Ambassador of the European Union to the Republic of Korea
2019 ECCK White Book Launch
November 29, 2019 (Friday) 10:00~11:00am at Four Seasons Hotel.
Venue: Four Seasons Hotel 6F Ara Room
Participants: EU Ambassador, ECCK Chairperson, ECCK President, ECCK Committee Chairpersons
Distinguished Guests, Ladies and Gentlemen,
I would like to congratulate ECCK on the publication of their 2019 White Paper.
The European Commission values very much the extensive work done by ECCK, which, year-after-year is becoming a benchmark of the ease of doing business in Korea.
The White Paper is a big book.
Dimitris calls it "the bible"!
It goes into detail, sector by sector, and offers recommendations to policy-makers, in a non-confrontational way, on how to improve business conditions in Korea.
Business is generally positive about Korea, but here and there, there is scope for improvement.
I note that compared with last year, the number of ECCK issues and recommendations has increased, not decreased.
A cross-cutting issue on which we place utmost importance is the need to avoid discrimination and ensure equal treatment.
There is a widespread perception among foreign-invested companies that foreign businesses are relatively more subjected to Korean multi-agencies investigations (the so-called "dawn-raids"). The Korean law is very tough, and in certain cases, honest foreign businessmen, operating in good faith, may find themselves criminalised.
Ensuring equal treatment also means that when EU companies want to bid for public procurement contracts, there is fair competition and they have the same chances to win contracts as domestic companies.
A current example of unfair practice relates to the export of pork products. Even though the African Swine Fever (ASF) is now present in Korea, Korea can still export pork products from non-affected Korean areas to a number of countries, including Hong-Kong or Thailand. However, Korea denies such treatment to those EU countries affected by ASF (Belgium, Czech Republic, Poland). For the EU, this amounts to double standards.
EU business is not looking for special or privileged treatment, but rather improvements to the business and investment climate that will benefit all.
In March of this year, President Moon Jae-In held a dialogue with foreign-invested companies (including ECCK) and he said:
"when a foreign company invests in Korea, then it is 'our company'".
These are very powerful words which leave no room for discrimination or unequal treatment.
Foreign-invested companies account for 19 percent of Korea’s exports and 7 percent of the country’s employment.
Foreign-invested companies want the economic policy of this administration to succeed. They want to contribute to this success.
Now let us take a step back and look at the broader picture.
In GDP terms, the EU is ten times bigger than Korea.
The corner stone of our economic relationship is, of course, the EU Korea Free Trade agreement (FTA), in force since 2011.
EU-Korea bilateral trade in goods is worth over EUR 100 billion annually, up by 50% since the entry into force of the FTA.
The EU is the 4th largest trade partner of Korea, right after China, ASEAN and the US, but before Japan.
Korea is the 8th largest trade partner of the EU ahead of countries such as India and Brazil.
The EU (33% of total FDI stock in Korea) is by far the largest foreign investor in Korea.
The EU and Korea are important trade and investment partners. The FTA is working for both sides.
Although it is delivering, the EU RoK FTA is aging and is in need of an upgrade, with a view to closing legal loopholes or adding new features such as an investment chapter.
Both parties should strategically reflect on the potential benefits stemming from a possible modernisation of the EU RoK FTA.
We share similar views about global trade: we oppose protectionism and support the multilateral, rules-based system with the WTO at its core.
Why is that?
Because we share the same belief that free and fair trade is the bedrock of our prosperity.
International trade supports today 36 million EU jobs.
60% of Europeans feel that they personally benefit from international trade, 16 percentage points more than 10 years ago.
In the same vein, Trade Minister Yoo recently said: "over the past 15 years, Korea's real GDP increased by 3.4% after entry into force of FTAs, whilst the adverse impact of FTAs on the agricultural sector was much less significant than initially anticipated."
For the RoK, the EU is a large, stable, reliable, like-minded trade partner.
But too often, we feel that the EU does not receive from Korea the attention it deserves.
Last week, Korea released its new "trade strategy". The EU is not even mentioned in the press release.
It seems to us that, perhaps because we do not cause trouble, Korea's attention is focused on its relations and disputes with other large partners and neighbours.
Forgive me for speaking so openly and from the bottom of my heart. I see so much untapped potential in our trade relation that I just cannot help it!
I would therefore like to extend my thanks, first to the ECCK for producing this unequivocal document.
But I also wanted to congratulate all the ECCK Committees chairs and members, and the ECCK staff who are here today, for sharing their insights, but also for having the determination to strive for success in making Korea an even better place to do business.
Word count: 849 words (6 minutes)