[Editorial] Re-examine the Fair Trade Law from Scratch

The ruling Uri Party has failed to pass the revision bill on the Fair Trade Law due to the lack of quorum. It is fortunate that the majority party, turning a deaf ear to the business circles’ appeal to modify the bill at least at a minimum, ended up failing to railroad the bill. If the ruling party passed the bill despite boycott of the opposition, that would mean that the restoration of the politics of dialogue and the revitalization of the economy are only a remote possibility.

At this juncture, the ruling party should re-examine the revision bill on the Fair Trade Law from scratch. Here are the reasons. First, if the government reduces the voting right of the financial sector, businesses will have a harder time defending their control of the management, compounding the instability caused by foreign capital’s control over the stock market. If this happens, even Samsung Electronics could face a threat of hostile M&A.

Second, limitation on the aggregate amount of investment is one of the biggest roadblocks to Korean large conglomerates’ investment. The government also agrees that the system should ultimately be abolished. What is ironic is that the revision bill does not stipulate the timing of the abolition. That being the case, it is hard to believe the ruling party’s rhetoric on “de-regulation,” no matter how vigorously it argues.

Third, the Fair Trade Commission’s right to trace bank accounts was introduced only provisionally in 1999, and there is no reason to keep the right any longer, as it is against the underlying purpose of the real name transaction law. Furthermore, there are other ways to find and correct illegal inter-subsidiary dealings. There is no reason to extend the expiration of the system twice, unless the ruling party has some intention to take advantage of it. Even though the FTC cites some pretext to keep the system in place, many argue that the party is trying to revise the Fair Trade Law so much to get the authority to control businesses.

Uri Party floor leader Chun Jeong-bae harshly blamed the opposition Grand National Party, depicting it as a party with conviction and a philosophy that it can survive only when the economy sinks. But, it is fair to say that the Uri Party should reflect on itself rather than blaming others. The so-called corporate city is criticized as not being able to fulfill its purpose of attracting corporate investment. Worse yet, the ruling party is trying to eliminate even the existing inducement for corporate investment. Under the circumstance, there would be no company willing to make an investment and create jobs. It is the Uri Party that should not mess up the economy in the name of reform.