Martial Arts: "Post-COVID-19, 'Environment, Digital, Labor' Emerge as the Three Pillars of Trade"

[Asia Economy Reporter Hwang Yoon-joo] Amid the ongoing COVID-19 pandemic, it is anticipated that the traditional trade agenda, which has centered on market liberalization, will shift next year to focus on the environment, digital, and labor sectors.

The Korea International Trade Association (KITA) announced on the 22nd in its 'Top 7 Trade Issues of 2020-2021' report that the seven major trade issues for 2021 include ▲the emergence of Green New Trade ▲the intensification of the digital trade war ▲the trade disputes over security, labor, and human rights as the three main pillars, along with ▲the rise of Mini Deals ▲the continuation of the US-China conflict ▲strengthened protectionist measures due to COVID-19 ▲and the uncertain future of the World Trade Organization (WTO).

The report stated, "With the spread of COVID-19 and the inauguration of the Biden administration, which emphasizes environmental issues, the changes in the global trade environment that had been underway will accelerate. The pandemic has highlighted the severity of climate change and the importance of environmental protection, linking environment and trade, while the acceleration of digital industry development has made the establishment of digital trade norms urgent."

It continued, "The deepened US-China conflict after COVID-19 has expanded from the security domain to labor and human rights issues, and the European Union (EU) is also emphasizing labor and human rights clauses when concluding trade agreements."

In fact, the EU, which announced its Green Deal policy at the end of 2019, plans to legislate the Carbon Border Adjustment Mechanism in the first half of next year, and US President-elect Biden is expected to rejoin the Paris Climate Agreement upon his inauguration in January and actively establish environmental policies. If the environmental policies pursued by the EU and the US affect trade, trade conflicts between developed and developing countries cannot be ruled out.

Furthermore, in the process of establishing digital trade norms, competition for leadership among the US, EU, and China is expected to intensify, and the number of digital trade agreements in the form of Mini Deals limited to the digital industry sector is projected to increase. Currently, South Korea is negotiating a Digital Partnership Agreement with Singapore.

The report also noted, "The new Biden administration in the US will continue its tough stance on China, including Section 301 tariffs and export controls," adding, "Conflicts are expected to deepen over the implementation of the US-China Phase One agreement, the commencement of Phase Two negotiations including China's structural reforms, and issues related to environment and human rights." It further predicted that "the Biden administration's trade policy aimed at restoring a rule-based international trade order will influence WTO reforms, including the appointment of a new WTO Director-General and the rebuilding of the Appellate Body."

Choi Yong-min, Director of the KITA International Trade and Commerce Research Institute, said, "As environment, digital, and labor sectors are expected to become major trade issues, it is necessary to anticipate potential developments and for the government and industry to collaborate in establishing our position. Our companies should build supply chain reviews and risk management systems to respond to the prolonged US-China conflict, and since the New Southern region, emerging as an alternative to China, is showing a trend of strengthened import regulations, related trends must be thoroughly examined when entering these markets."

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