Rising Concerns Over Ukraine Crisis... Government Launches Full-Scale Effort to Build Global 'Raw Material Supply Chain'

Yeo Han-gu, Head of Trade Negotiations at the Ministry of Trade, Industry and Energy, is delivering a congratulatory speech at the "2022 New Trade Strategy Seminar" held on the 6th at Lotte Hotel in Jung-gu, Seoul. This seminar was organized to explore various response measures for Korea's supply chain, technology, climate change, health, and medical issues amid new trade challenges. Photo by Moon Ho-nam munonam@

[Asia Economy Sejong=Reporter Dongwoo Lee] The government discussed plans to establish a supply chain cooperation network with major countries that have high interdependence in preparation for raw material supply disruptions caused by the Ukraine crisis. The idea is to jointly build a secure supply chain through cooperation between South Korea, which possesses raw material production technology, and resource-rich countries.

The Trade Negotiation Headquarters of the Ministry of Trade, Industry and Energy announced on the 24th that it held a meeting to strengthen cooperation on raw material supply chains at the Lotte Hotel in Seoul, chaired by Headquarters Director Yeohangu, with ambassadors from nine countries including Vietnam, the Philippines, Mexico, and Canada. This meeting was a follow-up measure to promptly implement the 'Economic Security Core Item Supply Stabilization Plan' announced at the 4th Foreign Economic Security Strategy Meeting held on the 14th through bilateral and multilateral trade cooperation.

Director Yeohangu emphasized, "The recent Ukraine crisis could further increase the risk of disruption to the global supply chain," adding, "It is necessary to secure the stability and resilience of the raw material supply chain by exchanging accurate information quickly through trade cooperation among major countries and by preemptively responding jointly in case of emergencies."

Director Yeohangu mentioned that among the raw materials imported from Ukraine, rare gases such as neon gas, alloys and minerals from Russia, naphtha, and some high-dependency items like anthracite coal should be prepared for alternative sourcing. The plan is for countries possessing raw material production or technology to establish a 'strong solidarity and cooperative partnership' to support securing the global competitiveness of domestic industries, while overcoming raw material supply crises early through cooperation methods such as raw material swaps with partner countries.

Additionally, the government plans to support mutually beneficial economic cooperation reflecting key cooperation areas such as trade facilitation, international joint research, and supply chain integration, comprehensively considering the complementary industrial structures between South Korea and partner countries. Starting with this meeting, the government intends to conduct in-depth consultations soon to sign memorandums of understanding (MOUs) with individual partner countries.

This can be seen in the same context as the 'Strategic Partnership on Core Supply Chains between Korea and the UK' held on the 7th, and the 'Korea-Indonesia Core Mineral Cooperation MOU' signed between the Ministry of Trade, Industry and Energy and Indonesia’s Ministry of Mineral and Energy Resources on the 20th. The government is particularly focusing on bilateral cooperation but is also open to multilateral cooperation plans. Currently, as the 'Indo-Pacific Economic Framework' (IPEF) promoted by the United States is expected to include regional supply chain cooperation as a core agenda, it is anticipated that establishing a supply chain trade cooperation network will maximize policy synergy effects between trade cooperation and the industrial and energy sectors.

At the meeting, Teresa Dijon-de Vega, the Philippine ambassador to Korea, stated, "The Philippine government currently recognizes the importance of mineral supply chains such as nickel and cobalt and is undergoing policy changes to lift the mining ban," adding, "We look forward to investment cooperation with Korea in the mineral processing sector." Ambassadors from each country confirmed the Korean government’s intention to sign supply chain partnership MOUs and explained that they will actively cooperate to facilitate smooth consultations, including coordinating their home countries’ positions for future partnership agreements.

Director Yeohangu said, "By March this year, we plan to fully activate bilateral cooperation channels with more than 20 countries and prepare customized MOUs reflecting the cooperation demands of governments and companies in each country."

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