The United States has dashed South Korea’s hopes of a trade-off over difficult issues that block their efforts to establish a free trade agreement (FTA), pressing Korea to accept its proposal or face the consequences.

In its letter to the U.S. Congress and the Korean government Thursday, the U.S. Trade Representative (USTR) clarified that it will not give any concession in the trade remedies sector, including anti-dumping and countervailing duties, to Korea, which require law revisions.

This means that Korean exporters will be subject to just as strong anti-dumping duties as ones currently imposed by the U.S. government, even if the two countries establish an FTA.

In a new briefing, Lee Hye-min, the second man in Korea’s negotiating team said, "I think it is still possible for us to ask the U.S. to revise the law on anti-dumping duties as there are further chances for talks."

Korea has called for the U.S. to soften its anti-dumping measures as one of its key demands together with the inclusion of goods produced in the Kaesong Industrial Complex in North Korea.

Meanwhile, the new head of the American Chamber of Commerce in Korea said that it’s now or never for both Korea and the U.S. to establish a free trade agreement and benefit from it.

"We believe the KORUS FTA is a once-in-a-lifetime opportunity that neither nation can afford to miss," William Oberlin, the newly elected chairman of the American Chamber of Commerce in Korea (AMCHAM Korea) told a press conference at the Lotte Hotel in downtown Seoul on Thursday.

Oberlin, also the president of Boeing Korea, voiced a sense of urgency for the two sides to make progress in the negotiations and meet the March deadline next year before U.S. President George W. Bush’s fast-track trade authority runs out in June.

William Oberlin, newly elected chairman of the American Chamber of Commerce in Korea, bows ahead of a press conference on U.S-Korea business relations, including the KORUS FTA, at the Lotte Hotel in downtown Seoul, Thursday. At right is Tami Overby, CEO of AMCHAM Korea. / Yonhap 
The new chairman emphasized that if this bilateral deal does not go through on a timely basis, it is not only over, but also neither the U.S. nor Korea will have the energy to restart their trade talks.
"The last time a U.S. president (Bill Clinton) lost trade promotion authority, it took almost eight years to regain it," Oberlin said. "If that happens again, it is expected to make it more difficult to conclude a trade agreement. So many believe this may be Korea’s best chance."

Oberlin strongly believes that an FTA with the U.S. is a new growth model and is the only way to turn the tide around for Korea, which is facing a weak economy next year at around 4 percent growth, due to a strong won and rising oil prices.

It can also offset Korea’s unfavorable foreign business environment and declining foreign direct investment (FDI).

AMCHAM Korea’s Tami Overby echoed that an FTA will open a lot of doors for Korea, and will boost Korea as well as the U.S. in economic competitiveness.

"Foremost, the bilateral trade accord will benefit the consumers the most in both the U.S. and Korea where they can gain greater access to each other’s products," Overby said. "An FTA will also help Korea to become a Northeast Asian economic leader."

AMCHAM Korea said it is "cautiously optimistic" that the two countries will reach a successful deal that is fair and balanced.

"Although we have no place in the negotiations, we will act as cheerleaders on the sidelines for an establishment of a win-win FTA on time," said Oberlin.

China is an emerging market and after the trade mission by U.S. Treasury Secretary Henry Paulson and FED Chairman Ben Bernanke the opportunities for major U.S. businesses in China should expand. From manufacturing to technology and medical and financial, the opening of the door into China will continue the growth of the U.S. in that region.

Just recently Citigroup (NYSE: C) acquired a major China based financial institution by the name of the Guangdong Bank, while Goldman Sachs (NYSE: GS) and Morgan Stanley (NYSE: MS) continue to penetrate the region in all industries.

They are not concentrating on Hong Kong, they are looking at the home of the 2008 Summer Olympics Beijing and the surrounding areas including Shanghai and Shenzhen. But the small to mid sized U.S. Manufacturers and Technology companies are being left out for the time being as major U.S. corporations have not fully penetrated the region.

This presents a golden opportunity for small and mid sized U.S. businesses to expand into China as the opportunity is still vast. Once saturated by major U.S. business it may be extremely difficult for certain U.S. companies to gain any footing in China.

This is why NAMC Worldwide is organizing various U.S. Trade Delegation Events through out 2007 for specific industries. Taking U.S. Manufacturers and even smaller Financial Institutions and connecting them with the right people, organizations and businesses in China that could be an asset with them flourishing there.

David Wong
NAMC Newswire

The proposed property law is the most controversial measure to come before parliament in recent years. Earlier versions prompted an outcry by leftists, who complained it would undermine state control of the economy and worsen the growing gap between an elite who have profited from China’s reforms and the poor majority.

The controversial bill has already sparked public debate on whether the law represents a serious departure from Communist values or a realistic modern view of the nation's economic position. The legislation has been in revision since its introduction in 2002 and has had more reviews than any other in the NPC's history. A review of its sixth version was completed in October. In March 2004 the NPC officially enshrined private property protection in the Chinese constitution by approving an amendment declaring "legal private property is not to be encroached upon." The NPC Sunday also considered legislation that would equalize tax rates paid by Chinese and foreign companies, many of which get tax breaks that some say hurt domestic entrepreneurs.

It said that when various tax breaks are taken into account, the average Chinese company pays taxes at a 24 percent rate, while foreign companies pay 14 percent. 

ThyssenKrupp AG of Germany has initiated summary legal proceedings against Mittal Steel Company N V. The proceedings were initiated in district court of Rotterdam on December 22 alleging Mittal Steel breached a January 26, 2006 letter of agreement between Mittal Steel and ThyssenKrupp with respect to sale of Dofasco Inc., the Canadian steelmaker to ThyssenKrupp.

ThyssenKrupp has alleged that Mittal Steel breached the letter of agreement by failing to cause Arcelor SA to initiate litigation against Strategic Steel Stichting, an independent Dutch Foundation which currently holds 89% of Dofasco’s shares, to force Stichting to transfer the Dofasco shares to Arcelor so as to permit their sale to ThyssenKrupp, a Mittal Steel statement issued from Rotterdam said..

The lawsuit seeks a court order directing Mittal Steel to cause Arcelor to commence summary proceedings in Dutch courts to force Stichting to return the Dofasco shares to Arcelor and impose a penalty of 500,000 euros per day for each day that Mittal Steel fails to do so.

The statement quotes Simon Evans, Mittal Steel’s general counsel as having said: “ThyssenKrupp’s suit is entirely without merit. Mittal Steel is very surprised and disappointed that ThyssenKrupp has initiated a lawsuit since Mittal Steel has taken all reasonable actions to comply with the letter of agreement and to obtain dissolution of Stichting. Moreover, ThyssenKrupp is well aware from ongoing discussions, neither Mittal Steel nor Arcelor has yet made a final decision regarding possible litigation against Stichting.”

“Mittal Steel is continuing to consider the possibility of litigation against Stichting with its Dutch legal advisors , although Mittal Steel has been advised that the prospects for success of such litigation are remote,” the Mittal Steel statement said.

Incidentally the January 26, 2006 letter of agreement between ThyssenKrupp and Mittal Steel had said that if Mittal Steel was successful in its tender offer for Arcelor and was able to exert management control “with ability to sell Dofasco,” Mittal Steel would cause Arcelor to sell Dofasco shares to ThyssenKrupp.

During March-April 2006, Arcelor acquired 100% of Dofasco shares. On April 3 Arcelor had transferred 89% of shares of Dofasco to Stichting and independent foundation under Dutch la, thereby removing Arcelor’s ability to sell or dispose of such shares without Stichting’s consent. On June 25, Mittal Steel and Arcelor agreed to terms of a recommended offer and later Mittal Steel acquired 94% of Arcelor stock.

On August 1, to resolve certain US competition concerns, Mittal Steel agreed to use its best efforts to sell Dofasco to ThyssenKrupp or, if Dofasco cannot be sold due to Stichting , to sell certain alternative assets.

Subsequently on September 25 and October 11 boards of Mittal Steel and Arcelor formally requested that the Stichting be dissolved and return Dofasco shares to Arcelor. On November 10, the Stichting board of directors unanimously decided not to dissolve and to retain the Dofasco shares, thereby continuing to prevent their sale.

This is a major strategic revamp for Samsung, which has focused solely on the premium markets with pricey, feature-rich models.

"Let me say this first: we have no plan at all to introduce phones cheaper than $50. But we seek to attack the $50-$100 markets in some developing nations," said the executive, who declined to be named.

"This does not mean we will scrap our unique strategy of selling premium phones. We plan to ship the low-priced models to just a handful of potential-laden destinations to preempt the markets," he said.

As possible destinations of the inexpensive models, the anonymous executive picked India and countries in Southeast Asia and South America.

"Our top priority is to make folks in the entry markets get familiar with the user interfaces and brand of made-by-Samsung handsets," the executive said.

"Then, they will buy more expensive Samsung phones later when they switch their handsets after the income level goes up there," he said.

Experts point out the global competition to increase sales with low-priced handsets prompts Samsung to flirt with the low-tier wireless markets.

"As Nokia and Motorola continue to roll out cheap handsets in the developing countries, Samsung seems to have no choice but to jump onto the bandwagon to keep its market share," Mirae Asset analyst Kim Kyung-mo said.

"The tactical change is a two-edged sword: it may help Samsung to add market share or it may end up blowing out the hard-earned premium image of the firm," Kim said.

Nokia currently accounts for about one-third of the international demands for cell phones, followed by Motorola, which boasts of a 20 percent-plus market share. Samsung came in at third with about 12 percent share.

The won-dollar rate Monday fell briefly to its lowest level in nine years and one month on the Seoul currency market as weak dollar sentiment continued throughout the day.

The rate dropped to as low as 926.50 won per dollar at one point, the lowest level since Oct. 23, 1997, when the won traded at 921.0 won per dollar.

The won extended its gains for the fourth consecutive day to close at 927.60 won per dollar, down 1 won from the previous close.

``The dollar’s value is expected to fall for the time being on expectation that the United States may move to lower its interest rates early next year,’’ said Song Jin-kyong, an analyst at Daeshin Securities. ``In addition, the country’s strong exports may accelerate the dollar’s fall.’’

Song expected the won-dollar rate to move in a range between 920 won and 930 won despite currency authorities’ stepped-up intervention to prevent the won’s sharp gains.

The Korean currency has gained ground against the greenback over the past few weeks as dollar sentiment has turned weak as a series of economic indices point to a slowdown in the world’s largest economy.

Speculation is rampant in the market that the U.S. Federal Reserve may decide to lower its key short-term rate early next year to prop up its slowing economy.

Currency dealers said Korean authorities continued to buy dollars. The country’s foreign exchange reserves soared in November from a month earlier as a global slide in the value of the U.S. dollar boosted the dollar conversion value of foreign currencies, according to the Bank of Korea.

The bank said the nation's foreign reserves were tallied at $234.3 billion as of the end of November, up $4.8 billion from a month earlier. That is a much sharper rise than the $1.2 billion increase in October.