[INTERVIEW] KGCCI aiming for '400 years of success'

German Chamber of Commerce says time is right to adjust Korea-EU FTA, address travel restrictions

By Kim Bo-eun

Korean-German Chamber of Commerce and Industry (KGCCI) Chairperson Park Hyun-nam, right, poses with KGCCI President & CEO Martin Henkelmann at KGCCI's office in central Seoul, Aug. 4. Korea Times photo by Shim Hyun-chul

Last year, South Korea became Germany's second-largest export market in Asia, after China. This status was backed by strong demand for German vehicles, as Korea's consumer sentiment was relatively less affected than other countries' by the COVID-19 pandemic at the time. But the increase in German exports to Korea could also be attributed to the long-standing economic cooperation between the two countries, to which the Korean-German Chamber of Commerce and Industry (KGCCI) has contributed significantly.

The KGCCI is the second-largest foreign chamber of commerce in Seoul, with nearly 500 member companies. The local chamber of commerce of the world's fourth-largest economy, established in 1981, marks its 40th anniversary this year. Over the past decades, trade and investments between the countries have grown, as has cooperation in making a positive social impact.

"Our main role is to improve the business environment for member firms. But the KGCCI is not here just to help make money, but also to expand ties with Germany and exert a positive influence on local society," KGCCI Chairperson Park Hyun-nam said in an interview on Aug. 4. The Korea Times interviewed Park and KGCCI President & CEO Martin Henkelmann, shortly after they took their positions. Park, Deutsche Bank Korea's managing director, is the first Korean female chairperson of the KGCCI.

"We celebrated our 40th anniversary in June. Our goal is to build 400 years of success," Park said.

Opportunities for German firms

Clear business opportunities need to be visible for firms based abroad to enter or expand their investments in Korea. Korea's growth has slowed in recent years, after decades of rapid development.

This slowed growth is why the Moon Jae-in administration launched the Korean New Deal project to transform the country into a green, digital-based economy. This state project, into which 220 trillion won will be invested through 2025, is set to offer ample opportunities for German firms.

"German companies have a strong position in the sectors of offshore wind power, solar and hydrogen energy," Park said.

Henkelmann added, "The German experience can be brought here when it comes to smart factories."

The KGCCI currently is fielding interest from existing and potentially new entities to expand cooperation in this field.

Henkelmann added that the Korean market offers additional benefits for German firms. "The Korean market is interesting for German companies. For consumer goods, it is a high-end, highly demanding market and, therefore, also a benchmark practice market," he said.

"So if you make it here, you can make it anywhere. There is also strong competition in industrial products, as you must compete with Korean, Japanese and Chinese goods. This forces companies to improve and have an edge."

The president added that Germany is also an attractive business destination for firms based abroad, due to factors, including the European country's political decentralization, regional industrial clusters around specific industries and generally safe environment.

"Germany is the one of the economic power houses in the EU. When you do business in Germany, companies can easily do businesses in all the other EU-countries," he said.

"There is also a strong drive for digitization in Germany, as well as for e-mobility. Digitization is unthinkable without semiconductors. And the Korean wave in Europe and Germany presents opportunities for consumer goods."

KGCCI Chairperson Park Hyun-nam speaks during an interview with The Korea Times at the KGCCI's office in central Seoul, Aug. 4. Korea Times photo by Shim Hyun-chul

Requests for Korean gov't

More can be done to boost trade further between the two countries, Henkelmann said, referring to the need to upgrade the free trade agreement (FTA) that was made between the European Union and Korea in 2010. This agreement was the first FTA between the EU and an Asian country.

"If you look at the numbers, there is no doubt this FTA has been beneficial for both sides. Negotiations for the agreement took place more than 10 years ago and circumstances have changed as time passed," the KGCCI president said.

"Products have changed and the strength of Korea has changed as well. It's a good moment to look at this. The agreement was a benchmark 10 years ago. The agreement will be another benchmark when it is renegotiated."

He added that the FTA could serve as an example at a time when protectionism is growing around the world.

Another more pressing task is for governments to ease travel restrictions for businesspeople, Park said.

"It is difficult for foreign national businesspeople to get quarantine exemptions for when they are traveling for work. Easing this restriction could be a big help for foreign-based companies and potential investors," Park said.

Henkelmann added, "Work needs to be done on both sides, as mutual agreement is needed."

Finally, the KGCCI referred to the long-standing difficulties that firms face while doing business here.

"We need visibility when there are changes in laws. And we need time for companies to adapt," Henkelmann said, while noting that this issue is not specific to Korea.

KGCCI President & CEO Martin Henkelmann speaks during an interview with The Korea Times at the KGCCI's office in central Seoul, Aug. 4. Korea Times photo by Shim Hyun-chul

KGCCI's efforts for social impact

The KGCCI's vocational training program, Ausbildung, along with its mentoring group for female managers, are among the chamber's efforts to have a positive social impact.

In 2017, the KGCCI introduced the Ausbildung program, which enables high school students to get job training before they graduate. BMW Group Korea and Mercedes-Benz Korea were the pioneers when they first launched the program at their service centers, and now the participating brands include Audi Volkswagen Korea, Daimler Trucks Korea, MAN Truck & Bus Korea and Porsche Korea. Participants receive daily training on the job for three years, during which they spend 70 percent of their time at the workplace and the remaining 30 percent at their universities to obtain their degrees.

Close to 500 young people are in training in the program. The Ausbildung program has helped the carmakers address the problem of the workforce's lack of loyalty at service centers, as well as contributed to tackling the high unemployment rate among young people here.

The KGCCI also runs the "Women in Korea" group, intended to help Korean women in middle management realize their leadership potential via a 10 month-period, one-on-one mentoring program.

"The program is unique in that it connects a cross-industry, cross-national network of female executives," Park said.

The project began in 2018 and 102 mentees have benefited so far. Though the mentoring program officially lasts ten months, that doesn't mean things are over after just one year. The mentors and mentees keep in touch. Park referred to a scheduled conference call to be held with CEOs of German firms that have left Korea, to share what governments are doing in countries around the world to address gender issues.

"It would be wonderful to see the mentees in a couple of years hold positions on the KGCCI board," Henkelmann said.