Foreign chambers note business barriers
The U.S., British, European, French and German chambers in Korea organized a joint seminar in central Seoul to discuss the country’s business landscape for foreign companies. Some of them regularly hold seminars of their own to share their thoughts on trade and business.
This is the first time the five have combined forces to do so.
The Korea-U.S. trade relationship “has been a strong, robust partnership. But there is still more work to be done. We see non-tariff barriers, Korea-unique regulatory standards and limited access to the market,” Gregory Briscoe, the U.S. Embassy’s minister counselor for commercial affairs, said at Friday’s event.
In a joint statement issued by the five chambers, they stressed the “need to give greater weight to the predictability and consistency of the regulatory environment” and called for “improved coordination between all government agencies in Korea to ensure consistent and predictable enforcement of rules and regulations.”
Korea-unique regulations, or so-called “Galapagos” regulations, have long been the target of criticism by local business insiders as well. The list is long, with barriers ranging from the broad and industry wide - such as the rule limiting non-financial company stakes in banks to 4 percent - to the specific - such as the rule requiring a ground clearance of 12 centimeters that for cars, a standard found nowhere else in the world.
The European Chamber of Commerce in Korea (ECCK) held a seminar on Tuesday in which various industry representatives voiced concerns about the country’s business landscape.
During the seminar, it was noted how Korea-unique regulations keep foreign investment away and that regulations often change too fast, sometimes without adequate input from businesses or evaluations as to whether the new policies will bring the desired effects or unintended consequences.
During Friday’s panel discussion, ECCK’s President Christoph Heider said that regulations can be obstacles not only for foreign companies, but also for local firms.
“Small and mid-sized enterprises play a vital role in exports,” he said, “but they follow local standards, and it will be difficult when the time comes for exports because they have to learn international standards, which is often difficult as it takes time and knowledge to understand them.”
The chambers said that aligning domestic regulations with global standards is important in an era where technology is bringing rapid changes and quickly reshaping the business landscape.
“In terms of innovation, fields like the Internet of Things, energy and others cannot be led by one country,” said Chairman David-Pierre Jalicon of the French Korean Chamber of Commerce and Industry. “We need international cooperation. Without global standards, this will be difficult.”
The seminar was also attended by government officials who agreed with the sentiment that old regulations can slow growth in new areas.
“A lot of new technologies, like artificial intelligence and blockchain, didn’t exist in the past, so there are cases where new technologies are not addressed or have relevant laws prepared - it’s a serious question for us,” said Kim Jeong-wha, a director of the foreign investment policy division at the Ministry of Trade. Joung Ki-won, the co-chair of the U.S. chamber’s blockchain committee and founder of her own blockchain startup, called Directional, acknowledged that the government had made efforts to create a favorable business environment for her business, but that the slow speed of change was hindering growth.
“Fintech is about speed - everything needs to go fast. But even requests for authoritative interpretations sometime take months,” she said, adding that local regulations are difficult even for her as an experienced lawyer. “The difficult part is ambiguous regulations and the lack of predictability.”
BY SONG KYOUNG-SON [firstname.lastname@example.org]