Locked between crotchety superpowers, and with an unstable neighbour to the north, South Korea must balance diplomacy with development, and its legal sector is no different, writes John Church
While media news reports are hopeful, a string of analysts are quick to warn against any change bar an opportunity for Kim to elevate his self-importance, bargaining as he is with an operational nuclear arsenal he claims is capable of reaching the US.
Pusan National University political science professor Robert Kelly and others have described the summit as an unnecessary risk that would “probably be a bust”.
“The ideological and strategic divisions between the two sides are so wide that it’s almost impossible to bridge them [before the meeting],” said Kelly. “It’s just not doable.”
Lee Wan-keun, president of the Korea Inhouse Counsel Association (KICA), says outsiders looking in must understand that the environment surrounding the Korean peninsula has been dynamic and volatile for decades. “The scope of uncertainty is not specific to certain areas, rather it is universal,” he says. “So, in-house counsel in South Korea are very familiar with coping with political and economic uncertainties. If you see the very recent rapid political changes in this region, it is no exaggeration that in-house counsel in [South] Korea should always be prepared for any drastic change coming into their own industry.”
Accordingly, and in line with continuing uncertainty (regardless of apparent moves towards peace on the peninsular), all business conducted in South Korea has a political postscript. Developments in commercial law must consider the bigger picture. International and domestic contracts are signed and sealed with the firm knowledge that there are two or three large elephants in the room scrutinizing the pen strokes.
First and foremost is North Korea, nuclear-capable, in recent weeks passive, but always unpredictable. It is matched by a US led by a man many associate with brashness and egotism, not unlike the North Korean leader. And with China lies an ally to Pyongyang with an uncertain amount of influence and its own aggressive regional agenda.
Political instability, even due to positive events or influences, is instability nonetheless, and has repercussions, not the least being for the South Korean legal sector. And of course, recent moves give many reason to be optimistic. “Although I have talked about staying calm during the most tense periods, we are currently seeing renewed interest in the analysis of the local and global economic impacts of the North Korea situation and future opportunities for investment under a new era of peace and economic stability in the region,” says John Kim, a partner at Lee & Ko.
But on the other hand, he reasons, “the political uncertainties and proposed tariffs have created opportunities for lawyers specializing in international trade and WTO counselling. While all the interested parties on the ground are closely watching the KORUS FTA [United States-Korea Free Trade Agreement] renegotiations, the current priorities have centred around managing local legal risk on behalf of critical local industries such s steel, automotive, shipbuilding, consumer electronics, and the agricultural sector.”
Steven Li, foreign counsel with Orne Haneul Attorneys at Law, believes that politics and economy are inseparable from each other, and economic foundation is indispensable to the prosperity of legal business. “So long as it is politically uncertain among countries, economic activities, including investment and trade, will not be as active as usual, which will eventually cause the legal business, especially the cross-border part, to shrink,” he says.
“It seems that the trade war between [China and the US] has started, subject to further negotiation. The US and China together account for almost 40% of the GWP [gross world product], thus the trade war between them should not be simply regarded as a regional economic conflict between two countries. It is actually a global issue that affects almost all the countries taking part in the process of globalization, and will destroy sound economic relationships among countries, which in turn will also eventually bring about damage to the legal business.”
But as South Korea’s relatively young democracy develops, there are other challenges closer to home. “[South] Korean society normally has two extreme ends at the same time,” says Lee Wan-keun. “For example, while there is a very radical legislation toward transparency and compliance, there are still people who insist on conventional practice. Addressing these two extremes may be one of the toughest challenges that in-house counsel face.