Government supports technological and management innovation for companies affected by FTA/IPEF ‘new trade agreement’ :: Sympathetic Media Newsis ::

Trade Change Response Act takes effect on January 1

Establishment of ‘innovation strategy’ instead of financing

(Sejong = Newsis) Reporter Son Cha-min = The government plans to support technological and management innovation of companies that have lost sales due to new trade agreements as well as free trade agreements (FTAs). The support system has been reorganized so that Korean companies can respond more effectively to the changing trade environment.

The Ministry of Trade, Industry and Energy announced on the 31st that the ‘Trade Change Response Act’ with these contents will come into effect from January 1st.

First, we support companies affected by the implementation of new types of trade agreements such as FTA, Indo-Pacific Economic Framework (IPEF), and Digital Economy Partnership Agreement (DEPA).

Previously, support was focused on financial loans only for FTAs, but the scope of support was expanded to include ‘trade treaties, etc.’

In order to improve the fundamental competitiveness of companies, one-time financial loans will be abolished (sunset after 5 years) and support for technological and management innovation for companies will be introduced.

Specifically, it supports the establishment of a company’s technology and management innovation strategy through basic diagnosis of the company’s business environment and dispatch of technology and management experts to the field.

In addition, support requirements were relaxed to expand the number of companies eligible for support. Previously, only companies that suffered serious damage due to an increase in imports of the same or directly competitive products from FTA partner countries were supported, but in the future, we plan to also support companies that were negatively affected by a decrease in imports of raw materials and intermediate products and a decrease in exports of final products.

The standard for judging the impact on trade suffered by a company was lowered from ‘10% or more reduction’ in sales or production to ‘5% or more reduction’.

In addition, the Small and Medium Venture Business Corporation, which has been carrying out trade coordination support work as the existing Trade Coordination Support Center, will take over the position as the Trade Change Response Support Center and carry out trade change response support work.

Jinhyeok Choi, Director of Free Trade Agreement Policy at the Ministry of Trade, Industry and Energy, said, “With the implementation of the Trade Change Response Act, timely support has become possible by reflecting recent trade policy trends, such as the expansion of new trade norms agreements,” and added, “Through support for technology and management innovation, companies can participate in global trade.” “The government will provide support so that we can more actively respond to environmental changes,” he said.

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