[Deputy Director's Column] Ministry of SMEs and Startups and Used Cars, The End of the Dilemma

[Asia Economy Kim Daeseop, Deputy Director of the Ministry of SMEs and Startups] It seems like they are being cautious. A high-ranking former government official I recently met said this about the Ministry of SMEs and Startups postponing the Small Business Livelihood-Type Suitable Industry Deliberation Committee meeting regarding the used car sales industry. One of the reasons for not holding the committee within the legally mandated period was cited as the "Ministry of SMEs and Startups' dilemma(?)."

According to the Special Act on the Designation of Livelihood-Type Suitable Industries, the Minister of SMEs and Startups must designate and announce the livelihood-type suitable industry within three months (with a possible three-month extension) from the day the Win-Win Growth Committee recommends the designation, based on the deliberation and resolution of the committee.

The deliberation and resolution are decided through a committee composed of 15 private experts, but ultimately, the "joy and sorrow" greatly depend on whether the Ministry of SMEs and Startups designates the livelihood-type suitable industry. Depending on the designation or non-designation outcome, one party among the stakeholders may suffer significant business damage.

The Korea Used Car Dealers Association Federation requested the Win-Win Growth Committee in February last year to recommend the designation of the used car sales industry as a livelihood-type suitable industry and applied for designation to the Ministry of SMEs and Startups.

On November 6 of the same year, the Win-Win Growth Committee submitted an opinion to the Ministry of SMEs and Startups stating that the used car sales industry partially does not meet the criteria for livelihood-type suitable industry, according to the resolution of the plenary session. According to the law, the Ministry of SMEs and Startups should have completed the committee’s deliberation and resolution and the designation and announcement of the livelihood-type suitable industry by the 6th of this month.

If designated as a Small Business Livelihood-Type Suitable Industry, large corporations, etc., in principle, cannot newly enter or expand existing businesses in the relevant industry, and if violated, a compliance penalty of up to 5% of the violating sales is imposed. Small business owners can receive policy support to protect and build self-sustainability during the designation period (5 years).

The Federation argues that if domestic major automobile manufacturers enter the used car sales market, there is no way to check or control volume and price, and large-scale unemployment among small business owners will be caused. On the other hand, the Win-Win Growth Committee expressed the opinion that recommending the used car sales industry as a livelihood-type suitable industry does not meet some criteria, including industrial competitiveness and consumer welfare impact.

Now, let's end the dilemma. Protecting small business owners and strengthening self-sustainability policies are the core duties of the Ministry of SMEs and Startups. They must be fulfilled faithfully.