{"id":2207062,"date":"2024-11-07T16:29:02","date_gmt":"2024-11-07T07:29:02","guid":{"rendered":"https:\/\/koreapro.org\/?p=2207062"},"modified":"2024-11-07T16:29:02","modified_gmt":"2024-11-07T07:29:02","slug":"donald-trumps-win-sets-stage-for-digital-trade-battle-with-south-korea","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2024\/11\/donald-trumps-win-sets-stage-for-digital-trade-battle-with-south-korea\/","title":{"rendered":"Donald Trump\u2019s win sets stage for digital trade battle with South Korea"},"content":{"rendered":"
Donald Trump\u2019s election victory poses new challenges for U.S.-ROK economic ties, and one of the first is likely to be a looming dispute over Seoul\u2019s efforts to regulate digital trade.<\/span><\/p>\n Five lawmakers from South Korea\u2019s ruling People Power Party <\/span>proposed an amendment<\/span><\/a> to the country\u2019s <\/span>Monopoly Regulation and Fair Trade Act<\/span><\/a> on Oct. 28, which seeks to impose tighter controls on digital platforms.<\/span><\/p>\n The move has already sparked <\/span>strong objections<\/span><\/a> from U.S.-based tech firms and their advocates, including the Computer and Communications Industry Association (CCIA).\u00a0<\/span><\/p>\n Given Trump\u2019s preference for protectionist trade policies, his administration will likely leverage the <\/span>U.S.-Korea Free Trade Agreement<\/span><\/a> (KORUS) to push back against the proposal to shield U.S. companies from regulations viewed as discriminatory.<\/span><\/p>\n PROPOSAL AND OBJECTIONS<\/b><\/p>\n The South Korean government\u2019s proposal aims to curb perceived anti-competitive practices in the digital marketplace by regulating dominant platform operators. The proposed changes would allow South Korea\u2019s Fair Trade Commission (KFTC) to issue \u201ccorrective\u201d orders for practices like self-preferencing, where platforms prioritize their own products over competitors\u2019.<\/span><\/p>\n Other measures include restricting practices like tying and bundling (where consumers are required to buy additional products or services) and enforcing most-favored-nation clauses, which require platforms to offer the same terms they provide in other countries. The amendment would allow the KFTC to impose fines of up to 8% of sales on firms violating these rules.<\/span><\/p>\n The CCIA, an international trade association representing a range of technology and telecommunications companies, argues that these regulations unfairly target U.S. tech giants, primarily Google, Meta and Amazon. These firms are deeply embedded in South Korea\u2019s digital ecosystem: According to Seoul\u2019s technology ministry, Google and Facebook accounted for 27.1% and 3.5% of all <\/span>data used in the country in 2021<\/span><\/a>, respectively.<\/span><\/p>\n The CCIA asserts that the amendment\u2019s criteria disproportionately apply to foreign firms, potentially violating fair trade standards set by KORUS. According to the CCIA, the focus on U.S. firms while leaving local and Chinese competitors less encumbered is \u201cinappropriate,\u201d given South Korea\u2019s high level of digital market competition.<\/span><\/p>\n The CCIA also warns that the policy could open doors for Chinese e-commerce platforms, such as <\/span>AliExpress and Temu<\/span><\/a>, to expand aggressively in the South Korean market, possibly undermining U.S. companies\u2019 market share.<\/span><\/p>\n