ED Ensuring orderly markets

National Assembly should enact 3 fair trade-related laws

The government is working to enact and revise three fair trade-related laws, a move which was thwarted by the opposition parties in the previous National Assembly. Behind such efforts is the Moon Jae-in administration's determination to rectify an unfair market order and improve opaque corporate governance. Specifically, the Fair Trade Commission and the Justice Ministry preannounced the revision bills of the Fair Trade Act and the Commercial Act, respectively, on Thursday. The Financial Services Commission also decided to enact the “Law on the Supervision of Financial Groups” and put it to public notice last Friday.

The revision bill to the Fair Trade Act aims at toughening regulations on internal business transactions between the affiliates of conglomerates while abolishing part of the antitrust agency's exclusive right to file anti-trust related charges. The amendment bill for the Commercial Act will focus on strengthening minority shareholders' rights and improving corporate governance. The top financial regulator, for its part, seeks to enhance prudent supervision of conglomerate-affiliated financial firms by bundling all subsidiaries into one package and preventing simultaneous insolvencies.

All three revision bills were submitted in the 20th Assembly but got nowhere due to opposition parties' objections. The renewed attempt will also likely run into opposition, with critics saying, “Why squeeze businesses at an economically difficult time like now?” Such a voice of complaint may get even louder given the ongoing shrinkage of business confidence amid the economic shock caused by the coronavirus pandemic.

However, the government should push ahead with its campaign to upgrade fair trade order and ensure transparent management regardless of economic situations.

Now that the ball is in the parliament's court, the ruling Democratic Party of Korea (DPK) should play a pivotal role in the bills' passage. The DPK, which has the overwhelming majority of 177 seats in the 300-member Assembly, will have few good excuses if it fails to legislate. The main opposition United Future Party (UFP) should also cooperate positively with the legislation. Kim Chong-in, head of UFP's emergency committee, has vowed to recreate the conservative opposition as “a forward-looking party through creative destruction and bold innovation.” This is the time when Kim should turn his words into action.