Coupang dispute raises stakes in Korea's $350 bil. US investment talks
President Lee Jae Myung holds summit talks with U.S. President Donald Trump on the sidelines of the U.N. General Assembly in New York, Tuesday. Yonhap
Coupang risk feared to emerge as stumbling block for Korea-US investment agreement
Korean regulators’ hardline stance toward Coupang is complicating Seoul’s talks with Washington over the next stages of its planned $350 billion investment in the United States.
The latest development came Wednesday when the Seoul High Court rejected Coupang’s request to suspend the effect of a Fair Trade Commission (FTC) decision ordering an on-site inspection of the U.S.-headquartered e-commerce firm’s alleged violations of a local fair transaction act.
Coupang had refused to cooperate with the probe, arguing that the FTC failed to provide advance notice.
The court ruling allows the FTC to proceed with the investigation. FTC Chairman Ju Biung-ghi has vowed to review the agency’s internal rules to close what he described as loopholes that allow companies to delay or evade investigations through court injunctions.
He has also rejected U.S. criticism that the regulator is discriminating against American companies, saying the FTC will continue to enforce Korean law without regard to nationality.
Fair Trade Commission (FTC) Chairman Ju Biung-ghi attends a press conference at Government Complex Sejong, Monday. Yonhap
The confrontation is particularly sensitive, as Korea and the U.S. work to flesh out the details of their investment agreement. Under the deal, Korea is committed to invest $350 billion in the U.S., including major projects in shipbuilding and other strategic industries, in exchange for a reduced U.S. tariff rate on Korean exports.
The first major project has already taken shape, with Seoul selecting a $200 billion gas-fired power project in Texas to supply electricity to data centers and semiconductor facilities.
The remaining negotiations, however, cover projects that are considerably more complicated in terms of financing, profitability and corporate participation. The two sides are discussing potential investments in nuclear power, Westinghouse and Alaska LNG, among others, with several details still subject to negotiation and U.S. government review.
Against that backdrop, the Coupang dispute could give Washington another issue to raise when assessing whether Korean companies face a sufficiently predictable regulatory environment in the bilateral economic relationship.
Continued U.S. criticism could potentially increase Washington’s demands for protections on American companies operating in Korea.
That risk has become more visible in recent months. A U.S. House committee accused Korean authorities in July of engaging in discriminatory treatment of Coupang, and a U.S. lawmaker introduced legislation targeting foreign officials accused of discriminating against American businesses.
Seoul has rejected the allegations, saying its regulatory actions are based on domestic law and never target companies because of their nationality.
“Neither country looks likely to make concessions on the Coupang dispute anytime soon, leaving the issue as a potential source of trade friction as the two countries finalize the investment framework,” an industry official said.