Ambassador Speeches

Remarks by Ambassador Thomas C. Hubbard

December 7, 2001

Thank you, Chairman Kim, and members of KUSEC (Korea-U.S. Economic Council) and KITA (Korea International Trade Association), for inviting me here today. I am honored to be able to address this distinguished gathering of Korean business leaders.

I would like to commend KUSEC and KITA for the excellent work you do promoting closer economic ties between Korea and the United States. I plan to spend much of my time as Ambassador to Korea promoting our common interest in expanding economic ties.

In addition to today's event, KUSEC has organized a trade and investment seminar next week on the Pacific U.S. Region, which the Embassy will be participating in. Also earlier this year, you worked very hard on the program for the 16th Joint Conference between Korea and the Southeast U.S., which unfortunately had to be postponed due to the September 11 terrorist attacks.

I am pleased that KUSEC and KITA are working closely with many of our states in the U.S. Establishing and nurturing these key relationships is a valuable and productive investment both for you and for our states in that they will help forge even closer links between us. I salute your efforts in this regard.

I have talked a lot about foreign policy issues - particularly North-South relations and the war against terrorism since coming to Korea. These are very important pressing issues. This morning, however, I would like to spend a few moments focusing on another critical part of my role here in Korea, one that is of great interest to you -- that of further strengthening the mutually beneficial commercial relations between the United States and Korea. I will also talk a bit about the state of the global economy and the importance of increased world trade in the ongoing struggle to eradicate the seeds of terrorism. I will say more on this later, but let me state my conviction that the enhancement of the world trading system discussed at the recent WTO Summit in Doha will help raise global living standards and reduce some of the poverty that serves as a breeding ground for hate and terrorist causes.

It is well known how the Korean economy made a remarkable recovery from the financial crisis of four years ago. Recently Korea's growth has slowed, as Korean exports have declined because Korea's largest markets are experiencing their own economic downturns.

But, Korea has done relatively well. Despite the sluggish export situation during 2001, the Korean economy has managed to achieve a modest expansion, even as many other competing Asian economies contract or fall into recession.

Over the last few years, the Korean economy has reoriented itself toward a more market-based and transparent structure, I believe retreat from this is no longer an option. However, although a great deal of economic and financial reform has taken place, more remains to be done if this transformation is to be completed and if Korea is to fully reap the benefits of reform. Meanwhile, there have been some signs of sliding on reform and occasionally we see less-than-transparent business practices that are not only having a negative impact on American firms but on the overall FDI climate.

Korea must continue to reform and restructure if it is to strengthen its position in this intensely competitive global economy, especially as China continues to attract much foreign direct investment and becomes an active player in the World Trade Organization.

As the Korean economy has recovered from the 1997 financial crisis, there have been some calls for a return to "business as usual," and some bad habits and practices from the past have shown signs of life. Nevertheless, I am convinced that the Korean people will reject such a shortsighted approach. I believe that Korea can and will make the reforms needed to restructure its economy to thrive in the 21st Century -- with a little help from its friends.

Reviewing the U.S.-Korean trade relationship, the Korean government continues to take steps to further open its markets. However, there too, more work remains to be done.

Occasionally, disagreements will arise between Korea and the United States, but these are natural given the breadth and volume of our interchange. We should, and do, work out our disputes through bilateral discussions as well as under the auspices of the world trading system.

As U.S. and Korean economic and trade relations have vastly expanded, our capacity as governments to resolve issues has also improved significantly. Officials of our two nations today genuinely listen to each other and closely engage on contentious issues.

We may not always agree fully on every matter, but we each seriously consider what the other has to say and seek to take steps to meet our mutual concerns. Disagreements may remain, but the nature of the dialogue has evolved to one of ever-greater cooperation and problem-solving.

To summarize my views on the Korean economy and our bilateral trade relationship, the United States has an important stake in a stable and prosperous Korea. American companies, workers and consumers all benefit from economic prosperity in Korea and healthy trade flows between our two nations.

Looking at my country, it is now apparent that well before the September 11 terrorist attacks the U.S. economy had been weakening. Earlier this year, in response to this trend, the Bush Administration obtained the approval of Congress for a partial refund of income taxes to Americans. This money started flowing to American pocketbooks just before the September 11 tragedies.

In addition, Federal Reserve Chairman Greenspan acted several times to reduce short-term interest rates and provide plenty of liquidity to the American banking system.

Thus, the Bush Administration has effectively used both fiscal and monetary policy to stimulate growth and to enhance confidence in the American economy. Over time, as fiscal and monetary policy increase their stimulative effect, I am confident that strong, non-inflationary growth will resume in the U.S. and elsewhere. But, as world leaders agreed at the APEC Summit in Shanghai, concerted efforts by all nations are needed.

As you know, last month, representatives from more than 140 nations met in Doha and agreed - through the efforts of countries like Korea - to the launching of a New WTO Round of multilateral trade talks. This development is an important first step in determining the international rules of trade for the new century. It's also a development that can help us respond as a united international community to the forces behind the attacks of September 11.

In an important sense, not only America but the world was attacked by a network of terrorists on September 11. This network is against everything that the international trading system represents - openness, higher living standards, opportunity, and democracy. By pressing ahead with the New WTO Round we are demonstrating clearly that we will not allow the terrorists to destroy the international community's focus on expanding trade and accelerating economic development.

More practically, the launch of the New Round of global trade negotiations offers reassurances and recovery in the near term and stability and economic growth in the longer term.

The United States worked hard for the New Round because we believe that the world trading system can and must promote international growth and development. Trade can serve as both an engine of growth and a source of hope for workers and families throughout the world. That is why expanding trade - and growth - is such a high priority for the United States, and why supporting your efforts in this regard is one of my most important tasks.

On behalf of the U.S. government, I gratefully acknowledge KUSEC and KITA's contributions to U.S.-Korea bilateral relations. I look forward as Ambassador here to further strengthening our excellent relationship and, in doing so, I ask for your friendship and counsel. Thank you.