(AMCHAM)Rigidity Waves Investors Away from Korean Labor Market

Interview with Amy Jackson(pictured), the president of American Chamber of Commerce (AMCHAM) Korea

“Sometimes, rules and regulations in Korea are changing too quickly here without any involvement of the foreign stakeholders. I think that every single foreigner doing business here in Korea probably echoes.”

Amy Jackson(pictured), the president of American Chamber of Commerce (AMCHAM) Korea, pointed out in an interview with The Asia Business that rules in Korea sometimes change too fast to attract more foreign investment into Korea.

She also mentioned the rigid flexibility in labor market and the regulatory transparency issues which might be less attractive to foreign investors.

“Korea should have some more flexibility in the labor force so that very productive members of Korean workforce can be adequately rewarded but the people who aren’t productive can be let go in a pleasant and logical way,” she added.

However, she praised the competence of Korean workforce saying that Korea has one of the best workforces available in the world with very well-educated, hard-working and dedicated workers with good English language skills.

Jackson also highlighted improvement in the intellectual property rights protection.

“That’s big difference from my eyes when I first started working with Korea in 2002 and now where a significant improvement has been made. There are rules and regulations that dictate the intellectual property rights. That’s very important component to any foreign companies –which either want to invest or set up an R&D center here,” she said.

The former US government negotiator gave a full support on the free trade agreement between Korea and U.S.

“We are absolutely in favor of Korea and US FTA and we think it should be enacted as soon as possible. In our part, we do everything we can do by traveling to the United States and going on our door-knocks with Washington to advocate the importance of FTA between two countries,” she said.

However, she added that because the environment for auto manufactures in the US and  Korea and the world has changed so much, it makes sense for two sides to sit down and talk more about how the FTA meets the needs today of both sides of auto markets.

“We support that the conversation outside of renegotiation of the FTA, but we do not believe there is need for the renegotiation and are very supportive with Korean government’s position.”

The following is the excerpt from the interview with her.

- The Asia Business:  Tell us about how you have spent the last three months since the inaugural as the president of American Chamber of Commerce in Korea.

 ▲ Amy Jackson : It was very interesting and busy meeting with my board members and Korean government and industry officials. One of my primary jobs I am here is to continue to make sure AMCHAM relationship with Korean government and industries smooth. My members had many issues in doing business in Korea, but I think there is a positive way we can come up with and work together with Korean authorities to get those issues addressed.

That is one of them I have been focusing on for my first 3 months. One thing that is very positive for us – this is not new under my watch – is that  President Lee has the presidential council for national competitiveness that meets once every month and he has put a lot of efforts into seeking the opinion the foreign business community. So, the AMCHAM have been very appreciative that we have been included in those meetings and the President Lee also pays attention to our views as he looks at every agenda every month.

- Tell us about good ones that the Lee administration offers to the foreign investors and bad ones that need to be fixed.

▲ In terms of labor force, it is very well-known among the American business community that Korea has one of the best workforces available in the world. They are very well-educated, hard-working and dedicated with good English language skills.

So, that’s really strong and positive for investment in Korea. Korea has also done very good job in improving the intellectual property rights protection. That’s big difference from my eyes when I first started working with Korea in 2002 and now where a significant improvement has been made.

There are rules and regulations that dictate the intellectual property rights. That’s very important component to any foreign companies which either want to invest or set up an R&D center here. Korea also has strong democracy rule of law and all those things are very attractive to foreign investors.

On the flip side of positive labor is the inflexibility in the labor market. I don’t think AMCHAM or any of my members advocate Korea adopt US system. But, there should be some more flexibility in the labor force so that very productive members of Korean workforce can be adequately rewarded but the people aren’t productive can be let go in a pleasant and logical way.  And the inflexibility in labor makes it very difficult for foreign investors to decide to invest here or put more money into Korea.

The regulatory transparency has been a huge issue we always talked about. Sometimes, rules and regulations are changing too quickly here without any involvement of the foreign stakeholders. I think that every single foreigner doing business here in Korea probably echoes.

International standards are things that we have been trying to piggyback under the President Lee administration. President Lee pledges to have Korea in line with international standards; there are still a number of areas in which Korea is not in line with the international standards such as food additives and packaging.

From the members of prospective, the win-win situation where it will help Korea and Korean industries domestically if Korean industry does not have to produce just for Korean standards. So, perhaps there is something we can work on more cooperatively with Korean authorities and Korean industries that help the work towards the international standards in a number of areas.

-As the representative of American businesses in Korea, what is your position on free trade agreement between Korea and the United States?

▲ Our position is that we are absolutely in favor of Korea and US FTA. We think it should be enacted as soon as possible and we are, in our part, doing everything we can both here and US. We are also traveling to the United States and going on our door-knocks with Washington. We are still strongly urging US policymakers to enact FTA soon.

Since the FTA has been completed, AMCHAM has gone to Washington a lot more frequently than usual and plus we also have many business delegations here. For example, we had some California state senators and congressional staff here for the last few weeks. We meet with them every time they are here and we strongly advocate on behalf of US industries and their domestic constituents reminding them how important the FTA is for their own constituencies.

- Tell us about the pros and cons on KOR-US FTA in America.

▲Cons are basically on the automobile front where US automobile manufactures concerned that the FTA does not go far enough to open Korea’s market, particularly in area with non-tariff barriers like standards setting. As the former US government negotiator, I can tell you that there have been historical problems in the auto sector with tax audit.

So we have to make sure that the automakers are comfortable with particularly the environment that has changed so much in 2 years since the FTA was signed. Because the environment for auto manufactures in the US and Korea and the world has changed so much, it makes sense for two sides to sit down and talk more about how the FTA meets the needs today of both sides of auto markets.

So we strongly support that. But we support that the conversation outside of renegotiation of the FTA. We do not believe there is need for the renegotiation. We are very supportive with Korean government’s position in that regard. One thing very important to know is that the vast of majority of American companies and Americans are supportive for trade agreement.

- One word to best describe Korea and Korean people?

▲ One thing that really strikes me about Korea and Koreans is the adaptability. It is very striking when you compare Korea to other countries including Asian countries. Korea can band together and make a decision and turn into the new direction very quickly and easily. 

That is why Korean economy has been very successful. When you convince Korean people that this is good way to go for your future, then they band together and work together and look at the tremendous success just like coming out of the Asian financial crisis and coming out of this financial meltdown.  Korea is one of the fastest economies emerging in positive growth.

아주경제= 신기림 기자 [e-mail]
(아주경제=ajnews.co.kr) 무단전재 배포금지