[Viewpoint] Supermarket madness

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[Viewpoint] Supermarket madness

Large discount stores were first introduced in Korea in the mid-1990s. Since then they have positioned themselves as a part of our daily lives, as consumers have welcomed them in with open wallets. However, the recent rapid increase in the number of these types of stores is threatening the foundation of conventional supermarkets and smaller markets.

A bill that would temper additional growth of large discount stores is being pursued, based on the sentiment that the weak should be protected. The bill includes the introduction of a registration system, limited operation times and additional conditions for opening large discount stores. Additionally, it regulates that they must be at least 500 meters (547 yards) away from traditional markets.

Whether or not these regulations are in accordance with international standards and are effective domestic measures to address the situation must be considered before they become law.

Korea already promised an open market to the World Trade Organization during the Uruguay Round. The agreement includes the free establishment of consumer stores, excluding shopping centers and department stores. The current bill abides by international standards - as long as it incorporates certain registration standards and is applied indiscriminately to domestic and international businesses.

However, discriminatory limitations on operating times and the requirement that large discount stores set up shop at least 500 meters from traditional markets violates the international promises we made.

First of all, since large Korean discount stores are not technically shopping centers, department stores or general consumer stores, market access must not be limited.

Some scholars claim that distance requirements can be recognized as exceptions to this from the perspective of zoning for preservation of traditional culture. However, zoning should be applied to prohibit gambling facilities from setting up near schools and adult entertainment facilities from locating near ancient palaces - not to prohibit the operation of similar businesses.

Based simply on the promises Korea made to the WTO, additional expansion of large discount stores can in fact be limited. We did not promise to provide completely unrestricted access to all items. We only permitted sales of food such as vegetables, fruit and fish as well as other everyday items. Yet to restrict sales of these items at discount stores would be the same as saying they should not operate at all.

Violation of the most-favored-nation rule is another problem. More than two foreign companies have advanced to the consumer sales market in Korea and handle all the items. Therefore, limiting new stores or items sold violates the rule.

Ultimately, the bill that has been presented has many problems in terms of international standards. International law ratified by the National Assembly is as effective as domestic law in Korea. Furthermore, the bill violates the Korea?European Union free trade agreement and concessions already presented to the World Trade Organization that promise more openness than in the past.

International standards aside, there is also the problem of whether or not the expansion of large discount stores should really be regulated. It is not up to the government to regulate what form of business is right. Even if regulations are necessary, we must think about whether direct intervention is the most effective means.

A thorough examination of whether the only way to protect small and midsize markets is to prevent advancement of large discount stores - and what exactly is best for the convenience and benefit of consumers - is necessary. If the conclusion is still that direct regulation is needed, Korea should anticipate lawsuits from the countries involved and prepare for the loss of national trust that follows.


*The writer is the dean of the Kyung Hee University Graduate School of Pan-Pacific International Studies. Translation by the JoongAng Daily staff.


by Sung Keuk-je

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