"Preparing for 'Competitive Protectionism' After COVID-19"

Martial Arts, Report on 'Changes in the Trade Environment in the Post-COVID-19 Era' Announced

[Asia Economy Reporter Hwang Yoon-joo] In the wake of the pandemic, with the rampant rise of nationalist protectionism among major countries, the resurgence of US-China conflicts, and the weakening of international cooperation, competitive protectionism is expected to intensify, highlighting the need for proactive preparation.

According to the Korea International Trade Association (Chairman Kim Young-joo) report titled "Changes in the Trade Environment in the Post-COVID-19 Era," released on the 13th, COVID-19 occurred during a period when global protectionism was spreading, making it difficult to expect international cooperation to eradicate the virus and overcome the economic crisis.

In particular, major countries such as the United States are rushing to expand economic intervention and indiscriminately provide subsidies to protect their domestic industries. From next year, import restrictions such as trade remedies and anti-dumping measures are also expected to increase. Countries like India, Germany, and Italy are strengthening foreign investment reviews to prevent their struggling domestic companies from being sold cheaply to foreign capital. The European Union (EU), the United States, and Japan are increasing incentives for reshoring companies as a reflection on the China-centered global value chain (GVC).

The report pointed out, "The deepening US-China conflict is the biggest factor making international cooperation to overcome COVID-19 difficult," noting that "US exports to China in the first quarter fell by 15.4% compared to the same period last year, lowering the likelihood of implementing the Phase One agreement, which focuses on expanding China's imports of US goods and services." It further predicted, "The US will intensify trade pressure not only on agreement implementation but also on various issues such as subsidies, exchange rates, and export-import controls."

However, the report also analyzed that the COVID-19 crisis is not entirely negative for the trade environment. It stated, "With the growth of online business such as non-face-to-face e-commerce due to the pandemic, the importance of digital trade is being reemphasized."

International discussions on digital trade norms, such as the previously stalled World Trade Organization (WTO) e-commerce negotiations, are gaining new momentum, and the use of personal medical information for developing epidemic treatments and the free cross-border transfer of such data could serve as a catalyst for activating the data economy.

Lee Won-seok, Deputy Director of the Trade Support Center at the Korea International Trade Association, emphasized, "Korea should actively engage in international cooperation to revitalize trade by leveraging the image built through successful quarantine efforts," adding, "Domestically, it is necessary to use this as an opportunity to ease regulations to activate the data economy."

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