If not an incompetent government, what else?

Cho Min-geun
The author is the business and industry news director of the JoongAng Ilbo.

A policy to contain the influx of unsafe foreign merchandise through direct online purchases has caused a major pratfall for the government. The policy itself was rough-and-ready, and the government response to consumer backlash equally sloppy.

The government held a briefing over the weekend to address consumer outcry. It clarified that its measure was not to restrict or ban 80 electrical and household appliances and kids’ items, but to more closely scrutinize their safeness. Its suggested that consumers misunderstood its intention.

Had consumers overreacted? The statement posted on the webpage of the Prime Minister’s Office on May 16 was loud and clear. It listed 34 overseas-made kids’ products, 34 electronic and household appliances and 12 consumer chemical products subject to an online purchase ban if they do not possess the Korea Certification (KC) stamp before reaching consumers. It specifically detailed the items that face a ban. The government cannot avoid criticism even if it blames consumers for misunderstanding the policy. The Prime Minister’s Office launched a task force of officials from the industry, environment, and food and drug safety ministries as well as the fair trade commission, the customs office and others in March. The statement said the taskforce drew up the measure after 20 meetings over the last two months. The action plan was endorsed in a Cabinet meeting led by Prime Minister Han Duck-soo. The announcement implies none from the government had pointed out the drawbacks in the policy during the process.

Safety checks on imports is already a routine duty for the government. Forming a pan-government team from 14 offices to strengthen the role is incomprehensible. The government has chosen to appear irresponsible to hide its deftness.

The task was complex, but the action simple. Consumer migration to Chinese e-commerce platforms like AliExpress and Temu accelerated at an alarming speed with their price competitiveness amid strong inflation, stifling local retailers, small merchants and manufacturers. Consumer concerns about safety and quality surged. Countries around the world are widely being inundated with cheap factory products rushed out of China, which is trying to combat deflation with exports.

There is a limit to the expansion of regulatory guardrails to contain the inflow, as such action must take into consideration the conflicting interests of consumers, producers and trade partners. Governments around the world are struggling to come up with justifiable and effective restrictions. We saw little effort from our government. It resorted to an expedient action without thorough deliberation — slapping KC authorization on online purchases the same as the imports that go through the customs process — to correct the “tilted playing field” favoring of foreign online retailers. But the industry responded as coolly to the plan as consumers, questioning the plausibility of verifying the KC mark for thousands of items being traded on online platforms. The policy lacked cause as well as efficacy. If the task force tapped the opinions of consumers and relevant industries, it could not have reached such a poor decision. It habitually turned to regulatory action instead of going through the opinion-gauging process to generate the policy flop.

The fiasco suggests the government’s outdated patriarchal style in policymaking. The role and competitiveness of the government have become imperative during the industrial transition period. Rival parties are at war over the policy flop. But the legislative branch shares responsibility for neglecting to lift regulations choking local retailers. How can we expect competent public policy action in response to complex issues related to economic security such as Tokyo’s pressure to push Naver from the Line chat business in Japan?

Chey Tae-won, chair of SK Group and the Korea Chamber of Commerce and Industry, recently posed a philosophical question to reporters. “Is Korea safe if it keeps to its past ways?” The world is changing at a dizzying pace. Korea could fall behind if it sticks to its traditional mindset. The government should deliberate deeply on the question raised by the entrepreneur facing everyday battles on the international stage.