Business in the United States:
A Korean Perspective
Speech by Hong Taek Chung
Korean Chamber of Commerce and Industry in the USA, Inc. (KOCHAM)
you. It is a great pleasure to address this session of the 15th
annual U.S.-Korea Business Council Joint Steering Committee Meeting.
My name is Hong-Taek Chung. I am the president of KOCHAM, the
Korean Chamber of Commerce & Industry in the USA. This is the
first time a KOCHAM representative has had the privilege of addressing
this committee and we are very grateful for this opportunity.
membership includes over 400 Korean subsidiary companies and financial
institutions doing businesses in the United States. We are working
as a private organization and dedicate ourselves to improving business
relations between Korea and the U.S. Every year our operating members
travel to Washington D.C to make an official visit to concerned
offices of the U.S. Commerce and Treasury departments, Congress
and other institutions to help promote a dialogue and mutual understanding
in conjunction with current trading and financial issues. They are
eager to hear from us as we can give them a front-line view of the
concerns of Korean businesses operating in the United States and
carry back their views to our member firms and our colleagues in
I would like to discuss the U.S. business environment and the experience
of Korean companies as they seek to expand and operate their businesses
in the United States.
December of last year (2001) the Korea International Trade Association
(KITA) conducted a survey among KOCHAM members. As many as 83% of
the 225 subsidiaries surveyed expected that Korean exports to the
U.S. would increase this year. Most attributed this rise to an expectation
of a U.S. economic recovery. While 56% replied that they have no
import-regulated items, 30% foresaw the possibility of new regulations.
Additionally, 40% of now-regulated companies worried that import
regulations and restrictions will be strengthened to their detriment.
asked to describe the big obstacles
they faced in respect to their U.S. operations, interviewed firms
identified a range of factors.
a lack of competitiveness in price and quality, marketing power,
market information and tax concerns were identified as major problems.
To solve and overcome these difficulties, Korean companies are making
substantial efforts to lower costs in every aspect. At the same
time they are moving to enhance product development, quality control,
participation in local marketing systems, and their ability to provide
Korean companies are keeping a sharp eye on important bilateral
trade issues such as TPA (Trade Promotion Authority), the Byrd amendment,
Trade Remedy law and U.S.-Korea Free Trade Agreement (FTA). Among
these issues FTA draws special attention as the most reasonable
alternative to address trade barriers and to promote long term growth
in our trading relationship with the United States.
asked to name the areas where they have the most concern, Korean
executives often cite banking, automobiles and steel. Among these
three fields, banking has made special progress -- both in respect
to the actual achievements that have been made as well as toward
a strengthened relationship between the authorities concerned.
Together to Strengthen Korean Banking Operating in the U.S.
the Asian financial crises in 1997, U.S. financial and banking regulators
imposed stringent supervisory and inspection standards on Korean
bank branches. Inspection teams, composed of members of both the
Federal Reserve Board (FRB) and Supervisory Banking Department of
New York, began to jointly audit Korean banking operations in the
U.S. These teams came every year and spent about seven weeks working
with each bank.
banks strove to get rid of this bondage. Their efforts included
writing off bad assets and strengthening risk-management and compliance
with U.S. regulations to prevent money laundering. Many fortified
their operational systems by hiring additional U.S. personnel to
help them comply with their regulatory obligations.
workshops hosted by both U.S. and Korean Authorities were held on
a regular basis. These workshops provided Korean banks with information
on restructuring and economic trends, as well as the inspection
process. As a result, from this year on, these two agencies will
alternate in performing these inspections.
attribute this change to the fact that many Korean banks have been
upgraded to 2nd grade from a punitive 3rd or 4th grade. More specifically,
the ratings of thirteen of the eighteen Korean branches operating
in the U.S. were elevated back to where they had been before the
bottom line is that Korean companies truly appreciate the many benefits
we enjoy operating in U.S.A. These include clear regulatory guidelines,
a well functioning legal and financial system, superior corporate
governance practices and a dynamic competitive operating environment.
KOCHAM is here functioning as the lubricant oil to remove any friction
within the trade mechanism between Korea and the United States.
would like to conclude with a recent statement by Mr. Ajai Chopra,
Assistant Director, of the Asia and Pacific Dept. at the IMF. He
noted "Korea was one of the few countries
that showed economic growth in spite of the worldwide recession
because of the effective implementation of its restructuring efforts.
Further progress is foreseen over the coming year with the potential
sale and restructuring of major companies such as Hynix, Daewoo
Motor and Hyundai Trust and Investment."
you. I look forward to working with you in the future and to answering
any questions you might have.
The preceeding information is provided by:
KWR International, Inc.
New York, NY 10023
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