Yoo Myung-hee Increasing Activities... "Global Supply Chain Restructuring"

Yoo Myung-hee, Chief Negotiator of the Ministry of Trade, Industry and Energy. / Photo by Moon Ho-nam munonam@

[Asia Economy Reporter Moon Chaeseok] South Korea's trade chief is actively engaging not only overseas but also in domestic activities. As voices calling for the restructuring of global supply chains grow louder amid the spread of the novel coronavirus disease (COVID-19), attention is drawn to the fact that the trade chief is directly meeting with Korean export companies to provide tailored support.

According to the Ministry of Trade, Industry and Energy on the 26th, Yoo Myung-hee, the Chief Trade Negotiator, conducted two domestic activities just last week. She visited companies and met with experts to hear about the difficulties faced by domestic export companies.

Earlier, on the 17th, Chief Yoo visited Wonbong, a water purifier and hot-cold water dispenser company located in Magok, Gangseo-gu, Seoul. Wonbong is a company that has been enduring the impact of COVID-19 by effectively utilizing Free Trade Agreements (FTAs). Wonbong demonstrated strong performance by increasing its export amount by 29% year-on-year in the first quarter (18.7 billion KRW).

Thanks to the Ministry of Trade, Industry and Energy's FTA utilization support project, Wonbong was able to obtain certified exporter status for specific items under the Korea-European Union (EU) and Korea-ASEAN FTAs for water purifiers and hot-cold water dispensers in 2018, and for air purifiers this year.

Exporters certified by customs authorities as having FTA origin management capabilities benefit from simplified documentation requirements when issuing certificates of origin.

They also received preferential tariff treatment under FTAs. The Korea-EU tariff on hot-cold water dispensers was reduced from 2.2% to 0% (agreement tariff rate), and the Korea-ASEAN tariff was lowered from 10-30% to 0-5%, respectively.

The Korea-EU tariff on water purifiers and parts and air purifiers dropped from 1.7% to 0%, and the Korea-ASEAN tariff decreased from 5% to 0%, respectively.

On the 23rd, Chief Yoo met with experts and forecasted that the future trade environment will shift toward strengthened new protectionism and accelerated digital transformation.

She stated, "Regarding the trade order, trends such as nationalism, weakening global supply chains, and digital transformation, which had been progressing even before COVID-19, will be accelerated by the pandemic and establish a new order." She diagnosed that these changes could pose even greater risks to Korea, which has an export-oriented industrial structure.

She explained the post-COVID-19 trade strategy in four major points. First, to facilitate smooth human and material exchanges, such as resolving difficulties caused by entry restrictions on essential personnel, bilateral and multilateral trade networks will be strengthened.

In the event of crises like COVID-19 in the future, South Korea plans to lead international discussions at multilateral levels such as the WTO and the Group of Twenty (G20) to establish cooperation models or manuals that ensure smooth logistics and customs clearance and guarantee the movement of essential personnel.

Proactive responses will be made to the restructuring of global supply chains, where stability and resilience are prioritized over efficiency.

By inspecting and analyzing domestic and international supply chains of key industries, damage caused by supply chain restructuring will be minimized, and trade and industrial cooperation with strategic partner countries will be strengthened to expand overseas advancement, focusing on promising sectors such as new industries.

Various digital cooperation projects will also be promoted with key countries including those in the New Southern Policy region.

A public-private joint import regulation response system will be established, and a new FTA cooperation model will be introduced with developing countries to minimize damage to small and medium-sized enterprises (SMEs) and mid-sized companies that are relatively vulnerable to protectionist measures.

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