'Preparing K-Trade Strategy'... Business Mobility, Digital Agreements, and Responses to Protectionism

Ministry of Trade, Industry and Energy Launches Full-Scale 'K-Trade of Solidarity and Cooperation'
Minister Sung Yun-mo Discusses 'Post-COVID New Trade Strategy'
Promotion of New FTAs and Enactment of Trade Cooperation Promotion Act
Expansion of Fast Track for Businesspeople and Establishment of Comprehensive Support Center for Business Mobility
Digital Partnership Agreement... 'Trade Norms + Cooperation Projects'
Public-Private Joint 'New Protectionism Response Team' Established for Proactive Response to New Protectionism

[Image source=Yonhap News]

[Asia Economy Reporter Moon Chaeseok] The government announced that it has reshaped its trade strategy focusing on 'business travel, digital agreements, and responses to protectionism' in reflection of the impact of the novel coronavirus infection (COVID-19). It plans to enact the Trade Cooperation Promotion Act and continue to pursue new Free Trade Agreements (FTAs).

The Ministry of Trade, Industry and Energy announced that on the 21st at 2 p.m., it will hold a Trade Industry Forum chaired by Minister Sung Yun-mo to unveil the 'Post-COVID New Trade Strategy (K-Trade Strategy)'.

Nineteen participants attended, including Minister Sung, Kim Young-joo, Chairman of the Korea International Trade Association, Kang Ho-gap, Chairman of the Korea Federation of Medium-sized Enterprises (economic organizations), business representatives from Samsung Electronics, Hyundai Kia Motors, SK Innovation, POSCO, and experts such as Kim Heung-jong, President of the Korea Institute for International Economic Policy, Kim Young-min, President of LG Economic Research Institute, Professor Ahn Deok-geun of Seoul National University, Professor Jung In-kyo of Inha University, and Professor Heo Yoon of Sogang University.

The K-Trade Strategy was prepared to proactively respond to the rapid changes in the trade order after COVID-19, including deglobalization, digitalization, and supply chain restructuring (decoupling).

The main tasks of the K-Trade Strategy include ▲establishing an international cooperation system to facilitate trade and investment ▲strengthening all-round digital economy cooperation including digital ▲strategic trade cooperation to respond to the restructuring of the global value chain (GVC) ▲preemptive response to new waves of protectionism.

First, the cross-border movement of essential business personnel will be expanded. The 'Fast Track System' currently implemented in China will be extended to Singapore, the United Arab Emirates (UAE), Indonesia, and others. A 'Comprehensive Support Center for Business Travel' will be established at the Korea International Trade Association to assist essential business personnel with entry and exit difficulties. The Ministry of Trade, Industry and Energy, Korea International Trade Association, Korea Chamber of Commerce and Industry, and KOTRA will jointly operate it.

To prepare for pandemics like COVID-19, the introduction of a Free Passport system is being pursued. This system guarantees the movement of essential business personnel between countries, smooth logistics and customs clearance, and minimization of trade and investment restrictions at the multilateral level such as ASEAN+3 and the Asia-Pacific Economic Cooperation (APEC).

Customized Free Trade Agreements (FTAs) will be promoted mainly targeting developing countries. The so-called 'K-FTA' model will be pursued, linking development cooperation required by partner countries with market opening in areas of Korean interest, moving beyond the traditional product concession-centered FTAs. Support packages for inter-ministerial cooperation projects tailored to partner countries' needs will be provided, and linked efforts will be made to eliminate non-tariff barriers.

The enactment of the 'Trade Cooperation Promotion Act' (tentative name) will be pursued to establish the K-FTA model. The law will include provisions for establishing a Trade Cooperation Coordination Committee, building a cross-ministerial cooperation system such as formulating a comprehensive trade cooperation plan, securing promotion funds for trade cooperation, and designating and installing dedicated support organizations.

Efforts to formalize bilateral trade norms and Digital Partnership Agreements (DPA) will be intensified. Considering the formation of digital economic zones such as the United States, Japan, the European Union (EU), and China, agreements with middle powers in the Asia-Pacific region like Singapore, which share similar positions with Korea, will be increased.

Domestic systems will also be improved. After selecting domestic regulations related to key issues of digital trade norms such as ensuring the activation of cross-border data transfer and applying national treatment to digital products, advanced improvement measures will be explored.

Standardization of non-face-to-face digital technologies and securing international standards will be pursued. Focused support will be provided in four major service sectors: logistics, medical care, education, and daily life.

Through FTAs, diversification and stabilization of the GVC will be supported. The final conclusion of the Regional Comprehensive Economic Partnership (RCEP), progress in FTA negotiations with the Philippines and Cambodia, and the start of trade agreement negotiations with Uzbekistan will expand FTAs with New Southern and New Northern regions.

Trade cooperation centered on GVCs by key regions will be promoted. With New Southern and New Northern countries, efforts will be made to ▲establish three major cooperation platforms with ASEAN ▲support the entry of small and medium parts companies linked to priority industries of partner countries, promoting GVC diversification cooperation.

With technological powerhouses or GVC hubs such as the U.S., China, and the EU, cooperation will be strengthened focusing on four promising new industries: Human (medical and bio), Untact (digital), Materials (materials, parts, and equipment), and Green (hydrogen economy and future cars). Joint research and development (R&D), opening of state government cooperation channels, investment attraction, and standard cooperation will be conducted.

A public-private joint 'New Protectionism Response Team' will be established to respond to U.S. trade expansion laws such as Sections 232 and 301. The response team will be composed and operated by the Ministry of Trade, Industry and Energy, Korea International Trade Association, KOTRA, industry groups, law firms, and experts. Major issues will be jointly addressed by the whole government through the 'Trade Promotion Committee' chaired by Trade Negotiations Chief Yoo Myung-hee (attended by first-level officials from related ministries).

The response team will ▲monitor and provide early warnings on each country's policies and export trends by industry and country ▲pre-review domestic systems that may cause issues such as subsidies ▲conduct public-private joint outreach activities.

Additionally, ▲the establishment of 'KOTRAS', an AI-based trade analysis and response portal ▲expansion of support for small and medium-sized enterprises' responses to import regulations ▲and legal and institutional improvements for security and technology protection will be implemented.

Specifically for security and technology protection, measures will be prepared including ▲improving strategic goods export control systems such as export permit procedures and requirements ▲strengthening foreign investment reviews regarding security threats ▲and expanding the scope of national core technologies to enhance technology protection.

The Ministry of Trade, Industry and Energy plans to finalize and implement the 'K-Trade Strategy' after reflecting on opinions raised on the day and consulting with related ministries.

First, measures such as the special entry of about 600 people to Vietnam on the 22nd, charter flights and entry to Guangdong Province, China with about 150 people on the 23rd, and the establishment of the Comprehensive Support Center for Business Travel early next month will be carried out without delay.

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