To safeguard their interest and tackle the threat of geopolitical risk to their operations in foreign markets, Korean firms are asked to develop the skills and mindset of the diplomat, and their first job is understanding the fast-changing regulatory environment with a long-term commitment, experts said Thursday

“Diplomacy is no longer just a matter of national defense and security. It is an economic issue directly related to the country's future livelihood. At the center are companies,” said Seoul Mayor Oh Se-hoon during his congratulatory remarks at The Korea Herald HIT Forum held at the Korea Chamber of Commerce and Industry in Seoul.

Reshaping global supply chains stemming from deepening protectionism coupled with industrial transformation induced by artificial intelligence and other digital innovations could be a vast challenge that Korean firms embrace, but it could also be a “new opportunity to expand corporate diplomacy,” he said.

Under the title “Business Diplomacy,” Thursday's forum discussed the current status of Korean firms’ government affairs and external communications capabilities to influence laws and mitigate uncertain regulatory risks in foreign markets.

Some 300 business executives, including those in charge of government relations, participated in the annual event.

“As Korean companies take the lead in major high-tech industries, they receive many invitations to invest from around the world,” Herald Media Group CEO Choi Jin-young said in an opening remark.

Geopolitical uncertainties, including the conflict between the United States and China, prompt Korean firms to sharpen their diplomatic skills to boost negotiation power as much as they expand their capital allocation to foreign markets, he added.

James Kim, chairman and CEO of the American Chamber of Commerce in Korea, touted that the relationship between Korea and the US and Korean investments in the US are reaching a new high level.

“US-Korea relations are at an all-time high. Both countries are key players in global trade and innovation,” he said, adding their tie would stay “rock solid” regardless of the result of the US presidential election in November.

In the special session with Brian Ballard, founder and president of Ballard Partners and one of the top lobbyists in Washington, key insights were provided on the importance of business diplomacy and lobbying for Korean companies operating in the US, especially in light of the unpredictable political climate. Brian emphasized the critical role lobbying plays in navigating the complex US regulatory environment, particularly during election years when policy shifts can significantly impact foreign businesses.

“If you’re entering the US market, it’s essential to rely on legal advice to understand the environment. But if you want to influence that environment, you need strong government relations,” he said in a conversation with Korean political scientist Kim Ji-yoon.

He stressed that foreign companies, including those from Korea, must understand the importance of engaging both at the federal and state levels, with a particular focus on local governance where many regulations are determined.

“State politics are critical. The regulatory climates vary greatly from state to state,” he said.

In a panel discussion session, Choi Seok-young, senior advisor at Korean law firm Lee & Ko, stressed that the top decision-makers at Korean corporations need to perceive lobbying as an integral part of business activities in order to elevate their presence in the global markets.

“Enhancing lobbying capability requires a determination from CEOs of companies to make an aggressive investment in lobbying team and human resource and budget for the activities,” said Choi, a retired career diplomat who served at the Ministry of Foreign Affairs for 37 years before joining the law firm.

He assessed that there seems to be a long journey remaining for Korean firms to compete with global peers in the field of government relations, citing a 2018 deal in which the US decided to impose a quota on steel imports from Korea.

“The fact that such an unfavorable agreement has not been improved shows that the Korean government and companies’ lobbying efforts toward the US congress still have much room for improvement,” he said.

Kim Seong-joong, an attorney who provides legal counsel in international trade and customs practices at leading Korean law firm Kim & Chang, urged Korean corporates to have a long-term perspective rather than chasing instant results out of lobbying activities -- although the result of the upcoming US presidential election would be their primary focus for the time being.

“I think Korean firms should prioritize local-level, meaning that they put down roots in states where they made an inroad to monitor the regulatory environment closely and analyze trends there,” he said.