Transition Team: "If Delivery Prices Are Adjusted, 'Incentives'... Fair Trade Commission's Ex Officio Investigation Exempted"

Kim Ki-heung, Deputy Spokesperson of the Presidential Transition Committee [Photo by Yonhap News]

The Presidential Transition Committee (PTC) has prepared a model contract that reflects raw material prices in delivery prices and decided to incorporate the performance of delivery price adjustments into the evaluation of fair trade agreement implementation. This measure takes into account the fact that small and medium-sized enterprises (SMEs) are experiencing management difficulties as they fail to reflect the rising raw material prices in their delivery prices amid the intensifying upward trend in raw material costs.

On the 19th, Kim Ki-heung, deputy spokesperson of the PTC, stated at a briefing room in Tongui-dong, Seoul, "We are discussing various measures with the Fair Trade Commission and the Ministry of SMEs and Startups to resolve the difficulties faced by SMEs," and presented this adjustment plan.

First, the PTC plans to prepare and distribute a model contract to ensure that raw material prices are reflected in delivery prices. In particular, it plans to reflect the performance of delivery price adjustments in the evaluation of fair trade agreement implementation. It will require disclosure of the status of delivery price adjustments by primary contractors belonging to publicly disclosed corporate groups and ensure that adjustments are made down to second-tier and lower-tier subcontractors.

The model contract will be prepared by referring to cases in the current market where raw material prices are autonomously reflected in delivery prices. Deputy spokesperson Kim added, "For example, methods under discussion include periodically reflecting raw material price fluctuations based on the market price at the time of contract or having the primary contractor directly negotiate raw material prices with suppliers to reflect them in delivery prices."

Companies that conclude contracts reflecting delivery prices will be provided with incentives. The policy aims to autonomously establish and spread the practice of adjusting delivery prices according to fluctuations in raw material prices in the market. Regarding this, Deputy spokesperson Kim said, "As for incentives, there is a plan to award additional points during the current fair trade agreement implementation evaluation," adding, "Companies scoring 95 or above are classified as top-tier, and those scoring 90 or above as excellent, based on comprehensive assessments of contract fairness, legal compliance efforts, and mutual growth support. Companies receiving top-tier or excellent ratings will be exempt from Fair Trade Commission’s ex officio investigations."

Additionally, raw material prices will be monitored regularly, and investigations related to delivery price adjustments will be strengthened. Through the ‘Delivery Price Adjustment Reporting Center’ operated by the Fair Trade Commission, any illegal acts such as omitting the mandatory delivery price adjustment items in subcontract contracts or refusing to negotiate delivery price adjustments will be strictly addressed. The PTC is also considering lowering the barriers so that SME cooperatives and others can more easily negotiate on behalf of individual SMEs during delivery price adjustment discussions.

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