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A Platform for Dialogue
The Korea-US free trade agreement (KORUS FTA) has been a hot topic of discussion over the last year. Amid continued talks of renegotiation, pundits from both the American and Korean side have weighed in about the future of the FTA. And if there’s one person who understands both sides, it’s James Kim. As the first Korean-American to serve as chairman and CEO of the American Chamber of Commerce (AMCHAM) in Korea, Kim acknowledges that the FTA has room for improvement but emphasizes that the agreement is crucial to further strengthening the U.S.–Korea economic partnership. Here’s what Kim had to say about the FTA and how AMCHAM became the go-to organization for enhancing trade and investment opportunities between the two countries.
What is the role of AMCHAM and how is AMCHAM Korea strengthening Korea-U.S. relations?
AMCHAM serves as a solid platform for the U.S. and the international business community to voice their opinion in building a business-friendly environment in Korea. We have been in Korea for 65 years, helping and supporting the business community to succeed and thrive in the market.
As the largest foreign chamber in Korea, our focus is to foster growth of the U.S. and Korean economies through increased trade and commerce. AMCHAM achieves these goals by serving as a vital communication channel for the U.S. business community and engaging in dialogue with key decision makers in both Korea and the U.S. As an advocate of business, we also assist in opening opportunities for our members while helping to reduce barriers for fair competition.
In addition, facilitating the successful implementation of the KORUS FTA is a primary focus for AMCHAM. We believe it is key to furthering the U.S.–Korea economic partnership, and that it will continue to bring benefits for the vast majority of those American businesses operating in Korea and Korean businesses operating in the U.S.
We have over 30 committees covering virtually all industries in Korea. The committees meet regularly to exchange ideas and information, and engage in dialogue with relevant stakeholder throughout the government, academia and the business community.
We also collaborate with the Korean government to increase investment. Last year we signed an MOU with the Presidential Committee on Jobs Policy with the aim to promote job creation and foreign direct investment in Korea.
Also each year, AMCHAM visits Washington D.C. to meet with key officials from the White House, Congress and policy think tanks to discuss issues critical to the U.S.–Korea relationship. Last year, we delivered the message that the KORUS FTA is effective on several levels for the continued economic relationship between the U.S. and Korea.
But AMCHAM is not just about business. We operate a charity foundation called Partners for the Future which helps underprivileged students. Since 2000, we have awarded close to 3,000 scholarships to university students in Korea.
Are there particular industries in Korea that are attracting attention from American companies?
Korea is well-known for its vibrant and dynamic industries like the IT sector. It also helps that Korea has a highly educated work force characterized by strong work ethics.
Thanks to home grown companies, Korea leads the world in areas such as semiconductors and display panels. We’re seeing a lot of global companies attracted to this kind of environment, not only in manufacturing but also services and innovative startups.
For example, companies like WeWork with its innovative shared space business model, is thriving in Korea and opening up new spaces. Delta Airlines recently decided to locate its Asia head office in Korea. These are all examples of how attractive the Korean market is.
What are some challenges that American companies face when doing business here? What can the Korean government do for foreign companies to make things easier for them?
Some of the biggest challenges of doing business in Korea are the various regulations dubbed ‘Korea–Unique Standards’. These barriers create imbalances in what should be a level playing field, and foreign businesses lose motivation to participate and compete in the Korean economy. Aligning these unique standards with global standards is very important.
However, we are seeing progress. Particularly the government’s willingness to engage in meaningful dialogues with the global business community has greatly improved. For instance, recently the Korean authorities decided to delay the implementation of a revised tax regulation designed to widen the taxation base among foreign investors. This was made after intense discussions with the international finance community, including AMCHAM.
Korea and the United States have been close allies for many years. What are your hopes for economic/political relations between the two regions?
Today, Korea is the 6th largest trading partner to the U.S. and the 2nd largest foreign direct investor to the U.S. from Asia. There is no question that the economic relationship between the two countries is inseparable.
The KORUS FTA has been the platform through which the two nations are able to increase cooperation and resolve potential issues. However, we must acknowledge that the FTA has room for improvement, especially in regards to the implementation of the existing agreement. I am confident that through a constructive and productive process we will have a more stable and sustainable roadmap for the future.
As evidenced by President Moon Jae-in and President Donald Trump’s greatly successful state visits in 2017, I remain optimistic that the rock-solid alliance U.S. and Korea have built over the years will only strengthen in the future.
By Esther Oh (email@example.com)
Executive Consultant/Invest Korea