Korea-Russia Expand Cooperation in Finance and Culture... Focus on New Northern Policy Implementation

Government Announces This Year's External Economic Policy Directions
Establishes Russia and 9 Bridges Action Plan 2.0
Criticism That Achievements Are Limited Without Inter-Korean Economic Cooperation Related to Abductees

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, is delivering opening remarks while presiding over the '210th Ministerial Meeting on External Economic Affairs' held at the Government Complex Sejong on the 20th.

[Sejong=Asia Economy Reporters Kim Hyunjung and Jang Sehee] At the Foreign Economic Ministers' Meeting held on the 20th, the government announced the New Northern Policy as the top priority policy in the 2020 Foreign Economic Policy Direction, forecasting that various economic cooperation with northern countries such as Russia, Mongolia, and Central Asia will be promoted this year. This government announcement came after President Moon Jae-in recently emphasized making this year the "Year of New Northern Cooperation." However, there is an analysis that economic cooperation with northern countries like Russia will be difficult to show tangible results while inter-Korean economic cooperation remains blocked. For this reason, some interpret the government's emphasis on the New Northern Policy as a key project this year as a reaffirmation of the government's will regarding inter-Korean economic cooperation.

◆Focused Promotion of the New Northern Policy... Deriving and Expanding Substantial Results= The government selected the New Northern Policy as a major task in this year's foreign economic policy. For one of the main partner countries, Russia, the government plans to establish a version 2.0 of the "9 Bridges Action Plan" proposed by President Moon Jae-in in September 2017, adding finance, culture, and innovation sectors. The existing 9 Bridges Action Plan includes gas, railroads, ports, electricity, Arctic routes, shipbuilding, jobs, agriculture, and fisheries. This plan is primarily infrastructure development-oriented and inevitably requires physical cooperation or joint discussions with North Korea. Given that U.S. sanctions on North Korea remain in place, making it difficult to realize the related action plan, the focus appears to have shifted to finance, culture, and innovation sectors where cooperation between the two countries is feasible.

Some point out that without the foundation of inter-Korean economic cooperation, the achievements of the New Northern Policy will be limited. There is also an analysis that the government's New Northern projects are aimed at building justification for inter-Korean economic cooperation. In response, Deputy Prime Minister Hong Nam-ki stated, "Inter-Korean relations and North Korea policy are distinct," adding, "Basically, Russia, Mongolia, and Central Asia are at the center of the economic cooperation framework, so there is no conflict."

◆Restoration of Korea-China Economic Cooperation... Discussions on Export Controls with Japan= Strengthening economic cooperation with China was also identified as a key task this year. First, the Korea-China Economic Ministers' Meeting, attended by Korea’s Ministry of Economy and Finance and China’s National Development and Reform Commission, will be held in Seoul in March to specify cooperation in service and new industry sectors and joint entry of companies from both countries into third countries. In particular, the government plans to use high-level cooperation channels to resolve difficulties faced by Korean companies.

The Chinese government is currently investigating Samsung Electronics and SK Hynix for potential antitrust violations such as price-fixing and tying sales, following complaints from its domestic smartphone industry, raising concerns about damage to Korean companies. The government is also accelerating dialogue with Japan, with which it is experiencing trade conflicts. The 8th Korea-Japan Export Control Policy Dialogue will be held soon in Seoul with Japanese diplomatic authorities to restore the situation to before Japan’s export restrictions through consultations between diplomatic authorities. Previously, the two countries held the 7th Korea-Japan Export Control Policy Dialogue in Tokyo on December 16 last year for the first time in three and a half years but failed to reach concrete conclusions.

Additionally, the government is focusing on expanding foreign investment attraction. To maintain over $20 billion in investment for six consecutive years, it plans to expand one-on-one customized investment briefings (IR) and cash incentives, and in July, it will include advanced industries in the cash support targets for foreign-invested companies.

This content was produced with the assistance of AI translation services.