The quirks of trade diplomacy: Getting drunk in Korea doubled the UK’s exports

The quirks of trade diplomacy: Getting drunk in Korea doubled the UK’s exports

On his recent trip to New Zealand, I felt sympathy for Liam Fox facing a bright-eyed, bushy-tailed Sky News interviewer in London after a long day at almost midnight where he was. His satellite delayed answers to some good questions brought back fond memories of exporting to wily people in hard markets. Never easy but never dull!

Not quite as far as New Zealand but still a fair way around the globe lies South Korea. Thirty years ago no free trade deals existed with South Korea. Far from it, at that time the Korean government had lists of banned imports that filled several books. When a trade mission arrived, on their first morning I would give a talk about the history, culture and customs of Korea so when they went out of the embassy front gates at least they started with some kind of simple lode stone to guide them through the day and one hoped, the whole week. The commercial department staff consisted of four UK diplomats and twenty very able local staff, more ladies than men. Our missions came from trade associations and regional development corporations, most very well organised. Several thousand Korean businessmen visited the commercial department during a year, our staff known, liked and respected.

Our problems were less about free trade than encouraging more companies of all sizes, great or small, to come and have a look at Korea. As the DTI budget only allowed us about twenty missions a year – a number they would not increase – somehow we had to persuade hundreds more businesses to visit Korea. As my previous job had been Director of the British Information Services across Canada my instinct was to run a media campaign about Korea in Britain and a campaign about Britain in Korea. The former was easier than the latter because in those days most of the media in Korea was controlled by the government. For our purposes – promoting the image of British equals quality – that didn’t matter and besides, wiser to keep our powder dry for the political messages. A time would come when the Koreans were ripe to hear those and my gut feeling was that would fall during the following summer. Our best strategy with no money was to lure British business people on their way to or from our neighbouring markets, Japan, Hong Kong and China. Free trade deals obviously can help but enthusiasm, energy, imagination, stamina, flexibility, good products and salesmanship, reliable delivery and support, all at fair prices are also keys to success. The Koreans have one more, the most important, good kibun.

This is often clinched by meeting your potential business partners at a Kaesong house – like a geisha house – where you spend the evening sitting cross-legged, entertained by the ladies wearing their hanbok dresses, while the men each drink about a bottle of whisky. During the 1970s there was still a great deal of hepatitis B in Korea and by tradition brim full glasses were exchanged throughout the evening! So you really had to believe in your product before taking the medical risk. My wife is a doctor’s daughter from Switzerland and after stern interrogation she decided that I’d done enough Kaesong parties. We struck a deal. I could do one more – to back out would have been bad manners – with the Vice Minister for Trade who was a good sport. The meeting was about lifting some of the countless trade restrictions but, of course, none of us were going to attempt any business while running super-charged on a mixture of blood and whisky.

About half way into the night he and I began swapping full glasses until one of us keeled over. The honour of the Korean Government and the British Airborne Forces were both on the roulette wheel of fickle fate. Through my steadily blurring vision I saw yet another bottle of Grant’s Single Malt – which we had been promoting – being passed like a rugby ball along the cross-legged line of his ministry staff perched on their cushions opposite. In the corner of my left eye I vaguely recorded the embassy number two, who had spent seventeen years in Brussels on secondment to the EC, looking horrified. Suddenly the bottle reversed direction and my confused brain slowly worked out the contest was winding down. Eventually both competitors were helped onto their feet and taken home by their trainers. After being steered through the garden gates I weaved and swerved until after a several attempts I managed to open the front door. Then, still in my overcoat, I lunged forward, hands out-stretched to break my fall. Soft carpet rushed up to meet me and I crawled on all fours up the wide stairs and along the corridor. I rose and leaned against the wall, then reported to my better half, who was sitting up in bed, reading. My breath smelt like a petrol bomb when voice kept low, (our children were asleep) swaying violently I blurted, ‘ Prob’ wone ash me agin’ aarter toonyte, nobowee’ won rizz anudder’ beeeg losh off faysh.’

The Koreans enjoy such hilarious encounters. We all agreed it was a draw. Nobody lost face. I was never invited to another Kaesong party. But in a Confucian society with very strict social discipline any slack provided by a ‘long nose’ was a present from heaven. All you bright young diplomats, if you’re allowed to read stuff written by the enemy, those disruptive Brexiteers, take this on board, it’s the thousands of human encounters like that night in Seoul that make our influence so special all over the world. Indeed, from then onwards, something changed. I’d passed a test and the Koreans liked that. They knew me. What they saw was what they got. We felt at mutual ease with each other, we had reached good kibun. They became much more interested in talking about possible deals and British goods. We enjoyed our good kibun. I’m not suggesting that he and his staff hit the bars and Kaesong houses night after night. They were all respectable government officials. I am saying our human interfaces are more important than anything else.

Leaving aside the single malt promotion, Doctor Fox’s challenge is very similar though global. Many small and medium sized companies in the British Isles have good markets at home and never think of exporting. Why bother if you’re making a good living from familiar customers? This is one of the reasons why so many British companies who are comfortable trucking products to the Continent are less adventurous when it comes to selling into a market thousands of miles away. And yet our forefathers were second to none at importing raw materials, manufacturing, then exporting the finished products and they modernised whole continents. During three years running the commercial department in Seoul I admired how our Korean staff helped numerous small and medium sized British companies double or triple their turnover by selling to Korea. Over three years our exports to South Korea not only doubled in value but shifted from an awful lot of raw materials with far too few manufactures to many, many more manufactures while increasing our sales of raw materials. My message for any politicians reading these words is that nothing beats a first class local staff in a distant and tough market. And the local staff are the first to say that they need switched on and streetwise, experienced UK diplomats running on the inside fast lane for the tricky sales and moments that need political savvy. By all means appoint trade commissioners for markets similar to our own such as North America, Australia, New Zealand, Japan, India, Malaysia, Singapore and much of Europe; but strengthen the embassies and consulates to carry on their highly effective work in the places where language, culture and politics are the crucial cocktail and very tricky to mix unless you know precisely what you’re doing.

How did we persuade them to buy plane tickets to Seoul? Click the link to read more.