Fair Trade Commission Chairman Urges Samsung to "Promote Win-Win with Second-Tier and Lower Suppliers"

Samsung 1st, 2nd, and 3rd Tier Partners Fair Trade Agreement Ceremony and Electronics Industry Meeting Held

Samsung Electronics Seocho Building. Photo by Mun Honam munonam@

[Asia Economy Reporter Moon Chaeseok] "For true mutual growth and strengthening industrial competitiveness, the warmth must be sufficiently delivered not only to the first-tier suppliers of large corporations but also to the second- and third-tier suppliers."

On the 28th, Cho Sung-wook, Chairman of the Fair Trade Commission, visited Samsung Electronics Digital City in Suwon, Gyeonggi Province, and emphasized this to Samsung.

At the 'Samsung Group Fair Trade Agreement Signing Ceremony and Electronics Industry Meeting' held that day, Chairman Cho, Samsung Electronics Vice Chairman Kim Ki-nam, and four representatives from three Samsung Group companies (Samsung Electronics, Samsung Electro-Mechanics, Samsung Display), along with nine representatives from first-, second-, and third-tier suppliers in the electrical and electronics sectors, attended.

◆Samsung and First-Tier Suppliers Use Standard Contracts... Efforts to Pay Cash Within 30 Days After Closing Between First- and Second-Tier Suppliers

Image source=Yonhap News

A fair trade agreement was signed between Samsung and first-tier suppliers, between first- and second-tier suppliers, and between second- and third-tier suppliers. Large and medium-sized enterprises and small and medium-sized suppliers pledged to comply with fair trade-related laws and autonomously cooperate for mutual growth. Companies with excellent implementation evaluation results will receive incentives such as exemption from ex officio investigations.

The agreement between Samsung and first-tier suppliers includes ▲use of standard subcontract agreements ▲operation of a 'major information prior notification system' for production and discontinuation plans ▲financial support for suppliers through a mutual growth fund ▲support for joint technology development and patent applications.

The agreements between first- and second-tier suppliers and between second- and third-tier suppliers include ▲efforts to pay cash within 30 days after the closing date ▲sharing of benefits such as mutual growth cooperation funds, technology development, and manpower support from large corporations with lower-tier suppliers.

Kim Ki-nam, Vice Chairman of Samsung Electronics, said, "With the signing ceremony between Samsung and first-, second-, and third-tier suppliers as an opportunity, we will build a higher-level cooperative relationship as a community of shared destiny where large corporations and small and medium suppliers grow together."

◆Cho Sung-wook Emphasizes 'Mutual Growth Spillover'... Urges Samsung to "Participate in Creating a Fair Ecosystem"

Kim Sang-jo, Chief of Policy at the Blue House, and Cho Sung-wook, Chairman of the Fair Trade Commission, attended the "Agreement Ceremony for the Establishment and Expansion of Fair Economy in 7 Major Public Enterprises" held at the National Assembly on November 26 last year, and are seen talking before the meeting started. Photo by Yoon Dong-joo doso7@

According to the Fair Trade Commission, this year, 11 Samsung Group affiliates including Samsung Electronics, Samsung Display, Samsung Electro-Mechanics, Samsung SDI, Samsung SDS, Samsung C&T (Construction and Fashion), Samsung Heavy Industries, Samsung Engineering, Cheil Worldwide, Hotel Shilla, and Semes signed fair trade agreements with 2,602 first-tier suppliers. 520 first-tier suppliers signed agreements with 1,927 second-tier suppliers, and 510 second-tier suppliers signed agreements with 801 third-tier suppliers.

Chairman Cho mentioned that the rate at which Samsung Electronics' first-tier suppliers paid subcontracting fees in cash to second-tier suppliers reached 90%, and the payment period was within 24 days, about one-third of the legal deadline. He focused on the spillover effect of mutual growth through the agreement system.

He emphasized that large corporations must cooperate with second- and third-tier suppliers as well. He evaluated, "Samsung Group and its suppliers recognized this early and have actively participated in the fair trade agreement system since 2011."

Chairman Cho said, "The Fair Trade Commission will also focus its capabilities on strengthening the bargaining power of subcontractors and ensuring the effectiveness of rights remedies for victim companies, thereby solidifying the institutional foundation of a fair economy," and urged, "Businesses should actively participate in creating a fair market ecosystem by complying with fair trade-related laws."

The Fair Trade Commission attributed significance to this signing ceremony as the first fair trade agreement signing event involving not only first-tier suppliers who directly transact with large corporations but also second- and third-tier suppliers together.

Meanwhile, Chairman Cho listened to difficulties and suggestions from the electronics industry at the meeting. He said, "We will strive to ensure that companies' difficulties are resolved promptly and that the suggestions are faithfully reflected in future Fair Trade Commission policy formulation and system improvement processes."

This content was produced with the assistance of AI translation services.