Seoul Counters White House Critique Over Alleged Coupang Discrimination

The South Korean government has issued statements for the second day running regarding the White House's criticism over alleged discrimination against the U.S. company Coupang. As both a U.S. House report and now the White House express concerns about the South Korean government's policies, Seoul has emphasized fair investigations conducted under domestic law. Chang Ho-jin, Senior Secretary to the President for National Security, explained, "The investigation into Coupang is proceeding fairly in accordance with domestic legal procedures and does not discriminate against or target companies from any specific country." He noted this marks the first instance of the Presidential Office directly addressing the U.S. side's repeated accusations.

Through its Foreign Ministry spokesperson, the government expressed regret, pointing out that the U.S. House Judiciary Committee report "unilaterally reflected only Coupang's claims." The National Intelligence Service also released a statement asserting that the report's contents were factually incorrect. This has led to a situation where Seoul is responding for the second consecutive day to what it perceives as one-sided U.S. support for Coupang.

On July 1 (U.S. time), the U.S. House Judiciary Committee released a report characterizing the Coupang personal information leak incident as "unauthorized access to data systems by a disgruntled former employee." However, the report used this as a basis to accuse the South Korean government of launching an "all-out offensive" and solely incorporated Coupang's unilateral assertions. In a statement sent to South Korean media on July 2, a White House official claimed, "By any reasonable standard, Coupang is being singled out by the Lee Jae-myung administration." The official added, "The Trump administration will not tolerate unfair trade practices, including actions that restrict market access for American digital services.".

Amid a growing sentiment within the U.S. Congress and administration that favors Coupang's one-sided narrative, the South Korean government, led by the embassy in Washington, is explaining Seoul's principles and position to the U.S. government and Congress. However, the situation is complicated by Coupang's significant lobbying power and the recent hardline stance of the U.S. Congress. The U.S. House Judiciary Committee heard testimony from the interim representative of Coupang Korea in February, and in April, 54 Republican House members sent a letter to Ambassador Kang Kyung-wha urging an end to discrimination against U.S. companies like Coupang. Concerns have been raised that this situation could develop similarly to recent U.S. Congressional hearings on the EU's Digital Services Act, where sanctions were imposed on individuals related to the legislation, indicating a tough stance on issues concerning U.S. companies operating abroad.

To prevent negative spillover effects on broader South Korea-U.S. relations, including negotiations on nuclear energy and nuclear-powered submarines, the government is striving to ensure this issue does not escalate disproportionately and cause wider repercussions, according to Senior Secretary Chang Ho-jin. He stated efforts would be made to isolate and compartmentalize the issue to prevent it from affecting other bilateral matters. While the first round of South Korea-U.S. nuclear energy consultations was held in Seoul last month, the schedule for the second round has not yet been confirmed. The U.S. House Judiciary Committee report claimed that "South Korea violated trade agreements specified in the joint statement between the leaders," leading to analyses suggesting an intent to delay nuclear energy consultations through the Coupang issue. Some observers also posited that the U.S. might use the Coupang issue as a pretext to postpone nuclear energy talks.

A South Korean Foreign Ministry official further stated, "We will continuously correct factual inaccuracies with the U.S. government and Congress." He added, "We will actively explain that we are faithfully fulfilling our promise in the joint statement to treat U.S. digital companies in a non-discriminatory manner, and we will manage this issue so that it does not become a burden on bilateral relations." Despite continuous explanations thus far, the reality is that the U.S. government and Congress continue to lend an ear to Coupang's claims, necessitating the South Korean government to devise groundbreaking solutions. This dispute puts the principles of economic security and fair trade to the test, questioning how they can harmonize when discussing the future of the South Korea-U.S. alliance. The government's future response will influence not only the overall atmosphere of economic cooperation between the two countries but also negotiations on sensitive security issues.