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  • Archive for March, 2014

    South Korea’s Deregulation Decision: If You Love Creativity, Set the Economy Free [Asia-Pacific Global Research Group]

    March 22nd, 2014  by  Asia-Pacific Global Research Group - Jasper Kim

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    SEOUL, March 20 (as reported by Yonhap News) — President Park Geun-hye held a nationally televised meeting with regulators and businesses Thursday in a highly symbolic show of determination to undo non-essential regulations she has denounced as “cancer” that’s killing South Korea’s economy.
     
    Park has made deregulation the most important point in her drive to reinvigorate Asia’s fourth-largest economy under her three-year economic innovation plan. The plan calls for raising South Korea’s potential growth rate to around 4 percent and the per capita national income to more than US$30,000 by 2017.
     
    Deregulation is also important in realizing Park’s “creative economy” vision that calls for boosting the economy by turning creative ideas into real businesses through science and technology and information technology.
     
    Park has repeatedly stressed the importance of deregulation and how much she is committed to it, with the language and tone in her appeals growing increasingly stronger in a sign of frustration she feels about the lack of progress and the difficulty getting bureaucrats to remove regulations.
     
    During the meeting, the government reported that it will cut the total number of registered regulations on business activity to 80 percent of the current level by 2016. That translates into the removal of 2,200 regulations and a drop in the total from 15,269 to 13,069.
     
    The government also reported it will adopt Britain’s “regulation cap” system to keep steady the total cost of regulations borne by businesses and the public. The system calls for removing old regulations to make room for new ones. British Ambassador Scott Wightman has also been invited to speak at the meeting about the country’s “regulation cap” system that calls for keeping the total number of regulations steady by making it mandatory to remove old regulations in order to introduce new ones, officials said.
     
    It will first be tested by seven ministries, including the Ministry of Land, Infrastructure and Transport, starting July, before being expanded across the government starting in January next year.
     
    ASIA-PACIFIC GLOBAL RESEARCH GROUP’S IN-HOUSE VIEW:
     
    We absolutely believe in the principles of principled deregulation for the South Korean economy. This is especially the case in the 21st century, as Asia’s fourth largest economy tries to “free the minds” of its untapped youth and next-generation creative talent. Currently, the economy is overly top-heavy as reflected in an industrial infrastructure that is heavily producer and export-driven. Today, most of South Korea’s GDP is export-dependent. This is good when South Korean exports are in demand by overseas markets, but not so good when such demand falters for endogenous or exogenous factors.
     
    We commend President Park Geun-hye’s latest public efforts to deregulate. Hopefully, such governmental will not turn into another added and ironic regulatory layer in and of itself to get the mission accomplished.
     
    In addition to such government-led deregulatory efforts by the Park administration, why not try an alternative approach?
     
    Why not set out the principles of deregulation in the form of “negative” and “positive” rights?
     
    this would be an elegant, efficient, and effective step forward, without requiring overly burdensome legislative efforts.
     
    To illustrate, during the formation of the U.S. (the world’s oldest democracy), The Declaration of Independence calls for the British government to end the “long train of abuses and usurpations” of “certain unalienable Rights,” specifically “Life, Liberty and the pursuit of Happiness.” The authors and signers of the Declaration did not desire for government to provide “Life, Liberty and the pursuit of Happiness”, but rather they expected government to protect their pre-existing rights which were “endowed by their Creator.”
     
    The unalienable rights in the Declaration and many found among the first amendments to the Constitution are considered “negative rights.” A “negative right” restrains other persons or governments by limiting their actions toward or against the right holder. In other words, it enables the right holder to be left alone in certain areas. For example, the right to be secure in one’s home requires that others refrain from trespassing or entering without permission.
     
    On the other hand, many claims of rights emerging since America’s founding, such as rights to healthcare, housing, or standards of living, are considered “positive rights.” These positive rights essentially provide the right holder with a claim against another person or the state for some good, service, or treatment. Thus, a right to housing obligates someone – presumably the state – to provide the right holder with housing, typically via resources obtained from others.
     
    The words “negative” and “positive” reflect the nature of the right itself.
     
    Applying “negative” and “positive” rights, entities in the South Korean marketplace (including SMEs and start-ups) could be protected under both a “negative” right (i.e., freedom from overly burdensome regulatory processes; specifics could be listed instead) as well as certain “positive” rights (e.g., freedom to pursue life, liberty, and happiness through the pursuit of commercial activities; this is just a broad case in which specifics could instead be provided by the state).
     
    After all, everything else being equal, wouldn’t we want to “let a thousand start-ups and new enterprises bloom” in South Korea and elsewhere with less (rather than more) regulation?

     
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    Korea-Canada FTA Concluded: 5 Things You Need to Know

    March 14th, 2014  by  Asia-Pacific Global Research Group - Jasper Kim

    Park Geun-hye and Stephen Harper
    On March 11, South Korea and Canada on Tuesday concluded their negotiations for a bilateral free trade agreement (FTA), which will likely be signed and ratified later this year.
     
    1. EXECUTIVE SUMMARY: The Korea-Canada FTA is expected to help significantly boost bilateral trade. The Korea-Canada FTA completely removes the two countries’ import tariffs on 97.5 percent of products traded between them within 10 years from the day of implementation.
     
    2. SEVEN YEARS TO NEGOTIATE: The negotiations for the Korea-Canada FTA resumed late last year after five years of stalled talks. The FTA negotiations were first launched in July 2007, nearly seven years ago. Canada has signed FTAs with nine other countries, but South Korea is the first Asian country to sign an FTA with the North American nation.
     
    3. AUTOMOBILES AS WINNERS: South Korea will completely remove its 8 percent import tariffs on all automobiles and auto parts from Canada as soon as the bilateral trade pact goes into effect. Canada, on its side, will reduce its current 6.1 percent import tariffs on South Korean automobiles and parts to about 4 percent within 24 months of the implementation. In 2013, South Korea shipped over 130,000 vehicles worth some US$2.23 billion to Canada while importing approximately $92 million worth of vehicles and parts. Canada is the world’s fifth-largest market for South Korean automakers, also importing about 90,000 cars per year from South Korean manufacturers in the United States, according to the trade ministry.
     
    4. RICE MARKET STILL PROTECTED: A total of 211 of 282 total products, including rice, will be permanently exempt from market liberalization. Rice is often considered one of the most sensitive items with South Korea’s FTA negotiations with various counterparties.
     
    5. BEEF IMPORTS NOW ALLOWED: South Korea will also gradually remove its tariffs on another sensitive domestic issue– beef imports -from Canada over a span of 15 years.
     
     
    fta
     
     
    If you are interested in how Asia-Pacific Global Research Group can help your organization, CONTACT US HERE.