Main Points of the Interview

Topic #1 - Overview of the Korean Legal Services Market

  • Tom has been based in Korea since around the time of the Seoul Olympics in 1988 following several years working for US-based law firms.
  • Barun Law, Tom's employer since 2005, is the newest major law firm in Korea, having been established only 11 years ago. The firm is particularly known for its litigation practice, having been founded primarily by former judges. However, Barun's international practice is growing quickly too so that there are now 140 professionals at the firm.
  • The Korean legal services market is unique considering the size and sophistication of the Korean economy. While most areas of commerce are fully open to foreign participation, the legal services area remains closed. It means that no international law firms are physically present in Korea.
  • However, the Korea-US Free Trade Agreement (KORUS) will open the Korean legal services market once it is ratified by the US Congress. There is other legislation in the works in Korea to open the market to foreigners but the KORUS is what Americans are mainly waiting on.
  • Just because non-Korean legal firms can't open up physically in Korea doesn't mean there aren't a lot of foreign lawyers working in Korea. These run the gamut from Korean lawyers who are members of the Korean bar, to non-Koreans and ethnic Koreans who are members of the bar in other countries. Some work in Korean law firms and others in corporate settings.
  • The titles that foreign lawyers can use in Korea depends somewhat on whether they are being expressed in English or Korean, and there is a lot of discussion going on about how this will evolve going forward so it's hard to predict the future regarding the use of titles by foreign lawyers in Korea.
  • Foreign lawyers cannot go into a Korean court alone to represent a client. But they can get involved with international arbitration, work with Korean colleagues on corporate and litigation matters, as well as other roles short of going to court.

Topic #2 - Foreign Investment and the Legal System

  • The Korean legal system is a civil system as opposed to the US common law system, meaning there are no juries. This avoids complicated discovery and evidence rules that you'd find in the US. Foreign investments in Korea that have been made legally can be adequately protected, though you can't deny that there's a bit of a "home-court advantage" for Korean companies.
  • Legal redress for foreign companies in Korea includes the court system, as well as arbitration. The Korean legal system is very efficient and results can generally be expected within nine and ten months, which is much faster than most jurisdictions in the United States.
  • During the mid- to late-90s, Korea liberalized its economy and there were a lot of joint ventures and direct foreign investment for which legal services were needed. Mergers and acquisitions really took off during the Asian economic crisis of 1997-1998, followed by strategic investors. This faded for awhile as foreign companies had a renewed interest in establishing their own companies. But the more diverse range of investments has been coming back over the last two years or so. There's also been a revival in private equity.
  • Because the legal services industry is closed to non-Koreans, a foreign company wishing to do business in Korea will require a Korean law firm. Korea is a successful economy but in general, the costs of many services, including legal services, are more expensive in Korea than in most parts of the US.

Topic #3 - Korean Investments Overseas

  • Korean investments overseas are called "outbound work" by Korea-based law firms. Weakness in the Korean currency over the past couple years sharply curtailed this activity but it is increasing again recently. 
  • High-profile recent outbound investments by Korean companies into the US include Kia's car facilities in Georgia, Samsung's semiconductor factory in Austin, Doosan's acquisition of Bobcat, real estate deals in New York, etc. Koreans are also investing a lot in China and other resource-rich regions.

Topic #4 - Korean Law Firms

  • The large Korean law firms have a core of internationally-trained lawyers with a broad variety of backgrounds and from a broad variety of jurisdictions. In many cases, Korea-educated attorneys are given the opportunity to study overseas and then come back to become partners in the firm that sent them. Tom is not aware of any non-ethnic Koreans who came to Korea, passed the Korean bar and are practicing in Korea as a local Korean attorney.

Topic #5 - Opening of the Korean Legal Services Industry

  • The Asia-Pacific Council of American Chambers of Commerce (APCAC) consists of 27 member AmChambs in the Asia-Pacific region, and AmCham Korea is the respective member for Korea. Tom has chaired this organization for two of the last 15 years, though he's been affiliated closely with it during this entire time. APCAC and AmCham Korea have been lobbying hard for the passage of KORUS, in part because of the opening it will bring to the Korean legal services industry. KORUS would help nearly all American businesses and the current delays on the US side are allowing other countries to move ahead into the Korean market.
  • Regardless of KORUS, the Korean economic opening is inevitable though and there isn't much opposition to it anymore. 
  • Interestingly, though legal services are still closed, Korea is relatively open in many other areas, including real estate, whether residential or commercial.
  • Other Asian markets where the legal services industry is closed include Malaysia and India. Countries like Hong Kong, Singapore, Japan and even China have already liberalized. Japan today resembles what we might expect the Korean legal services market to look like in a few years.

 


A Recap of Amy Jackson's Exclusive Interview on Korea Business Central

 

Author_amyjackson Amy Jackson is currently president of The American Chamber of Commerce in Korea (AMCHAM Korea). She previously worked in the Office of the US Trade Representative and negotiated space deals with Japan while at NASA. Ms. Jackson was the sixth interviewee in our Korea Business Interview Series hosted at KoreaBusinessCentral.com.

To listen to the interview or download the .mp3, read the transcript and discuss her interview with members of Korea Business Central, visit the following discussion link: http://www.koreabusinesscentral.com/forum/topics/korea-business-central-5.

(The full list of interviews in the Korea Business Interview Series is kept here: http://www.koreabusinesscentral.com/page/interviews-2)

Main points of the Interview:

Topic #1 – About AMCHAM Korea - Overview

 

  • AMCHAM Korea has approximately 2,000 individual members and 1,000 corporate members.
  • The Chamber works to promote and facilitate US/Korea trade.
  • The Chamber has moved away from a “table pounding” approach to become a more “partner-focused organization”.
  • AMCHAM Korea was also instrumental in getting Korea on the US Visa Waiver Program.
  • Another achievement is the US-Korea Free Trade Agreement, which AMCHAM Korea was one of the key promoters of.  
  • The US-Korea FTA builds on the close political and military cooperation between Korea and the US, to put economic cooperation as a third pillar in the relationship.
  • The US-Korea FTA addresses not only tariff reduction, but also investor rights, regulatory transparency.
  • Hopefully the US Congress will take up passage of the US-Korea FTA shortly after the November elections in the US.
  • AMCHAM Korea sends a delegation about three times per year to Washington to promote the interests of the membership with US government policymakers.
  • It is necessary to ensure that Korean policies regarding “green” business do not have ill-intentioned consequences. AMCHAM Korea is working on this, as well as on forging relationships for US pharmaceutical companies in Korea.

Topic #2 – About AMCHAM Korea Members

  • AMCHAM Korea is not only for American companies. Membership is encouraged for anyone involved in US-Korea trade.
  • Membership runs the gamut of very large companies, manufacturing companies, small companies, service providers and individuals.
  • In addition to the issue advocacy role, AMCHAM Korea provides an excellent opportunity to network.
  • There are about 30 active committees in the Chamber broken down by sector and theme. Committee meetings often invite speakers to discuss timely and pertinent issues.
  • The new Small-Medium Enterprise Committee is working to appeal to a smaller company audience.
  • Korean policymakers often attend and speak at AMCHAM Korea events, which is another way that dialogue is facilitated.
Topic #3 – About the Business Climate in Korea
  • One of the most striking things about Korea is the ability of the country to change quickly. Thus, Korea is becoming a better place for foreign companies to do business. 
  • The Korean government is reaching out to the foreign community in order to achieve more regulatory transparency. 
  • Korea is rapidly rising in stature on the international stage through events like hosting the G-20, success in the Olympics and hosting of the next Nuclear Summit. 
  • Korea is a dynamic economy in ways that many other Asian countries are not, and Korean companies are adept at responding quickly to changes in the business environment.
  • Top issues of doing business in Korea include bureaucracy, non-tariff barriers and labor unrest.
  • AMCHAM Korea is involved in the Korean Government’s Presidential Council on National Competitiveness, which has been an effective way to present ideas to the Korean government, especially since President Lee Myung-Bak is personally involved in the Council.

A Summary of Dr. Victor Cha's Interview on Korea Business Central

The Korea Business Interview Series continues at Korea Business Central (KoreaBusinessCentral.com). 

The latest interview was held with Dr. Victor Cha, former Director for Asian Affairs in the White House's National Security Council and current Director of the Asian Studies Program at Georgetown University. Dr. Cha is author of Beyond the Final Score: The Politics of Sport in Asia.

Here is the link to the interview audio:

In addition, the discussion and transcript can be found on Korea Business Central at the following link: http://www.koreabusinesscentral.com/forum/topics/korea-business-central-3

(The full list of interviews can be found here: http://www.koreabusinesscentral.com/page/interviews-2)

Main points of the interview:

Topic #1 - KORUS and the Korean Economy

  1. The Korean economy is improving thanks to the current Korean government's expansionary fiscal policy, which sets the administration up for good results in the June local elections.
  2. The Korea-US Free Trade Agreement (KORUS) will lead to increased economic activity in both the US and Korea. 
  3. The Obama administration is starting to say the right things about trade and passage of KORUS will ultimately depend on a big push by the White House.
  4. In addition to being the largest bilateral free trade agreement negotiated by the US, KORUS is also important in terms of the template it offers for future free trade agreements.
  5. It is unlikely that the US Congress will do anything on KORUS until after the US mid-term elections in November.
  6. The main sticking points to passage of KORUS by the US Congress include trade terms for beef and automobiles. These will likely be dealt with through side agreements, rather than renegotiation of the main agreement text
  7. Passage of KORUS is expected to benefit US automakers, citrus growers and various service industries, among others.

Topic #2 - Economic Engagement Between South and North Korea

  • North Korea is not taking up the Lee Myung-Bak government's "3,000 Proposal", which promises North Korea a per-capital income of $3,000/year within ten years if North Korea will denuclearize and improve its human rights record with South Korea. Therefore, economic engagement between North and South Korea has gone into reverse under the current administration.

Topic #3 - Sports Diplomacy in Asia

  1. Dr. Cha's idea for his book Beyond the Final Score: The Politics of Sport in Asia came after seeing the newsworthiness of sports on a visit to Australia with US Secretary of State Condoleezza Rice.
  2. The seminal case of sports diplomacy was "ping-pong diplomacy" which lead to China's opening to the United States in the 1970s.
  3. Since then, Korea has been very successful in promoting diplomatic initiatives through sports, such as the Seoul Summer Olympics in 1988, where Korea's efforts eventually led to the normalization of relations between the Soviet Union and South Korea in 1990.
  4. Korean success in the recent Vancouver Winter Olympics positions Korea well to host a future Winter Olympics in Korea.

KORUS FTA – Congressional Passage & Ratification: Some Thoughts by Dom LaVigne

My fellow administrator over at Korea Business Central, Dom LaVigne listened to the Korea Business Central interview with Dr. Victor Cha (available here) and shared the following very thorough and pertinent insights about KORUS FTA. He gave me permission to post his comments here in their entirety:

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3-15-2010 1-12-25 AM  I thought the interview with Dr. Cha was very interesting, and certainly a coup for KBC in being able to get someone so prominent (i.e., NSC background) for an interview on the KORUS FTA.

My comments on the interview and on the KORUS FTA topic in general are from my perspectives in having led US business lobbying efforts for the US-Singapore FTA (it become effective on January 1, 2004) and the US-Malaysia FTA (started in June 2006 but remains incomplete due to several sensitive Malaysian political and sectoral issues).

1.                  US Commitment to Asia

As Dr. Cha rightly pointed out, many government officials in Asia – particularly in ASEAN (Association of Southeast Asian Nations = Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam) have been questioning the perceived US commitment to Asia in the last 5-6 years.

Since September 2001, the predominant feeling among many in Southeast Asia has been that the US is only interested in a military, security, and/or anti-terrorism relationship with the region, and less so in business or trade.  These officials cite the ever-growing “soft power” diplomacy of China, which has made significant inroads throughout the region and in Africa in recent years.  Some have questioned whether China had displaced the United States in terms of influence in the region.

While I am not on-the-ground in Korea, I would suspect the situation there is very much as it is in Singapore and Malaysia.  In the last couple years of the Bush (’43) Administration, and certainly in just the first six months of the Obama Administration, the US sent significant numbers of senior-level officials to Southeast Asia to discuss everything from FTAs and economic cooperation, to trade and investment.  I was involved in hosting many meetings when these officials visited AmCham, and I can attest to the level of sincerity and interest by the USG in Asia.

However, what we often told officials is that the USG and its respective embassies in the region need to do a much better job of PR and marketing their commitment and involvement in Asia.  While the US government is doing a lot, very people on the street (and unfortunately even many of our close supporters in Asian governments) are not clearly getting the message.

2.                  TPP (Trans-Pacific Partnership - http://www.ustr.gov/tpp)

The TPP was started around 2006 by Brunei, New Zealand, and Singapore, who were looking to establish a very large Asia Pacific FTA that would involve partners in North and South America, including the United States.

The US recently agreed to participate in this, and it is expected that they will participate in the first rounds of the TPP this month (Mar 2010).  While this will require a huge amount of work, the US will push to have the TPP be part of its standard “Gold Standard” for FTA agreements – i.e., FTAs which are comprehensive and address all sectors, thus resulting in the highest possible trade liberalization by the relevant parties.

The US’ involvement in the TPP is certainly significant, and sends the right signals of its long-term commitment to Asia.  If Korea were also able to join the TPP, that would be quite important, given its growing global economic and political influence.

Note:  The TPP would not negate specific “bilaterals” (two-country agreements) which the US and Korea are undertaking with each other and/or other partners.  Rather, the TPP will seek to be a standard that is compatible with the various bilaterals, but also provide a platform upon which TPP members can build gold-standard bilaterals among each other.

Lessons Learned:

From my involvement in the USSFTA (US-Singapore) and USMFTA (US-Malaysia), and also my having kept pace with the KORUS FTA as we were negotiating the USMFTA, several key points and lessons learned that are important for the KORUS situation:

  1. US Public Sentiment:  Most of us who are doing international business know the value of an FTA, and (inspite of what people would think) many Congresspeople and Senators and their staffs will admit privately that they see and understand the value of having and FTA.  However, what ultimately pushes them to approve or not approve it will be their constituents.

The US economy and job market are frankly still in a shambles.  It is quite scary to see (on-the-ground) how hard it has been hit everywhere, and the big gap between how Asia continues to chug along, while in the States, it feels as though the wind has been taken out of the US’ sails.

CAFTA (Central American FTA) barely squeaked by in 2004 when the US economy was much more robust, and President Bush had to expend significant political capital to get it through.  The main obstacles to such FTAs passing will inevitable be feelings of potential job loss, questions about other countries not having labor unions (or how they treat their workers), and environmental implications.

Given the current public sentiment in the US – and with the mid-term Congressional elections happening in Nov 2010 – there is no way KORUS would pass Congress at this stage.

  1. Congress:

Note:  KORUS was signed by USTR and the Korean Minister for Trade & Economy on June 30, 2007.  I don’t know whether the agreement has been ratified by the Korean Parliament, but Congress must ratify it or it will be back to the drawing board. 

Congress takes a summer recess from June-Sept each year.  Given the amount of discussions and lobbying required to get this legislation through Congress, it will likely not be possible to do before June.  Also with midterm elections in Nov, most people who are running for office again will be busy with campaigning during the August-Nov period.  

Quite frankly, US public sentiment is such that I believe any US government official voting for an FTA prior to the Nov elections would most likely not regain his/her seat.

The only plausible option would be to introduce KORUS in late Jan 2011, after Congress reconvenes from the midterm elections and winter recess.

  1. TPA (Trade Promotional Authority)

When the US was getting more involved in FTAs in the late 1990s and early 2000s, President Clinton or President Bush signed the Trade Promotional Authority, which would enable the President to present future FTAs to Congress for ratification, but Congress could only do an “up-or-down” vote – i.e., they could only vote YES or NO on the entire agreement.  Normally for legislation going through Congress, members have the ability to request changes on a line-by-line basis, attach their own riders, etc.

TPA was enacted specifically to prevent this, because if Congress could make changes to the Agreement, it would need to go back to the other country’s legislative branch, who would either need to re-approve it, or if they did not, then the trade negotiators from both sides would have to work out a deal.

Unfortunately TPA expired on July 1, 2007.  At that time, it was felt that Congress would not renew it, and people were anticipating at least four years before Congress would approve it again.  Given the current economic situation in the US, it’s very unlikely TPA would have much of a chance unless the economy picks up significantly by 2011.  Still, it would likely take at least 8-10 months for TPA to be re-approved, given how slowly legislation can move through the US Congress.

Korea and Malaysia were racing to get their FTAs with the US negotiated and signed prior to July 1, 2006.  I think Korea just made it (June 30), while as I said, the Malaysia FTA is still under discussion.  So far as I am aware, no US FTAs have been presented to Congress since TPA expired. 

There is a real, significant risk the KORUS FTA could get bogged down in Congress as people pick it apart line-by-line.  Particularly given the very pugilistic bi-partisan bickering that has been taking place between Congress and the Administration in recent months, if the White House is putting forward KORUS, the Democrats would need to ensure party discipline to avoid their members voting with the Republicans (who might put up a fight due to partisan politics, even though most Republicans you talk to have favored and would favor this FTA). 

What will be critical is for US industry and business to put together a very comprehensive strategy for educating Congress and the American public on the benefits of KORUS.  We did this in Singapore after the FTA was signed, and while we were pressing Congress for ratification.  It took around six months of extremely intense work, including having AmCham members and their corporate HQs in the US send faxes by the thousands.  We even hired “runners” – professionals in Washington, DC who are hired to stand in lines outside of Congressional hearing rooms to pick up copies of the meeting transcripts – to hand-deliver letters to all Congressional and Senate offices stating the importance of the FTA and what needed to be done.

I know that Tami Overby (AMCHAM’s past President who is now heading up the US Chamber’s Asia Pacific operations) spent much time in Washington, DC lobbying Congress on the FTA. Once it is announced that KORUS will be submitted to Congress for consideration, a huge amount of educational work (particularly on correcting misperceptions) will be required by the US and Korean business communities.

  1. What the US Stands to Gain?

Potential gains for US industry would be tremendous, if forces in the States realized how much this would open the Korean market, expand export opps for US companies, create more and higher-paying jobs, etc.

a. Services: Allow US law firms to establish offices and practice in Korea (I do not know whether this is part of the KORUS FTA, but this is certainly a barrier currently in Korea).

As with the USSFTA and USMFTA, a KORUS FTA would allow express delivery services (e.g., FedEx, UPS) to operate more easily and effectively in Korea, and not be subject to restrictions which are common in many countries (e.g., de minimus limits, requirements on delivering their products in-country through local partners, etc.

If it is difficult for US professionals to work in Korea because of their qualifications not being recognized (e.g., US engineers, architects, doctors), the KORUS FTA might be addressing these areas (this was an issue in the USSFTA).

b.  Autos: As controversial as this issue is, an FTA should open the Korea market more to US automobiles.  Now the question arises whether Koreans would actually want American cars, given the very strong nationalism on Korean brands (even in cases where American products are cheaper).  I’ve seen Nokia dominate much of the world mobile phone market outside Korea, yet fail twice when they tried to sell their products in Korea.  I would guess there are very few examples of foreign brands doing well in Korea (exceptions being Starbucks, Nike, Dunkin’ Doughnuts, etc.)

c. Beef: Again, another very controversial issue.  Assuming the health questions/considerations are addressed properly, increases in US beef exports to Korea will not only benefit US beef producers, but also Korean consumers.  While I must admit that I prefer Korean beef to US beef, it is ridiculous to have to pay KRW 55,000 or more for deung shim in many Seoul BBQ restaurants, versus a top-quality US beef which might run KRW 15,000 cheaper.

What the Korea Stands to Gain?

a. Branding: Ask many people in the States where is Korea, and you’ll likely get the answer that it’s a city close to Tokyo or Beijing.  Malaysia and Singapore suffer the same problem.  The other opinion (which I’ve seen very much since I have been back from people in the Midwest) is that Korea is still as poor as it was in the “MASH” tv series portraying the Korean war.  I have even had top academics in US business schools disagree very strongly with me when I told them that five-star hotels in Seoul hardly run under USD 300.00 per night and that the cost of living in Korea was so high (i.e., they thought Korea was still a third-world country).

When we were going through the USSFTA and USMFTAs, these same questions arose.  One significant benefit of the FTA would be to put Korea “on the radar screen” among most Americans who have no idea that it is the US’ 10th (?) largest trading partner.

b. Korean companies: After we completed the USSFTA, I received many (many) calls from Singaporean companies who had heard so much about the States via the FTA, and now wanted to see how they could take advantage of the FTA to do business in the US, export more to there.   Quite a few even wanted to setup offices and investments in the US. Not only is this good for Korean companies and will increase Korean jobs at home, but it will also bring in badly-needed tax revenues and trickle-down spending to many US states and cities.