Ambassador Speeches

U.S.-Korea Relations: Taking Things To The Next Level

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

Luncheon Remarks at the
American Chamber of Commerce in Korea
General Membership Meeting (GMM)
Grand Hyatt Hotel, Seoul - November 30, 2005

I want to thank Chairman Wayne Chumley for that warm introduction, and for giving me this opportunity to address the American Chamber of Commerce. AmCham President Tami Overby and her team have done their usual outstanding job in setting up this meeting. We all appreciate your efforts. I’ve already met many of the AmCham board members over the last few weeks, but I’m very pleased so see so many of you again here today.

And to all AmCham members, particularly those of you who volunteer to serve on your various committees and working groups, I want you to know that this Ambassador will also work hard to enhance the close working relationship you have with our American Embassy here in Seoul, as we work together in advancing the commercial and business relationship between the United States and Korea. I am looking forward to “taking things to the next level” in that relationship, with your help.

As I learn more about this fascinating country, it strikes me that our bilateral relationship is complex and developing. I’ve seen some exciting times in Europe and in Russia, where Cold War divisions have been largely overcome, and I have the distinct feeling that I will also see history in the making on the Korean Peninsula during my time here. And I know I will have plenty of interesting issues to work on in the months and years ahead in U.S.-Korean relations.

Taking Things to the Next Level with a “Dynamic Korea”

In choosing the English word “dynamic” to describe their country, Koreans have chosen well. Checking that word in my American Webster’s dictionary, I find definitions like “force in motion,” “continuous change” and “marked by vigor and energy.”

This country fits all those definitions. And it has become clear to me in these last few busy weeks that it is Korea’s dynamism - along with a dynamic and engaged United States - that will help propel the U.S.-Korea relationship to the next level. Whether riding the KTX bullet train from Seoul to Busan, enjoying fast broadband Internet access at home, seeing inspiring arts performances, or participating in the recent (and well-run) APEC event, it is clear to me this country is on an upward trajectory. So I’m thrilled to be the U.S. Ambassador to Korea at such an historic time. I look forward to a long stay and I’m excited about where we can go in U.S.-Korean relations.

My first six weeks have been quite amazing and intense. I was honored to present my credentials to President Roh Moo-Hyun within less than 24 hours of my arrival. Since then, the highlight has been the visit by President Bush, Secretary Rice and other high officials from around the world to attend the APEC meetings in Busan. The visits of former president George Bush and our Secretary of Defense, Donald Rumsfeld, and the Seoul Air Show were also memorable.

As President Bush and President Roh agreed at their meeting in Gyeongju on November 17, we have come to a “high point” in the U.S.-Korea relationship. And sometimes, as allies and economic partners and looking down from this high point, it is good to reflect on how far we’ve come - even as we realize that we can go higher still and take this relationship to the next level.

The U.S.-Korea Alliance and the Changing Security Environment

In learning about Korea, I was surprised to discover that South Korea’s economic growth did not overtake North Korea’s until the early 1970s. Since then, this dynamic southern half of Korea has really taken off.

Progress in the northern part of the peninsula, meanwhile, has really slowed down, to put it mildly. North Korea’s economic and social development can be described as stagnant, at best. Yet North Korea remains a military threat, with over million troops, a claim to possess nuclear weapons, and near-total control of its own people. That means that U.S.-Korean military cooperation is still an important part of our alliance.

But, together, our countries are also taking our defense alliance to the next level by realigning our troops, moving them out of population centers, consolidating our bases, and shifting more responsibility to the ROK’s armed forces. Along with new investments in military hardware, this rebalancing will improve our collective ability to defend Korea. We are also redefining the purposes of our alliance for the long term, to encompass the promotion of peace and stability throughout Northeast Asia and beyond.

Six Party Talks

As the U.S.-ROK relationship has expanded and grown beyond our traditional military focus, we continue to have shared concerns for the Northern half of the Peninsula. These concerns are most acute with respect to North Korea’s nuclear weapons programs. The United States, and our South Korean allies, have coordinated closely in all five rounds of the Six Party Talks and will continue to maintain a tightly-knit partnership in our efforts to persuade North Korea to get out of the nuclear business.

On September 19, the delegates to the Six Party Talks successfully agreed on a joint statement of principles. Although this was a significant development, we now face the even more formidable challenge of implementing the agreed principles. It remains to be seen whether North Korea is truly prepared to eliminate its nuclear programs, and to do so in a prompt and verifiable manner. If they are, as President Bush and President Roh stated in Gyeongju, we are prepared to move forward on other aspects of the September 19 joint statement, including discussion of a permanent peace regime for the Korean Peninsula.

The fifth round of the Six Party Talks began just before APEC with a short, three-day session. While South Korea and other participants put forward some constructive ideas for implementing the September 19 joint statement, the North Koreans’ tactics were not especially encouraging. All parties agreed to resume the fifth round at an early date. In the weeks running up to the next session, we and our South Korean allies will be busy coordinating with one another and with other partners in preparation for substantive and, hopefully, constructive discussions in Beijing.

Korea’s Place in the World

While some outside Korea focus mostly on North Korea and the future of the Korean peninsula security situation, they miss an important transition South Korea is making on how it deals with the rest of the world. As a democracy, proponent of free trade and forward-looking developed economy, Korea is a growing force in the global community. Korea is taking things to the next level internationally. Koreans have participated with the United States and other countries in peacekeeping missions around the world. In Iraq, it has contributed over 3,000 troops, making it the third largest coalition partner there. Realizing that it is time to give back to the world community, Korea has increased its foreign assistance to countries in need.

Korea’s hosting of APEC shined a world-class spotlight on how far this country has come and showed how Korea is moving to the next level as a political and economic leader. Korea’s leadership in negotiating the APEC “Busan Declaration” emphasized that transition. That declaration advanced the cause of free trade, especially in its support for the WTO Doha Development Agenda and in its renewed commitment to improve the investment climate throughout the Asia-Pacific region.

For our part, the United States is committed to a successful Hong Kong Ministerial and to the conclusion of an ambitious Doha Round in 2006 that fully achieves trade and development objectives. We expect an ambitious and comprehensive result from the Doha Round, covering agriculture as well as non-agricultural goods and services. We are convinced that this is the best way to help developing countries, and we do not want to settle for less ambitious approaches. The ball is now in the European Union’s court to take bolder steps on agricultural market liberalization.

U.S.-Korea Economic Ties

While our military alliance and security issues may have shaped our past, and continue to shape our present, our economic cooperation and the global marketplace will shape our future. While North Korean nuclear and security issues get most of the headlines, it is South Korea’s business, commercial and investment success that is enhancing regional economic development. And an economically strong, democratic, pro-free trade and dynamic Korea is good for the United States, and for other countries in Northeast Asia. I am pleased to know that organizations like AmCham and your counterpart Korean associations, including the Federation of Korean Industries and the Korean Chamber of Commerce and Industry, stand firmly behind closer economic cooperation.

Korea has become a fully democratic society and a developed country in an extremely short period of time. By any measure, this country has arrived, and it is on the cutting edge in many industries and is serving as a model for others in the region and around the world. So the economic and policy decisions that Korea makes will have broad implications in other countries and markets, including in the United States.

Korea is no longer a small country tucked away in a quiet corner of Asia. It is the world’s 11th largest economy and the United States’s 7th largest trading partner. Korea is at the center of the world’s most dynamic economic region.

So Korea matters to the United States - now more than ever. And while China recently supplanted the United States as Korea’s number one trading partner, that change did not come at the expense of the U.S.-Korea trading relationship. For while China has continued to rise in importance for Korea’s economy, at the same time, bilateral trade between the United States and Korea has also continued to grow, and encompass higher-order goods and services.

In 2004, Korea exported $46 billion in goods and services to the United States and imported $26 billion from us in return. As members of AmCham know, the United States remains Korea’s number one foreign investor, with over $33 billion in total investment here through last year. And investment is no longer one-way. As Hyundai’s recent opening of its automobile manufacturing plant in Alabama demonstrates, Korea’s investments in the United States are growing.

Korea is a good friend in an important neighborhood. The Asia-Pacific region is also our neighborhood. But Korea is also now a more mature partner for the United States and we are now working together as full members of the international economic community. Our two countries see many of the same opportunities that the global economy and economic interdependence bring.

That interdependence is now a fact of life in the world economy - we are now more dependent on each other for our own economic health. Trade and business relationships are no longer a zero-sum game in which one country’s gain is the other’s loss. Now both players can win. But new trading relationships and global investment strategies mean that leaders have to consider a bigger and more global playing field.

That is why I believe Korea and the United States are natural partners for a Free Trade Agreement. All the economic research shows that both our countries would benefit mightily from a Free Trade Agreement. We have begun to explore this with Korea’s economic policymakers and we are hopeful that we can make further progress in the months ahead. Hopefully, this is another area where we can jointly take our relationship to the next level. We will appreciate your support as we push forward with this effort.

The Economic “Next Level”

Korea’s export economy continues to do well, and now its domestic economy is also picking up. We expect that this will create even more opportunities for U.S.-Korea business cooperation, in sectors as varied as biotech, aerospace, information technology, financial services, energy and education.

But as members of my staff and AmCham board members have told me, while Korea and the U.S. have a healthy trade and business relationship, and Korea has begun the process of reform in many sectors, there are still some problems to overcome. U.S. and other investors often single out labor-management relations, an ongoing need for regulatory reform, and a lack of transparency in corporate governance as some of the remaining challenges in the Korean marketplace.

The leaders of the Korean government clearly understand the need to promote and maintain a friendly environment for foreign business and foreign investors. This is a central part of the government’s “economic hub strategy.” Unfortunately, over the past year or so, we’ve seen a disturbing trend of independent regulators and economic enforcement officials devoting a large amount of their energies specifically toward foreign investors - and seeking “credit” from the public by trumpeting their actions in the media. Hopefully, working together with the Korean leadership, we can help create a climate that leads public opinion rather than follows it, by explaining to the Korean public the benefits of foreign investment rather than allowing Korean citizens to consider foreign ownership and control as something to be avoided. We’re not looking for special advantages for foreign investors versus domestic investors - just for a level playing field that provides fair regulation and due process regardless of nationality.

The good news is that Korean officials and leaders, like their counterparts in the United States, realize that structural change is a necessary process in this fast-paced world. The even better news is that most of Korea’s major structural challenges are a by-product of Korea’s own very rapid development, and can indeed be resolved by Korean officials.

Our Embassy will continue to discuss such issues on a policy level in our Quarterly Trade Meetings and in other venues. I know that AmCham has been a very responsible corporate citizen here in Korea, and that you are not shy in engaging Korean government officials on matters of concern to your membership. Please continue that dialogue, including your discussion of ongoing regulatory reform efforts.

I plan to work closely with American companies to ensure that the playing field is level. I want to work with you to help expand your access to the Korean market and to overcome remaining trade and investment barriers, including the resumption of American beef imports. We are making progress in convincing Korean officials and technical experts that our beef, which Americans and others continue to enjoy, is safe for Korean consumers. I am hopeful that, once Korean government experts have fully examined the scientific evidence, Korean consumers will again be able to enjoy the taste and excellent value of U.S. beef.

Please let me, and the U.S. embassy, know how we can help in other areas. In my statement before I was confirmed as ambassador at the Senate Foreign Relations Committee I listed as one of my top priorities “to promote broader economic and trade relations, and to increase opportunities for U.S. companies in Korea.” I know those opportunities are out there. I stand ready to be the “advocacy ambassador” for U.S. companies and the U.S.-Korea economic relationship.

Person-to-Person Ties - and Visas

And as we cooperate on political, alliance, economic and commercial issues we should remember that the key to success in any relationship is communication. And knowing how to communicate requires contact between people. Some may have not noticed, but for a long time now our U.S.-Korea partnership has been based on mutual respect and personal ties. We not only have similar democratic values, a strong alliance, and a growing economic relationship - but we share a powerful friendship that makes those ties even stronger. Koreans, like Americans, work hard and are proud of doing a good job - and from what I can see so far in Korea we’re on our way to taking these personal ties to the next level.

We help each other. The United States is deeply grateful for Korea’s pledge of $30 million to assist those areas of the United States devastated by Hurricane Katrina. That money has gone to assist Americans get back on their feet, get back to work, and to begin to return to a normal life. I understand that AmCham made its own contributions to Hurricane Katrina relief and I thank you for everything that you have done. I also understand that AmCham has a strong and growing record of service in the Korean community and I applaud you for that.

We processed over 400,000 visas in our fiscal year that ended on September 30, 2005 and we hope to process as many as a half a million in this 2006 fiscal year. The 2005 figures included a record number of education and business visas. Even though we have been required to institute additional procedures after 9/11 we are doing whatever we can to cut processing time and smooth the process. AmCham is a principal partner in our Business Registration Program and the Embassy looks forward to expanded cooperation in this regard.

The United States realizes how important it is to increase consular resources and simplify the visa application process. We will continue to work on that. In the Joint Declaration after the Bush-Roh summit in Gyeongju, President Bush announced that “the United States will work with the Republic of Korea to develop a Visa Waiver Program roadmap to assist in meeting the requirements for membership in the program.” While this is only the beginning of the process, and Korea has lots of work to do to meet the standards for the Visa Waiver Program, I am personally committed to seeing it through.

A Broad Range of Cooperation

The U.S.-Korea relationship is a complete relationship, and therefore it also covers a wide range of science, technology, health and environment issues. As the leaders at APEC acknowledged, avian and pandemic influenza is an area that will require extensive multilateral and bilateral attention. We are cooperating closely with Korea in areas such as science and health. Korea is a founding member of the International Partnership on Avian and Pandemic Influenza (IPAPI) launched by President Bush at the United Nations this fall.

The U.S. and Korea are also collaborating to confront another modern scourge - the emergence of multi-drug-resistant tuberculosis. Tuberculosis kills some 30,000 people in Korea every year. Our two countries launched the International Tuberculosis Research Center at National Masan Hospital in September this year to conduct clinical studies, and additional joint research is planned to identify new drugs to combat TB. In sum, our cooperation knows no limits.

Conclusion

In conclusion, ladies and gentlemen, I am glad that I had this chance to address AmCham as one of my earliest appointments. If the United States and Korea are going to take things to the next level, a fully engaged and active AmCham membership is necessary to move ahead.

Thankfully, AmCham Korea has a great track record, representing not only the interests of your members but the interests of Korea and the United States. That makes you fellow ambassadors in advancing our commercial and business relationship. I assure you that this American ambassador is with you as we take the relationship to the next level.