Reasons for Proposal
The Trade Adjustment Assistance System was introduced to establish and implement support measures for enterprises and workers who have been harmed or are certainly harmed by free trade agreements (FTA) signed by the government. Enterprises eligible for assistance in trade adjustment, which are harmed by declined revenue because of increased imports as a result of the implementation of FTAs are designated for financing and consulting support.
The external trade environment surrounding Korean enterprises, however, is changing rapidly due to not only FTAs but also COVID-19, trade disputes, and protectionism, which leads to increasing closures and job losses in small and medium enterprises vulnerable to external shocks.
Nevertheless, support under the Trade Adjustment Assistance System is only limited to “enterprises harmed by FTAs” and not provided to Korean enterprises and workers experiencing a crisis due to the shock of a rapidly changing trade environment.
On the other hand, the US and EU have the Trade Adjustment Assistance System (TAA) and European Globalisation Adjustment Fund (EGF), which are equivalent to the Trade Adjustment Assistance System in Korea, and support not just harm by FTAs but also a wide range of harm due to economic downturn, increasing imports, trade changes due to glottalization, and financial crises.
In this regard, to protect enterprises and workers from temporary shocks in trade crises, overcome national crises and strengthen stability in industry and employment, and consider fairness with overseas cases where the US and EU support trade harm extensively, experts in industry and trade are agreeing on the suggestion that support under the current Trade Adjustment Assistance System needs to be expanded.
Hence, it is intended to newly insert a provision that supports enterprises and workers harmed by a rapidly changing trade environment to the current Act, which only defines harm by FTAs, in an effort to protect enterprises and workers from temporary shocks in trade environments and establish a systematic safety net which promotes safety in industry and employment.
Details
A. Change the title of the Act to the Act on Trade Adjustment Assistance (Act Title).
B. Introduce trade harm enterprise and worker designation systems to supplement the current Trade Adjustment Assistance System, which only defines harm by FTAs, to minimize or overcome harm in enterprises and workers due to rapid changes in trade environments including global supply chain collapses (Articles 14 and 15 newly inserted).
C. Allow the Minister of Trade, Industry and Energy and the Minister of Employment and Labor to designate trade harm agencies to allow the agencies to efficiently support designated trade harm enterprises or workers (Article 16-2 newly inserted).
