Support Extended to 'Concerned Companies' Affected by FTA... Scope Expanded to Include IPEF and More

Amendment to the Trade Adjustment Assistance Act Passed in the National Assembly Plenary Session

Requirements for corporate support related to the promotion of free trade agreements (FTAs) will be relaxed. Until now, only companies suffering severe damage were supported, but starting next year, the government will be able to support companies that are also concerned about substantial impacts.

The Ministry of Trade, Industry and Energy announced that the amendment to the Act on Trade Adjustment Assistance, which includes these changes, passed the National Assembly plenary session on the 25th.

Trade adjustment assistance, introduced in 2007 as part of supplementary measures for the manufacturing sector due to FTA promotion, remained at the level of short-term loans to prevent the closure of FTA-affected companies, showing limitations in fundamentally strengthening corporate competitiveness. Additionally, the recent trade environment is changing not only due to market opening from FTAs but also due to regulations related to supply chains and the environment, raising opinions that support for these areas is also necessary.

On the 9th, the National Assembly plenary session passed the "Special Act on Ending the Breeding, Slaughter, and Distribution of Dogs for Food Purposes." Photo by Hyunmin Kim kimhyun81@

This amendment first changed the name of the law to the "Act on Response and Support for Changes in the Trade Environment" to make it easier for the public to understand. It also expanded the scope of supported agreements from existing FTAs to include "trade treaties, etc." This means that companies can now be supported in response to environmental changes caused by the conclusion of new trade agreements such as the Indo-Pacific Economic Framework (IPEF), as well as FTAs.

The requirements for corporate support have also been relaxed. Previously, only companies suffering "severe damage" due to FTAs were supported, but going forward, companies that are "concerned" about "substantial impacts" caused by trade treaties, etc., can also be included, enabling proactive support to secure competitiveness.

The content of corporate support has been enhanced. Government support will shift from one-time financial loans to "technology and management innovation support," and a close support system by specialized institutions will be introduced, from corporate diagnosis to the establishment and implementation of competitiveness enhancement strategies, so that changes in trade can become a catalyst for companies to leap into global top-tier enterprises.

The amended law is scheduled to be fully enforced on January 1 of next year after about 11 months of preparation, including the revision of subordinate statutes.