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Talk of the Day -- Learn from South Korea in trade protection

Talk of the Day -- Learn from South Korea in trade protection

South Korea's Fair Trade Commission has imposed strict conditions on its approval of a planned merger of two Taiwanese integrated circuit designers -- MediaTek Inc. and MStar Semiconductor Inc., according to latest Korean media reports. The move was rare, Korean news media said, adding that the Korean free trade regulator's requests could exacerbate trade frictions between Taiwan and South Korea. Nevertheless, the reports said the Korea Free Trade Commission (KFTC) expected MediaTek and MStar to accept its conditions because two Korean companies Samsung and LG are their key customers. Local industry analysts said the KFTC's move reflected its ultimate goal of protecting interests of Korean companies. Its move should remind our trade regulators in fulfilling their mission in the face of ever increasing international competition. Late last year, South Korea's Nexon Co. was fined for intending to merge Gamania Digital Entertainment, one of Taiwan's largest online game and digital entertainment companies. The following are excerpts from local media coverage of development in the technology sector: United Evening News: MediaTek, Taiwan's largest handset chip designer, struck a deal to merge its smaller rival MStar, which specializes in TV chip design, last August. But the merger has not yet been realized pending approval of South Korea and China. South Korea finally gave it the green light March 18, but outlined several requirements, according to Korean news media. The KFTC demanded that the merged company should continue to lower prices for its components and parts in the next three years, the reports said. It also pointed out that the two Korean companies Samsung and LG are entitled to seek other suppliers. Moreover, the KFTC said the merged Taiwanese firm should offer written warranty for product prices, technical support and replacement of defective products. According to a KFTC survey, MediaTek and MStar jointly controlled 57 percent of the global TC chip market in 2011. As their merger could lead to their dominance of the global market, the KFTC's conditions are aimed at preventing price fixing, Korean media reports said. Responding to the reports, MediaTek said Wednesday that the KFTC requirements are generally reasonable. The company said it will not abuse its merger deal with MStar to engage in unfair trade and will instead focus on speeding up innovation and technological upgrading to offer better and cheaper products. Also on Wednesday, Taiwanese smartphone maker HTC Corp. denied a foreign media report that its chief executive officer Peter Chou would step down if its new flagship model -- the New HTC One -- fails to reach sales target. Meanwhile, the company refrained from making comments on the report that the New HTC One cannot hit store shelves until April because of delayed supply of key parts, including camera lens. (March 20, 2013). Commercial Times: Former Japanese Ambassador to China Uichiro Niwa said in Taipei Tuesday that Taiwan, Japan, China and South Korea should form a free trade zone to boost trade liberalization for mutual benefits. He also optimistically forecast that Japan-China tensions over the disputed Diaoyutai Islands will cool down in May when China's new Premier Li Keqiang will attend a China-Japan-Korea leadership meeting. (March 20, 2013). (By Sofia Wu)


Updated : 2021-03-02 00:26 GMT+08:00