Government to Promote Enactment of 'Supply Chain Basic Act'... "Establishing Comprehensive Legal Response System Including General-Purpose Goods"

President Moon Jae-in is presiding over the External Economic Security Strategy Meeting at the Blue House on the afternoon of the 14th. [Image source=Yonhap News]

[Asia Economy Sejong=Reporter Son Seon-hee] Amid increasing supply chain risks due to international geopolitical instability, the government is pushing for the enactment of the 'Basic Act on Supply Chain Management for Economic Security.'

On the 14th, the Ministry of Economy and Finance announced in relation to the '4th Foreign Economic Security Strategy Meeting' chaired by President Moon Jae-in, "We will establish a new management system that inspects and improves the entire supply chain process, and complete a legal response system that covers not only the management of existing advanced industry intermediate goods and raw materials but also general goods and supply chain-related services."

The Foreign Economic Security Strategy Meeting was newly established in October last year, previously chaired three times by Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki. This year's first meeting was chaired by President Moon for the first time, with ministers of related ministries, heads of national policy banks, and research institute directors attending to discuss supply chain response strategies and institutional improvement measures, as well as reviewing the recent Ukraine situation.

The supply chain basic law the government is promoting aims to systematize the designation of economic security items and early warning systems that were previously underway, and to provide an integrated legal basis for technology development and protection to prevent supply chain risks, expansion of domestic and overseas production bases, and establishment of a system for rapid response in case of crises.

Additionally, plans to secure funding, including the establishment of related funds, will be prepared. The government also announced it will pursue the enactment of the Special Act on National Resource Security and amendments to the Special Act on Materials, Parts, and Equipment.

At the meeting, a review of response strategies to the recent Ukraine situation was also conducted. Military tensions are escalating around the Ukraine border area as negotiations between Russia and the West face difficulties.

The government assessed that the impact on the Korean economy is still 'limited,' citing that the trade volume and financial sector exposure with Russia and Ukraine are not significant. However, if the situation worsens or prolongs, there are concerns about negative effects such as supply chain disruptions of raw materials, constraints on the recovery of the real economy, and increased uncertainty in financial markets.

Accordingly, the government has prepared scenario-based response strategies including ▲support for exports and local companies ▲pre-securement of quantities of raw materials, energy, and grains ▲emergency response measures for the real economy and financial markets.

The Ministry of Economy and Finance stated, "We will continue to closely monitor the progress of the situation and enhance the response system centered on the inter-ministerial task force and the Foreign Economic Security Strategy Meeting."

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