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On June 9-11, a delegation from the American Chamber of Commerce in Korea (AmCham) visited Washington to apprise Congressmen, Senators, and Korea
policy analysts of the current business and investment climate during their annual "Doorknock." The Doorknock message on Capitol Hill was quite clear; trade with Korea is important. In spite of the crisis, the U.S.
Department of Commerce reported this month that in April, Korea had remained a top ten export market for the United States. Moreover, Korea became the fifth largest export market for U.S. goods and the seventh largest
trading partner for the United States.
The delegation stated that business opportunities in Korea for U.S. firms are plentiful. Despite the economic setback in 1997, Korea is expected to post a rate of 5-6%
growth in 1999. With US$4.2 billion in two-way investment between U.S. and Korea, it is clear that Korea will continue to be a vital economic partner in the 21st Century.
One member stated that during his
past two decades living in Korea, there has never been a better time for foreign investors. The financial sector has been restructured, and many foreign investors are in the process of finalizing joint venture deals.
Goldman Sachs has recently signed an agreement to invest US$500 million in South Korea's Kookmin Bank (See page 3). With financial institutions becoming more transparent and using internationally accepted
accounting standards, new opportunies abound. Banks, once viewed as quasi-government institutions, whose purpose was to give generous loans to those whom the government deemed worthy, are applying Western- style methods
in order to become profit-making institutions that make loan decisions based on sound business practices. This has caused the chaebol to rethink their policies and re-evaluate their overall worth and in some cases have
led to downsizing by selling off non-core assets. Korea's labor market continues to be one of the best educated in the world. Following the crisis, there has been a 30% reduction in labor costs. This, in addition to the
numerous subsidiaries being sold, provides an ideal combination for U.S. investors.
AmCham also made clear the importance of Korea continuing to open its markets through the reduction of
non-tariff trade barriers. Needed reforms include the recognition of international standards and testing of imported products; simplification of labeling requirements and a more expeditious customs clearance process. On
the issue of pharmaceuticals, delegates emphasized the need for consumers to have greater access to imported drugs. For this to happen, imported drugs must be treated fairly through the acceptance and protection of
international data for product licensing; acceptance of foreign quality of assurance certificates; and the use of a market-based pricing system. On automobiles, delegates spoke on the need for assurances from the ROK
government that consumers will not be impeded from purchasing foreign automobiles through fair treatment in marketing; the reduction in passenger vehicle tariff rates; and more readily available auto financing. On
intellectual property rights (IPR), AmCham positively endorsed the efforts made by the Korean government over the last year to strengthen IPR-related laws. Areas needing improvement include
greater protection of trademarks, copyrights, famous marks, software, trade secrets, and patent models. In addition, the delegation urged the government to improve enforcement of
legislation against counterfeiting and piracy.
Although some roadblocks remain, AmCham believes that in time there will be unrestricted access to the Korean market. According to AmCham, Korea is still a very
dynamic economy, one that will surely be a leading force for trade in Northeast Asia in the years to come. |
