The European Union Chamber of Commerce in Korea
The European Union Chamber of Commerce in Korea
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  • 승인 2004.08.01 12:01
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The European Union Chamber of Commerce in Korea

A Bridge Between Europe and Potential Investors

The European Union is a model for the rest of the world and especially Northeast Asia. Cooperation and economic trade between the many member states remains unprecedented. Korea, as a leader in the IT and telecommunications sector, is looking to cooperate with the rest of Northeast Asia and act as the center of technology in the region. Korea is also looking to attract European investors and further expand into European markets.

by Yang Jin-uk , Overseas Editor / jimmy@ittimes.co.kr

f you want to be a hub, you have to be competitive with your surrounding countries, and the incentives that are being offered are not very attractive for these European countries. So the Korean government should be careful that we don over-price in the logistics area, compared to surrounding countries.'

Mr. Frans Hampsink, chairman of the EUCCK, says his basic mission is to meet the needs of foreign direct investment (FDI) in Korea.
Business executives from different EU companies in Korea saw the need for proper channels between the EU and Korea. As a result, the European Union Chamber of Commerce in Korea (EUCCK) was formed in 1986 to help promote trade, commercial and industrial relations between the EU and Korea.

Mr. Frans Hampsink, chairman of the EUCCK, said, regarding the role of the EUCCK, asically, our mission is to meet the needs of foreign direct investment (FDI) in Korea. As you know, the central ministries like MOCIE (Ministry of Commerce, Industry and Energy) and each provincial government are putting their efforts into promoting foreign direct investment. MOCIE has already set up ten targeted industries including semiconductors and automotive parts. Our role is to build a bridge between Europe and the potential investor and getting them the right channel into each targeted area in Korea."

A region of peace and co-prosperity is not only the dream of the South Korean president, but of the rest of the Korean people as well. In 1950, shortly after World War II, Asia was once again the center of conflict when North Korea invaded South Korea to begin the Korean War.

The European Union also had its beginnings after World War II. French Foreign Minister Robert Schuman first proposed the EU concept. May 9, 1950 is referred to as Europe Day, the birthday of the EU. The idea behind the EU first began as a concept that would prevent conflicts such as World War II, which devastated Europe.

Fifty-four years later, Korea remains a divided nation while Europe has become a model for the rest of the world in terms of international cooperation. Realizing President Roh's vision for the future will require unprecedented cooperation among Northeast Asian countries, including North Korea. The President's vision will also need help from Korea's largest foreign direct investors. The European Union recently surpassed the U.S. in terms of foreign direct investment in Korea over the last 30 years.

The European Union currently consists of 25 member states, but was initially formed with only six: Belgium, France, Germany, Italy, Luxembourg and the Netherlands. The new EU is a huge economic bloc comprising 450 million people, 8.8 trillion euros in gross domestic product and a trade volume of 2.34 trillion euros. The EU is now expected to outpace the United States in trade volume and will have to be regarded as vital for Korean trade and industrial activities.

Regarding the perceived differences between the 10 states inducted into the EU this year and older members, Mr. Frans Hampsink, president of EUCCK: here is no serious gap because they have shared in various business fields for a long time. In some business fields, they are ahead of the old member states."

The new EU member states will require substantial technological development to catch up with the levels achieved in the rest of Europe. They will undoubtedly look to IT industry leaders such as Korea to help them develop. The new member states should not be underestimated, however, because they possess significant expertise in other areas, such as in the scientific field.

Mr. Jean-Jacques Grauhar, secretary general of the EUCCK said: n fact, those countries are extremely strong in all scientific fields. In the IT field, there are a couple of countries that are quite strong, and they are also quite strong in terms of theoretical IT. Probably what is missing in terms of where Korea could help is how to bring this technical knowledge into mass production. That's where Korean investment could be useful."

Larger Korean companies such as Samsung and LG are currently very active in the European market. Telecom companies such as Hutchinson and Mobilkom Austria use Korean mobile handsets (Samsung and LG respectively). European countries are generally impressed with Korean - made products; as a result of growing sales, Korean companies are able to offer competitive prices and quality products.

Korean small and medium-sized enterprises (SMEs), however, encounter difficulties with the European market due to various factors, such as distance from Korea, differing mentalities and lack of cultural familiarity.

It is the aim of the EUCCK to help Korean companies entering the European market, as well as the other way around. One of the difficult tasks for Korean companies is trying to find lucrative markets in which to invest.

One of the main tasks of the EUCCK is to relay any problems or complaints regarding different sectors as they relate to foreigners on a yearly basis. All of the recommendations, problems and complaints are relayed to the appropriate sectors via the Ministry of Foreign Affairs and Trade (MOFAT) and all the responses are collected and compiled a few months after the documents are released.

Cooperation between the EU and Korea via the EUCCK is essential in realizing President Roh's vision of a Northeast Asian community. With the development of the new high-tech hubs in South Korea, foreign direct investment is more important than ever.

Chairman Frans Hampsink of the EUCCK (forth from left) presides over the chairman's meeting
Large European countries are also active in Korea; companies such as Philips, Siemens and Alcatel are very active in the IT industry. Many partnerships have developed between European and Korean companies. LG Philips is active in the LCD display market and Renault Samsung Motors is active in the automotive industry.

The Incheon Free Economic Zone is going to be developed, along with other regions in South Korea, into high-tech cities. These cities will be ubiquitous societies, where technology is everywhere. Incheon International Airport, which serves the Seoul metropolitan area, will become an even more crucial logistics and transportation hub in Northeast Asia. The Korean government is encouraging foreign investment, but there are some initial hurdles to overcome.

Mr. Hampsink notes: heard that the lease agreements have now gone up between 500 and 1000 percent. That povokes a lot of unwillingness from European companies. If you want to be a hub, you have to be competitive with your surrounding countries, and the incentives that are being offered are not very attractive for these European countries. So the Korean government should be careful that we are not out-pricing ourselves in the logistics area, compared to the surrounding countries.

One of the main tasks of the EUCCK is to relay any problems or complaints regarding different sectors as they relate to foreigners on a yearly basis. All of the recommendations, problems and complaints are relayed to the appropriate sectors via the Ministry of Foreign Affairs and Trade (MOFAT) and all the responses are collected and compiled a few months after the documents are released.

Cooperation between the EU and Korea via the EUCCK is essential in realizing President Roh's vision of a Northeast Asian community. With the development of the new high-tech hubs in South Korea, foreign direct investment is more important than ever.


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