"Next Year’s US-Led Supply Chain Restructuring, ‘Kkanbu Shoring’ to Accelerate"

Trade Association's Report on '2022 Trade Outlook Explained Through Squid Game'

[Asia Economy Reporter Kim Heung-soon] As supply chain disruptions have intensified since COVID-19, an analysis suggests that next year will see the full-scale implementation of country-specific self-reliant supply chain strengthening policies and the reorganization of supply chains centered on U.S.-led allied countries, so-called ‘Kkanbu-shoring (Friendshoring).’

The Korea International Trade Association’s Institute for International Trade and Commerce stated this in its report titled “2022 Trade Outlook Explained Through Squid Game” on the 24th, highlighting five key trade issues to watch next year: ▲the full-scale division for supply chain stabilization ▲the prolonged ‘managed strategic competition’ between the U.S. and China ▲the unilateral extraterritorial application of domestic measures ▲trade disputes in the era of interdependence as seen in Australia-China trade conflicts ▲and the intensification of trade conflicts surrounding the European Union (EU)’s Carbon Border Adjustment Mechanism (CBAM).

After U.S. President Joe Biden mentioned a new Indo-Pacific economic cooperation framework last month, U.S. Secretary of Commerce Gina Raimondo recently announced that official procedures for this cooperation will begin early next year. The report anticipates that the core agenda of the new economic cooperation system promoted by the U.S. will be the establishment of digital new technology standards and related norms concerning technological hegemony, as well as the construction of stable supply chains. It further predicted, “The U.S.-China competition will prolong into a more complex strategic rivalry involving technological competition, restructuring of critical material supply chains, mobilization of allied countries, and expansion of international influence.”

As U.S.-China competition continues, there is also a phenomenon where individual countries unilaterally apply their domestic laws and measures to other countries. Representative examples include the U.S. Trade Act Section 301 export control regulations and the EU’s CBAM. Concerns have been raised that such unilateral implementation of domestic laws will deepen policy conflicts and trade frictions between countries. The report also noted, “Since the EU’s CBAM legislative proposal was disclosed, many countries have actively engaged in various policy discussions linking environment and trade,” and forecasted, “Debates on pursuing carbon neutrality in ways that do not hinder trade will intensify going forward.”

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