1. Introduction to the text
This article discusses the issues surrounding offset trade in the defense industry. It highlights the challenges faced by some companies in fulfilling their offset obligations, and the potential impact on technology transfer and procurement costs.
2. Vocabulary
| Korean Word | Romanization | English Meaning | Contextual Example |
|---|---|---|---|
| 절충 | Jeolchung | Offset | Some companies have taken a long time, even up to 3 years, to complete their offset trade obligations. |
| 교역 | Gyoyeok | Trade | There is a tug-of-war between domestic and foreign companies over technology transfer in the offset trade. |
| 기술 | Gisul | Technology | The issue of technology transfer is a point of contention in the offset trade negotiations. |
| 있다 | Itda | To exist, to be | There are suggestions that the scale of offset trade should be reduced. |
| 이행 | Ihaeng | Fulfillment, implementation | Some companies have completed their offset trade obligations only after a long delay. |
| 완료 | Wanryo | Completion | The company finally completed the $11.6 million worth of offset trade in July, even though they had agreed to do so by November 2022. |
| 부과 | Bugwa | Imposition, assessment | If the offset trade is delayed, penalties are imposed on the company. |
| 상환 | Sanghwan | Repayment | If the company is unable to fulfill the offset trade even after multiple extensions, they have to repay 50% of the agreed amount in cash. |
| 선정 | Seonjeong | Selection | In such cases, it becomes difficult for the purchasing country to select the technology items they want to acquire. |
| 찾기 | Chajgi | To find | Foreign companies also find it difficult to locate suitable components to purchase in Korea. |
3. The main text in both Korean and English
일부 기업은 3년이 지나도록 절충 교역을 이행하지 않다가 뒤늦게 완료하기도 했다.
Some companies have taken a long time, even up to 3 years, to complete their offset trade obligations.
방산 업계에서는 기술 이전을 놓고 국내외 업체 간 줄다리기가 반복돼 절충 교역 규모를 줄여야 한다는 지적도 나온다.
There is a tug-of-war between domestic and foreign companies over technology transfer in the offset trade, leading to suggestions that the scale of offset trade should be reduced.
당시 2022년 11월까지 1160만달러(약 162억원) 상당의 절충 교역을 이행하기로 합의했으나 올해 7월에서야 완료했다.
The company had agreed to complete $11.6 million (about 162 billion won) worth of offset trade by November 2022, but they only did so in July this year.
통상 절충 교역 이행이 늦어지면, 해당 업체에 페널티(벌칙)가 부과된다.
Typically, if the offset trade is delayed, penalties are imposed on the company.
수차례 연장했음에도 이행이 어렵다면 현재까지 부과된 절충 교역 금액의 50%를 현금으로 상환하도록 돼 있다.
If the company is unable to fulfill the offset trade even after multiple extensions, they have to repay 50% of the agreed amount in cash.
이 경우 판매국에 요구할 기술 품목을 선정하기가 어렵고 해외 업체들 또한 국내에서 구입할 만한 부품을 찾기가 어려워진다.
In such cases, it becomes difficult for the purchasing country to select the technology items they want to acquire, and foreign companies also find it difficult to locate suitable components to purchase in Korea.
4. Reading comprehension questions
- What is the main issue discussed in the article regarding offset trade in the defense industry?
- What are some of the challenges faced by companies in fulfilling their offset trade obligations?
- How does the delay in fulfilling offset trade obligations impact the purchasing country and foreign companies?
- What are the potential penalties for companies that fail to fulfill their offset trade agreements?
- What suggestions have been made to address the issues surrounding offset trade in the defense industry?
5. Cultural and historical notes
Offset trade, also known as countertrade, is a common practice in the defense industry, where the purchasing country requires the seller to invest in the local economy or provide technology transfer as a condition of the sale. This practice is intended to benefit the local economy and promote technology development, but it can also create challenges for both the purchasing country and the selling companies.