FKI seeks revision of Fair Trade Law

The business circle is fiercely protesting investigation and regulations on large corporations as part of the so-called chaebol reform, calling for respect for the market economy. In particular, they have decided to launch a campaign for revision of the Fair Trade Law, saying that steadfast policy changes and excessive application of relevant laws by the Fair Trade Commission (FTC) are discouraging corporate activities.

Jwa Sung-Hee, president of the Korea Economic Research Institute, which is affiliated with the Federation of Korean Industries (FKI), said that the restriction on investment amount, revival of newspaper posting and uniform designation of the top 30 business groups. He criticized that such measures are discouraging corporate activities at a time when the economy is facing difficulties.

The FKI is planning to bring the problems of the Fair Trade Law by holding a seminar from May and then pursue revision of the law through the National Assembly.

Corporations embarrassed by reversal:

As the Fair Trade Commission changed its policy not to investigate corporations for the time being, considering the difficult economic situation, and said that it would investigate unfair internal trading among eight major groups within the first half, relevant business groups are protesting, saying that corporations are hit by inconsistent policy.

They also pointed out that the government announced it would include public corporations among the nation`s top 30 business groups but refused to do so as the deadline approaches. An executive of one of the nation`s top four corporations said, ``The government is tough on private firms but is generous to public firms, using a dual standard.``

As for the FTC`s decision to postpone for three more years the right to trace of financial transactions, which was temporarily introduced at the end of February, corporations say that the government has broken its promise. Corporate executives indicated that it is violation of the constitution for government ministries to trace financial transactions without a search warrant.

Revival of abolished regulations:

Corporations are strained, as the government revived restrictions on total investment amount, which was expelled after the outbreak of the nation`s foreign exchange crisis, and it has been applied effective this month.

The system prohibits investments of more than 25 percent of net asset in other companies. In this connection, the government abolished the system on the grounds that it would make restructuring difficult. But the government revived the system one year later, saying that it is necessary to curb economic concentration.

Park Won-Jae parkwj@donga.com