To What Extent Are Kaesong Industrial Complex Entrepreneurs Lobbying Alone in the US?

Kaesong Industrial Complex Companies Association Hires Major US Law Firm... Lobbying to Begin in September
230 Million Won 'Huge Sum' Spent... 92% "Hope to Re-enter"
Government Response 'Lukewarm'... Association Estimates Losses at 1.5 Trillion Won
Annual Damage Increasing... Expected to Be a 'Lonely Fight'

The Kaesong Industrial Complex Enterprises Association held a press conference at the inter-Korean entry office gate in Paju, Gyeonggi Province, last April to mark the 3rd anniversary of the April 27 Panmunjom Declaration, urging the reopening of the Kaesong Industrial Complex.
[Photo by Lee Jun-hyung]

[Asia Economy Reporter Lee Junhyung] “Since the government is doing nothing, we have no choice but to take action ourselves.”

Businesspeople residing in the Kaesong Industrial Complex are conducting a ‘solo lobbying’ effort against the U.S. government. Although it has been five years since the Kaesong Industrial Complex was shut down, the possibility of its reopening remains uncertain. There are criticisms that the government’s response, including compensation for losses, has been insufficient. The Kaesong Industrial Complex businesspeople unanimously stated, “What has the government done to revive the Kaesong Industrial Complex, a symbol of inter-Korean economic cooperation?”

According to the industry on the 31st, the Kaesong Industrial Complex Business Association has hired a U.S. lobbyist. The lobbyist the association partnered with is Pillsbury, a major U.S. law firm. The association agreed to pay Pillsbury $200,000 (approximately 230.8 million KRW) in exchange for lobbying the U.S. legislative and executive branches until May 14 of next year. Most member companies are unable to pay their membership fees due to financial difficulties, so about ten companies in relatively better condition pooled their money to cover the costs.

The reason the association spent such a ‘large sum’ despite poor financial conditions is simple: their desire to reopen the Kaesong Industrial Complex is that strong. In fact, most resident companies hope to re-enter the complex. According to a survey conducted by the Korea Federation of SMEs in February targeting 111 Kaesong Industrial Complex companies, 91.9% of respondents expressed their intention to re-enter.

However, the government’s response has been lukewarm. More than five full years have passed since the Kaesong Industrial Complex ceased operations, but the government has yet to present any concrete solutions. Occasionally, high-ranking government officials have mentioned reopening the complex as an issue, but these have not led to effective measures.

One Year Since the Destruction of the Kaesong Inter-Korean Liaison Office
(Paju=Yonhap News) Reporter Lim Byung-sik = On the 16th, the Kaesong Industrial Complex area viewed from the border region in Paju, Gyeonggi Province, shows the Inter-Korean Liaison Office, which was blown up by North Korea last year, and the Kaesong Industrial Complex Support Center, damaged by the blast shock, both left abandoned for one year. 2021.6.16
andphotodo@yna.co.kr
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The government’s compensation for losses is also evaluated as insufficient. The government provided 583.3 billion KRW until last year under the principle of compensating only for ‘direct damages due to closure’ when halting the complex’s operations. In contrast, the association estimates the damage at around 1.5 trillion KRW. Investment assets such as buildings and facilities left behind in the complex alone amount to approximately 593.6 billion KRW.

As damages have increased annually, the association intends to achieve visible results by any means before the contract ends in May next year. A representative of the Kaesong Industrial Complex Business Association said, “We signed the contract with the determination to put an end to the Kaesong Industrial Complex issue by May next year,” adding, “The law firm also empathizes with the difficulties faced by Kaesong Industrial Complex businesspeople, so we expect there will be parts that can proceed quickly.”

The association will begin full-scale lobbying activities starting this September. They plan to meet with U.S. government officials and emphasize the need to ease sanctions against North Korea to reopen the Kaesong Industrial Complex. Since the complex’s operations were suspended due to strengthened UN and U.S. sanctions against North Korea, the strategy is interpreted as persuading the international community starting from the U.S. to find a breakthrough.

According to the association, after news of hiring the lobbyist became known, inquiries from government officials including the Ministry of Unification followed. However, no one stepped forward to actively assist the association. Ultimately, it appears to be the association’s ‘lonely fight.’ This is why it is difficult to avoid criticism that the government has used small and medium-sized enterprises for political interests. A Kaesong Industrial Complex businessperson said, “One-fifth of the resident companies are either closed or in situations equivalent to closure,” adding, “Now that the inter-Korean direct communication line has been restored, the government should take active measures.”

This content was produced with the assistance of AI translation services.