Business Community: "No Global Legislative Precedent... Need to Develop Measures to Minimize Side Effects"
SME Sector: "Actively Welcome... Correcting Transaction Order"
[Asia Economy Reporter Oh Su-yeon] Lee Jae-myung, leader of the Democratic Party of Korea, stated on the 8th during the National Assembly plenary session that the passage of the Delivery Price Linkage System is "meaningful as it is a long-cherished wish for a fair economy and the number one common pledge of presidential candidates."
Lee said on Facebook that afternoon, "The Delivery Price Linkage System Act was promoted as a party policy by the Democratic Party and passed through bipartisan agreement."
He added, "We will do our best to handle urgent livelihood bills until the last day of the regular session of the National Assembly, and continue to address any remaining issues in the extraordinary session. Under the banner of prioritizing people's livelihood, we will exercise the authority given by the people to the fullest to protect their lives."
However, the business community showed mixed reactions. While organizations such as the Korea Chamber of Commerce and Industry, the Federation of Korean Industries, and the Korea International Trade Association expressed concerns about side effects, the small and medium-sized enterprises (SMEs) welcomed the move.
The Korea Chamber of Commerce and Industry stated in a commentary that "the amended Win-Win Cooperation Act, which includes the Delivery Price Linkage System unprecedented in global legislation, passed the National Assembly without resolving the concerns of the business community." They added, "It would not have been too late to legalize the system after verifying its side effects through pilot projects, so we regret the forced legislative push." They also emphasized the need to continuously review and supplement measures to minimize the side effects of the Delivery Price Linkage System legislation, resolve conflicts with existing laws, and devise innovation plans for SMEs.
Yoo Hwan-ik, head of the Industrial Headquarters at the Federation of Korean Industries, pointed out, "If the Delivery Price Linkage System is implemented, side effects such as consumer harm due to final product price increases, weakening of SME competitiveness, and factory relocation overseas may occur."
He continued, "Before implementing the system, the government should resolve conflicts with the current Subcontracting Act and minimize issues exposed during pilot projects. Additionally, it should develop groundbreaking incentives for companies implementing the Delivery Price Linkage System to minimize industrial concerns related to its implementation."
Kim Byung-yu, head of Member Services at the Korea International Trade Association, expressed concerns, saying, "The Trade Association is worried about the passage of the Delivery Price Linkage System bill in the National Assembly plenary session because it distorts the market principle of autonomy between contracting parties." He added, "This bill poses legal risks unique to Korea, which could increase uncertainty by causing foreign companies to withdraw or revise investment plans, so it should be abolished in the long term."
Contrary to the concerns expressed by economic organizations, the SME sector welcomed the introduction of the Delivery Price Linkage System and showed expectations.
The Korea Federation of SMEs said in a statement, "We actively welcome the passage of the Delivery Price Linkage System-related bill in the National Assembly plenary session," and expressed gratitude for the efforts of the National Assembly and government in legalizing the system.
They added, "Through legalization, we expect an era where SMEs receive fair compensation proportional to their efforts. We will cooperate with the government and large corporations to prepare implementation plans so that the Delivery Price Linkage System works effectively on the ground and strive to create an economic structure where SMEs and large corporations grow together."
The Korea Venture Business Association stated, "The Delivery Price Linkage System corrects the previously tilted playing field between large and small-medium enterprises. It will contribute to the development of a fair market economy by stabilizing corporate management, improving workers' wages, and creating safe workplaces."
They continued, "Before full implementation, it is necessary to prepare enforcement ordinances reflecting field voices regarding the core of the Delivery Price Linkage System, such as the scope of delivery payment linkage for contracts between consignors and consignees, adjustment conditions, indicators, and formulas. Based on this legalization, we hope that the culture of voluntary implementation of the Delivery Price Linkage System will be established not only in transactions between large and small-medium enterprises but also in second- and third-tier subcontracting transactions between mid-sized and small-medium enterprises."
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