"Large Corporations, Not Opposing 'Supply Price Linkage System' but Asking for Cooperation," Appeal from SMEs

Kim Ki-moon, President of the Korea Federation of SMEs, Holds Press Briefing on the 28th
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[Asia Economy Reporter Kim Bo-kyung] The small and medium-sized enterprise (SME) sector has urged large corporations to cooperate in passing legislation to introduce a delivery price linkage system. Regarding the Cargo Solidarity transport refusal incident, they supported the government's push for a work commencement order.

On the morning of the 28th, Kim Ki-moon, chairman of the Korea Federation of SMEs, held a briefing at the Federation's office in Yeouido, Seoul, and announced the SME sector's stance on recent issues.

First, he appealed for active cooperation from large corporations to pass the amendment to the "Large and Small Business Win-Win Cooperation Act," which includes the delivery price linkage system. The Win-Win Cooperation Act passed the National Assembly's Industry, Trade, Energy, SMEs and Startups Committee on the 24th and is now awaiting processing by the Legislation and Judiciary Committee and the plenary session. The introduction of the delivery price linkage system has been a 14-year-long aspiration of the SME sector. However, five economic organizations, including the Federation of Korean Industries, issued a statement opposing it, advocating for "voluntary participation first, legislation later." They argued that enforcing contract terms between companies could disrupt trade order.

In response, Chairman Kim explained, "The delivery price linkage system is intended to create rules for coexistence between large and small enterprises," adding, "Since the system excludes cases where the parties agree, there will be almost no instances where voluntary cooperation violates the law." He expressed discomfort, saying, "I hope economic organizations do not react sensitively," and criticized, "It is unreasonable to issue a statement now after not taking action for 14 years." He also sought to alleviate concerns by stating, "There may be some shortcomings when the law is implemented," and "I have discussed with Minister Lee Young of the Ministry of SMEs and Startups to operate the system for one to two years and then make improvements."

During a Q&A session with reporters, Chairman Kim clarified his position on why only the Federation of SMEs among the six economic organizations voices a different opinion regarding the delivery price linkage system: "If it is something that must be done for SMEs, I am willing to be isolated." He particularly noted, "In the case of the Korea Chamber of Commerce and Industry and the Korea International Trade Association, over 90% of their members are SMEs," adding, "That is their official stance, but their members likely do not oppose the linkage system."

Furthermore, he mentioned the necessity of the government's work commencement order, warning that if the indefinite collective transport refusal by the Cargo Solidarity under the Korean Confederation of Trade Unions prolongs, damages such as transaction suspensions are expected. According to the Act on the Transport Business of Freight Motor Vehicles, if a group refuses freight transport without justifiable reasons, causing a national economic crisis, the Minister of Land, Infrastructure and Transport can issue a work commencement order to transport operators after deliberation by the State Council.

Chairman Kim expressed concern that prolonged logistics disruptions and delivery delays could lead overseas premium customers to shift their business from Korea to other countries. According to a June survey by the Federation of SMEs, the biggest damages from the Cargo Solidarity transport refusal were delayed product delivery (80.9%) and difficulties in procuring raw materials (64.9%). He said, "Companies exporting daily 3 to 5 container loads of essential daily goods like sanitary tissues to U.S. retailers such as Costco and Walmart have expressed that switching import sources for daily necessities is not difficult, hence the need for a work commencement order."