U.S. report urges Korea to reduce regulatory barriers

The U.S. State Department highlighted non-tariff barriers, including regulatory hurdles, in the Korea section of its 2025 Investment Climate Statements, released Sept. 26. These references, absent from previous reports, signal pressure on South Korea to lower regulatory barriers amid stalled follow-up talks on the U.S.-Korea tariff agreement.

In the preface to this year’s Korea section, the report said, “Reducing regulatory barriers in Korea is critical to maximizing market access for U.S. services and related industries and improving the investment climate.” This passage, not included in reports from 2021 to 2024, specifically highlighted sectors such as fintech, legal services, and educational technology.

The report noted that U.S. companies “frequently cite Korea’s strict regulations as barriers,” highlighting that Korea’s digital economy rules pose a unique challenge. It criticized Seoul for failing to produce visible changes despite intermittent regulatory easing plans, adding, “Regulatory barriers remain prominent despite provisions in the U.S.-Korea Free Trade Agreement (KORUS FTA) designed to address transparency issues.”

The report also noted that the United States runs an annual $10 billion trade surplus in services with South Korea, adding that “the digital trade sector, led by innovative U.S. companies, is increasing its share of U.S. exports and investment in Korea.” It suggested that lowering regulatory barriers could allow more U.S. firms to enter sectors such as fintech and legal services.

Prepared by economic officers at the U.S. Embassy in Seoul, the report is part of the State Department’s annual effort to assess investment climates in key countries and support U.S. companies’ overseas investment. The U.S. Trade Representative’s office (USTR) also flagged Korea’s non-tariff barriers, including restrictions on Google’s precision mapping exports, in its March 2025 National Trade Estimates report to Congress.


Seong-Mo Kim mo@donga.com