Conglomerates poaching experienced trade negotiators
Big businesses gain advantage by hiring trade deal insiders
By Jung Eun-joo
11 January 2012
Following former trade minister Kim Hyun-jong, another former diplomat who played a key role in negotiations over the Korea-US Free Trade Agreement (KORUS FTA) has gone to work for Samsung. The Ministry of Foreign Affairs and Trade (MOFAT) stated on Sunday that 45-year-old Kim Won-gyeong, an economic adviser at the Korean Embassy to the United States, had submitted his resignation ahead of the regular February reshuffle. Though it has been reported that Kim will go to work as a director for Samsung Electronics America, a Samsung Electronics official said that talks were still in progress and nothing had been confirmed.
Kim, who began his diplomatic career after passing the 24th High Diplomatic Service Examination and became the first Korean diplomat who obtained certification as a lawyer in the United States, led negotiations as head of the planning team for the KORUS FTA. From 2009, he was in charge of trade matters, including follow-up negotiations.
“Overseas sales have reached 85% of Samsung Electronics’ total sales, so we need more trade experts from a variety of fields from now on,” explained one Samsung official.
In March 2009, 53-year-old former trade minister Kim Hyun-jong, who played a leading role in the KORUS FTA, went to work at Samsung Electronics, which was then establishing its overseas legal team. Kim was in charge of Samsung Electronics’ overseas legal affairs and trade disputes, including overseas patents and anti-dumping, before retiring last year.
The scouting of government trade officials by conglomerates is closely connected to the increasing number of international disputes in this area. As “Korean national team players,” trade bureaucrats have experience in trade negotiations that are not made public and therefore are uniquely skills at interpreting agreements. This gives them a clear advantage in international negotiations. When it comes to the KORUS FTA, the power of government trade officials is greater because the joint committee, composed of trade bureaucrats from both states, has the authority to interpret all the laws related to the agreement, including regulations and annexes. International arbitrating bodies are forbidden from deviating from this committee’s judgment.
“For firms that stand to see a big increase in overseas sales because of the FTA, recruiting trade bureaucrats is well worth considering,” said an official for one conglomerate. “Samsung has begun doing this.” Just as other conglomerates followed suit when Samsung Electronics began recruiting figures from legal circles, including judges and prosecutors, in early 2000, trade bureaucrats are now expected to become increasingly sought after. Within MOFAT, a sense of change is already palpable. More young applicants with backgrounds in trade and economics are now applying to work in the foreign service.
Some, however, are expressing concern about the movement of trade bureaucrats to conglomerates. Such critics point out that such individuals could use classified information learned when taking part in trade negotiations for the benefit of conglomerates, and that trade bureaucrats could draw the outcome of negotiations in directions that served the interests of big business.
Lawyer Song Gi-ho, an expert in trade law, expressed concern, saying, “It is inevitable that the interests of large conglomerates, small-medium enterprises, small-scale entrepreneurs, farmers and fishermen will be at odds when a FTA is concluded. If diplomats that played central roles in negotiations keep moving to conglomerates, the government’s trade negotiations could lose the trust of the public, as happened with the judiciary when its former members were employed on high salaries in the private sector.”