ROK-US Economic Relations Stand at Threshold of New Era
With the election of George W. Bush as the 43rd President of the United States, U.S.-Korea economic relations stand at the threshold of a new era.
Over the past eight years, during the period of the Clinton administration, the U.S.-Korea economic relationship flourished. Total two- way trade grew from slightly over $31 billion in 1992 to over $54 billion in 1999, and is on a pace to reach nearly $70 billion for 2000. U.S. direct investment into Korea rose from $379 million in 1992 to $3.7 billion in 1999. The United States is Korea's largest trading partner and a larger source of foreign investment than any other single country. The American Chamber of Commerce in Korea has over 2000 members representing over 900 firms.
As the economic relationship grew closer, trade friction initially increased in intensity and frequency. There was a growing chorus of complaints from American firms in a wide variety of sectors about difficulties in selling their goods and services in Korea. Many Americans felt that Koreans had a hostile attitude toward foreign products; many Koreans felt that the United States was overly aggressive in pressing Korea to open its markets. The United States Trade Representative characterized Korea as one of the most difficult countries in the world in which to do business.
However, during the Clinton administration, the United States and Korea made significant progress in easing trade frictions in a number of areas.
In 1993 they signed a Record of Understanding relating to Korean imports of beef and cattle. In 1996 and 1997 the two governments reached agreements dealing with telecommunications trade. And in 1998 the two sides signed a Memorandum of Understanding designed to improve market access into Korea for foreign automobiles. While these agreements did not resolve all the issues between the United States and Korea in these areas, they laid the groundwork for further progress.
The United States also responded quickly and forcefully to Korea's request for assistance when the economic and financial crisis that swept through Southeast Asia in the summer and fall of 1997 reached Korea. The United States played a key role in mobilizing an assistance program for Korea in conjunction with the IMF and with major American financial institutions.
In addition to strengthening their bilateral economic ties over the past eight years, the United States and South Korea have forged a close relationship in a common effort to strengthen the international economic system. Both countries worked closely together to achieve a successful conclusion to the Uruguay Round of trade negotiations, which led to the establishment of the World Trade Organization. Both countries collaborated to make a series of APEC leaders' meetings successful. The United States gave its full support and encouragement to Korea's successful bid to become a member of the OECD, and both countries are now collaborating in the work of the G-20 to strengthen the international financial system.
The United States and Korea have become true economic partners in every sense of the word.
The challenge facing both countries as the Bush administration prepares to take office on January 20 will be to sustain and build on the momentum of the past eight years.
Many of the challenges ahead will be in the bilateral economic arena. As Korea has rebounded from the economic crisis of 1997-1998, many American industries have resumed their pressure on the U.S. government to negotiate improved conditions for access to the Korean market.
The U.S. automobile industry is increasingly concerned about the low level of imports of foreign vehicles into Korea, particularly in light of the rapid growth in Korean automobile exports to the United States. The Intellectual Property Alliance, representing U.S. firms in the motion picture, computer software, film, and book publishing industries, has increased the level of its criticism of the intellectual property protection regime in Korea, and there is a chorus of complaints from other U. …