New Amcham chair is optimistic on FTA [English, KJH]

Pat Gaines gives first press conference since attaining post in May

http://joongangdaily.joins.com/article/view.asp?aid=2937935

Full Text: Pat Gaines, the new chairman of the American Chamber of Commerce in Korea, said the Korean government is on the right track in its drive to root out corruption.

“There has been a lot of press on corruption issues in Korea especially over the past year. Part of that, I think, there is now much more awareness. The Korean government has made a very aggressive move to try to eliminate any aspect of corruption, of unfair practices,” he said during his first press conference yesterday at a hotel in central Seoul.

Gaines is also president of Boeing Korea. He joined the Boeing Company in 1987 as a ground school instructor.
He succeeded former Amcham Chairman Frank Little in May.

His comments come at a time when the government and society come to terms with a string of corruption cases in the public and private sectors. “The public believes the entire government is rotten,” President Lee Myung-bak said over the weekend.

Gaines expressed the opinion that Korea must foster an environment free of corruption as a precursor to gaining more global economic power.

Regarding the Korea-United States FTA that is currently pending in both countries’ legislatures, Gaines is “optimistic” about ratification. The nation’s largest foreign business group, with more than 2,000 members, is doing everything possible to make the agreement happen, he said. The Korus FTA was signed in June 2007, but the two countries later renegotiated controversial auto tariffs and pork terms late last year.

In March, Gaines led a delegation from Amcham to Washington D.C. as part of its annual “door knock” program, where they met with leading members of Congress and the White House to lobby for the ratification of the Korus FTA. A door knock is a term unique to Amcham.

“Secretary Clinton emphasized that passing the Korus FTA will be beneficial for both countries, and that it is one of her highest priorities,” Gaines said, adding that Secretary of Commerce Gary Locke is also supportive of its ratification.

The accord, if it takes effect, will boost Korea’s economic growth by 6 percent in the long-run and help create 340,000 new jobs, according to the state-run Korea Institute for International Economic Policy. Korea’s trade with the U.S., its second-largest trade partner and the world’s largest economy, came to $84.7 billion last year.

Gaines said the bilateral agreement will enable Korea’s small and mid-size enterprises to become more successful in overseas markets.

Addressing “shared growth” between large conglomerates and SMEs, Gaines suggested that the government offer big firms more incentives.

Gaines’ press conference came after Amcham held a meeting for its members, along with Fair Trade Commission Chairman Kim Dong-soo.

With regard to intellectual property rights, an issue that draws keen attention from U.S. companies, Kim emphasized that he will work hard to eradicate “foul play” in the area. But he noted that the FTC will intensify its oversight in intellectual property rights abuses.

“Intellectual property rights are granted the exclusive use of innovative technologies, but sometimes holders engage in abusive behavior that exceeds the rights rewarded for the innovation” he said.

“Abuse that brings about anticompetitive effects is subject to enforcement of competition law in Korea, and as I know, this is the same in the U.S.”

The antitrust agency chief said that he will set up an intellectual property rights abuse report center this year to make it easier to monitor violations. It will also distribute guidelines to enhance the maintenance of intellectual property rights and prevent possible damage.

2. LIVESTOCK ISSUES

Four Local Cheese Processors Charged 10 Billion KRW of Fine for Price Fixing [Korean, OSY]

http://www.ytn.co.kr/_ln/0102_201106270035546563

Summary: Fair Trade Committee (FTC) has charged a total of 10.6 billion KRW of fine to four local cheese processors for price fixing.  According to the FTC announcement, the four companies, which accounted for 95 percent of the total cheese sales in Korea, exercised illegal price fixings in 2007 and 2008.

3. MARKETING ISSUES

FTC gives CJ record fine for obstruction [English, KJH]

Agency asked CJ to submit information, but the company refused.

http://joongang.joinsmsn.com/article/947/5679947.html?ctg=

The Fair Trade Commission slapped CJ Cheiljedang with a fine of 340 million won ($316,573) for interfering with an investigation. It is the biggest penalty ever imposed by the antitrust agency for obstructing an inspection.

According to the antitrust agency yesterday, a number of CJ’s employees attempted to hinder the agency’s probe into its flour prices. The antitrust agency said there was “serious interference” during the field investigation conducted between Jan. 10 and Jan. 12.

“Most of all, we came across interference and asked for assistance from a vice president surnamed Park, but the executive deleted files and took part in the meddling,” the agency said in a statement. More than 170 files were deleted from his portable hard drive, according to the FTC.

The agency asked CJ to submit the erased information, but the company declined the request.

The agency accused CJ employees of hiding the external storage drive it assumed contained information on an illicit plan to raise the price of flour. When FTC inspectors raided CJ’s headquarters in January, its employees hid the device in a flower bed on the first floor of the building. When inspectors asked about its whereabouts, the employees denied it existed.

The company was fined 160 million won; the vice president 40 million won; and four more employees were hit with the remaining 140 million won.

It is not the first time CJ has interfered with an FTC investigation. In August 2003 two employees were fined 5 million won each for submitting false documents. In July 2005, two more employees were slapped with 10 million won fines for destroying evidence.

“It is meaningful because it is a tough sanction against what was deliberate, repetitive interference committed by a number of employees,” the FTC said in the statement.

Interference with an FTC investigation is subject to a maximum 200 million won penalty and a individual employee fines of up to 50 million won.

Even though CJ was given the biggest-ever fine, critics say the penalty is still too small.

Democratic Party Congresswoman Park Sun-sook proposed a bill in April that would have allowed prosecutors to press criminal charges against those who hinder Fair Trade Commission investigations.

Will big companies be squeezed out of tofu trade? [English, KJH]

http://joongangdaily.joins.com/article/view.asp?aid=2937947