Big businesses rap US for call on Chaebol control
Korea Times
Big Businesses Rap US for Call on Chaebol Control
US Claims Chaebol’s Dominance Blocks Access by Multinationals to Korean Market During FTA Talks
By Park Hyong-ki, Staff Reporter
7 September 2006
The Federation of Korean Industries (FKI), Korea’s biggest business lobby group, has raised its voice against the United States’ demand for stricter rules on chaebols or family-run conglomerates in the free trade agreement talks between the two countries.
In a statement, FKI said yesterday that although the Korean business community greatly supports an FTA with the U.S., it cannot accept the U.S.’ request, as the proposal overlooks Korea’s market, business enviroment and international standards.
Korean conglomerates are under watchful eyes of anti-trust regulators,'' said an official at the FKI headquarters in Yoido, Seoul.
“Laws like equity investment cap, cross-shareholding rules and other chaebol restrictions have always been applied to big business groups, not to mid- and small-sized companies or even foreign invested companies in the country. Therefore, the U.S. demand is unacceptable and unfair.”
As far as this issue is concerned, large corporations are instead conversely discriminated against, the FKI added.
Big industrial groups have constantly argued against these rules as they cast a shadow over their investment plans and capital spending, calling for their abolishment.
The chaebol rules are part of the Fair Trade Commission's efforts to enhance corporate transparency as well as to prohibit family-controlled companies' anti-competitive practices and curb them from becoming too dominant in the market.
However, the governing Uri Party recently proposed a plan of easing anti-chaebol rules to the influential business circles, including FKI, the Korea Chamber of Commerce and Industry (KCCI) and the Korea International Trade Association (KITA) to boost investments and jobs amid a sluggish economy. The deal received little approval both on the political and business fronts.
The U.S.' call for stiffer competition laws on conglomerates to be included in an FTA can not be discovered in any other bilateral or multilateral trade accords established among countries in the world, including Korea's FTAs with other nations, the FKI official stressed.This U.S. claim is burdening only the Korean companies. The U.S. must withdraw this demand, which can roadblock both countries to successfully conclude a bilateral FTA.’’
The FKI’s response comes after chief U.S. negotiator Wendy Cutler said that the U.S. wants Korea to apply tougher rules on chaebols, adding that their dominance overshadows multinational companies operating in Korea.
Meanwhile, Korea’s chief negotiator Kim Jong-hoon responded by saying that the U.S. opinion on chaebols is wrong.
