Dram Man: August 2006

Thursday, August 31, 2006

US ROK FTA - Break out the Hot Dogs in Seattle

Seattle is the site of the third round of FTA talks between the US and Korea, and what are trade talks involving Korea without the chance of two legged BBQ's? That's right the farmers are set to go to Seattle:

More than 100 South Korean farmers and activists will go to Seattle next week to stage rallies against a free trade agreement (FTA) between Seoul and Washington, a chief organizer told Yonhap News Agency yesterday.

They say they will be non-violent and cite the earlier 50 person protest in Washington DC. I am not so sure.

First the farmers have a history of violent protests in Korea and now abroad in light of the Hong Kong arrests last year. Further Seattle has the dubious distinction as the site of the "Battle of Seattle" brought on in part, one must honestly say, by the politics in the area (to be polite). One must wonder if the 100 will combine forces with other anti-globalization groups and have a explosive synergistic effect.

I would really hate to be Seattle riot cop right now.

What the heck?

A few days ago a Korean Time piece talked about a local firm suing Google for violating their search patents. I wanted to wait on commnenting on this until I saw the patents owned by the Korean company Park and Opc.

According to the KT:

In the suit lodged with the Seoul District Court, Park & Opc Co. claimed that the U.S.-based search-engine giant infringed upon its technology used mainly in personalizing an individual's search results in the Internet.
The company said that it received a patent for the technology in 2003, but Google has been using the patent for its Internet search-engine service without its permission, Yonhap reported.

So I log into KIPO's database of patents and the only patent Park and Opc recived in 2003 is:

2020030011709 - Detachable Device for Transmitting Driving Force toRotational Axis of OPC Drum

Park and Opc's other patents are for simular printing technologies, not internet search.

What the heck is going on here?

Lucky Me

I want to thank who ever nominated me as part of the Asian Blog Awards. However who ever is judging this thing, the others are much more deserving.

Wednesday, August 30, 2006

US ROK FTA - Ivory Towers Speak

I would be remiss if I did not mention a series of articles, likely put into some special section in the real paper, on the FTA. Most of them are professors and intellectuals of some stripe. Some interesting, many not so. Allow me to link with a brief review a few of them:

Financial Reforms More Important Than FTA Itself
By Shyn Yong-Sang
Chief of Macroeconomic Analysis at Korea Institute of Finance

First, I am going to call him Mr. Shin, I am declaring a personal war on tortured romanizations after Mssrs. Chough and Vark. Mr. Shin gives a good outline of the US-Singapore FTA and how it can serve as a model (or an argumentative proxy) for the Korean FTA. To me however he does not back up his headline which has a nugget of truth, many of the reforms Korea may have to take as part of the FTA will actually end up benefiting Korea.

FTA Boon or Bane for Korean Economy
Hyun Jung-taik
President of Korea Development Institute

Good persuasive article on why the FTA will be a good thing for Korea, and in reality there is little to fear. I find some humor of his rather stark assessment of the benefits of free trade most proponents avoid, some people have to loose.

FTA to Build Bridge for Future Prosperity
By Kim Sung-jin
Deputy Minister of Finance and Economy

Perhaps the big gun writing. Pretty bland Ministry of Trade and Foreign Affairs boilerplate. However I would like to point out two metaphors. The ill timed "both sides brought home the bacon", does this mean a compromise on pork imports? Second is the statement "The FTA is the new 'Silk Road'". In my six years in Korea the "New Silk Road" has been applied to the Internet, the North/South Rail link, the "Hub of Asia" plan, and oddly DMB mobile services. Find new Konglish to stick in there Mr. Kim.

Korea-US FTA Deal Faces Bumpy Road
By Henry M. Seggerman
President of International Investment Advisers

In his rather acid contribution Mr. Seggerman finds time to swipe at US immigration policy and predict a unified currency and stock market in 2050. Consider him flagged for unnecessary roughness. Also somebody wake him up, we already have a unified stock market in all but name only.

FTA Poses New Challenge to Financial Market
By Yang Doo-yong
Head of International Finance Department at Korea Institute for International Economic Policy

Mr. Yang takes 1,255 to say that the FTA presents both a crisis and oprotunity to the Korean financial industry. In other words he punted, and not very well. (BTW-Note the rather anti-FTA boxed quote the Korea Times gives.)

Meanwhile you might want to browse the rest of the articles in the business section a few more talking about the future of the Korean economy. I had to give up, I got woozy from some of the vapid hot gas exposed in some articles.

Tuesday, August 29, 2006

Faking Demand

There is a hilarious and very level headed op-ed in the Korea Times today about the ineptitude of Korean Govrenment forecasting demand. The key graphs:

According to an agreement signed between the government and private enterprisers [for the new rail link between Kimpo and Incheon airports], the number of daily u sers for the train was forecast to reach 210,000 in 2007, 490,000 in 2010 and 670,000 in 2015.

However, the Incheon Airport Corporation views it differently. The number of daily airport users which now stands at 74,00, will grow to 80,000 in 2007, 100,000 in 2010 and 130,000 in 2015. Funny thing is that in the government estimate, the number of train users in 2010 is five times higher than the total expected number of airport users....

Officials of the Construction and Transportation Ministry belatedly explained that there was no way for them to verify what they had forecast. Another regrettable fact is that the amount of train losses to be covered by the government is only the tip of the iceberg...A case in point is the subway system. The growing deficits of subway operation in Seoul and other cities have been derived from the government failure to predict the number of users. The construction of Kimje Airport was stopped as a result of the revelation by the Board of Audit and Inspection that the demand forecast for the airport was fake.

If I can be the ultimate skeptic, should we call into question other government forecasts too?

Speaking of which, note the author relies somewhat on the premise that the Incheon Airport Co.'s figures are gospel. Given this, and his later citation of the Kimje Airport, what if they are inflated as well? Which means the rail passenger figures could be well above five times real usage of the Incheon Airport in 2010!

Frozen Babies an Trade Secret Matter?

Thanks to DDA, I was able to read his translation of a Le Figaro piece on the frozen French kids that involved trade secrets. Wow! Thats an odd sentance ain't it? The things that go on in Korea I tell you...

To recap the story so far. A French man who works for a US auto parts company (unknown at this time exactly which) came home to Seoul from vacation in France in late July for an emergency meeting. While putting away a load of halibut, he found two frozen babies in his freezer. He reported the matter, and returned to France. DNA tests then reveild that the parents of the frozen kids were none other than the Frenchman and his wife. Meanwhile the couple stayed in France with no intention to return to Korea, thus exasperating the Korean police from solving case let alone charging them for the murders.

The (alleged) father of the babies, Mr. Courjault, has this Oliver Stone worth quote in the Le Figaro:

Even a plot with industrial motivations can’t be excluded, says J.L. Courjault. Employed by the local branch of an American automotive equipment company, in charge of technology transfers, in a very competitive market, this engineer could have been framed. Moreover, he adds, my unscheduled return to Korea could have interrupted someone, involved in something.” A set of keys is said to have disappeared during their absence.

Sounds like an elephant in pate feuiletee, lots of absurd layers and odd French names.

Spot the Idiot

There is a dialogue that is getting humorous to me. Many people complain about a Korean movie "The Host" because it some how got placed on many screens across the nation for its opening run. Some are complaining on how this has crowded out "art house" movies. Similar complaints are made outside Korea all the time. There is added humor to the fact that recently the US got Korea to cut its screen-quota for US movies shown in Korea. The humor is now these smaller movies are being crowed out not by Hollywood, but by other Korean movies.

There's an article about the issue in the JoongAng Ilbo, which I would like to quote:

theaters that play small independent films continue to see heavy losses. After Core Art Hall was closed down in 2004, its affiliate chain, Cine Core, which played a mix of non-mainstream foreign films and independent Korean films, closed down in June due to financial difficulties....CGV, a multiplex chain run by CJ Entertainment, is currently operating "indie screens" in four locations, setting aside screens with 90 to 178 seats apiece to play Korean independent films. The company said, however, that it has lost an estimated 1 billion won ($1 million) annually and that the audiences for the independent films will be half the average occupancy of that for blockbusters....Currently, six arthouse theaters nationwide are partly funded by the Korea Film Council, which is affiliated with the Culture Ministry. But even with the support most theaters suffer major losses, according to Kim Bo-yeon, an official at the Korean Film Council.

OK so "art house" films number wise are a financial disaster for the theaters. Nobody really goes to see them. At the end of the article we get this gem:

"We know the audience for arthouse films is still there," said Song Il-gon, the independent film director of "Magicians.

Spot the Idiot!

Fashion Brand Building - Vark You!

The JoongAng Ilbo has a good piece on local branding in the Korean fashion industry. Good article number one. Number two it has one of the more humorous romanizations of a Korean name I have seen:

Vark Ji-won

Monday, August 28, 2006

Inventive Logos? (Something that slipped past)

A while ago on this blog (or rather in my history of blogging), I used to use the english webpage of the Korean Intellectual Property Office as a source for news. The page tends to translate things of interest that appear in the Korean press that do not make it to the English language press in Korea. However when I got my new Apple iBook, I was disapointed that Safari is not compatiable with the page and forgot about looking at it.

Since I have some time on the PC I have to use at my office, I typed up the website to browse. I found something of note, an article from the Hankook Ilbo around June 28, 2006:

In order to improve the BI (latest Konglish for logo - DM) images of our companies as well as to promote them to the global market, Hankook Ilbo created the first “Korea Enterprise BI Award” with the sponsorship of KIPO and KIDP (Korea Institute of Design Promotion). Last 29th, 4 companies (or agencies) have been selected as the winners.

The article is translated to be unclear as to find samples of one, but of three selected I want to point out something interesing.

The first is Yearim Publishing. Their logo is:

Now consider the following Korean logos:

Not such an innovative logo if you ask me.

Consider another winner, the new logo for the Korean National Tourism office:

Cute huh? Then consider this:

Looks familar doesn't it?

Consider the last one for Shin Won Construction:

Now consider the mark for Seo-gu (ward), Busan city:

or the more famous logo of the Minsitry of Unification:

Seems to me that none of the logos featured were that distinctive and award worthy.

That 70's Headline

Trademark van set for another run

The Story Behind the Story

The Korea Times gets excited about the International Labor Organization meeting in Busan:

More than 600 government officials, workers, employers and leaders from some 40 Asian, Pacific and Arab countries will gather at the 14th Asian Regional Meeting of the International Labor Organization (ILO) in Pusan from Aug. 29 to Sept. 1...The ILO Asian Regional Meeting will be held at the Busan Exhibition and Convention Center (BEXCO) in the nation's second largest city with delegates from 29 countries in Asia and the Pacific and 11 Arab nations in attendance.

Of course they do not mention a small detail, the reason why the are meeting now. Leaf through the Korea Times and you can find this gem from a year ago:

The International Labor Organization (ILO) decided to postpone its 14th Asian Regional Meeting, as Korea’s two umbrella union groups refused to withdraw their decision not to participate in it....The decision came after the Korean Confederation of Trade Unions (KCTU) and the Federation of Korean Trade Unions (FKTU) confirmed its plan earlier that day in a joint media conference that the two groups will not take part in the ILO meeting.

Thats right, the ILO meeting last year was postponed because Korean labor unions went on strike.

Friday, August 25, 2006

Fun with Statistics - Gambling Addiction Addition

In this edition of Fun with Statistics I want to look into this Korea Times quote:

The gambling industry has grown to a 17 trillion won business. If you include the 15 trillion won legal gambling industry _ including horseracing, lotteries and casinos _ the nation spends over 30 trillion won on gambling. Moreover, illegal gambling parlors are often located in residential areas.

According to a government report in 2002, 3,000,000 Koreans or 9.3 percent of adult population were addicted to gambling.

So lets compare apples to apples. According to this Joongang Ilbo report spending on legal gambling in Korea was 11.5 billion won in 2002. To calculate illegal gambling, let us assume the same growth rate (about) 30%, which gives about 13 billion won illegal gambling in 2002. Now this figure could be inflated given, as the KT suggests, the boom in illegal gambling such as "Sea Story". In any case we will use a total figure of 14.5 billion.

Now according to the National Statistics Office combined leisure and "Other" expenditure in 2003 (closest number available) was about 400,000 per month. Take that times 12 (months in the year) and 3,000,000 (the addicted), you get 14.4 billion won in what could be called "gambling demand".

What is interesting here is that these 3 million people are NOT overspending on gambling, rather they are spending pretty much exactly how much an average Korean spends on leisure and discretionary items. They are simply doing it a different way. These 3 million are not say gambling the grocery bill, or the electric bill.

Now keep in mind the assumption we made about the growth of illegal gambling in relation to legal gambling. We stated the growth rates were the same, which as I mentioned may not be case since the KT intimates that illegal gambling has boomed in relation to legal gambling. If the KT is correct, this would mean the illegal figure, and therefore the overall figure, is less. In other words, in light of the assumption, the 3 million people were gambling an smaller proportion of their leisure and discretionary spending than the 100% indicated above.

This begs two questions. First, is there a substantial differences in gambling addition between income levels in Korea? All these stats are "on average" so such an imbalance could be covered up by the statistics. Second, how were these 3 million people classified as "gambling addicts", in other words I call BS on the 3 million figure. For what its worth the National Association of State and Provincial Lotteries cites a Harvard University Study that places "gambling addiction" in the US and Canada at less than 4% max. This is much less than the 10% stated above.

Finally, as part of my research, I found a self diagnostic question on Gambling addiction:

I have felt regret over my gambling. (agree/disagree)

You bet I have. I really regret betting on that 4th horse in the 6th race at Santa Anita a few years back!

US ROK FTA - Have the Koreans Given Up

A couple stories today indicate that perhaps even the Koreans have given up on reaching an FTA with the Americans. First, and most damning, is a Korea Times quoting the Minister of Industry Commerce and Energy:

In a meeting with newspaper business editors Wednesday night, Minister of Commerce, Industry and Energy Chung Sye-kyun said, "We could choose the EU as the primary negotiator for an FTA if the talks with the U.S. linger too long.”

However Mr. Chung goes on to expand with a profundity that makes me wonder if he does not know his ass from a hole in the ground:

Chung said Korea will not hasten negotiations, although the Bush administration's Trade Promotion Authority (TPA), given by the U.S. Congress, will expire on June 30, 2007. "Should the talks face hurdles, an extension of talks would be possible (regardless of the TPA).''

This man expects to do an FTA with out "fast-track" authority? You gotta be kidding me! What ever is agreed to at the table, the US Senate is sure to butcher it to something unrecognizable. For instance just yesterday Michigan lawmakers tried to score some cheap political points, without "fast-track" their views can actually make it into an FTA. Does Mr. Lee actually want that to happen?

Mr. Lee continues with the nuggets of wisdom:

He also said there is a possibility that U.S. would extend the maturity of President Bush's trade-related right.

Does Mr. Lee actually think that in the midst of the war on terror Bush is going to invest the political capital necessary to renew "fast-track" just because Korea won't come to a decision? This goes beyond narcissistic and crosses into smugness. Bush aint going to do anything for you Lee, and not only that if your counting "fast-track" with whoever is elected in 2008, that is a close to rolling the dice as you can get.

Mr. Lee's comments make me seriously wonder who the hell is advising the Korean leadership in regards to an FTA, and more specifically the political climate of the US. Its like they get all their information of the US government from 70's vintage Schoolhouse Rock shorts.

While we have Mr. Lee jumping off the US ROK FTA bandwagon, we have the GNP using a meeting on the FTA to score cheap political points:

President Roh Moo-hyun is scheduled to hold a dinner meeting with lawmakers working in the National Assembly’s special committee on the South Korea-U.S. free trade agreement (FTA) at Chong Wa Dae today...But the main opposition Grand National Party (GNP) boycotted the meeting, citing the inopportuneness of the event as the nation has been embroiled in a scandal over the “Pada Iyagi,” or “Sea Story” video gambling games.

Classy guys, a momentous opportunity for Korea and all you guys can do is skip out on a strategy session so you can remind the national of a scandal. Classy...

One can say this is just the usual domestic politics in Korea. However I a bit disturbed due to the fact Korea has constantly talked about the need for internal dialogue to "sell" the FTA, yet the GNP thinks sticking it to the president is more important. Could this very well be the simple fact that the FTA is not nearly as important anymore and the rats are leaving the ship?

Thursday, August 24, 2006

US ROK FTA - Marketing Help

The Hani publishes a well know secret in the legal field in Korea, the fees charged by Kim and Chang (the dominate law firm in Korea they way King Kong was dominate on the streets of New York.

So what might lower Kim and Chang's fees. Hmmmm....let me think. How about opening the legal services to competition in Korea via the US ROK FTA? Not that Hani will mention such an idea. Neither will the Korean govrenment for that matter. They would likely issue instructions on how Kim and Chang has to "defend" themselves. Thats how the ROK sells an FTA in Korea it seems.

Anti-Consumption or Anti-Import

A few weeks ago I did a post on Anti-Import bias in Korea by siting the begining of the latest media craze, the "doenjang-neyo". In a new story in the craze, I would again like to point out the distinct anti-import bias this craze has:

Earlier this month, Sisa Journal, a domestic weekly news magazine, published a full-length story on the recent doenjang-nyeo craze. In the article, titled, "What we don't know about real doenjang-nyeo," two young women were mentioned as examples.

A 25-year-old "Ms. Kwon" was described as a shopaholic who habitually bought foreign brand clothes and undergarments whenever she flew abroad, and a 23-year-old "Ms. Shin" was introduced as a Starbucks coffee addict. The article identified them by their full real names, and published clear photos of them sipping coffee.

The women had little idea what would happen when the article was released on the magazine's Internet edition. The two were bombarded with online comments about "how vain" they were and that they were good examples of how some thoughtless girls could "wring money out of their rich parents to waste it abroad."

Again notice the gratitous attack on "foreign" consuption and money spent "abroad". The complaint here is not just consumption, but in someway on how consumption of non-Korean items is espeicaly wrong.

In case you wonder more, consider this handy guide from the Joongang Ilbo on how to spot a "doenjang-nyo":

A typical doenjang-nyeo is described as a foolish female who has no time to eat kimchi for breakfast at home but drops by a brand-name doughnut shop instead to have a cup of black coffee ― in fear of gaining weight ― while still chowing down on raspberry-filled doughnuts, sitting in front of the shop window to show that she is patronizing international chains.

During the day, she carries around a designer tote bag that isn't big enough to hold her schoolbooks ― it just looks prettier to carry thick books in one arm and the purse on the other. She sweet-talks her nerdy male classmates into buying her lavish dinners where she takes photos of herself (alone) and gleefully uploads them on her Cyworld blog at night.

She often carries around an empty Starbucks coffee cup to help her look more like a New Yorker and keeps sending text messages to her friends, asking such important questions as "Where did you buy that pair of shoes?"

Again, notet the attack on imports, not to mention the scandalous attidude of choosing dounuts over Kimchi at 7am. This whole trend is clearly not just about excessive consuption or even materialism in general.

Wednesday, August 23, 2006

Fifth Reich gets compeition

Six years ago (damn have I been here that long!) the big news was the Nazi bar in Shinchon, Seoul. The bar is still in operation last I heard, albeit toned down some.

Well in the bar has competition, apparently in India:

A new restaurant in India's financial hub, named after Adolf Hitler and promoted with posters showing the German leader and Nazi swastikas, has infuriated the country's small Jewish community.

'Hitler's Cross', which opened last week, serves up a wide range of continental fare and a big helping of controversy, thanks to a name the owners say they chose to stand out among hundreds of Mumbai eateries.

"We wanted to be different. This is one name that will stay in people's minds," owner Punit Shablok told Reuters.

US ROK FTA - Hear no Good, Speak no Good, See no Good

Since nobody will play this up, and I only saw one article about this, I thought I should highlight it:

At a conference in Seoul yesterday, Lee Young-joo, a research fellow at the Korea Institute for Industrial Economics and Trade, said a poll of 1,200 small and medium-sized firms found that 71 percent had a positive or neutral attitude toward a free trade accord with the United States.... In contrast, a little under 16 percent of respondents said they expected a free trade agreement to have a negative effect on their businesses... "Although a trade deal would help Korean companies extend their business abroad and encourage technical cooperation with the United States among high-technology companies," Mr. Lee said,

However KIET is a government body so it has to do its best to keep up Korea's ham-handed FTA sales technique. So accordingly Mr Lee does his best to whip-up the plight of the 16 percent and engages in some veiled anti-americanism:

"it would also increase risks for small companies. For example, large companies might import goods rather than use local suppliers, and the number of takeover attempts [of small firms] would increase."

Yes, god forbid an American might try to give Mr. Kim an ungodly amount of money for his widget casting business. Not to mention the first part of the "yes but..." comment where in it is just as likely that under free trade that US companies may choose small Korean co's as suppliers. However we cannot play up that benefit now can we KIET?

In fact the according to the article an FTA is not something to "benefit" from but to "defend against", literally:

To defend themselves, Mr. Lee said, small and medium-sized companies should boost their exports to the United States, high-technology companies should increase their technical cooperation with their U.S. counterparts, and companies expecting to suffer losses from increased imports should diversify as quickly as possible.

If shooting yourself in the foot was an Olympic sport...

Dongdaemun, Faking Popularity

The Dong-A has a piece on how "Dongdaemun is Korea's fashion center". Some key parts:

On a weekday, the scenery of Dongdaemun Shopping Town makes you think of an apartment construction site. High-rise construction tower cranes are moving busily here and there, building extra-large shopping malls such as Fashion TV (2,088 shops) and Goodmorning City (4,000 shops).

According to the Seoul Business Agency, the number of shops in Dongdaemun Shopping Town is approximately 31,200. The number is expected to rise by over seven thousand by the end of 2007 to a total of over 38,500...

The government and the city of Seoul are also making an effort to make Dongdaemun into an industrial base to lead the future of Korean fashion....

The Ministry of Commerce, Industry and Energy, the Ministry of Labor, and Korea Industrial Complex Corporation are working together to create a sewing cluster in the old city parking lot site. The government is planning on linking nearby shopping malls with this cluster in order to make a base for everything: planning, design, sewing, and marketing.

Sounds like great booming area. However the article does not mention the underbelly of why Dongdaemun is proving so popular:

The government crackdown on counterfeiting will be strengthened, and commercial areas notorious for selling counterfeits will be monitored and police enforcement increased, the Korea Intellectual Property Office said yesterday...

Three commercial areas infamous for selling counterfeits in Seoul — Dongdaemun Market, Namdaemun Market and Itaewon — were named to the red zone. - Joongang Ilbo, February 26, 2004

Korea has been infamous for decades for the ingenuity of its counterfeiters; Itaewon and Dongdaemun markets have been magnets for Koreans and foreign tourists looking for knock-off fashion at bargain-basement prices. Take your pick: Rolex, Louis Vuitton, Chanel, Burberry, Gucci, Nike — the list goes on. - Joongang Ilbo, February 22, 2004

The Korea Apparel Industry Association's Center for Intellectual Property Rights Protection...was established on March 2. Since then, it has found 17 cases of fabrication, notably in the Dongdaemun and Namdaemun markets and warehouses in the Seoul metropolitan area. - Joongang Ilbo, June 9, 2004

Prosecutors indicted yesterday 17 Korean ginseng merchants on charges of passing off imported Chinese red ginseng as the more expensive domestic product...merchants, working at the Gyeongdong herbal medicine market in Dongdaemun, Seoul, told customers the product was cheap because it hadn't been certified by the government. - Joongang Ilbo, February 3, 2005

Walking down a narrow lane of handbag shops in Seoul's Dongdaemun Market offers a quick education in the counterfeit market in Korea. Most of the 100 or more stalls on either side of the street are offering handbags and purses with such recognizable logos as Louis Vuitton, Gucci and Chanel.

But instead of displaying the actual goods, merchants invite shoppers to peruse catalogues spread out on tables. "We give 15 percent off the price listed in the catalogue," one said. "They're so real, you can't tell the difference from the original." The merchant said he could fetch whatever the customer wanted from the catalogue...

On so-called "Fake Avenue" near Dongdaemun Stadium, vendors do business only after sunset, and draw young customers willing to fight their way through the crowded, narrow street for a deal. - Joongang Ilbo August 23, 2005

Here's this week's tip on Korean language and customs:

Q: My friends and I went shopping to the Dongdaemun market late at night and saw that the entire floors of some of the largest shopping centers there and also street carts carried a lot of luxury import brands. In one store, a pair of Gucci sneakers cost over $300, while another pair looking exactly the same cost one tenth of that. What's the deal? - Joongang Ilbo, May 16, 2006

Now keep in mind this is just the citations from ONE newspaper in the past couple years. If I wanted to I could find more all across the Korean media about this aspect of Dongdaemun.

So excuse me as I chortle at the idea of "Dongdaemun is Korea's fashion center".

Tuesday, August 22, 2006

A Fish Story

Korea is abuzz about the Sea Story slot machine story. Proof of that is it finally made Marmots Hole the Korean blog clearinghouse.

Ironic though it comes exactly at the same time as another case in Florida. Apparently a slot machine room owner there has been aquited of running an illegal casino because of something called the "Chuck E. Cheese" exception. The rule basicaly states that if a game requires some skill, its not gambling. The idea was to protect businesses like its namesake.

I wonder how finely Korean law is written here.

Monday, August 21, 2006

An Apology, Sort of

The past few days I have been blogging a lot about fake luxury goods, which is ironic since I personally Target is high fashion to me and people who shop at Nordstroms are snobs (must be my midwest upbringing).

A few days ago I cited a Korean Times article that announced that Korean police have busted a watch brand called "Gio Monaco". Since then I have received a lot of hits from people searching for the brand. Apparently it is a real brand of some sort. I apologize for any confusion.

However this does raise the question what the original article was talking about. Are these counterfeits? Or is the scam more elaborate and sucked in many more people worldwide? Or have the local police simply screwed the pooch?

Can anybody fill me in on this all?

UPDATE

Based on the comments below, I decided to look into things a bit more. The mark "GIO MONACO" has not been registered with either the EU nor the Swiss (the alleged orgin on the watch). Perhaps I need to retract my apology.

UPDATE II

Looking around and foundt he mark registered in the US, UK, and Hong Kong under the name "Pietro Ascione" with a legit looking Italian address. This name matches up to the Whois search mentioned below. However the email address in the Whois search for Mr. Ascione (produzione@manuitalia.it) seems bogus (domain does not check out). Also worth noting searches for Mr. Ascione come up empty as well (one would think some mention of his connection to Gio Monaco, other than for TM's, woudn be found). Finaly it is interesting, though not too suspicous, that Mr. Ascione registered the domain through Tucows.com, not what I would expect for a luxury watch company nor someone based in Italy.

UPDATE III
OK I officaly call bullshit to all of this, and take back my appology. What did it for me is looking at the Gio Monaco site. They have no vendor in NYC (a must really) and one of their only two locations in the US (one Atlanta) is in LA at: 3250 W. Olympic, which as any Los Anglenio can tell you thats dead center in Koreatown, not Beverly Hills. Yeah, this brand is bullshit. Thanks Antti for getting me on this track.

US ROK FTA - US Side all but given up?

I am waiting to see the video on the C-SPAN site, but Susan Schwab, head USTR, must have gave what ammounts to an interesting interview on the station recently. One may conclude from her rather gloomy language that like I said, this deal is a dead as a doornail. All this talk now could be just politeness.

First consider her strong words (quoted by Hani/Yonhap) on the idea of Kaesong being included in the deal:

"It won't happen. It can't happen," Susan Schwab, the U.S. Trade Representative, said about accepting imports from the Kaesong industrial complex in an interview with C-SPAN aired Sunday.

Asked whether the U.S. stance has changed on the issue, she said, "No, that won't change."...

"Obviously, we have rather significant differences of opinions with Koreans over the issue of Kaesong," Schwab said, adding later, "It's not part of the trade agreement."

Why not just say "Over my cold dead body." Susan? Kudos to you for the stand on the issue though, not one mealy word in there.

What makes me think even the USTR has given up is this line (from the Joongang):

Rice tariffs and imports from an industrial complex in North Korea are some of the toughest issues in negotiating the free trade agreement with South Korea, she said..."It's possible to get them all done by the end of the year," Ms. Schwab was quoted as saying, but she added, "It's also possible you won't reach agreement with some of these countries. It wouldn't be the first time."

Free trade accords are hard to negotiate because the U.S. insists on commercially meaningful deals, she said...

She said she is optimistic about the prospects for South Korea and Malaysia but repeatedly mentioned these were difficult negotiations.

Translation, either stop dicking around Seoul or we will go elsewhere where we can make a meaningful deal.

Super French Babies

From a Korea Times Op-ed:

In addition, it is highly likely that the infants didn't die in the French couple's present residence where they moved last year, leaving open the possibility that the bodies were moved from the place where they died at least once.

You mean to tell me its possible they died more than once?

Fake Gift Certificates

For those of you who are not following it, Korea is currently imitating a scene from Casablanca where it is "Shocked" to find gambling going on in what they will freely refer to as "adult arcades". This little paragraph in the Dong-A caught my eye:

The number of counterfeit gift certificates has also greatly increased. According to police, last year only 413 counterfeit 5,000-won gift certificates were found, but this year, until late June, an amazing 49,138 forged gift certificates were discovered. Police consider that arcade owners seeking to cut costs in buying gift certificates used as prizes might be involved in the forgeries. As a matter of fact, since most of the gift certificates are cashed rather than used to purchase products, it is very likely that owners thought that even if forged the chances of being caught were very low.

Saturday, August 19, 2006

Whacky Anti-americanism!

I got a good chuckle from this DongA Ilbo piece about how US Antitrust law is too tough on the Korean companies. I guess what can you expect from a country who thinks passing out pardons for such is a good for the economy.

What bothers me is how the article devolves into you basic anti-american screed. The first is the linking of the Patriot act to wiretaps used in the cases against Hynix and Samsung. As I recall wiretaps in antitrust cases were always possible (especially in cartel cases) since its possible to attain them through RICO statutes (correct me if I am wrong on this). The Patriot act may have made it easier, but the possibly was always there I think.

The article then really begins to get nutty:

Regarding this move, Wang Sang-han, a law professor at Sogang University, pointed out that Washington in an attempt to defend its people and the market economy ignores international law and other nations' sovereignty.

Some said that strengthened regulations including the tapping of conversations of alleged price-fixers are designed to make up for the loss from the Iraq War.

However, professor Lee Ho-sun of Kookmin University said that U.S. antitrust law has positioned itself as a universal value in the global market though its history is short and often exploited to serve national interests.

OK say it with me...WHAT THE HELL??? According to these Korean law professors, eliminating cartels do the following:

A. Ignores International Law

I am unaware on any international law on cartels (if there were why dont we go after OPEC?). I am sure this is just a bromide proffered out of the fashionable delusion that "everything the US does is against International Law".

B. Ignores other nations sovereignty

If this is the case, then any Korean law that governs US companies is in some way a violating of US sovereignty

C. Provides economic benefits to compensate the US government from the Iraq war

This is too absurd of a connection to even bother with, but how can an action that cost the US easily one trillion dollars be compensated by the two Korean companies paltry 140 million mentioned in the article?

D. Exploit antitrust law to further US interest overseas

First considering Micron Technologies, a US company not mentioned in the article, was subject to simular penalties in the same case I fail to see how this furthers US interests.

Further if that truly is the case, then explain Rambus. Rambus, a US company, is currently under antitrust investigation, if found guilty (and it looks like they will be) this BENEFITS SAMSUNG AND HYNIX. So again I fail to see the "national interest" angle.

US ROK FTA - Beef, its not on the table. Slave labor is.

More disturbing restrictions in the planned FTA document are leaking out. The Korean side is pretty firm on excluding beef:

Beef is not on the list of products that will enjoy tax-free status under the proposed free trade agreement between Korea and the U.S. Appearing on a radio program, the chairman of a new committee in charge of facilitating the Korea-U.S. FTA talks, Han Duck-soo, said the beef tariff will stay at 40 percent when the agreement is signed.

Equally firm are Korea's demands to include the Kaesong Industrial Park in North Korea:

Han also said Korea will continue to push the U.S. on including products made at an inter-Korean industrial complex in North Korea, regardless of opposition from the international community. Washington has ruled out including products made at the Kaesong Industrial Park and is refusing to discuss the matter in negotiations.

Glad to see the US side being equally firm on Kaesong. I just hope they push the beef more, how anybody can accept a 40% tariff on anything and then still claim have a "free trade" agreement is beyond pale.

Finally, again it annoys the heck out of me to see the Korean side selling this wrong. For some reason they, and that includes the pro-FTA government, keeps on wanting to talk about these things as a loss when in actuality Korea's gain from the pact. Why not frame the debate as "Korea will give up regulations that keep beef prices 10-40% above the market price."? (to explain the 10% see here)

Friday, August 18, 2006

You can fool some people all the time

In case anybody cares, Hwang Woo-suk has restarted is crusade in some lab in Guro-gu, Seoul.

"Hwang focuses on animal cloning and already achieved notable performances like obtaining a number of cloned pigs, which are genetically engineered to provide their organs to humans,’’ Lee said.

Hwang and his associates have worked on pigs embedded with human immunity genes with the aim of transplanting their organs to humans without causing negative immune responses.

If you trust a Hwang brand pig kidney enough to put it inside you, I got a crocheted gravy boat to sell.

A overview of Korean fakes

The Korean Times rises above its own journalism standards and publishes a great expose on the luxury goods fakes market in Korea, sellers and buyers. If anything though the article UNDERSTATES the problem here in opinion. Perhaps the key passage of worry for luxury goods makers, and their IP gaurdians:

Min-jung accompanied this reporter to buy a fake designer bag in Itaewon. After asking around for Louis Vuitton bags, one of the men asks her to follow him to a hidden, air-conditioned room in the back streets of Itaewon, which is a hideaway for the super fake designer bags...

He has two kinds of [Louis Vuitton] Speedy bags, one made in China and another made in Korea. The China copy, he said, is a good enough copy but there are flaws that can be easily spotted. On the other hand, the Korea-made copy is almost an exact copy of the original one, and naturally, is more expensive.

Placed side-by-side, you can notice the differences between the Chinese copy and the Korean copy. Park points out the leather used for the handles of the Chinese copy are "not good," and looks too shiny and new. Even the brown LV canvas material looks stiffer

Upon closer look at the Korean copy, small details such as the stitching show loose threads. Min-jung, who already owns an original Speedy, notes the only difference she can spot is the punch hole on the zipper pull, which is slightly bigger than the original one...To further convince his customers, Park points out the Korean copy has an authentic-looking numerical code stamped inside the bag

The Chinese copy costs 65,000 won, while the Korean copy costs 100,000 won. It may seem a lot of money to pay for a fake bag, but Min-jung said she got her original Speedy bag for almost $800 in the U.S.

One of the more annoying things is the focus on Chinese fakes, when its the Koreans who are really producing the high-quality stuff. A couple months ago I shared a lunch table with one of these luxury goods brand protection managers. My impression of him was that he was more concerned about Chinese exports to Korea than anything made in Korea. However he was rather interested in the online market, which is a step in the right direction. For all my belly-aching about the shops and stalls in shopping areas, I know a good part of this trade is infact online.

Think I am overstating my case? Consider my recent posts on "Grade A" fakes in Korea. Including Japanese tourists (also note the catalouge above was Japanese) and Singapore merchants fawning over the Korean fakes quality. The above is clearly not limited to "only to Koreans" or a problem found "only in Korea".

Meanwhile the Dong-A gives a (warmed over) report on the second hand luxury shops in Apgujeong. Interesting if you have not heard anything about the these stores (think high class pawn shops). What I want to know though is how sure can these shops be sure they are getting real goods, espeical considering the article above.

I bring this out for the following quote. This again drives home my worries about the fake market in Korea:

“80 percent of luxury goods that people have received as gifts are fake. When the women realize this too late they’re quite disappointed.”

80%? granted they are gifts, so some givers may be trying to pull a fast one. However if 80% reciving gifts that are such a high quality they feel emboldened to try to sell them, just think about how many never make it through the door because they spot the fake immediately.

Before I sign off here, I would like to juxtapose some paragraphs from the Dong-A article together for a laugh:

Used luxury goods shops also act as pawnshops. In most stores the goods are used as collateral in exchange for 30 percent of the buying price in cash. A source tells us that the goods are usually traded in to pay off credit card debts...One used luxury goods shop owner says, “If you look at some of the stuff the customers bring in, over 90 percent of them are nearly new,” describing Koreans as extremely gullible to marketing tricks..

On August 16 at a secondhand luxury goods store in Apgujeong-dong, Seoul, a woman in her early thirties entered the store, set down her black handbag, and asked, “How much can I get?”...She received a written commission note and looked around the store before plucking a 1.0 million won Chanel handbag off the shelf and paid for it on her credit card

Some people never learn their lessons.

Thursday, August 17, 2006

"Swiss" Watch Crackdown!

Well the whole Vincent & Co. incident has pissed of somebody. According to the Korea Times the whole sector is due for a Korean "crackdown":

The National Police Agency (NPA) held a meeting yesterday joined by 60 senior officials, including the directors of external affairs and white-collar crime unit, to discuss the direction of the investigation into fake designer watches.

“Knock-off products or fakedesigner watches are certainly an increasing concern in the local market, as more customers spend on luxury products. It will be treated as a serious problem by the country’s law enforcement,” said NPA Commissioner General Lee Taek-soon, in a news briefing.

Apparently Vincent & Co. are not alone:

Police are also investigating the manufacturers of another fakedesigner brand, named “Gio Monaco,” who also promoted their watches as Swiss-made and distributed them to department stores and luxury shops in southern Seoul.

The creators of Gio Monaco watches have been fraudulently claiming that the brand has existed for 180 years in the Swiss watch industry, despite starting their business in Seoul less than five years ago.

I hope to see the authorities not only crackdown on fraudulently marked watches, but also fake brands in particular. As I mentioned before currently prices for grade A fake Rolexes in Iteawon are between US$65-100 (depending on volume). And I am sure they are not isolated in Iteawon.

However excuse me if I do not hold my breath. In the past two years I have seen "crackdowns" on corruption (which I think died with the head of the Uri party offering pardons to businessmen in exchange for support and the President pardoning his cronies) and prostitution (which as anybody walking the streets of Seoul, no pun intended, did not get far).

Tipping your hand

I just want to note an inadvertently funny quotes from a Dong-Ah op-ed. The article is one of these "mediative" pieces. You who read Korean newspapers (no matter the language) know what I mean. Its one of the winding pieces using 1000 words crafted into three sentences with 15 clauses each to say something that a normal person would use a five word simple sentence for. Worse, the actual theme is normally something so trite that the conclusion is an anti-climatic non-sequitur.

Anyway par for this genre is a opening refrencee to some "literary work" (in this case a movie so you can see why its in quotes). Also par is the author showing off how much english they may know. Normaly this is done through multi-syllable words placed like a puppy poops in the center of the living room thinking its keystone to their entire life so far. This time though the poop is a tortured idiom:

Sachs is shocked to find out that Emily, a senior personal assistant, holds her water for hours just because she is afraid of missing a call from Miranda.

Can Emily hold my water some time? How much does she charge?

"Korea is boring" redux

A small footnote to attach to my comments on how and why "Korea is boring". An article in the Dong-A about falling airfares between China and Korea:

[China Eastern Airlines] also lowered the prices for return trips between Incheon and Yantai and between Incheon and the famous holiday destination of Hainan Island, from 450,000 to 240,000 won and from 550,000 to 260,000 won, respectively. The return fare for the Incheon-Ningbo route, which has been newly established to fly twice a week starting August 9, has been set at 240,000 won

These prices are not much higher than Korean Air and Asiana Airlines’ peak season prices for Seoul-Jeju return trip, which costs 185,800 won.

Again, one of my central points to Korea's worries about the balance of the tourism trade is simply tourism in Korea, even for Koreans, is expensive considering the options in the area.

Wednesday, August 16, 2006

US ROK FTA - Half Baked Analysis

I rarely pursue the Korean Herald anymore because of complicated login/subscription/payment model. Its just not worth it for what you get. Anyway in a column today a partner of Hwang Mok and Park, Kim Seok-hyun, writes in the legal column about some of the IPR issues surrounding the Pharma controversy(read it while you can freely). He does a good job talking about the situation "buy the book", however as anybody can attest here in Korea (from mighty multi-national CEO to lowly english teacher) "the book" is only half the story.

What Mr. Kim ignores is the "off book" problem here is the Korean Food and Drug Administration has a history of registering drugs that violate patent rights (due to Korea's patent system for drugs). I unfortunately could not find the news article of a year or so ago that directly illustrates this, however I found the complaint in general terms arise in a number of forums:

KFDA, while assuming responsibility for safety and efficacy review, apparently has abdicated any responsibility for ensuring that competitors do not market products covered by patents that could result from linkage to KIPO. Thus, instead of taking the opportunity to prevent infringement during the marketing approval process, the Government of Korea does not actively seek to rectify intellectual property violations that result from the failure of patent linkage which forces patent owners to resort to the court system after infringement has occurred. - PhRMA "Special 301" Submission 2004, Korea, Pharmaceutical Research and Manufacturers of America.

The Government of Korea has taken steps over the years to remedy data or patent protection problems that affect pharmaceuticals, but problems remain, including the lack of coordination between Korean health and safety and intellectual property officials. This lack of coordination results in the granting of marketing approval for products that may infringe existing patents.should be urgently considered. - Foreign Trade Barriers, Korea, US Trade Representatives Office, 2003

U.S. firms report that, although the release of business confidential information is forbidden by Korean law, government officials have not sufficiently protected submitted information and, in some cases, has been made available to Korean competitors or to their trade associations. - Korea Country Commercial Guide FY 2003 - Investment Climate Statement, US Commercial Service, US Dept. of State, 2003

international companies are concerned over the lack of data protection, which they consider an important barrier to trade and investment. For example, it appears that the Korean Food & Drug Administration (KFDA) may still approve products that infringe a patent, whereas in other countries the drug’s approval is delayed until there is confirmation that there is no infringement. - Medicines access and innovation in developing countries, Europe Economics, September 2001

The [European Union Chamber of Commerce's] Pharma/IPR Committee has reported instances where an originator's technical data submitted to the Korean Food and Drug Administration (KFDA) has been used by generic competitors to gain registration. Published data has used to gain product approval by KFDA contrary to Korea's commitments under the World Trade Organization's TRIPs (Trade-related Aspects of Intellectual Property Rights) protocol. Furthermore, the committee noted the absence of coordination between health and safety officials at KFDA and intellectual property officials at KIPO. The committee thus called for a system linking product registration review at KFDA with the patent protection enforcement powers of KIPO, since the absence of such a system has resulted in granting approval for products that infringe existing patents. - La Lettre du Korea, KOTRA June 2001

So Mr. Kim I ask you, why did you not want to discuss this "off book" problem? There is much more to this than simple extension of a patent period in Korea.

Fidel's Dying wish....

From the Chosun of all places:

Right before falling ill with intestinal bleeding, Castro and a group of aides made a surprise visit to the construction site on July 11. The elderly revolutionary was dressed in military uniform and limped a little...The Cuban leader was quoted as urging his people to learn from the diligence and aggressive working style of Koreans.

Its good to see Dan Rather finding work at the Chosun Ilbo after leaving CBS.

Tuesday, August 15, 2006

If you do not mind, I want a second opinion

Writing a piece in the Joongang Ilbo the always "blond", but
engaging, fashion editor Inez Cho gives some amusing information on
checking for real luxury goods after the "Vincnet and Co." scandal :

7. To check an international fashion designer's label, go to
www.style.com and verify the collection.

So I go to style, it's all in English. Fine for me, but I wanted to
probe more. So I notice that it's a site owned by Conde Nast
Publications. One of their publications is Vogue, which is licensed
by the Joognang Ilbo for a Korean version.

So I try to search "Vincent and Co." on the Korean Vogue site, cannot
find out how to do it. So I go to Google and use their more advanced tools, and find a reference on the Vogue site. Apparently its downfor the moment, but Google does provide a cached version. Guess what magazine that Ms. Cho implicitly gives as a source for truth wrote lavish things about the fake watches?

Immune to "the Hub" Kool-aid

We have all heard the pronouncement of the business community on why it would be difficult for Korea to be a hub, business regulation. Yet we hear very rarely hear individual examples of what these regulations can be like. If any of you are interested in reading some of these examples, the JoongAng daily has an interview with CEO of Incheon Airport, who used be head of Unilever Korea. His best shot:

There is no creativity in this [airport management] organization. Since officials at state-run companies are, by nature, similar to public servants at government agencies, their way of thinking is only confined to regulations and rules.

Funniest dumb rule story

There is a small subway line under construction called IAT [Intra Airport Transit] that will connect the Incheon airport terminal and the new departure terminal. I thought the name of IAT may not mean anything to most Koreans who use it and they won't know what IAT really means, so I suggested renaming it. I was recently given a three-page report on the name change, which was full of what regulations and rules are involved in the renaming process, how to form advisory committees for that and how long the project will take. But it basically can be summed up as "we don't want to do this."

The thing about all this is the Incheon airport is treated as the lynchpin for most of "the Hub" plans (the hub of "the Hub" if you will), yet this is what the CEO is saying about government regulation, not for a foreign company but for a another Korean government-owned firm. Mr. Lee (the CEO) sounds like a good guy, I hope he gets out of this mess unscathed and more importantly NEVER DRINKS "THE HUB" KOOL-AID!

US ROK FTA - Gimme my Omaha beef

Korea announces a decision to be made early next month on the status to import US beef. The Korean team returns from their fact finding mission September 3. This nicely fits into the schedule start of the FTA third round of talks of September 6. I wonder if the decision will be a "barganing chip" at the talks, or if the US side will give the Korean's a frosty response if they delay the expected positive decision.

Dram Man