Speeches and Transcripts

Remarks for the Korean Importers’ Association (KOIMA)

by
Alexander Vershbow
U.S. Ambassador to the Republic of Korea

February 27, 2008
Seoul Plaza Hotel

Thank you for that introduction Chairman Kwon Gee-chan. Dr. Kim Wan-hee, distinguished guests and KOIMA members: I’m delighted to be here this morning to speak to the members of one of the most important trade organizations in Korea, representing close to 10,000 companies and handling over 80% of Korea’s imports. Your efforts in partnering with U.S. businesses have made Korea the seventh largest market for U.S. products in the world and I applaud your achievements. I also want to commend KOIMA for its initiative in organizing a trade mission to the U.S. in a few weeks, getting a running start on what we foresee as a new and stronger era of trade between our two countries.

It has been an exciting week for all of Korea.  Last night we saw the New York Philharmonic perform in Pyongyang, the first-ever visit by a major U.S. orchestra to North Korea.  Even more exciting was the inauguration of President Lee Myung-bak here in Seoul on Monday. This morning let me share with you a few thoughts regarding our bilateral relationship, and especially what I foresee as a very bright future for our trading relationship.

Let me begin with recent events: U.S. Secretary of State Condoleezza Rice, our KORUS FTA Chief Negotiator Wendy Cutler, and representatives of U.S. business community attended the inauguration of President Lee two days ago. Earlier this month, both the U.S. House of Representatives and Senate passed resolutions expressing their congratulations and best wishes to President Lee. On this special occasion, our public and private sector leaders, along with the U.S. Congress, are conveying our best wishes for President Lee’s success, our commitment to strengthening our two economies, and above all our close friendship.          

Leading up to the events of this week, we have all been impressed with the decisiveness of the election – over 48% of Korea voted in President Lee’s favor, and he won nearly twice the number of votes as his nearest competitor. The Korean people clearly responded to President Lee’s call to boost economic growth and standards of living, as well as reinvigorate the alliance between our two countries, including strong support for the Korea-U.S. Free Trade Agreement.   

As you may have noticed, the U.S. is in the midst of its own presidential campaign season. I imagine that Koreans find U.S. campaigns fairly familiar, particularly when it comes to parades, pep rallies, baby-kissing, and rock and roll music. While Korean candidates have engaged in synchronized dance routines and sing-alongs, our candidates can be seen singing, and even playing the bass guitar. Of course, who can forget former President Clinton’s saxophone playing on the campaign trail?  I suppose, were I to ever run for political office, I could always fall back on playing the drums. But whether it is dance routines or bass riffs, what is happening on both sides of the Pacific is that the population is becoming energized and engaged; we’ve seen record high voter turnouts – a great testimony to democracy-in-action in both our countries.     

These are indeed exciting times with “change” very much part of the vocabulary of leaders in the U.S. and Korea. Let me focus on the most significant change to affect our trading relationship – the KORUS FTA. Last June, after many months of hard negotiations, our two governments signed a comprehensive Free Trade Agreement that will eliminate virtually all tariffs on trade between our two countries, and also eliminate non-tariff barriers to trade and investment.  The FTA will significantly boost commerce between the United States and Korea and increase economic growth, investment, and jobs in our two countries.  Experts estimate that the benefits of the FTA will lead to billions of dollars of increased sales as well a general facilitation of bilateral trade in both directions.

Beyond its direct benefits for trade, the KORUS FTA will also place a special spotlight on the Korea-U.S. relationship, facilitating a major expansion in travel and tourism, cultural exchanges, educational opportunities, and countless other areas tangential to commerce.   As you know, once the U.S. and Korea concluded our negotiations, the European Union initiated FTA discussions with Korea, and many other countries have expressed interest in having an FTA with Korea, so I think that our KORUS FTA will not just have an impact on the two-way trade between our two countries, but on the broader trade patterns within the region.

For importers such as you, the benefits of the KORUS FTA will be huge: The bipartisan International Trade Commission, in its report to the Congress in October, estimated that the FTA will lead to a $10 billion annual increase in  U.S. exports to Korea. If realized, that would be a roughly 1/3 increase, catapulting Korea ahead of Germany and next to the United Kingdom in total U.S. exports.  

I recently returned from the United States on a cross-country speaking tour with Korean Ambassador Lee Tae-sik, and I can attest to the interest in doing business with Korea among companies large and small and in sectors across the board. Too often, however, companies focus first on the Chinese and Japanese markets in their Asia strategy, oftentimes simply because of public awareness and the attention they receive in the media. I believe that the KORUS FTA will provide Korea with the attention it deserves, raise public awareness, and generate significant U.S. business interest in this important market.  

Ratification of the FTA in both the Korean National Assembly and the U.S. Congress still remains as the final but challenging step. Both our democracies are known for vigorous debates on issues that will deeply affect our economies.  Here in Korea there has been a lively debate going on in the National Assembly this month, but I am encouraged that the leaders of the major parties, and of course President Lee himself, have supporting ratifying the FTA. Public opinion polls continue to show a very healthy majority of Koreans support the FTA and understand its benefits, so we hope that the FTA will be ratified by the National Assembly in the coming weeks. 

In the United States, our public began debating the FTA later than Korea did – really only after the agreement was signed last June – so our public education process about the FTA is not as far along in the U.S. as here in Korea. The U.S. business community strongly supports the FTA, and the media opinion has been almost universally enthusiastic. The analysis of the International Trade Commission demonstrated that the commercial benefits of the FTA will be huge, for both the United States and Korea, and the strategic arguments for further strengthening our bilateral partnership are self-evident.  But a few voices of opposition to the KORUS FTA – mostly in the automobile sector – have been very active, and they have shaped much of the debate on KORUS so far, including in the U.S. primary elections. However, I am convinced that once the agreement is carefully considered, the American public and our lawmakers will understand the importance of this agreement, and that we will obtain the necessary majority of votes to get it ratified in the United States as well.  

Let me add that President Bush is firmly committed to the FTA and to seeing it ratified by the U.S. Congress. Secretary of State Rice underscored this in her meeting with President Lee and in a meeting with the American Chamber of Commerce on Monday. We intend to work very hard to get the FTA approved in the House and Senate.

The Korean Government can of course increase the likelihood of that positive outcome in Congress by following through on its pledge to re-open the Korean beef market in line with international science. This is not only an issue of great concern for the U.S. Congress, but it’s also a matter of concern for Korean consumers and families, who currently pay the highest prices in the world for beef. American beef is safe, delicious and affordable; I encourage you to enjoy some when you are in the United States, but my real hope is that it won’t be too long before you can enjoy it here in Korea as well.

KOIMA’s upcoming trade mission to the United States will be a harbinger of the strong trade potential of Korea – from major industrial goods to consumer products, from medical to IT technologies; virtually every export sector of U.S. economy will be more competitive and more accessible to the Korean market than ever before under the KORUS FTA. We expect that the traditional Korean connection to West Coast markets will grow, but equally important, Korean trade will expand to new areas of the United States such as the South and the Midwest. On that note, I’m especially pleased to hear that the KOIMA mission will visit the states of Pennsylvania and Kansas (and Kansas City, Missouri). 

As we move to take advantage of this new era of expanded trade between the United States and Korea, we look forward to working closely with KOIMA and the many other Korean trade associations. The U.S. Embassy’s Commercial and Agricultural Sections are aggressively positioned to support U.S. exports with existing contacts in their network of U.S. offices, as well as through their experienced staffs. Additionally, Korea has a significant number of U.S. State representative offices that have additional commercial connections for Korean importers. In the next few months, the State of North Dakota and later in the fall, California will be organizing major trade missions to Korea. 

We at the U.S. Embassy are ready to assist KOIMA in identifying and concluding successful business opportunities in the United States. Members of the Commercial and Agricultural Section at the U.S. Embassy are here today and welcome your inquiries. 

Thank you for the opportunity to present some thoughts on our bilateral relationship and our vital trading relationship and the bright future it holds. Once again I commend KOIMA for their trade initiatives and for inviting me here today to meet personally with your members. I’d be happy to take questions.