Monday, July 31, 2006

Counterfeit Mirror Images

The Korea Herald has another one of those amusing stories about how Korean companies are shocked and angry about counterfeiting in China. I wonder how the old Korean saw about how "copying is necessary since Korea is a developing country with no native technology or means to develop such" works when its regurgitated to them.

The funniest thing about the story is you can substitute "Korea" and such in the article and much of it would be just as correct. I even wonder about the only place I have reservations on, the part about local authorities in collusion with manufacturers. While I do not think the manufacturers are in collusion, I do wonder about about the shops and government.

For example, the market areas of Dongdaemun and Namdaemun are rife with counterfeits. The city of Seoul and their respective local offices have placed much investment into these market areas. Now if the government were to say round up everyone selling counterfeits it would get everyone bothered. The city would complain since all that market infrastructure is now empty.

More importantly here in Korea such a clamp down would likely cause protests and demonstrations by the merchants. This may sound counter intuitive, but consider the riots over the restoration of Chonggaechon stream in Seoul the past few years. Under the Expressway once standing over the paved over stream was a thriving market area in the shade. The problem was the shops and stands were illegal, none of the building was approved by the city. When the city decide to clear out the illegal squatters, riots happened. Therefore I wonder if one of the reasons for Korea's complex and lax IP enforcment regime is partly to keep public order.

(Incedently, who the hell is editing the Korea Herald today? Granted I am not Shakespeare, but the errors in the above mentioned article...)

Friday, July 28, 2006

Good reason to quit the diet

OK so I am supposed to be on a diet. First that is hard in Korea, unless you eat Korean exclusively. Second it is doubly hard when you are on the go so much like I am. So having a few minutes before my train tonight at Seoul station, I head to the Bennigans attached to the station for something diet friendly.

Halfway through the salad I was eating, two flies popped out of the the pile of greens in front of me. I fought the urge to wretch, and called over the waitress. I complained, she took away the food. I was too horrified/sick to eat more of anything, so I patiently waited to for the bill to pay for my diet coke and get going. I get the bill, and see that once again I was given a taste of good old fashioned Korean customer service, I was charged for diet coke, chicken salad, and amazingly they did not charge me extra for the side of flies.

Scratching Bennigans off my list now.

US ROK FTA - Why the Pharma dispute is a public health issue not just trade

For those who think the US is automatical wrong in sticking to its guns on Korea's planned changes to its drug purchasing system should consider this:

Police on Thursday arrested five people on charges of producing cosmetics containing heavy metals, such as mercury, and selling them to hospitals and skin clinics across the country. 

Another 53 people, including hospital directors, were booked without detention for selling the fake cosmetics to customers. They sold the cosmetics, saying the products were efficacious against atopic dermatitis and pimples, a police officer said...

 ... According to the Food and Drug Administration's examination, Vasheti cream contained about 71-98 times as much mercury as the authority's limit for heavy metal in cosmetics. White cream had 33-2,150 times the mercury limitation.

Just think those types of things could be included as part of the positive list scheme since they are cheaper than normal imports. Think I am over stating my case? Consider the following citation from an Op-ed in the Korea Times:

In reality, South Korea has no fair and transparent process for evaluating efficacies and bioequivalence of medicines, thus making it difficult for the national health insurance to cover only cost-effective drugs. 

In April, the Korea Food and Drug Administration (KFDA) announced that four bioresearch centers falsified test results for 10 genetic drugs, each produced by 10 local pharmaceutical firms. 

The KFDA said the 10 firms had obtained approval for their genetic medicines after presenting test results which were manipulated in collaboration with the research center

You read that right 10 "generic" manufacturers sold drugs with falsified effectivity reports. And these are only the 10 caught, imagine how many more.

I mention this so you can remind yourself any some idiot wants to lecture how the US government is lobbying for the "greed" of big pharma. There are other issues involoved here one should know about.

Wake up and smell the coffee

Prime Minister Han Myeong-sook said on Thursday that South Korea "can speak with a different voice'' than the United States, saying Seoul's independent comments will not break its alliance with Washington.

Lets see here, a decline in troops overall, troops moving back, threats of an Air Force pull out, a rushing of Korea lead command structure, and no calls to Roh after a North Korean missile test. Man, she should really consider what has happened so far while South Korea has "spoken in a different voice". Then again what do you expect from a govrement who's trade minsiter thinks the Maginot line worked.

When is a cliche not a cliche?

I got a bit of a giggle out of this in the Joongang:

There is something horribly cliche-ridden about branding random Asian cities with the names of famous European capitals.  Why should the Han River be "Asia's Seine" or Huistenbosch "Kyushu's Netherlands"?  

Yet when it comes to Tongyeong, a snug port city on the southern coast of South Gyeongsang province, some of the comparisons made with the city are understandable, if in odd ways.  

There is Tongyeong the "Naples of Asia," an image which parallels raw images of the Italian port, surrounded by dingy fishermen's restaurants and old, run-down motels.  Then there is Tongyeong the "Salzburg of Asia," a catchy slogan, which the city government swiftly picked up after a German reporter used it to describe the site of a music festival that was held in the city in 2000 as a homage to exiled composer Yun I-sang.  

Whether it's a coincidence or not, both Mozart and Yun happen to share the composition of serene and melancholy music and a sense of pathos in their lives. 

So there is something horribly cliched, except of course when a reporter and a city are too lazy to market a city otherwise?

Is the North branching out?

An odd little case:

Police recovered a briefcase containing a hoard of probably forged United States Treasury bonds worth $500 million.

You know if you can forge currency quite well, I would think that bonds and other securities would be a cinch as well. Of course I wonder how diligent the South will be in tracking the origin of the forgeries.

Wednesday, July 26, 2006


oversized counterfeit.
Originally uploaded by superlocal.
Apparently a store in Hongdae, got to go visit it some time.

Tuesday, July 25, 2006

US ROK FTA - American Hardass

I have gotten a flood of visitors from my recent post on the FTA (thanks Korea Liberator). In that deluge, somebody left a comment I thought in all fairness should be put as a post:

Do you suppose that if the FTA agreement with the US dies ... that maybe the US should impose duties on Korean goods? Right now, it seems to me, that things are very one-sided (guess whose). I realize that Korea seems to never want to play fair. It seems to be all about buy my stuff, but ... I'm not buying yours.  - Brett

First thing to say is no, personaly I think any tariffs as a reaction to the breakdown in talks. In fact it would be pointless and counterproductive in my opinion.

However the reason I want to bring this out is that being a hardass in this negoitations is a two way street. Long ago I was going to a detailed post on each parties goals and postions. However the US side just got longer, and longer, and longer as I started to enumerate the US problems with Korea's trading system. Even being very general on the issues I ended up with twenty pages of a dense Word document, and that was only on the easy issues! In the end, I punted and posted this. The party who got shafted in that decision was the ROK, since Korea has trade issues with the US that many are unaware of or ignore.

One can too easly romanticaly (or nefariously) look at the US side as some sort of trade knight, galloping in on a horse, leaping over a tarriff barrier, avoiding the quota, and slaying the non-tarriff barrier dragon since most changes are made by the the other party given the US rather open trade policy since WWII. However, the US side has their own 3000 lbs. dragon to bring out for the invading nights.

Among the major issues for the ROK is the US system of anti-dumping and mesures. "Dumping" is a trade practice of importing goods below cost, in the hopes of driving out local competition. It is the international equal of "preditory pricing" which some might recognise more. As an aside, both concepts are somwhat theoretical, practicaly speaking its hard to prove and debatable if the practice works or is knowing employed. For more information on this look up the Matsushita v. Zenith case.

Getting rid of anti-dumping mesures are important to the ROK side since it would allow more efficent business planning. Around the world Korean compaines have entered into many markets, for many goods, and were successful, only to be unexpectedly slapped with an emergency anti-dumping tarriff by a govrenment. In the end it creates a headache for both the company and the ROK government.

The Korean govrenment may also be pushing for other matters that make sense in an FTA, but are rather prickly domesticaly for the US. There is talk of liberalizing banking laws in the US to allow more Korean banks into more areas, such as retail banking. Unfortunatly there are state banking laws that may come into play, and it is hard for the US side to change things that are normaly a state concern.

Another possible Korean position the US would have problems with either some agreement, or perhaps understanding not in the FTA, regarding the use of state-owned/controled banks for loans and other subsidies. The idea here to is to head-off some sort case as the Hynix subsidy trade dispute (note, this is mainly my conjecture). 

Finaly there are a whole host of issues which the US may still want to maintain for political reasons. Things such as the US current auto import restrictions ( a mix of tarrifs and quotas). Also steel matters can be tricky, and Korea might be trying to break those trade restrictions down. Steel is a problem for the US, it is notable that most, if not all, the countries the US has an agreement or talks with are not big steel exporter such as Korea.

A lot of this is merely conjecture, the US side has done much to sheild its poker hand and Korea does not crow about the victories gained, only things lost. However as you can see there are things Korea may be asking for in the spirt of free trade that the US does not want to compromise on.

Monday, July 24, 2006

US ROK FTA - Talking out of both sides of your mouth

got a chuckle out of this Korea Times article on the FTA talks:

Korea added that the market here does not discriminate against foreign or domestic carmakers, citing an example of European and Japanese cars selling well in Korea even under the current taxation system...The two sides also exchanged views on country-of-origin regulations on automobiles, as Korea doesn't want to accept Japanese and other foreign makers' cars manufactured in the U.S. to be considered as American cars.

Odd, if Japanese vehicles do so well here and such a state is acceptable, why are the Koreans so keen on excluding US made Toyota's and Hondas with a good deal of US made parts?

US ROK FTA- Dead as a Doornail

Over the weekend I surveyed the various news coming out of the US ROK Free Trade Talks. I must say that I am far from encouraged, and quite frankly I think the US side has pretty much given up in frustration. Here are the tea leaves I am reading:

1. The second round talks ended abruptly when the US side pulled out, mainly it seems over Korea's stance to keep its plans to change drug policy in place. I do not want to get debate right or wrong here, but clearly leaving scheduled talks is pretty much a bold statement. As an aside, it seems both the US and ROK have learned much from talking with the North Koreans these many years.

2. While this is something I cannot prove easily, or link to, I feel the message traffic from the US side has fallen off. At the beginning and at the end of the first round, there was a deluge of US activity in the US and Korea in support of an FTA. Articles and op-eds appeared frequently based on what the US said, or even written by US officials. Now however, things have ground to a halt, except for a few half-hearted comments it seems.

3. The US has started FTA negotiations with Malaysia. This will defiantly distract US attention and resources, which means any moves now will happen more slowly on the US side, and as you recall time is a critical factor to these talks.

4. The Korean side wants to treat Singapore as a baseline for the talks. This is rather unfortunate since the Singapore agreement includes many things the US side would likely never except, including things like the screen quota and sever agricultural restrictions. See my comments here. Calling that ROK-Singapore agreement an FTA is like calling a ground hamburger patty a "chopped steak" IMHO.

5. You can forget the pharmaceutical side show. The more disturbing news is Korea's reluctance on things like automobilesagriculture, and Gaesong. If the final agreement includes Korea's status quo on these issues, hell even I will join the protesters in Korea. For the US side you can do some easy vote counts on these issues. The autos, you can take the rust-belt states (WI-IL-IN-OH-MI-PA) to get 16 nay votes. The major farming states (CA-TX-FL-ND-SD-NE-KS-MN-MO) for 34 votes total. You add to that the possible opposition to Gaesong from the right and the left, and you easily tip over the 50 needed. Then as the safety measure you can throw in the pharma's and other services excluded. Also remember the president nor even the US Trade Representative will likely never agree to an FTA document that would not have a fighting chance in the Senate (the political stakes are too high).

6. Given the recent protests and timbre of the debate in Korea, the US side should begin to wonder if an FTA is a good strategic move anyway. One should consider if an FTA will simply be used in Korea as a bloody shirt to be waved anytime somebody want to show how evil the US is (Similar to the way the USFK is used and the IMF). Why willing give your enemies that much more ammo. 

There you go, my six reasons you can stick a fork in this baby. Oh sure, things are to be packaged in to neat little diplomatic words about planning and pending talks, but most can read through that. 

Sunday, July 23, 2006

Korean Food - Seconds

The english edition of the Joongang Ilbo put together a review of various forms of packaged ramen in Korea. While I have no definite preferences, it is nice to see in the past 6 years since I have been here the ramen market has evolved out of offering one flavor...HOT.

Meanwhile I want the feedback by some of the regular readers. I am thinking of adding a food review section of some sort. Basically I want to travel around Korea finding the best of one non-Korean food item. I would appreciate an idea on what dish/item and also some recommendations of your best places for it (anywhere in Korea). Leave a comment or email me at AT

Saturday, July 22, 2006

US ROK FTA - Singapore Suprise

I was interested in doing some research when I found this quote in the Joongang recently:

The government said it made a proposal to the United States yesterday to exclude approximately 100 service businesses, such as broadcasting, electricity, accounting and medical services, from a market opening..."We now have a greater number of areas to be excluded than we did for the free trade agreement with Singapore," said Kim Jong-hoon, Korea's chief negotiator on the free trade talks, yesterday.

Well lets take a look at the Singapore Korea FTA. You can find a copy of it on Singapore Ministry of Trade and Industry Website. Some choice quotes what cannot be done in Korea:

Those who are not Korean nationals shall not be the representative or chief programmer of an electric billboard operator. 

A representative of a foreign legal entity or organization shall not be the representative or chief programmer of an electric billboard operator. 


Those who are not Korean nationals shall not be the representative or member of Board of Directors of Korea Broadcasting Advertising Corporation. 

-Annex 9A

Only Korean citizens may invest in the rice or barley industry in the Republic of Korea 


Foreign nationals or foreign legal entities are permitted to hold less than 50 per cent of the shares or stocks of legal entities engaged in farming beef cattle.  


Foreign nationals or foreign legal entities are permitted to hold less than 50 per cent of the shares or stocks of legal entities engaged in the wholesale of meat 

-Annex 9A

Operators of Movie theaters shall screen Korean movies for not less than 146 days a year in all. 

-Annex 9A

Limitation on stocks held by foreign government or foreigner 
(a) A foreign government or a foreigner shall not hold combined stocks of a facilities-based telecom carrier in excess of 49% of the total issued stocks. 
(b) A legal entity in which a foreign government or a foreigner(including a specially related person under Article 36.3 of the Securities Exchange Act) is the largest shareholder and holds over 15% of its total issued stocks shall be regarded as a foreigners. 
(c) Notwithstanding the preceding paragraph, a legal entity that holds less than 1% of the total issued stocks of a facilities-based telecom carrier shall not be regarded as a 
(d) A foreign government or a foreigner shall not become the largest shareholder of Korea Telecom, However, this provision shall not apply to the case a foreign government 
or a foreigner holds less than 5% of the total issued stocks of Korea Telecom. 


Under the Radio Waves Act, a person who does not hold the nationality of the Republic of Korea, a foreign government or its representative, and a foreign legal entity or a foreign organization shall not be permitted to establish a radio station. 

-Annex 9A

When a general contractor receives an order of construction work exceeding two(2) billion KRW, it shall subcontract (use local companies-DM)  a portion of its work to specialized contractors according to the following guideline : 


- Contract between 2 billion ~ 3 billion KRW : at least 20% of the value of the contract 
- Contract over 3 billion KRW : at least 30% of the value of the contract 

-Annex 9A

Any person who falls under either of the following  41 subparagraphs shall not serve on the board of Yonhap News or the News Agency Promotion Committee: 
a. a person who is not of Korean nationality 
b. a person who has no domicile in the Republic of Korea 


A foreign news agency shall supply news communications through a contract with a domestic agency. Any natural or juridical person or entity that falls under any of the following subparagraphs shall not establish a wireless station 
(a) a person who is not of Korean nationality 
(b) a foreign government or its representative 
(c) a foreign legal entity or foreign legal organization 

-Annex 9A

In order to balance supply and demand of grains and to manage quality of liquors., the types and amount of raw materials for liquors may be designated. (Korean Government may require you to make according to their recipe, not yours -DM)


Sales of liquors on-line is prohibited except for on-line sale of traditional liquors by those manufacturers. (I would love to know how the determine what a 'traditional liquor' is -DM)

-Annex 9A


Any person who falls under the categories stipulated in subparagraphs of Article 6 of the Aviation Act(and listed below) may not provide domestic services, nor international services(scheduled/non-scheduled). 


1. A person who is not a citizen of the Republic of Korea; 
2. A foreign government or foreign public organization; 
3. A foreign corporation or organization; 
4. A corporation in which any of those referred to in sub-paragraph 1 through 3 above either owns 50% or more of the stocks or shares, or yields de-facto control; and 
5. A corporation whose representative is a foreigner, or half or more of whose officers(executives) are foreigners. 

-Annex 9A

Only a Korean national is eligible to be a maritime pilot.  
Only Korean nationals or Korean corporations may be involved in the rescue of wrecked ships or in the ship scraping.     


Only Korean nationals or legal entities are allowed to conduct vessel inspections as delegated by the Korean government.  

-Annex 9A

Now those are just some oddities regarding existing business. Things get beyond able to just quote in the other Annexes of section 9. Among areas that Singpore is forbiden to operate in are normally heavily controlled industries, such as gambling and arms/defense related industries. Arguably unreasonable forbidden services include things like energy distribution, credit reporting, agriculture, and broadcasting. There are also some "phantom" barring, they are listed innocuous diplomatic language that foreigners will follow local laws,  in areas like architecture, legal services, and accounting where it is fine to enter if they are "properly licensed", but arguably those licensing programs by their nature are de facto or de jure decidedly stacked against the foreign firm.

By my count there are a little under 100 markets forbiden, so the headline in the newspaper makes sense. The problem is if Korea's position is Singapore PLUS other areas, the US may eventually just give it up. I am really getting a bad feeling about the success of these talks, and if successful the document should even be ratified.

US ROK FTA - Fancy Fruits

One thing of endless debate among foreigners is "Is Korea an expensive place to live?". Every year different research firms announce global cost of living indexes. Seoul usually ranks quite high. Detractors like to point out how such are biased toward the cost of living for multi-national expats. In a way both sides are right. However one thing that has always bothered me is how people like to go around and say "Food is so cheap here". Being a "food guy", chef, and and once an owner for a restaurant I strongly disagree. One of the things that has always bothered me is the high price for fruit and other agricultural goods. Glad to know that thanks to the FTA talks I found one reason for it:

In free trade negotiations with Korea, the United States has demanded that the Korean government abolish a mark-up system on agricultural products that are imported through state-run agencies...Under the mark-up system, the Korean government pockets any difference between the initial price of certain imported agricultural produce and the price the produce fetches at public auctions held by state-run agencies.

Incidentally, I am not too sure based on the explanation here in the Joongang if this is a valid complaint made by the US side. It seems that all the government is doing is pocking the difference between what US producers wish to sell produce at versus what Koreans are willing to pay for this. In other words the brunt of this tax is being paid by Korean consumers than US producers.

On the other hand if this is used in combination with a quota, such as Korea has for rice and citrus, Korea is artificially raising the price even more by keeping this fruit out. Logically speaking, if one were to buy as much US products as they wanted the auction price would be closer to the market clearing price anyway (i.e. the non-inflated price). 

This brings me to perhaps a disturbing thought. If the US is attacking the auction system, it could very well mean that they have already conceded Korea's quota system on these goods. Say it ain't true Uncle Sam!

The Argument against You Tube

Ladies and Gentlemen, I give you incontrovertible evidence why the
plug should be pulled on You Tube.

Friday, July 21, 2006

Rather Odd

The Yonhap has an interesting little story in the Korea Times. Apparently some Korean companies with "patents" are filing with the Korean Trade Commission in order to bar imports of products that violate those patent rights. What is odd is that the normal way to do such is to file with the Korean District Court for an injunction to bar importation. This works well, so I wonder why these companies are filing with the KTC.

So I looked into one of the compaines mentioned, Crezenn. Apparently the company does not have a patent as the Yonhap article says they only have pending patent applications as far as I can tell (They may have something in Korea, I cannot search the Korean database with my Mac. However I doubt it due to the timing). Not only that, the application is so new it has yet to be laid open for public review. So in other words, Crezenn is trying to enforce rights they do not actualy have yet and are nowhere close to getting. If the KTC follow though, this could get ugly in Korea awfully quick.

Man U kicks it uphill

Manchester United in a legal blitz in Korea seized almost US$10 million in fakes from Korean street merchants. Lets hope it changes things for them. 

Screen Quota

As I said in a post a day or so ago, one reason I started to blog was to keep the clippings of various interesting things out there I could never find once I actualy needed them. One thing I am seriously considering doing is keeping a running tally on news on why there is no need for a screen quota. I have blogged in the past about the pointless of the screen quota in Korea, but could not link to much. Perhaps now I keep a record on the issue. Anyway from the Korea Herald today:

Director Kang Woo-suk hit the mark again with his latest blockbuster "Hanbando (Korean Peninsula)" which, with a popular nationalistic theme, edged Hollywood films "Superman Returns" and "Pirates of the Caribbean" in box offices nationwide. In a week, two million people watched the movie...

Thursday, July 20, 2006

More proof against the conspiracy

I have always had a good laugh of all the "conspiracies" in the world. In fact I was a little confused when my girlfriend at the time stated with a straight face that JFK was a serious movie. Why? It is my firm belief that my govrenment is much to imcompteant to pull off anyting like that (and bless be to God for that!). The latest proof comes from the Patent Prospector Blog:

Today's intra-patent office news: "Because of technical difficulties with our software program, today's web chat on telecommuting programs with Under Secretary Dudas was suspended." Over 300 people had logged in for today's chat.

As reported by an anonymous patent office worker: "Dudas planned an online discussion to talk about the new telecommuting/hoteling program at the PTO. However, one has to wonder when a program designed to allow examiners to work online hundreds of miles away from the office is being sponsored by an agency that cannot manage an online discussion between five different office buildings on the same block."

Believe it or not

A couple weeks ago there was a flurry of renewed talk about Disney comming to Korea since, well, it is already the Hub of Northeast Fantasyland. I do not know how the Disney talks went, but Korea did perhaps loose out to another westren icon moving in. Ripley's Believe It or Not is going to China.

OK that paragraph was tounge in cheek. What I want to bring out is something that always facinates me, how consumers can be diffrent from market to market:

Unlike other markets such as the United States, where people prefer more mundane fare such as strange arts and crafts, Ripley's Chinese brethren go for the truly bizarre, Masterson said.

He cited the firm's previous experience with a Hong Kong museum.

"The strange and bizarre were more popular there than anything: multi-headed animals, shrunken heads from the Amazon," he said. "Anything on the extreme side of nature -- they enjoy that immensely."

My favorite Principal

Man I wish I went to this school in North Carolina:

Some folks had their spots staked out at the Mill Creek Marketplace before the three semi-trucks carrying the Budweiser Clydesdales and their trademark wagon turned off School Road just before noon on Friday.

Must have been a good school lunch.

I pity the

How sad is this, Mr. T has given up his gold:

"I won't wear it no more. It's put up," he said. "I stopped wearing the gold as of last year during Katrina. See, as a spiritual man, I felt it would be a sin against my God for me to wear all that gold again because I spent a lot of time with the less fortunate.

Wednesday, July 19, 2006

US ROK FTA - Baggage

One reason I started a blog is to keep track of snippets of things I read in the news that really illustrate the problems here. Today's Joongang has a doozy of one. Have you ever wondered how restrictive the rice market is in Korea? You ever wonder how Korea tries it best to keep foreign rice out and redoubles its efforts to make nobody buy it? Consider:

 Korea may consider easing packaging rules for imported U.S. rice...Korea imports only 22- and 44- pound packages of U.S. rice, which have been accused of being too big. Insiders familiar with rice issues said Washington wants smaller-sized packages sold here. Changing the external design of sacks, which may include instruction on how best to cook rice, has also been raised.

Consider the implications of this story. Korea not only severely limits the amount of rice in by quota but also restricts the bags to the finest detail. They specify the sizes the rice must be packed in (no such restrictions on Korean producers). They specify the printing and design as well (agian no such restrictions on domestics). They even regulate what exactly is printed, even something as innocuous as cooking instructions (add water, rice, and boil). 

Many have asked me in the FTA talks what kind of restrictions Korea has and what is a non-tariff barrier. Well here you go.

Finally, remember this every time Korea says it cannot understand why foreigners say Korean cannot be hub because of cumbersome governmental rules.

US ROK FTA - Hijacking a blog

Jodi over at Asia Pages has an interesting front line report of sorts on the Korean perspective of the FTA. A banner displayed with some groups reasons why the FTA is a bad thing. There points, and my comments:

1. An FTA with the U.S. would result in foreign schools coming into the country. Such foreign schools would only be beneficial to upper-class Koreans.

Partially true. It could (depending on the final language) open it up to allow more foreign schools to come in. However it woudl not be  beneficial to only "upper-class Koreans". Again think of supply and demand. More schools mean more competition for students, which leads to lower prices and/or better service. Both of which would mean more than "upper-class Koreans" could put their kids in foreign schools.

For example consider the debate of the Yongsan school. The only reason there is controversy is foreign schools are limited here. If it was easier for the British School, or anybody, to open up a school not only would there be more seats, but also more selection for parents.

2. An FTA with America would result in the allowance of U.S. hospitals to enter Korea and as a result, all hospital fees will be greatly increased.

Again, a half truth. It may allow more hospitals in, but by the same reasoning above would likely lead to greater competition, more selection, better service, and better prices. I fail to see allowing new hospitals would raise prices.

3. An FTA with the U.S. would signicantly harm the Korean film industry as the screean quota would be altered to allow more U.S. movies to be shown in local theaters.

I actually doubt there will be a further decrease in the quota, the "damage" so to speak is already done and the US Is likely to yeild no more concessions here. That said, a change in quota does not FORCE anybody to show more US films. If a Korean theater only wanted to show Korean films, they could. It all depends on the market.

4. An FTA with the U.S. would result in severe suffering of rural citizens, especially farmers.

Define "rural citizens" and "severe". No doubt some in the farm sector will suffer. However those are declining in number. Why is there an influx of foreigen brides anyway? Simple, no people in the country. You have lower birthrates, and negative migration. Also it depends what the farmers are growing, rice maybe a hit, organic korean squash probably not.

5. An FTA with the U.S. would result in more Lone Star cases.

I would love to see the argument here. It sounds almost like this is a bald faced lie. If anything Lone Star happened due to the non-transparent and byzantine regulatory systems here regarding foreign investment (along with a healthy dollop of old-fashioned Korean corruption). An FTA my clear up some of the problems and make such cases less likely.

6. An FTA with the U.S. would result in a more open market, thus allowing American companies to make more money and bigger profits in Korea. what. One could make the opposite claim, "an FTA will open markets allowing Korean comaines to make more money and bigger profits in the US". Would the protesters say that is a fundementaly bad thing as well?

Also as well nothing is guaranteed. Look at the current pull-outs by Carrefour and Wal-Mart. Both "evil" forgein compaines thought they could make greater profits in Korea. They got slapped in the face and were bought out by locals (granted one could argue the lack of an FTA played a role in this). Anyway the upside here is the entry of both made Korea's entire retail and distribution markets more completive which benefited Korea as whole. 


Looking at most of these, especially the first few, makes me wonder what grasp of basic economics these anti-FTA groups have. Then again many of them are leftists, so one could cheekily argue they have no economic sense at all.

Tuesday, July 18, 2006

Just For The Record

Domo Plane
Originally uploaded by Drambuie_man.
Dram_man loves American Airlines.

Monday, July 17, 2006


For all of you who use the free Statcounter service to track your hits, am I the only one who feels creepy every time they encourage me to "increase the size of your log!"

Diet Tips

My sister sent me a version of some fad diet in the email. I love this line:

If you can’t go without alcohol during this diet (PROHIBITED DURING THE DIET) please make sure you have stopped dieting atleast 24 hours before your alcohol intake. Otherwise you have a big chance you will get intoxicated very fast ! 

Apparently the writer does not grasp the reason for drinking in the first place. Besides a little vodka makes all that tomato juice in the diet go down so much easier.

Heard on the BBC

Heard this Lebanese listener comment when she was talking to an
Israeli listener concerning the Israel/Lebanon news:

"When you talk about Iran and Syria, you should hold Iran and Syria
accounable...why didnt you solve the problem with them....I do not
mean hit Syria and Iran...I am against all military action...but why
not pressure them?"

Can you imagine how much Israeli diplomatic pressure means to Syria
and Iran? Can you think of better one-liner joke?

US anti-FTA side

I got the biggest laugh when my mail alert pushed an article by a commentator of the Puffington Host. Its always funny when commentators in the US enthusasitcaly comment on Korean issues when they could not even find the place on a map. Even more so when you cross over into an area where there are strong feelings already, such a free trade. A few quotes and my comments:

In the Korea negotiations one of the big demands by the US is to cut back the Korean "screen quotas,"... If the USTR "wins" this negotiation, it will reduce global cultural diversity.

Apparently Mr. Love of the Host did not get the memo. Korea scaled back its screen quota almost a year ago. And curiously, Korean movies still out sell American productions. If any culture is at risk in Korea, its Hollywood's.

The issue I follow the closest in the Korea FTA negotiations are the US proposals to create rules, committees and procedures to give the US Department of Commerce and the USTR the ability to exercise influence and control over the way Koreans reimburse pharmaceuticals and other medicines...The USTR strongly objected to Korea's efforts to tie its reimbursement policies (co-payments, etc), to the prices of medicines, practices which are essential for any country to control drug prices.

Again, not too educated on the facts. The problem is not the amounts to be reimbursed per se, rather that the new insurance laws refuse to reimburse ANYTHING for certian US Drugs which have not only been proven to be effective, but also had to go through a seperate approval test in Korea to make sure they work just as well on Koreans as they Coloradans. Meanwhile the same insurance plan will reimburse all sorts of untested "traditional" cures of questionable effects.

Lobbyists for big pharmaceutical companies, like Pfizer, Merck, or Swiss owned Norvartis, largely developed the USTR positions. These proposals are highly controversial, and were the biggest dispute in last week's negotiating meltdown in Seoul.

Really? Funny thing I walked through that protest you refer to as a "meltdown". I did not read ONE sign or banner refering to drug prices. Am I missing something here? I had no idea tens of thousands farmers and labor unionists were so concerned about drug prices. 

In the Malaysian negotiations this week, and later the next round of Thai negotiations, one of the big issues will be the efforts by USTR to impose very tough intellectual property (IP) rules, particularly as they relate to medicines. 

You cant really blame the US there Mr. Love, IPR violations are rife in those economies. As for the protections of drugs, there is something to be said for the fact that protecting IPR for drug companies help protect public health against fake drugs that are useless at best and life threatening at worst. I know that last statement is somewhat a strong man, but its clear to me that Mr. Love has no idea of how bad the IPR situation is in these countries.

Saturday, July 15, 2006

Fun with Statistics - The 3% solution

I just got done reading Occidentalism latest post in which a Korea Telecom ad claims that 3% of the world calls the Sea of Japan the East Sea, and thats a "start". Something about that sounded a bit odd to me. So lets go to the numbers.

The Wikipedia helpfuly lists that there are 80 million Koreans in the world. Wiki also helpfully puts world population at 6.5 billion. This means that Koreans make up bit more than 1% of the population. So really, KT "start" is really a third less impressive than it seems.

Meanwhile the aforementioned Wiki article says that the world is growing at a rate of 1.4% per year. Meanwhile the CIA world fact book places South Korean population growth rate at .42%. Meaning just to stay AT 3% of the worlds population saying its the East Sea, Korea will have to convince 3 more people in the world for every Korean born. 

3% may be a start, but thery're losing traction fast!!!

Fun with Statistics - Doing it the hardway


This somewhat got away from me, so I thought it best to turn this on its head. The following is a bit of an estimation to find out the viability of the Kangwon Casino, the only Casino in Korea open to residents. Kangwon's numbers make sense, or a least what was published in a recent article. I am surprised, given the nature of casino operations's history of creative accounting, to find things line up (at least on the surface). I was also pleasantly surprised to find that the average player of Kangwon could easily be spending average amounts on their vacation, that is to say the average gambler there is not necessarily a problem gambler. 

Read on if you want


Its been a while since I have done a "Fun with statistics" post as I like to call them. This article on the casino in Kangwon-do, the only Korean casino open to Koreans, seems ripe.

According to this article, the casino will miss its 820 billion won revenue target this year, missing its forecast by 10% (conservatively). The article also mentions that the casino hosted 1.9 million last year, with an estimated drop this year of about 10%.

Now lets crunch the numbers. The easy one is this years revenue is about 740 billion, and visitors of 1.7 million.

Now let us say that each guest gets a hotel room, and some meals for about 75,000 won on average (two people 100,000 won hotel bill split, 25,000 each food and beverage). This leaves us with a casino "take" of 613 billion won (740 billion minus 1.7 million times 75,000).

Now I do not know what the most popular bets are at the casino, but lets do some guessing. I have not been there but in the Korean foreign casinos the two most popular games I see are Blackjack, Roulette, and Baccarat (I am leaving out Sic Bo and Fan Tan since my knowledge of these are weak). The average house advantage of these for the basic bets are respectively .5% (basic strategy blackjack), 5.3% (double zero roulette), and 1.2% (player bet). This averages to a house advantage of 2.23%.

So then with a 613 billion won take and a 2.33% advantage means 26.3 trillion won in action was taken by the casino. Or per person, 15.5 million won per person. Now that is action. Let us use more guesses to say that each player plays for two days, four hours at a time, with a 10 minute break per hour. Let us also say ballpark that each bet takes 1.5 minutes to take and conclude (hand of blackjack, spin roulette, etc.). This equals 267 bets each visitor. Meaning the average bet is a bit less then 60,000 won each.

This seems a little high. Lets look at the assumptions that may bring it down. The obvious is the first assumption on the proportion of Kangwon Casino's revenue from gambling was off, they get more in hotel and F&B revenue. It could also be the visitors make risker bets (non-basic strategy blackjack, the "tie" in baccarat, etc.), or for that matter games other than they three used are played more.  Finally it could be they just play longer.

So then lets work on each one, using algebra and the hard numbers we do have.

Assume the average bet was 10,000, finding the other and leaving others the same:

1. Time played - means 1602 bets were taken. Given the same time per bet (not unreasonable IMHO), the average guest would need to spend 48 hours in the casino. So I think we can scratch this one off the list.

2. House advantage - The amount of action would be about 4.5 trillion, meaning an average house advantage of 13.6% which would be equal to some of the worst bets the casino. I doubt that the patrons are constantly betting such poor bets.

3. Other revenue - Such would equal about 100 billion in take, and an average F&B per person of 375,000 per visit. Too many bottles of soju for me to believe this bill.

While all the calculations proved to give fantastic results, it does give you some sense of scale. Just doubling the basic 20,000 won bet yields more understandable figure of about a 6.75% house advantage.

Likewise, if we increase the bet to 30,000 with same house advantage, we get a hotel and F&B per person of 250,000 won.

So lets work backwards, lets double the Hotel Bill and work it out. A 150,000 won per head bill works down to a 46,000 won average bet with first house advantage of 2.33%. Now to get this down to a more understandable bet level, lets halve this and work out the house advantage.

Doing so leaves the following won averages at Kangwon Casino:

1. Room F&B 150,000
2. Casino take (revenue) 485 billion
3. Average Bet 23,000
4. Average Action per Head 6.14 million
5. Casino Action 10.4 trillion
6. House Advantage 4.66%

Now these are all understandable figures (to me anyway). So lets dig deeper...

According to the National Statistics Office, the average household in Korea spends 100,000 won a month in "culture and leisure". Let us assume the average visitors to Kangwon Casino are a husband and wife, and take the entire "culture and leisure" budget for the year with them (note: This is some what unreasonable since it precludes other consumption and the consumption by other members in the household, mainly children). This means two people split 1,200,000, or 600,000 each. From that take out our 150,000 hotel and F&B bill and you get a gambling budget of 450,000 per visitor.

In taking that last figure and performing some spreadsheet magic you can find out that one can gamble for the time and house advantage specified for 450,000. The gambler will on average have about 100,000 won left. This nicely dovetails with our earlier assumption, this could conceivably be the amount spent on leisure in that year not at the casino.

FTA Football Hooligans

Originally uploaded by Drambuie_man.
A FTA protest photo I forgot to mention. The a bus that was used to trasport the protesters was the bus either for the team, or supporters, of Daejeon's K-league soccer team.

Budget Overruns

The Sofitel Ambassador Seoul has never impressed me. In fact not to get into it, but a few years ago I had an experience there that could easily be defined personally insulting at best.

Needless when I got a letter from the Sofitel through the AMCHAM spam factory I was amused by this (edited for space):

Dear Guest,
We proudly announce...renovation on our lobby...the two hundred million dollar lobby is not beautifully redecorated...

Sofitel Ambassador Seoul, under a $30 million renovation...since 1997...the remaining part of the hotel will under go renovation [of]...$15 million.

Wow! A $30 million project that got all the way to $200 million. For that matter what does a $200 million hotel lobby look like? That is the price of some modern hockey/basketball arenas!

Lets hope the remaining $15 million budget fares better.

Friday, July 14, 2006

FTA Protest Police Panic

Police Panic
Originally uploaded by Drambuie_man.
I left the Kyobo buliding in Kwangwhamun tuesday night, and ran into an FTA protest. A picture of a regular (non-riot police) cop shouting into one of his two walkie-talkies as the protesters in hard hats start to move.

FTA Protest Hard Hats

Hard Hats
Originally uploaded by Drambuie_man.
I left the Kyobo buliding in Kwangwhamun tuesday night, and ran into an FTA protest. My guess is protesters marching around in hardhats expect trouble and plan to be up for no good.