US politicians misunderstand Coupang's role: trade minister

Industry Minister Kim Jung-kwan speaks during a forum hosted by the Kwanhun Club, an organization of senior journalists, in central Seoul, Thursday. Yonhap

Many U.S. politicians mistakenly view Coupang as a key channel for exporting American agricultural products to Korea, Industry Minister Kim Jung-kwan said Thursday.

His comments were made amid monthslong protests from American politicians who claim that Korean authorities have been treating the U.S.-headquartered e-commerce giant unfairly in regards to a massive data breach involving more than 33 million customers, giving a clue about why the issue has been mischaracterized as a trade dispute.

Speaking at a press forum in central Seoul, the minister said some U.S. lawmakers had misunderstood the company’s role in the Korean market and the nature of the case.

“Some members of the U.S. political community mistakenly view Coupang as a channel for U.S. exports of agricultural, fisheries and livestock products and as a means of reducing the trade deficit,” Kim said.

“When I explain that Coupang is not viewed in Korea as a channel for importing U.S. products, but rather as a platform that imports inexpensive goods from neighboring countries such as China, they are surprised.”

Kim said he had pointed out that Coupang could not have grown at such a rapid pace if the Korean government had discriminated against the company.

The minister added the views on Coupang differ between policymakers and politicians.

“For example, if I talk with politicians, I get impression that they are overreacting to the matter. On the other hand, officials in the Department of Commerce or USTR (United States Trade Representative) have a much better understanding over the core of the Coupang issue,” he said.

“The essence of this issue is that Coupang leaked the personal information of nearly 80 percent of Korea’s adult population and remained unaware of the breach for months,” he said.

"When I ask back to U.S. politicians what American authorities would do if 80 percent of American adults' information is leaked to another country and the company does not report the case properly or undergo due legal processes, they are mostly convinced," he said, noting that the politicians he spoke to usually came to understand the legitimacy of the measures taken by Korean authorities.

Kim's remarks came as some U.S. lawmakers have raised concerns that Seoul’s investigation and regulatory actions since the data breach last November unfairly targeted the U.S.-headquartered company.

In April, 54 House Republican lawmakers sent a letter to the Korean Embassy in Washington and urged the Korean government to end “discriminatory regulations” against Coupang.

The U.S. House of Representatives also released a report last month arguing that Korea had imposed discriminatory regulations against Coupang and other U.S. companies and that such measures were inconsistent with the most recent Korea-U.S. trade agreement.

Kim stressed that the issue would not undermine the broader Seoul-Washington alliance, noting the U.S. trade authorities understood that the matter stemmed from a data breach rather than trade discrimination.

“The Korea-U.S. alliance is not at such a shallow level that the Coupang issue could shake the relationship,” he said. “We will continue efforts to resolve misunderstandings surrounding Coupang in cooperation with the Ministry of Foreign Affairs and the Korean Embassy in Washington.”

Industry Minister Kim Jung-kwan, right, shakes hands with U.S. Senator Todd Young during a meeting in Washington D.C., July 23. Courtesy of Ministry of Trade, Industry and Resources

Meanwhile, the minister said the U.S. is expected to release the results of its Section 301 investigation into alleged overcapacity concerns by the end of this month.

Concerns have grown that additional tariffs from the Section 301 overcapacity probe could push the overall tariff burden on Korean products above the 15 percent ceiling agreed on under last year’s bilateral trade deal.

Washington recently imposed a separate 12.5 percent tariff on Korean goods due to alleged forced labor concerns.

“We are doing our best to ensure that the Section 301 tariffs, including the remaining issues related to overcapacity, remain within the 15 percent level that was agreed with the U.S.,” Kim said.

“There is a certain level of consensus on this matter between the trade authorities of the two countries … Our goal is to ensure that we are not disadvantaged compared with competing countries.”