November 24, 2024

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Federation of Korean Industries Chairman Ryu Jin speaks during a press conference held on July 12 on the sideline of 2024 FKI CEO Jeju Summer Forum held on the southern resort island of Jeju. (FKI)

The head of the Federation of Korean Industries, the country’s major business lobby has said another term for former US President Donald Trump would be favorable for Korean companies operating there, as he would not discriminate against foreign firms that invest in the country.

Ryu Jin, the FKI chairman who also serves as the chairman of Poongsan Corp., suggested that Trump’s win in the November presidential election may offer a better business environment for Korean firms than that of his Democratic rival and US President Joe Biden.

“The Democratic Party is trying to protect domestic companies (from foreign companies entering the country), but Trump appears to be expected to treat (foreign) companies invested in the US the same as domestic companies,” he told reporters during a press conference in Jeju on Friday.

Given that Korean companies have mainly invested in states with a weak labor union presence, Trump’s second term would be a positive factor, as Biden would prefer states with union strongholds where Democrats are more likely to be, Ryu claimed.

Samsung Electronics invested in Texas while Hyundai Motor Group chose Georgia and Alabama for investment. Those states adopted right-to-work laws that restricts workers' mandatory membership of labor unions.

During the event, Ryu also called on the Korean government to increase its bargaining power over the US.

He suggested bringing in Japan to establish three-way cooperation between Korea, the US, and Japan rather than pursuing two-way negotiations with the US.

“I can imagine people who would appointed as Secretary of the Treasury and Secretary of State if Trump takes office again. They are people who value the Korea-US-Japan relationship.”

Along with his projection on the US elections, Ryu criticized regulations that he said weighed down Korean industry.

“If you look at the corporate-related systems, our companies are in a situation where they are running around with sandbags on their ankles,” he said. “We have to compete fiercely in the global market, but it is very difficult to deal with companies from competing countries that are running lightly (without tight regulations).”

As the most problematic issue, he picked the bill aimed at expanding the responsibilities of a company director not only to the interest of the firm but also to the interest of the shareholders.

Companies have been opposing the bill due to concerns that shareholders unsatisfied with directors’ management decisions could file suits against them for breach of trust, and claim that this would hamper their pursuit of aggressive investing strategies.

"Developed countries create regulations when a problem arises, but in our country, they create regulations first and tie them down, making it more difficult to do business," he said.

By Park Han-na (hnpark@heraldcorp.com)