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bassexpander
Joined: 13 Sep 2007
Location: Someplace you'd rather be.
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 Posted: Wed Dec 10, 2008 3:08 pm Post subject: Examples of Korean protectionism |
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I was really disgusted by a recent poster's assertion that Korea doesn't "protect" its own products. This, as we all know, is certainly not true. South Korea is one of the more protectionist countries in the world, from what I've read (and have certainly seen).
I thought I'd list an example or two and ask others to do the same:
1. Mobile phones and discouraging foreign competition. The I-Phone is finally coming to Korea, but not after the Korea Telecommunications regulator purposefully dragged its feat, in an attempt to help Korean makers catch up: http://www.koreatimes.co.kr/www/news/tech/2008/12/133_35873.html
2. ROK Army says "no" to foreign cigarettes: http://www.koreatimes.co.kr/www/news/nation/2008/12/113_35903.html |
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cdninkorea
Joined: 27 Jan 2006
Location: Seoul
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| Posted: Wed Dec 10, 2008 3:21 pm Post subject: |
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| According to the manager of Bentley Korea, there's a 20 percent duty on foreign cars. That's why my girlfriend was amazed at how inexpensive the BMW Mini is in America- it's $18,000 in the US and 30 million won in Korea! |
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Ukon
Joined: 29 Jan 2008
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| Posted: Wed Dec 10, 2008 4:11 pm Post subject: |
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| cdninkorea wrote: |
| According to the manager of Bentley Korea, there's a 20 percent duty on foreign cars. That's why my girlfriend was amazed at how inexpensive the BMW Mini is in America- it's $18,000 in the US and 30 million won in Korea! |
Damn...only 18,000? i'm surprised I don't see more |
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brento1138
Joined: 17 Nov 2004
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| Posted: Wed Dec 10, 2008 4:37 pm Post subject: |
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Korea's gotta be protectionist being right next to China & all... and I am sure the list is huge. I think there are definite benefits to the economy. And it does keep regional products and businesses doing better than they would if they just let the free market reign supreme.
Food - Rice - Beef - Taxes - Nationalism - Brainwashing
Korea is very protectionist with rice. I don't know if I've ever seen a bag of rice for sale that wasn't Korean rice. Koreans all claim their rice is the "best" and I'd have to agree that it is pretty good... but I believe this is a taste issue rather than a quality issue. If you've ever tried Japanese rice (Kohuna Rose) I honestly must say it is far superior to Korean rice, or any other rice I've ever tried in my life, for that matter. But Korean rice farmers must stay in business... and the Korean govt. and business sector knows this.
Korean protectionism goes beyond taxes. It's in the mindset of the people (remember the US beef protests?)... I suppose when a better product (such as US beef) is on the market for ultra cheap, then people do go for it... but there is the fact that Korean beef still sells rather well considering it is way overpriced and of questionable quality (ie. the cows are given unchecked feed, do not properly graze around, live in small spaces, are not checked for mad cow according to international standards, taste is just so so...). Ask any Korean which is better beef, and 99% of them will always say Korean beef, in an unquestioned, wide-eyed manner. When I think we all know which is truly better... On a global scale, it logically doesn't make much sense for a small country the size of Korea to have a beef industry... but somehow they manage to fiercely compete with US beef even though the price is ridiculously high. It really does add to the local economy, and though it isn't consumer friendly, it is country-friendly and helps people here in Korea (at "home") rather than somewhere abroad...
So, the protectionist policies here stem from nationalism but I believe it is a politically-motivated brainwashing media scheme which we cannot really investigate as most of us do not watch Korean TV since we cannot understand the language well. Maybe it doesn't make sense at first, but to be honest, I think the US went too far with global trade (ie sending its manufacturing base to China)... You gotta compete with the rest of the world, and Korea seems to be doing that rather well. |
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Xuanzang
Joined: 10 Apr 2007
Location: Sadang
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| Posted: Wed Dec 10, 2008 4:50 pm Post subject: |
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| No official IKEA stores says something. |
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RACETRAITOR
Joined: 24 Oct 2005
Location: Seoul, South Korea
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| Posted: Wed Dec 10, 2008 6:18 pm Post subject: |
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| Isn't pretty well every country in the world protectionist? |
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Whistleblower
Joined: 03 Feb 2007
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| Posted: Wed Dec 10, 2008 6:44 pm Post subject: |
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The article below illustrates protectionism to a point.
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775,000 vs. 6,500 misrepresents reality
Although Korea and the United States signed a free trade agreement in April last year, its ratification by the two countries' legislatures still remains uncertain. The automotive industry has been one of the key obstacles in the pact. The labor unions of both nations' auto industries have opposed the pact, each claiming that it will be unfavorable to them.
In addition to the unions, the U.S. sides' opposition has been supported by politicians, including President-elect Barack Obama, and carmakers who claim that the pact will be unfair to the U.S. industry, citing the disparity between Korean carmakers' U.S. sales and U.S. firms sales in Korea.
According to industry data, Korean carmakers' sold about 775,000 vehicles in the United States in 2007 while U.S. firms sold less than 6,500 units here in Korea.
However, according to a report by the U.S.-based Korea Economic Institute's director of congressional affairs and trade analysis Troy Stangarone, the numbers hide a much more complex situation.
The report says that the reality is that U.S. carmakers' sales in Korea are much larger, as the sales of General Motors Corp.'s subsidiary GM Daewoo Auto and Technology Co. is not included in the figure.
Although, GM Daewoo's sales in Korea are included in GM's global sales figures, the company's vehicles are not counted among U.S. carmakers' sales in Korea. Neither are the cars produced by GM's other foreign subsidiaries, such as Australia's Holden and the U.S. affiliate Saturn, sold in Korea as GM Daewoo, which are subject to the 8 percent tariff placed on all imported vehicles, counted among GM's sales in Korea.
If GM Daewoo's sales, which came in at over 130,000 in 2007, are added to the 6,400 units sold by the Big 3 of the United States, U.S. carmakers' Korean market share would rise to about 13 percent.
The report also points out that Korean carmakers' U.S. sales also include vehicles produced in the United States. At present, Hyundai Motor Co. operates a plant in Alabama that has an annual production capacity of 300,000 units, whose output accounted for 48 percent of the company's U.S. sales in 2007.
In addition, once Kia Motors Corp.'s plant in Georgia begins production next year, raising Hyundai Kia Automotive Group's U.S. output to 600,000, the number of cars exported to the United States from Korea will drop further.
As Korea seeks to form free trade agreements with other nations and regional groups including the European Union, the KORUS FTA will enable U.S. carmakers to market their vehicles produced in plants located outside of the United States.
By Choi He-suk
([email protected]) |
http://www.koreaherald.co.kr/NEWKHSITE/data/html_dir/2008/12/11/200812110088.asp |
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Bryan
Joined: 29 Oct 2007
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| Posted: Wed Dec 10, 2008 7:05 pm Post subject: |
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If Korea was not protectionist, that would mean it would have unilateral free trade with every country in the world, allow foreign nationals the ability to start a business without government regulations, would have 0 tariffs on all goods entering the country, allow foreign financial institutions to compete on a level playing field, the list goes on. None of that is here.
There's a reason why chaebols run the country and they face no outside foreign competition from better companies that are obviously more efficient. Chaebols cozy up to the government, write laws that guarantee they won't have to face foreign competition, and then sit back and relax in inefficient bureaucracy.
Why is it that every country in the world has has reduced the number of conglomerates in the past few decades and has moved to corporations that specialize in things? It 's more efficient to do something you're good at than try to do everything. Why is it the exact opposite in Korea? Let me tell you, its nothing to do with the market--its because of the laws in this country that protect the chaebols and harm all of the consumers and other businesses (and ultimately everyone). Korea doesn't have different soil or wind or something that magically makes economics different here. It's because of the lobby these corporations have. |
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yeoja
Joined: 27 Nov 2008
Location: Down south in South Korea
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| Posted: Wed Dec 10, 2008 7:17 pm Post subject: |
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| Bryan wrote: |
| If Korea was not protectionist, that would mean it would have unilateral free trade with every country in the world, allow foreign nationals the ability to start a business without government regulations, would have 0 tariffs on all goods entering the country, allow foreign financial institutions to compete on a level playing field, the list goes on. None of that is here. |
None of that exists anywhere in the world. Every country is protectionist to some degree, Korea's just got it worse than some other countries. It's holding onto it's sense of vulnerability from the 60s-80s when the K economy was worse than shite, even though it has grown a lot (enough growth, many would say) through these protectionist actions and could do with a bit of loosening up |
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crossmr
Joined: 22 Nov 2008
Location: Hwayangdong, Seoul
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| Posted: Wed Dec 10, 2008 7:20 pm Post subject: |
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| Quote: |
| No official IKEA stores says something. |
I know ikea was in talks with LG, I don't know whatever happened to that (that was about a year ago I think)
As for protectionism... doesn't the US government subsidize corn syrup?
Every country promotes their own products first and taxes imports... its good for the economy to generate internal business and exports... |
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yeoja
Joined: 27 Nov 2008
Location: Down south in South Korea
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| Posted: Wed Dec 10, 2008 7:27 pm Post subject: |
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| crossmr wrote: |
| Quote: |
| No official IKEA stores says something. |
I know ikea was in talks with LG, I don't know whatever happened to that (that was about a year ago I think)
As for protectionism... doesn't the US government subsidize corn syrup?
Every country promotes their own products first and taxes imports... its good for the economy to generate internal business and exports... |
Yep. There are a lot of reasons as to why the Kor-US FTA talks are having so much trouble but amongst many reasons, one is because both countries will gain lots yet lose lots at the same time. Korea will gain so much by gaining full access to the American car industry, yet agriculture will hit rock bottom because no way will korean farmers be able to compete with US' prices. Vice versa for the US. Both are trying to protect their own country's markets. |
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bassexpander
Joined: 13 Sep 2007
Location: Someplace you'd rather be.
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| Posted: Wed Dec 10, 2008 7:37 pm Post subject: |
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Wow... a few very recent join dates floating, "Oh, Korea isn't that bad" responses in this thread.
Interesting...
Here's another about the Hyundai Genesis, which was posted in the past:
http://english.yonhapnews.co.kr/business/2008/08/07/11/0503000000AEN20080807004700320F.HTML
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News Focus) S. Koreans reimport Hyundai Genesis from cheaper US market
혻 혻 SEOUL, Aug. 7 (Yonhap) -- When Hyundai Motor Co. debuted its new rear-wheel drive Genesis luxury sedan earlier this year, executives there were hoping to find a way to penetrate the luxury auto segment of the United States.
혻 혻 Nearly seven months later, however, Hyundai is facing a new headache at home as South Korean consumers have become increasingly aware of the fact that they have to pay 40 percent more for the Genesis sedan than American consumers.
혻혻 Hyundai, which controls over 75 percent of the domestic market along with its affiliate Kia Motors Corp., sells the 3.8-liter Genesis for 58.3 million won (US$57,000) in Korea, whereas in the U.S. it sells for $32,000.
혻혻 That's good news for grey importers, who import goods legally but without the consent of the manufacturer, as well as S. Korean consumers.
혻혻 Even excluding the nation's punitive car-import duties, engine-displacement taxes and shipping costs, a Korean customer can save as much as 13 million won if he or she purchases a Genesis sedan that has been reimported to Korea from the U.S. market, auto importers say.
혻혻 In addition, local buyers of models shipped back from the U.S. will benefit from Hyundai's 10-year, 100,000 mile warranty, which is only offered in the U.S., not Korea.
혻혻 "As for Korean consumers, they could save big money if they buy the Genesis after it has been reimported from the U.S.," said Choi Jae-woo, a grey importer in Seoul.
혻혻 Choi said he receives dozens of telephone and online queries a day from potential customers.
혻 혻 Since Hyundai announced details of its U.S. price range for the Genesis in May, disgruntled South Korean consumers have been abuzz with chatter on Internet sites about ways to reimport the vehicle from the U.S.
혻혻 While there is no official data on how many of the sedans were reimported from the U.S., a TV news report on Tuesday by MBC, one of the nation's three major national broadcasters, revealed that one grey importer sold 40 of the vehicles to local consumers this month after buying them at American showrooms.
혻혻 Amid rising consumer complaints, Korean anti-trust regulators are also investigating whether Hyundai and Kia have abused their domestic market dominance by charging higher prices at home.
혻혻 An official at the Fair Trade Commission declined to comment, citing the ongoing probe. Officials at Hyundai's public relations team in Seoul weren't immediately available for comment.
혻혻 Since entering the American market more than two decades ago, Hyundai has successfully raised its quality and consumer acceptance by offering generous warranties and affordable prices.
혻혻 Still, critics say Hyundai's success in the U.S. market comes at the expense of South Korean consumers, who are being forced to pay higher prices than their American counterparts.
혻혻 Hyundai was generating a profit margin of some 10 percent on the Korean-built cars, compared with just two percent for the same vehicles built in the U.S., according to industry analysts.
혻혻 "With those kinds of margins to extort from Hyundai, it's no wonder the Hyundai Motor labor union desperately opposes open markets and the Korea-US Free Trade Agreement," said Brendon Carr, an American lawyer who has been working as a foreign legal consultant in Seoul for over 10 years, on his blog.
혻혻 Hyundai's 45,000-strong union vigorously opposed a free trade deal signed by South Korea and the U.S. last year, which will cut car taxes and other non-tariff barriers on automobiles.
혻혻 Hyundai began selling the Genesis sedan in the U.S. market last month. However, U.S. customers have given the new sedan a lukewarm response, with only Hyundai 649 models sold, according to the company data.
혻혻 In comparison, Hyundai's domestic sales of the Genesis sedan averaged some 4,000 units each month for the first half of this year. |
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Captain Corea
Joined: 28 Feb 2005
Location: Seoul
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| Posted: Wed Dec 10, 2008 8:55 pm Post subject: |
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| Good thread. |
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esetters21
Joined: 30 Apr 2006
Location: Seoul
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| Posted: Wed Dec 10, 2008 9:23 pm Post subject: |
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| Captain Corea wrote: |
| Good thread. |
Agreed. I don't have anything to add, but enjoy the differing opinions on the subject. |
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Jandar
Joined: 11 Jun 2008
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