WHAN BOK CHO – South Korea Ambassador to Mexico

Editor’s Interview

WHAT ARE THE OBJECTIVES FOR SOUTH KOREA AND MEXICO UNDER THE ASIA-PACIFIC ECONOMIC COOPERATION (APEC)?

The objective pursued by APEC is to open regionalism and particularly liberalization of trade and to promote a strong relationship between APEC members.

Another important objective of APEC is trade facilitation. This is a multi-lateral regime and it aims at regional trade liberalization and focuses on two targets. One is to liberate and feed trade toward the year 2020. This is a kind of targeting of liberalization for us.

But more important is the facilitation of trade by reducing customs, procedures, the promotion of commodities and the e-commerce between APEC members. This facilitation that I am mentioning has a lot of potential in regard to cost reduction in business transactions between members.

WHAT IS THE ROLE THAT MEXICO PLAYS FOR KOREAN INVESTMENT IN NORTH AMERICA?

Mexico is very important economically and commercially, not to mention politically for Korea.

As a commercial partner, Mexico is very important in two aspects. One is that more than 110 million consumers are in the local market. With that population, Mexico is one of the largest consumer areas in the world. Secondly, as you mentioned, Mexico is also a platform for Korean investment in certain countries, like the United States.

For reference, look at how many Korean companies have invested in Mexico, mainly in the Maquiladoras. One of the main manufacturing industries where Koreans are very active is the Electronics Industry. This is where the Koreans produce electrocomponents fabricated in Mexico and then exported to the world. As a reference, 78% of the Korean electronic components produced in Mexico are for export, particularly to the U.S. and 22% is just for the local market. So Mexico is very important for us as a gateway for exports.

To explain how important strategically Mexico is for us, Mexico is the only country that has established a Strategic Association with Korea that defines our mutual relationship as strategic partners.

ARE THERE SPECIFIC SECTORS TARGETED BY KOREAN COMPANIES?

We are very strong in the Electronic Industry. Samsung, LG and many electronics contract manufacturers have an important presence in Mexico.

Another area where Korea has shown real interest is in the steel and iron industries. POSCO, for instance, is one of the world’s leading steel producers and established operations five years ago in Puebla and San Luis Potosi. Last year in August, POSCO invested US$250 billion in Altamira for the production of galvanized steel sheets for use in the Automotive Industry. This material is being produced with the highest quality standards. Before this investment, 100% of these products where imported from other countries. This raises the competitiveness of the Automotive Industry in Mexico.

Yet another industry where the Korean Companies have invested heavily is the energy sector. In July of 2007 Korean Gas invested US$860 million in Manzanillo. President Calderon has attended both of the latest mentioned investment sites.
So to summarize, the Korean companies are mainly interested in the electronic, steel and iron components as well as the energy sector.

IS THERE ANY ADDITIONAL KOREAN INVESTMENT IN MEXICO TO BE EXPECTED IN THE NEAR FUTURE?

In many senses, Mexico is a very good place for attracting Korean investments. In this range of interests, we would like to have all the opportunities possible to participate. One is in the energy sector with the PEMEX refinery plant.

Also, the mineral industry has a lot of potential to be exploited. We have many companies with wealthy resources already interested in Mexico.

An additional promising area where we would like to participate is in the renewable energies. We have important companies able to produce renewable energies, mainly in wind energy and they are very interested in investing in Mexico.

WHAT IS THE LEVEL OF SATISFACTION OF KOREAN COMPANIES WITH THEIR OPERATIONS IN MEXICO?

Mexico has offered many advantages to us. Mexico welcomes Korea with an open- minded culture. Geographically it is the only country with such a good location strategically speaking.

In 2008 Korea was ranked 6th as the most important country for trade and investment in Mexico. After the recession the Mexican economy has been recovering at a good pace and this will represent an important increase in the Korean investment in this country.

The employment created by Korean companies doing business in Mexico has to be considered. The Korean companies operating in Mexico to date have employed 45,000 people nationwide.

For another good illustration, the Korean electronics companies represent 3.5% of Mexico’s total exports. Korea certainly appreciates the opportunities Mexico has given in terms of trade promotion.

ANY LAST COMMENT FOR THE MEXICONOW SUBSCRIBERS?

The relationship between Korea and Mexico has a lot of potential. Both countries are very competitive and complement each other. The Mexican Maquiladora is very strong in Information Technologies just as its counterpart in Korean industry, to mention an example.

Korea is able to offer competitively in many themes that Mexico can take advantage of. The problem is that Mexico doesn’t know about the potential of Korea, and as Ambassador I would like to transmit all the excellent possibilities that I can about what Korea has to offer to Mexico.