[Weekly Review] 1 Million Won COVID-19 Support Fund for Small Business Owners... Payment by the End of This Month

Quarantine, Implementation of High-Intensity Social Distancing Policy '4 People · 9 PM'
Trade, Official Start of CPTPP Accession Procedures
Labor, Discussion on Expanding Labor Standards Act for Workplaces with Fewer than 5 Employees

Prime Minister Kim Boo-kyum (far right) is conducting a joint government briefing on support measures for small business owners and self-employed workers following the implementation of strengthened quarantine measures at the Government Seoul Office in Jongno-gu, Seoul, on the 17th. On this day, the government announced a plan to provide quarantine support funds of 100,000,000 KRW each, totaling 3.2 trillion KRW, to 3.2 million small enterprises and small business owners affected by the strengthened quarantine measures, separate from loss compensation. Photo by Kim Hyun-min kimhyun81@

[Sejong=Asia Economy Reporter Moon Chaeseok] The government has decided to provide 1 million won in 'quarantine support funds' to 3.2 million small business owners whose sales have declined due to strengthened quarantine measures, starting at the end of this month. The quarantine authorities decided to implement a 'high-intensity social distancing' policy from the 18th until January 2 of next year, limiting private gatherings to four people and requiring restaurants and cafes to close by 9 p.m. Because of this, the government changed its economic assessment from expecting a recovery in domestic demand under the phased daily recovery (With Corona) policy to expressing concerns about the impact of increased confirmed cases and strengthened quarantine measures on domestic demand within a month.

In the trade sector, the government decided to officially begin the comprehensive and gradual accession process to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and in the labor sector, discussions on a bill to expand the application of the Labor Standards Act to workplaces with fewer than five employees proceeded in the National Assembly.

Strengthening Quarantine with '4-person, 9 o'clock' System... Payment of Quarantine Support Funds

On the 16th, an employee wiping a table at a restaurant in Jung-gu, Seoul. Photo by Mun Ho-nam munonam@

The government announced on the 17th that it will implement a three-part package policy including quarantine support funds, in-kind support, and additional loss compensation for small business owners by investing 4.3 trillion won. Cash support will be provided to 3.2 million small business owners, and additional in-kind support will be provided to 1.15 million small business owners in restaurants, cafes, PC rooms, and study rooms. Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki explained regarding the payment of quarantine support funds, "As long as a decrease in sales is confirmed, 1 million won in cash will be provided from the end of the year regardless of sales scale or the level of quarantine measures," adding, "About 900,000 places that received loss compensation for businesses subject to closure or restrictions, as well as 2.3 million places such as travel and performance industries that were not eligible for loss compensation, are also included."

The government will invest 1 trillion won to expand the scope of small business loss compensation industries and raise the minimum amount from 100,000 won to 500,000 won. Additionally, the government will invest 100 billion won to provide additional in-kind support worth about 100,000 won to 1.15 million small business owners in restaurants, cafes, PC rooms, and study rooms where the vaccination certificate and negative test confirmation system (quarantine pass) is applied.

Along with these support measures, the government decided to implement a 'high-intensity social distancing' policy from today until January 2 of next year. Private gatherings are limited to four people, and restaurants and cafes must close by 9 p.m. Regarding this, the Ministry of Economy and Finance published the 'Recent Economic Trends (Green Book December issue)' the day before, stating, "Due to the increase in COVID-19 confirmed cases and strengthened quarantine measures, there are concerns about the impact on domestic demand, including face-to-face service industries." Last month's Green Book diagnosed that "the domestic demand environment, including face-to-face service industries, is likely to gradually improve due to the transition of the quarantine system (With Corona implementation)," but within a month, the economic assessment was changed to 'concern.'

Officialization of CPTPP Accession Covering 15% of Global Trade Volume

Despite the severe quarantine situation, the 'trade clock' did not stop. The government announced on the 13th during the Foreign Economic Ministers' Meeting that it would begin the CPTPP accession process. Deputy Prime Minister Hong said at the meeting, "It is difficult to remain only in inter-ministerial discussions about CPTPP accession," and added, "We will initiate related procedures, including social discussions with various stakeholders." Two days later, at a foreign press briefing, he added, "Our goal is to submit the CPTPP accession application within the current (Moon Jae-in) administration's term."

The CPTPP is a multilateral FTA launched at the end of 2018 by 11 countries including Japan, Australia, and Mexico. As of 2019, its trade volume was 5.7 trillion dollars, accounting for 15% of global trade. Its level of openness is considerably higher than other trade agreements. The strategic importance has increased since China and Taiwan applied for accession in October.

The biggest obstacle is expected to be the issue of lifting the ban on Japanese seafood imports, especially in the agriculture and fisheries sectors. Deputy Prime Minister Hong said, "Negotiations should be conducted within the scope of maximizing national interests, especially for sensitive sectors mainly in agriculture and fisheries, and the government should support the areas that suffer damage," adding, "According to the response from Japan confirmed yesterday, Korea's CPTPP accession is not expected to be linked to diplomatic or judicial issues, but Japan may raise the Fukushima seafood issue, and we expect consultations on this."

Expanding Labor Standards Act to 'Workplaces with Fewer than 5 Employees'... Discussions Accelerate

Yoon Seok-yeol, the presidential candidate of the People Power Party, is seen receiving and listening to an explanation of the "Legislative Petition Urging the Amendment of the Labor Standards Act" from Han Sang-gyun, former chairman of the Korean Confederation of Trade Unions (KCTU), who was holding a press conference outside the building on his way to attend a meeting at the Korea Federation of Trade Unions (KFTU) hall in Yeouido, Seoul, on the 15th. Photo by Yoon Dong-ju doso7@

Discussions on a bill to expand the application scope of the Labor Standards Act, which currently applies only to workplaces with five or more employees, have also accelerated in the National Assembly. The Environment and Labor Committee of the National Assembly held a subcommittee on employment and labor law on the afternoon of the 16th to discuss amendments including 'full application' (proposed by Justice Party lawmaker Kang Eun-mi) and 'full application excluding some small business owners' (proposed by Democratic Party lawmaker Yoon Jun-byeong).

The subcommittee members did not decide which proposal to apply or how to apply it. They agreed to hold the subcommittee again on the 21st. However, it appears that the long-standing grand discourse on the Labor Standards Act amendment, which has been under tripartite labor-management-government negotiations, is progressing rapidly.

In this regard, Yoon Seok-yeol, the People Power Party's presidential candidate, expressed support for the 'public institution labor director system,' which allows workers to participate directly in management. He also expressed support for the 'time-off system (working hours exemption system)' that grants public officials and teachers the authority to focus solely on union activities during working hours. On the 15th, at a private meeting with the leadership of the Federation of Korean Trade Unions held at the Korea Federation of Trade Unions building in Yeouido, Seoul, candidate Yoon stated his support for the public institution labor director system and the time-off system for public officials and teachers.