Cooperation & Development for Korean/American Women EntrepreneursAlexander Vershbow, U.S. Ambassador to the Republic of Korea
Remarks to 2006 Korean Women Entrepreneurs Association Breakfast Seminar
Renaissance Hotel, Seoul, Korea
March 21, 2006
President Jung Myung-keum, members of the Korean Women Entrepreneurs Association: thank you for extending this invitation to be here this morning. Lisa, thank you for that nice introduction. I know that in the past important Korean leaders such as Seoul Mayor Lee Myung-bak and former Health and Welfare Minister Kim Geun-tae have addressed you, and I am honored to join their company. I am humbled, actually, as I am not Korean, I am not a woman, nor I am an entrepreneur. I am, however, getting some help on the Korean part. In case you have not heard, I have recently been given an honorary Korean name. For those of you who find it difficult to say Vershbow, just call me "Park Bo-woo." Iím told that Iím first Park from the Sejong District Park clan.
All joking aside, as an American, and as a man, I will not presume to know what a Korean womanís experience is like. As a career diplomat, I wonít pretend to know what itís like to run a business, forecast future international market trends, or contend with global management issues. Instead, I would like to share with you some of the experiences of American women in the U.S. workforce and draw comparisons with Korean working women. Later, I would like to touch on the recently announced plans for a U.S.-Korea Free Trade Agreement and its potential to reap benefits for women entrepreneurs in both our nations.
The strength of American entrepreneurship rests on the diversity of the American labor market. It doesnít matter if you are black, yellow, white, or green. It doesnít matter if you are old or young. And, it doesnít matter if you are a man or a woman. Diversity in the workplace is about being the best qualified candidate for a job, for a promotion, or for a business loan.
In 2002, 64 million women were employed during a typical month and comprised 47% of the total American work force -- a number that has grown consistently from the level of 29% in 1948. Of the 10.2 million total increase in womenís employment between 1991 and 2001, 68% were in the managerial and professional specialties. Without the growing participation of women in the labor force, the American economy would be hard-pressed to provide the goods and services necessary for a growing population and a rising standard of living.
In addition, American womenís incomes have been on the rise -- approximately 620,000 more women earned $100,000 or more in 2001 than in 1991 (thatís 97 million Korean won by todayís exchange rate) and over 4 million women earned $60,000 (or 58 million Korean won). This increase in income is directly related to the educational level of American women. Between 1992 and 2002, the number of 25-to-64 year-old female college graduates increased by 10 million -- a 53% jump. Women accounted for slightly more than half the bachelorís degrees and slightly less than half of the advanced and professional degrees in 2002. Women were also less likely to drop out of school then man.
All this is to say that the data are showing what everyone in this room already knows: women are smarter and harder-working than men. People who know me and Lisa also know that Lisa is unequivocally the much better half. But women in the United States did not always enjoy such high levels of income, participation in the workforce, or access to education. For over 150 years, American women fought for equal rights in the workplace and equal rights in society to enjoy the status they have today.
These rights that American women fought for are the foundations on which they now enjoy relative equality with their male counterparts. I say relative because gender discrimination still exists. In fact, "push" factors such as the lack of female role models and male-centered work environments are some of the reasons American women quit working for others and start their own businesses. But the "pull" factors of greater earnings potential and a better balance between work and family responsibilities through flexible work arrangements are also reasons American women become entrepreneurs and are successfully doing so at ever increasing rates.
Women business owners are critically important to the American economy. America's 9.1 million women-owned businesses employ 27.5 million people and contribute $3.6 trillion to the economy. Wholesale and retail trade accounted for almost 40% of women-owned business revenue.
I would venture to guess that Korean women have gone through similar experiences as their American counterparts. As I understand it, Korean women have been making remarkable gains in education, as nearly 72% of women go to college and in 2004 women at Seoul National University took top honors at 11 of 16 colleges. Record numbers of Korean women are entering the private sector, and passing the tough go-shi tests with higher scores than their male counterparts to enter the government sector. Yet, last year, the World Economic Forum ranked Korea 54th out of 58 major countries for the empowerment of women, suggesting that Korean women continue to face obstacles in the workplace and society.
I hope that Korean women continue to make rapid gains in employment, empowerment and enrichment in the coming years. It is clear that Korean women are exceptionally talented. Foreign investors certainly know this to be the case. I think it is no accident that foreign firms operating in Korea tend to hire and promote women faster than their Korean competitors. These investors see the immense human capital that is available, which is sometimes under-valued by Korean employers, and take advantage of the situation to the great mutual benefit of both the employers and the employees.
Turning back to women entrepreneurs, amid this discussion of the progress that women entrepreneurs are making in both the United States and Korea, I think it is important to keep in mind the important role of general economic reform and growth. Reviewing the situation historically in both countries, I think the case can be made that women have made the most progress when the economy is growing rapidly and changing rapidly. In this context, women probably find it in their own self-interest to be advocates of economic reforms that will result in a more relaxed regulatory environment, and greater opportunities for the formation of new businesses.
U.S.-Korea Free Trade Agreement
When I began, I promised that I would mention today the U.S.-Korea Free Trade Agreement (FTA) negotiations. While there is no panacea to cure social and workplace inequalities, or to spur economic growth, it is my hope that conclusion of a Free Trade Agreement between our two countries can help promote economic growth and reform in Korea, to the advantage of both American and Korean female entrepreneurs.
As you know, last month, a big window of opportunity opened for the United States and the Republic of Korea when U.S. Trade Representative Rob Portman and Trade Minister Kim Hyun-chong announced the launch of FTA negotiations between our two countries. I personally intend to make the success of these negotiations a very high priority because this is an immense opportunity we cannot afford to miss for the business communities of both our countries.
From the American perspective, there are many reasons for the United States to pursue an FTA with Korea:
First, Korea is one of our biggest and most advanced trading partners. This FTA is our most ambitious FTA undertaking since we began negotiations with Canada and Mexico 15 years ago. So just from a commercial perspective, this is a very big opportunity for both sides. We expect that the overwhelming benefits of an FTA will justify the effort. The latest Korean Government research predicts that the FTA could increase Koreaís real GDP by as much as 2%, boost exports to the United States by 15%, and raise manufacturing employment by 6.5%. For the United States, the economic impact is also expected to be significant, around 0.2% of GDP, which is a lot for our $11 trillion economy.
We should also consider the impact on investment. We expect that with a U.S.-Korea FTA, we will see an acceleration of Korean investment in the United States to take advantage of improved business opportunities. An FTA between our two countries will also have a profoundly positive impact on foreign investment in Korea, which can provide Korea with more advanced jobs and technology. All previous American FTA partners have seen a sharp increase in U.S. direct investment. For example, U.S. investment in Mexico jumped from $4.4 billion pre-NAFTA to $13.2 billion after NAFTA. Our only other Asia-Pacific FTA partners, Singapore and Australia, also experienced increased inward foreign investment.
Beyond economic reasons, however, the FTA is a good idea because Korea is an important ally of the United States, and a key geostrategic partner in the Northeast Asian region. As President Bush said at the beginning of the year:
Third, I think it is fair to say that, in regional terms, a U.S.-Korea FTA will help cement trans-Pacific economic ties, and add balance to regional economic relations. Frankly, the United States hopes that the U.S.-Korea FTA will further enhance Koreaís growing leadership role in Northeast Asia. The benefits Korea will reap through increased trade and investment between Korea and the United States, for example, can only help encourage Japan and China to accelerate their own market opening, creating opportunities for the United States and Korea to increase exports to those two economic giants. This is an important adjunct to the "hub" vision with which President Roh began his presidency three years ago.
A final argument for an FTA relates to Koreaís internal economic structure, and relates most directly to the creation of opportunities for women entrepreneurs in Korea. We hope that a U.S.-Korea FTA will help Koreaís reform-minded economic leaders to continue to strengthen the Korean economy through further market opening and economic policy reform. Since the 1997 Asian financial crisis, under strong leadership, Korea has taken a series of important steps to open and reform its economy, which have continued to this day. We hope that the FTA talks will provide an important opportunity to lock in and build on these reforms.
This may be the most important benefit for Koreaís female entrepreneurs: to the extent that an FTA encourages a more transparent business environment, regu-latory reforms, and a more level playing field for all companies and entrepreneurs, it can only increase the opportunities for Korean businesswomen to succeed.
The FTA negotiations will very complex, covering virtually all aspects of our economic relationship. In addition, there will be areas of political sensitivity on both sides, where we will have to work hard to find mutually acceptable solutions. Time is another challenge, since the negotiations must be finished in less than a year in view of the expiration of the Trade Promotion Authority provided by the United States Congress.
This brings me to my final point, which I hope you will all consider carefully. For the U.S.-Korea FTA negotiations to succeed, it is absolutely essential to receive active and energetic support from the business communities of both countries, including entrepreneurial womenís communities such as KWEA. Without your help, this initiative will not succeed.
Business community support should come in the form of detailed input, since we need to understand your concerns, priorities and ideas for addressing market impediments. But the support should come in other forms as well -- including outreach to legislators, the media and the public -- from now until the FTA comes before the Congress and the National Assembly for ratification.
President Jung, KWEA members: There is a joke running around at the U.S. Trade Representative's office in Washington, that the U.S.-Korea FTA is a women's employment promotion policy. That's because not only is our lead negotiator a woman, but 10 out of the top 15 issue negotiators on the U.S. team are female. Also, the past five Deputy Assistant U.S. Trade Representatives covering Korea have all been women!
More seriously, however, I want to conclude with my main point: Trade is a noble endeavor, and itís one of the best and smartest things that people and societies do, helping themselves and others at the same time. I am confident that an FTA will benefit both economies in general and Korean and American women in particular, as further market opening and economic policy reform will lead to greater transparency in business practices. This can only further break down barriers to economic opportunities and help women entrepreneurs in both countries.
Launching FTA negotiations is a vote of confidence in the enduring strength of the ties between our two countries, and a further step in the ongoing modernization of our relationship toward a true partnership of equals. I am committed to doing my part to ensure the negotiations are successful, and hope that Koreaís women entrepreneurs will play their role too.
Released on March 21, 2006