Monday 15th March 2010 was the first public UK speech of the new ambassador Choo Kyu Ho, which he made before 150 business people at the launch of the UKTI report “South Korea Open for Business – 100 Opportunities for UK Companies in South Korea following the EU–South Korea Free Trade Agreement.” The agreement, though signed in October 2009, has not yet been ratified but the hope is that ratification will come before the, as yet unsigned, Korea-US FTA called KORUS. The London launch of the report has been immediately followed by parallel events in the Midlands and South-West.
Earlier ratification will give the EU ‘first to market’ advantage which will accrue especially to the UK as, on UKTI figures, the UK is biggest investor in Korea from the EU. The trade between the EU- South Korea is said to be €32bn, and UK-South Korea trade over €5bn. Recent UK investment stands at over €1bn. The FTA, the second largest and “most ambitious ever”, will reduce 97% of trade barriers between the EU and South Korea over 3 years, as well as many of the tariffs. Markets will be opened in services, public procurement, intellectual property and sustainable development. The FTA will cut €1.6 billion of duties annually for EU exporters, with UK firms paying over €0.5bn less. The UK fashion and luxury goods sector looks to be a certain winner, with tariffs dropped to zero on implementation. But the drinks sector, legal and financial services, pharmaceuticals, advanced engineering and low carbon will also benefit.
The ambassador was not alone in welcoming the agreement. He was accompanied by Sir David Wright of Barclays Investment who was ambassador in Korea between 1990 and 1994; by David Reid, Chairman of Tesco who have their largest overseas subsidiary based in South Korea; by Andrew Eborn, President and CEO of Octopus Media Technology; by Peter Underwood of IRC who were responsible for the report; by Jonathan Knott, Deputy Head of Mission, British Embassy, Seoul; by the CBI Director-General, Richard Lambert; and by Lord Davies of Abersoch CBE Minister for Trade, Investment and Small Business (jointly with the Foreign and Commonwealth Office). This bevy of business beauties with existing and former trading links to South Korea could only raise questions from the floor by the relatively few women present, although these included the Choi sisters of furniture manufacturing fame here in the UK.
South Korea is the 4th largest economy in Asia and 13th globally, with an average income per head of its 50m population roughly equivalent to that of New Zealand. From a business point of view Korea is located centrally within Northeast Asia, a region with a population of 1.5 billion with a combined GDP of €12.5 trillion that accounts for 22 percent of world GDP. South Korea provides a gateway to the adjacent markets of Japan and China. South Korea is also the UK’s 26th largest export market, taking goods and services worth around €3bn euros in 2009. Last year, South Korea set a target of 2020 for cutting emissions by 4% from 2005 levels and the Government has also committed to invest nearly €50bn in green initiatives under its Green Growth Plan.
In 2009 UK Trade & Investment helped nearly 400 companies to do business in the market, twice as many as in 2008. Some 166 Korean companies are said to have a presence in the UK. Lord Davies was keen to stress the opportunities brought about by the FTA were for companies of all shapes and sizes, but privately the view was expressed that smaller companies would find it difficult to find a place in the South Korean market itself. Indeed it was noticeable the Tesco’s Korean subsidiary Homeplus with some 300 outlets is, bar 4 people, completely staffed and run by Koreans. Other UK brands in South Korea include Burberry with 11 stores, Paul Smith, Marks & Spencer, Monsoon, Accessorize and Vivienne Westwood. Standard Chartered too has a long career on the peninsula, as does HSBC. In 2009 Diageo took nearly 40% of the South Korean whisky market. AMEC has been project managing the Incheon bridge.
So the opportunities are there, and in April the UKTI are supporting an outward mission to the Korean legal sector in association with the Legal and professional services section of the Law Society. Followed in June by a much better subsidised Fashion and Retail Market Visit. Details of both are available from the UKTI although the cut off day for grant support for the first has already passed while the second is open until the 31st of this month. In addition the EU runs a 12 month long training secondment professional development programme (ETP) for executives worth some €24,000.
Oh, and after the launch the ambassador had to rush off to a press conference. Was it ever like this in Venezuela or even Rome?