Government Unveils Modular New Trade Agreement... Details Customized 'Future Trade Model' for Each Country

Standard Clauses for Four Key Areas?Supply Chains, Critical Minerals, Green Economy, and Digital?to Be Finalized by Year-End
Priority Application to FTA Improvement Negotiations with Singapore and ASEAN Next Year

Yeo Hangoo, Director General for Trade Negotiations at the Ministry of Trade, Industry and Energy (center), is speaking at the "Modular New Trade Agreement Expert Meeting" held on the morning of the 10th at the Korea Chamber of Commerce and Industry conference room in Jung-gu, Seoul. Photo by Ministry of Trade, Industry and Energy

The government is accelerating efforts to develop a "modular new trade agreement" to respond to the rapidly changing trade environment, including supply chains, the green economy, and digital transformation. The plan is to allow the selection and combination of applicable areas according to the circumstances of each country and the needs of businesses, thereby supplementing the limitations of the existing market-opening-focused FTA system.

On the 10th, the Ministry of Trade, Industry and Energy held a "Modular New Trade Agreement Expert Meeting" at the Korea Chamber of Commerce and Industry to discuss the direction for pursuing agreements in response to the reorganization of the global trade order. Yeo Hangoo, Director General for Trade Negotiations, said, "This is a model to present international standards for future-oriented trade norms under our leadership in a rapidly changing trade environment," adding, "We will build a network that provides practical support to our companies through flexible and prompt cooperation tailored to the conditions of each country and the needs of businesses."

The modular trade agreement was conceived out of the recognition that traditional FTAs alone are insufficient to address new issues such as supply chain instability, securing critical minerals, the green transition, and the rise of the digital and AI economy. It aims for a "selective and combinable" agreement structure that can be customized for cooperation areas, taking into account the sensitivities of emerging economies to market-opening issues.

The Ministry is preparing standard clauses for the four new trade areas: supply chains, critical minerals, the green economy, and digital, and is promoting a system in which relevant provisions are selected and composed according to the conditions and cooperation needs of each country. To this end, the Ministry is widely gathering opinions from industry and experts.

At the meeting, participants emphasized that the modular trade agreement should closely reflect the risks and actual needs faced by businesses. There was considerable interest in the model, as it offers greater timeliness, flexibility, and speed compared to existing FTAs.

Based on the opinions collected at the meeting, the Ministry plans to further specify the details of cooperation for each module and finalize the standard clauses by the end of the year. The finalized clauses will first be applied to FTA improvement negotiations with Singapore and ASEAN early next year, and then gradually expanded to other countries.

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