Three More Pages on Korea's Digital Barriers: What Has Changed?

The Office of the United States Trade Representative (USTR) added complaints to its 10-page summary of South Korea's trade barriers—three pages longer than last year—noting that American companies are being deliberately excluded from AI infrastructure procurement and security certification frameworks.

The Office of the United States Trade Representative announced the "2026 Trade Barriers Report" on the 31st of last month (local time).

USTR created a new section on AI infrastructure procurement, pointing out that American companies are facing discrimination. Specifically, it cited that in May 2025, the Ministry of Science and ICT in South Korea limited bids for high-performance graphics processing units (GPUs) and cloud services to Korean companies only, thereby excluding participation by American firms. The report stated that, in May 2025, U.S. cloud service providers (CSPs) reported that American companies had been excluded from participation.

The report also highlighted issues with the new security certification system for public cloud service procurement, which South Korea introduced last year. Regarding the National Network Security Framework (N2SF) announced by the National Intelligence Service (NIS) in September 2025, the report assessed that it "classifies data sensitivity into three levels to modernize IT security in the public sector," but also noted, "U.S. cloud companies are concerned that the N2SF will require physical network separation for most public sector data."

Additionally, the report criticized the requirements for public tenders for information and communication technology (ICT) equipment in South Korea, stating that the country predominantly uses its own proprietary algorithms instead of the international standard Advanced Encryption Standard (AES), which disadvantages American companies. The report explained that "South Korea requires public institutions to use network equipment with encryption functions certified by the NIS, but only certifies Korean-developed algorithms (ARIA, SEED) rather than internationally adopted AES." It continued, "While these algorithms comply with ISO standards, they are only used in South Korea, meaning American companies aiming to enter the Korean market must develop separate, Korea-specific products. This can be commercially inefficient and effectively restricts market access."

The report also analyzed that South Korea’s restrictions on the overseas transfer of location information place American platform companies at a competitive disadvantage. It stated that "as of December 31, 2025, not a single location information export permit has been approved in South Korea," and explained, "The approval conditions, such as requiring the establishment of a domestic data center, effectively set discriminatory criteria against foreign companies."

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