Global Trade Alert

A 2 July 2009 press release by the Korean Ministry of Strategy and Finance described the steps to be taken by the Korean government in promoting corporate investment during the downturn. One such proposal referred to public procurement practices towards small and medium-sized enterprises. This proposal was put in the following manner: "To encourage R&D investment by SMEs, municipal governments and public institutions will be obliged to purchase SMEs' products up to 10 percent of their total purchase value, a two fold increase from 5 percent."
Such a proposal could harm the commercial interests of foreign firms that are not SMEs. Moreover, the description of the policy did not present any assurances that foreign SMEs located in Korea would be eligible to benefit from this proposal.