Category: Korea-Business

I wonder if the Moon administration is trying to use the threat of these sanctions as way to pressure the Trump administration to help resolve the current trade dispute with Japan?:

South Korea is seeking an annual $350 million in trade sanctions against the United States in an Obama-era dispute over tariffs on steel pipes, it said in a World Trade Organization (WTO) filing published on Tuesday.

South Korea went to the WTO in 2014 to challenge U.S. tariffs levied on oil country tubular goods (OCTG), a type of steel piping used in the energy industry.

Washington said its tariffs aimed to stop South Korea exporting the product at unfairly cheap prices. After South Korea won a partial victory at the WTO, the United States had until July 12 to comply with that ruling.

South Korea said the United States had failed to do so and it was seeking sanctions equal to the level of trade harm done.

“Based on available data, this level is estimated at $350 million annually. This amount will be adjusted by applying the annual growth rate of the OCTG market of the United States,” it said in the sanctions request published by the WTO.

South Korea plans to impose the sanctions by putting tariffs on certain types of U.S. goods, which it said it would announce at a later date.

Reuters

You can read more at the link.

If anyone has any spare cash lying around you could buy Asiana Airlines this week:

Asiana Airlines is expected to be up for sale as early as Thursday. 

Kumho Industrial, Asiana’s biggest shareholder, and the airline’s credit holders plan to start the sale process on Thursday or Friday. They are looking to find a buyer and sign a main contract by the end of this year. 

Market observers presume it will take one trillion won to two-point-five trillion won to buy South Korea’s second largest airline. Some local conglomerates are being mentioned as potential bidders, including SK, Hanwha, CJ and Aekyung. 

Earlier this year, the Asiana’s creditors led by the state-owned Korea Development Bank(KDB) decided to provide one-point-73 trillion won in financial assistance to help normalize the cash-strapped airline, setting a goal to sell it by year-end.

KBS World Radio

South Korea just posted the longest streak of unemployment at 4% or above in almost 20 years. This raises worries higher unemployment may be a new normal for the country that is facing headwinds in exports worldwide. pic.twitter.com/u09oiYAuVe

— Sam Kim 김혜성 (@samkimasia) July 10, 2019

It seems to me that having a lower minimum wage for foreign workers will increase unemployment because small business owners will look for foreigners to hire instead of Koreans:

Korea’s opposition party leader has vowed to introduce a “different” minimum wage system for foreign workers.

Hwang Kyo-ahn, chairman of the main opposition Liberty Korea Party (LKP), said Wednesday he will press ahead with revising related laws to lighten small business owners’ financial burden. He made the pledge at a meeting with employers in Busan.

Given “the different degrees of their contribution to Korea,” he said, it is “not fair” to set the same minimum wage for Korean and foreign workers.

“Koreans contribute more to the country, for example, by paying more in taxes,” Hwang said. “Our party will revise related laws to improve the situation (for employers).”

His remarks come amid complaints that steep minimum wage hikes over the past two years have pushed many small businesses to the edge.

But Article 6 of the Labor Standards Act stipulates that an employer cannot discriminate against workers on the basis of gender, nationality, religion and social status.

Korea Times

You can read more at the link.

What this will lead to is small business owners hiring foreigners instead of Koreans that will ultimately create higher unemployment:

Small business owners want the government to introduce a lower minimum wage for foreign workers in Korea.

At Monday’s public hearing on next year’s minimum wage in Gwangju, South Jeolla Province, representatives of employers said “steep” minimum wage hikes over the past two years have pushed many small businesses to the edge and that the government should help them by adopting a “different” wage system for foreign workers.

Song Young-soo, a small business owner in Gwangju, was among participants who reportedlyvoiced the need for a lower minimum wage for foreign employees, who they say show lower labor productivity than Korean workers mainly because of communication problems.

According to a Korea Federation of Small and Medium Business survey early this year, the productivity of an average foreign worker (E-9 visa holder) was 87.5 percent of a Korean worker.

Korea Times

You can read more at the link.

Below is a well made Youtube video that goes into the history of Samsung.

I did not realize that Samsung was founded as a truck company in Daegu by Lee Byung-chul who was chummy with the Imperial Japanese. He eventually moved his business down to Masan which was the main port the Japanese were using to export out of Korea.

After the colonial occupation Lee would go on to become friends with President Rhee Syngman and business continued to grow. Then during the Korean War business continued to thrive as he had contracts to move U.S. supplies and equipment with his trucks. After the war is when Samsung grew dramatically as it expanded into building construction and other industries to where today it is Korea’s flagship global business conglomerate.

Great to welcome Chairman Shin from Lotte Group to the WH. They just invested $3.1 BILLION into Louisiana-biggest investment in U.S. EVER from a South Korean company, & thousands more jobs for Americans. Great partners like ROK know the U.S. economy is running stronger than ever! pic.twitter.com/WaJxDeTuxj

— Donald J. Trump (@realDonaldTrump) May 13, 2019

Back in May when the Korean government announced a resolution to the fight between taxi drivers and the Kakao ride sharing app, I predicted this issue would come up again. That is because this picture clearly indicates both sides were not happy with the agreement and tensions are now boiling over again:

After more taxi drivers resort to extreme methods of protest, an organization comprised of the government, ruling party and taxi companies was created to find a compromise. After 45 days of discussions, the taxi and carpool companies finally reached an agreement on March 7.

In their agreement, carpooling hours were limited to 7 a.m. to 9 a.m. and 6 p.m. to 8 p.m., weekends and national holidays excluded. For the taxi industry, parties agreed to reduce the number of taxi drivers with advanced age and implement a monthly salary for taxi drivers. Not all parts of the agreement were carried out accordingly. 

“After announcing that a social agreement was made, we haven’t had a working session, not one,” said Kang Shin-pyo, the leader of the National Taxi Labor Union, in an interview with the JoongAng Ilbo. In the agreement, there was a section where parties agreed to create an organization for discussion between the ruling Democratic Party (DP) and the companies.

The National Assembly has not made much progress either. The Land Infrastructure and Transport Committee held a subcommittee meeting to examine the bill on March 27, but could not reach a conclusion due to objections from the opposition Liberty Korea Party. The discussion is currently suspended.

Joong Ang Ilbo

You can read more at the link.

Something to keep in mind that these jobless numbers have probably been modified as much as possible to make it not look as bad since President Moon fired the prior head of Statistics Korea and replaced her with an ally. The actual jobless is probably far worse:

Over 1.24 million people remained jobless in April, the highest in 19 years, a clear indication of the tightening job market amid an economic slowdown here, government data showed Wednesday. 

Statistics Korea said the number of jobless stood at 1,245,000, up 84,000 from a year earlier and the highest number since June 1999 when the agency began compiling related data. 

The jobless rate also jumped to 4.4 percent in April, up 0.3 percentage points year-on-year, the highest since 2000 when it stood at 4.5 percent. 

The rate for those aged between 15 and 29 reached 11.5 percent, up 0.8 percentage points from a year earlier, also the highest since April 2000. 

You can read more at the link.

I wonder if the ROK will get auto tariff relief when they decide to pay the amount President Trump has asked them to pay for the upkeep of the US-ROK alliance?

South Korea’s Trade Minister will visit the U.S. next week to call for the country’s exemption from potential U.S. tariffs on auto imports. 

Minister Yoo Myung-hee announced the plan in a meeting with reporters on Tuesday, emphasizing that South Korea cannot be complacent or sit idle on the issue. 

She plans to leave for the U.S. on Monday and meet with officials from the White House, Commerce Department, US Trade Representative as well as members of Congress. 

U.S. President Donald Trump has until Friday of next week to decide whether auto import tariffs are necessary for national security under Section 232 of the Trade Expansion Act. If a conclusion is made that such a measure is needed, the U.S. can impose tariffs of 25 percent on imported cars.

KBS World Radio