Koo Yoonchul: "Expanding FTAs into Emerging Markets such as New Southern Policy Countries, Central and South America, and Africa"

Koo Yoonchul, Deputy Prime Minister and Minister of Economy and Finance, delivers opening remarks at the 266th Ministerial Meeting on External Economic Policy held at the Government Complex Seoul in Jongno-gu, Seoul on the 13th. Ministry of Economy and Finance

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The government has announced plans to densely expand its future Free Trade Agreement (FTA) network into emerging markets such as New Southern Policy countries, Central and South America, and Africa to diversify global supply chains. To support the entry of developing countries into new markets, a cross-ministerial task force (TF) will be launched in the first half of this year to promote the "Korean-style development finance" initiative, which mobilizes private resources such as market loans and investment funds.

Deputy Prime Minister and Minister of Strategy and Finance Koo Yoonchul stated at the 266th External Economic Ministerial Meeting and the 157th Economic Development Cooperation Fund (EDCF) Operation Committee held at the Government Complex Seoul on April 13, "The government will not merely respond to current trade issues, but will also expand the FTA network to sustain export growth," announcing these measures.

Deputy Prime Minister Koo emphasized, "Due to the initiation of Section 301 investigation under U.S. trade law and escalating geopolitical tensions in the Middle East, external uncertainties are increasing. As the saying goes, 'When the winds of change blow, some build walls and others build windmills,' we will not only build 'walls' needed to respond to external risks, but also prepare 'windmills'-mid- to long-term foundations such as trade strategies and development finance-to proactively address these challenges."

He noted that despite the strengthening trend of protectionism, exports last month reached an all-time high of USD 86.13 billion, a 48.3% increase from the same month last year, stating, "The FTA network built over the past 20 years has served as a strong pillar for our economy." He reiterated, "Going forward, we will expand the FTA network densely into emerging markets such as New Southern Policy countries, Central and South America, and Africa to diversify global supply chains." He further explained, "Strategically, we will make the FTA model more flexible and advance our trade strategies by introducing modular trade agreements covering digital, green, and supply chains, as well as agreements linked to industry and investment."

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Regarding the U.S. Section 301 investigation, he stated, "Contrary to the U.S. claims, our manufacturing facility utilization rate remains at an appropriate level, and our exports of capital goods contribute to the revival of U.S. manufacturing. We will actively communicate these points." He also emphasized, "We are firmly grounded in International Labour Organization (ILO) conventions and domestic laws prohibiting forced labor, and we will make clear that we are responding strictly in this regard."

Previously, the Office of the United States Trade Representative (USTR) initiated the Section 301 investigation, identifying trade surpluses in Korea's electronics, automobiles, auto parts, machinery, steel, and shipbuilding sectors as being the result of overproduction.

He further stated, "Like other advanced countries, we are introducing new development finance by mobilizing private resources such as market loans and investment funds to support developing countries through various financial instruments, including lending, guarantees, insurance, and equity investment." He added, "A cross-ministerial TF will be launched in the first half of this year to establish a detailed implementation system for development finance." At the same time, there are plans to strengthen capabilities in development finance through cooperation with overseas development financial institutions.

Deputy Prime Minister Koo added, "Although we have supported economic development in developing countries and the overseas expansion of Korean companies through concessional loans such as the EDCF, it is difficult to continue expanding the official development assistance (ODA) budget."

Regarding the EDCF's mid-term operational direction, he stated, "We have set a target of approving new projects totaling approximately 3 trillion won annually over the next three years." To achieve this vision and goal, "We will focus support on key areas where our industries and companies have strengths and where there is strong demand in developing countries, such as artificial intelligence (AI) and digital sectors, culture, green industries, and supply chains."

He added, "We will also pursue restructuring of EDCF projects, including canceling approvals for long-delayed projects, and establish a profit reinvestment system utilizing the Strategic Export Finance Fund to help strengthen the domestic export ecosystem."

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