Chairman Oberlin,
Ambassador Stephens,
Distinguished Guests,
Ladies and Gentlemen,

Thank you Chairman Oberlin for your kind introduction.  It is indeed a great pleasure to speak in front of the esteemed members of the American Chamber of Commerce (AMCHAM).

And I would like to express my appreciation to Chairman Oberlin, Ms. Overby and the staff of AMCHAM for arranging this meaningful occasion.

I would also like to thank all the distinguished guests who are here today.

I believe that your presence is a reflection of your strong interest and support for the further enhancement of relations between Korea and the U.S.

Since its foundation in 1953, AMCHAM has greatly contributed to the economic growth of Korea and to the strengthening of Korea-U.S. relations.

Furthermore, I am well aware of the valuable contributions of the chamber during the Asian financial crisis of 1997, where your active investments were of much help to us in overcoming the crisis then.

Today, I would like to address some issues that are of interest to all of us.

Namely, I will share with you my thoughts on the future of the Korea-U.S. Alliance under the new leaderships of our two countries.

And, I also intend to talk about some current issues of concern, including the G-20 Summit, inter-Korean relations, and the North Korean nuclear issue.

[ The Future of Korea-U.S. Relations ]

(Assessment of the Alliance)

For over half a century, the ROK-U.S. alliance has served as the bulwark for maintaining peace and security on the Korean Peninsula, and in the region at large.

For Korea, it has not only rendered peace and stability, but also served as a gateway to reach out to the rest of the world in its early years.

And for the U.S., it has also played an important role of securing a foothold for democracy and freedom in the East Asian region.

Furthermore, our strong alliance has been a crucial factor on which Korea was able to achieve its phenomenal economic development and full-fledged democracy.

To the United States, the alliance has provided a capable and trustworthy partner for regional and international cooperation.

Based on our common strategic interests, our two countries were able to develop this alliance into a most successful one indeed.

(Circumstances Surrounding the Alliance)

I truly believe that any successful alliance should not be stagnant but continue to evolve in a way that meets the changes in the surrounding environment.

This is also the case with the Korea-U.S. alliance.

During the past few years, therefore, Korea and the United States have been taking steps on alliance readjustment, -- such as the relocation and realignment of the United States Forces in Korea (USFK).

However, the geopolitical landscape and the security environment surrounding the alliance has continued to evolve, thus requiring our constant efforts to cope with the changes.

In this light, let me briefly outline some of the major changes currently underway.

First, what started as a security alliance is now blooming into a multi-faceted partnership.

The two countries are now seeking to further expand the realm of cooperation from issues focusing on security into various other fields including the economy, culture, and society in general.

Secondly, pressing challenges concerning North Korea are still of key concern to the alliance.

Since the North Korean nuclear issue remains as a major task to be resolved, the continued close coordination between Korea and the U.S. is of vital importance.

In addition, close cooperation with respect to the future architecture of the Korean peninsula is also an issue of growing concern.

We need to work together to create a new peace structure, and to prepare for the reunification of the peninsula further on down the road.

Thirdly, Northeast Asia is now undergoing dynamic changes both politically and economically.

We need to establish a cooperation mechanism to successfully manage such changes and to maintain stability and prosperity in the region.

Lastly, we need close coordination and cooperation to meet a broad range of new challenges, including the proliferation of weapons of mass destruction, terrorism, the environment, drug trafficking, and energy security.

More recently, the global financial crisis is a good case in point where the international community as a whole needed to act with a coordinated response.

(Future Direction of the Alliance)

Taking the aforementioned circumstances into account, Korea and the U.S. have already embarked on the joint efforts to develop our alliance into what we call a "21st Century Strategic Alliance."

We plan to take our alliance to the next level so that it can effectively meet the changes in the security environment and the needs of the future as well.

Through the four rounds of summit meetings between Korea and the U.S. since the launch of the Lee administration, our two leaders shared their views on the guiding principles and direction with regard to the future of our strategic alliance.

To this end, the two countries are to make joint efforts to broaden the scope of cooperation so that it encompasses not only security cooperation but also political, economic, social, as well as cultural cooperation, -- on the basis of our shared values and trust.

The two countries are also very committed to developing our alliance in a way that will contribute to the peace and prosperity at both the regional and the global level.

The recent cooperation between Korea and the U.S. on the Free Trade Agreement(FTA), the Visa Waiver Program(VWP), the Work English Study and Travel Program(WEST), counter-terrorism, and the Asia Pacific Democracy Partnership(APDP), among others, is evidence that Korean-American relations are already heading towards such a positive direction.

What we need now is to come up with a blueprint to translate the guiding principles and direction into realities.

(Cooperation with the New U.S. Administration)

Distinguished Guests,

With the historic election of Mr. Barack Obama as its next president, the U.S. is currently undergoing a period of hopeful transition.

Having followed the election campaign carefully, we note with satisfaction that president-elect Obama has consistently supported the Korea-U.S. alliance.

During his term in office as a U.S. senator and throughout the campaign trail, President-elect Obama emphasized that the Korea-U.S. alliance is a strong and successful one that has been vital to U.S. security policy in East Asia.

He has also voiced support for a joint vision for the alliance to cope with the diverse challenges of the 21st century, and has emphasized that (if I quote) "we must be firm and unyielding in our commitment to a non-nuclear Korean peninsula." (unquote)

After only two days into his election victory, President-elect Obama spoke over the phone with President Lee Myung-bak.

During their conversation, the President-elect mentioned that the Korea-U.S. alliance is the cornerstone of peace and security in East Asia.

And, he expressed his willingness to strengthen our bilateral security and economic ties, and to work closely together to address the current financial crisis as well as the issues concerning North Korea.

In addition, while attending the G-20 Summit in Washington DC, President Lee had the opportunity to receive Ms. Albright and Mr. Jim Leach, -- President-elect Obama's representatives to the summit, -- to hold in-depth discussions on Korea-U.S. relations and other matters of common interest in a friendly and cordial atmosphere.

In light of the interactions thus far, we gladly note that there is a lot of common ground in terms of our policy objectives on the future of our alliance and on the major issues of common concern.

I have high hopes that our strategic alliance will be even further enhanced and substantiated under the new leaderships of both Korea and the U.S.

(Korea-U.S. FTA)

Now, let me touch upon the issue of the free trade agreement between Korea and the U.S., -- as I am sure all of you have a great deal of interest in this matter.

I am aware that there are diverse views on the Korea-U.S. (KORUS) FTA.

I would like to take this opportunity to stress once again that the FTA between our two countries will balance our interests and bring about immense benefits to both.

In the case of the U.S., the KORUS FTA is the most extensive free trade arrangement following the North American Free Trade Agreement (NAFTA).

The U.S. International Trade Commission (ITC) projects that the KORUS FTA will add to the Gross Domestic Product (GDP) of the U.S. in the amount of about 10 billion to 12 billion U.S. dollars per year.

U.S. exports to Korea are also forecasted to increase around 10 to 12 billion dollars per year.

Korea is already the sixth-largest importer of U.S. agricultural goods.

But the FTA is projected to further increase the market share of U.S. agricultural products in Korea.

However, some concerns have been raised over the trade imbalance in the automobile sector.

Let me, therefore, briefly elaborate on the situation concerning our trade in automobiles.

In 2007, Korea exported 670,000 cars to the U.S. whereas the U.S. exported 6,500 to Korea.

However, out of the 670,000 cars Korea exported to the U.S., 90,000 were actually automobiles produced by General Motors (GM) in Korea.

Also, we should bear in mind that Korean exports compete with Japanese and European cars for the import car market of the U.S., rather than directly with American manufacturers for shares in the market.

Korean cars took up about 4.8% of the U.S. market, and it was 37% for the Japanese and 5.9% for European auto makers.

Moreover, the Korean market is fully open to foreign competition.

Foreign-owned automobile manufacturers in Korea, including GM Daewoo and Renault Samsung, account for a quarter of the country’s total market share.

Despite the complaints on access to the Korean market, foreign car makers have continued to see their sales in Korea increase by 40% each year.

The market share of foreign cars in Korea in the first half of 2008 was around 6%, whereas it was about 4.5% in Japan.

And if there are any difficulties for foreign auto companies in entering the Korean market, the KORUS FTA will be the solution.

The FTA will eliminate Korea's tariffs on automobiles, that is 8%, immediately and address other issues as well, including automobile tax and environmental and safety standards.

The Korean auto industry is definitely not a threat to U.S. car makers.

In fact, Korea hopes to contribute to the recovery of the American automobile industry and the U.S. economy in general through constructive cooperation between the industries of our two countries.

In this vein, Hyundai Motors has made huge investments in Alabama, and is making significant contributions to the local economy.

Its plant hires 8,800 workers and manufactures 210,000 vehicles per year.

Kia Motors will also open its plants in Georgia in the second half of 2009 and help create new jobs in the U.S.

The FTA between Korea and the U.S. is not constrained to just economic benefits alone, but garners a great deal of strategic significance as well.

The FTA will increase the various exchanges between the peoples of our two countries, enhance mutual understanding and trust, and thereby further strengthen the foundations of our strategic alliance.

[ Issues of Concern ]

Now let me share with you my thoughts on three important current issues that affect us all in one way or another:

1) the G-20 Summit;

2) inter-Korean relations; and

3) the North Korean nuclear issue.

(G-20 Summit)

I had the opportunity to accompany President Lee to the recent G-20 Summit held in Washington DC.

I think my impressions at the Summit would be a good starting point.

My most conspicuous impression was the similarity of the points made by the attending leaders, -- as they spoke with the same sense of concern and urgency, and proposed a surprisingly similar set of policy options.

My second impression at the Summit was the wide scope of highly substantive consensus among the leaders in the form of a Declaration, -- where the leaders agreed on the principles to reform the financial market.

My third and last impression at the Summit was the thoroughness of the agreement the leaders made.

They reached common ground not only on the scope of the actions to be taken but also on the specific timeline and the implementation mechanism.

Let me now move on to Korea's views and actions on the 4 common set of issues addressed by the leaders at the Washington Summit.

First, with regard to providing liquidity to the market, you would recall that the Bank of Korea recently provided almost 60 billion U.S. dollars to the market.

On top of this, the Korean government issued a guarantee on inter-bank loans in foreign currency up to the amount of 100 billion U.S. dollars.

And, the Bank of Korea and the U.S. Federal Reserve Board concluded a swap arrangement to the tune of 30 billion U.S. dollars, -- in the efforts to deal with the foreign currency crunch and to restore confidence in the market.

Secondly, as for boosting the economy to neutralize the impact of the financial crisis, Korea has taken various monetary and fiscal policies including tax cuts, new social overhead capital projects and assistance to small and medium sized enterprises.

The total volume of these measures amounts to no less than 3.7% of our GDP.

Thirdly, with regard to keeping the temptations of resorting to protectionism at bay, President Lee emphasized with vigor that there should be no new barriers to trade and investment.

He stressed that renewed efforts must be made to bring the sluggish WTO/DDA negotiations to an early conclusion.

At the national level, he proposed that G-20 members consider declaring a standstill on new barriers to trade and investment.

Both of these points were well reflected in the Declaration.

With regard to the fourth and last common set of issues, namely reform of the financial markets, President Lee pointed out the importance of improving the performance of credit rating agencies and the need to enhance international accounting standards.

He also emphasized reforming international financial institutions so that there will be more participation of emerging economies in those institutions.

And, he suggested considering the integration of supervision over the banking, securities and insurance sectors.

This point was reflected in the Action Plan in a modified form.

In the aftermath of the Asian financial crisis of the late 1990's, Korea has strived to restore the health of our economy.

Since then, many indicators suggest that Korean banks and companies are in very good shape.

The non-performing loan (NPL) ratio of Korean banks dropped from 7% in the late 1990’s to around 1% today.

The debt to capital ratio of Korean companies dropped from 400% to 100% during the same period.

Although we learned a valuable lesson through the financial crisis of the 1990’s, we have been hit again in the current financial crisis because the nature of this crisis is totally different.

This notwithstanding, the improved health of Korean banks and companies will make it easier for them to overcome the difficulties this time around.

It was announced several days ago that the 2nd G-20 Summit will be held in the United Kingdom on April 2nd.

As one of the three Troika countries designated in the Washington Declaration, Korea will do our best to coordinate international efforts to implement the G-20 Action Plan and bring back confidence in the financial market.

With cooperation facilitated through the Washington Summit and the fully activated G-20 process, I am confident that the world will be in a better position to overcome the current crisis.

(Inter-Korean Relations)

Let me now turn to the relations between the two Koreas.

Last week, North Korea announced a number of drastic measures, that will hamper the overall inter-Korean relations, including that which involves the Gaeseong Industrial Complex (GIC) project.

The North claimed that their measures, which became effective as of Monday, were caused by the ROK government's policy toward North Korea.

Against such a backdrop, let me briefly elaborate on the North Korean policy of the current administration.

Our policy toward North Korea is based on a policy of engagement, reconciliation, and cooperation.

We have no intention to undermine North Korea, nor are we still trapped in an ideological pitfall of the Cold-War era. And we have been trying to promote genuine dialogue with the North to realize "mutual benefit and common prosperity."

However, the policy on inter-Korean relations and that on the North Korean nuclear issue should not be decoupled in the pursuit of their objectives.

Based on the lessons of our past experience, we have now integrated the two policy objectives, so that they can be pursued together.

We will exert our efforts so that the Six-Party Talks process and inter-Korean relations can reinforce one another in a positive manner.

North Korea, for its part, seems to have some difficulties in accepting the new policy of the South. 

Moreover, the North is making attempts to coerce the South to change our policy lines.

North Korea has continued to ratchet up their harsh rhetoric and unprovoked drastic measures.

In a month or so after the inauguration of the new administration, Pyongyang has been pouring out slanderous remarks against the leadership of the South.

And they have cut off all channels of dialogue between the authorities of the two sides.

But North Korea needs to realize sooner than later that our policy lines are to their own benefit and that our stance will not falter.

We believe that inter-Korean relations are undergoing a period of adjustments.

The old pattern where inter-Korean relations were swayed around by North Korea's whim should be changed.

It is now high time for us to forge a more 'normalized' and constructive relations with the North through more genuine and sincere dialogue. 

Based upon such a stance, we will continue to exercise patience and call upon the North to become more forthcoming.

(North Korean Nuclear Issue)

As for the North Korean nuclear issue, a new round of the Six-Party Talks is about to get underway.

At this round, we need to address two important agenda items.

The first one is that of verification.

The U.S. and North Korea have reached a tentative agreement on verification measures in early October.

Now, the Six-Party Talks process should finalize and adopt an official Verification Protocol that contains the essential elements of verification, -- so that we may determine the completeness and correctness of North Korea's Declaration.

The second agenda is to make sure that the second phase of denuclearization gets completed. 

The initial deadline of the end of October for the completion of the second phase has passed due to the unexpected actions by the North to reverse the disablement process a few months ago.

Thus, we need to set a new schedule now.

During the next Talks, we also expect to exchange preliminary views on the third phase, which we strongly believe should be the final phase of the denuclearization process.

For this sake, we need to draw out a comprehensive roadmap encompassing measures for North Korea to abandon all nuclear weapons and existing nuclear programs.

These efforts geared toward the denuclearization of North Korea should continue on through the Six-Party Talks process.

We look forward to working closely with the new U.S. administration in this regard.

During the presidential campaign, Mr. Obama emphasized his support for the Six-Party Talks and at the same time expressed his intention to engage in direct diplomacy with North Korea, -- within the framework of the Six-Party Talks and through close consultations with South Korea.

In all, I have great hopes that the Six-Party Talks process and the strengthened efforts of the new U.S. administration will facilitate progress in the denuclearization of North Korea.

(Conclusion)

Korea and the U.S. are already on par in terms of understanding the necessity to develop our alliance into a more future-oriented one.

Being a democracy, there are diverse views within Korea, but the majority of our people are supportive of the alliance and the need for its further development.

Likewise, such feelings are reciprocated within the U.S. as well.

Working on the specifics is the very task ahead of us.

I have every confidence that we will be successful as we share a strong political will, common values, and mutual trust.

In closing, I would like to ask the members of AMCHAM to render your continued support on the development of the strategic alliance between Korea and the United States, -- and on further strengthening the friendly relations between our two countries and peoples.

Thank you very much for your kind attention.

/End/