November 21, 2024

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South Korean Trade Minister Cheong In-kyo speaks to reporters about the country's new trade roadmap at Sejong Government Complex on Thursday. (Yonhap)

South Korea has set a goal to secure the most extensive free trade agreement network and to establish a risk management system to handle growing geopolitical uncertainties in a "super election" year, the Industry Ministry said Thursday while announcing the country's new trade policy roadmap.

In a ministerial meeting on economic affairs, Prime Minister Han Duck-soo and other ministers reviewed the Yoon Suk Yeol administration's trade achievements of the past two years and introduced a new roadmap, the Ministry of Trade, Industry and Energy said. The roadmap is designed to better handle the protectionist measures a growing number of key economies are adopting and the potential impacts of presidential elections, the ministry added.

One of the roadmap's major goals is expanding South Korea's free trade agreement network to cover 90 percent of the global gross domestic product, making it the most extensive in the world. The country is currently No. 2 after Singapore, having 85 percent of the global GDP covered via 21 FTAs forged with 59 countries.

To achieve the goal, Korea will prioritize forging strategic economic partnership agreements with resource-rich countries and emerging economies in Asia, Africa and other neighboring countries it has yet to build ties with, the ministry said.

Korea seeks to build a “trade belt” in South Asia by forging economic partnership agreements with countries including Mongolia, Pakistan and Bangladesh, and also plans to kick off bilateral FTA negotiations with Malaysia and Thailand. Korea is currently negotiating EPA terms with Tanzania and Kenya.

The ministry said it is also working to resume negotiations on a Korea-Japan-China FTA, and build social consensus on joining the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership, which represents 13.4 percent of the global GDP.

Strengthening cooperation with the emerging “Global South," including ASEAN, India, the Middle East, Central Asia, Africa and Latin America would also be pursued as a key mission, deemed essential in diversifying Korea’s export markets, production bases and critical mineral supply chains.

The roadmap also includes the government’s scheme to strengthen strategic cooperation with key nations such as the US, Japan, members of the European Union and China, to focus on managing trade risks and minimizing negative impacts on Korean businesses.

In preparation for the US presidential election slated for November, the ministry said it will establish a collaborative system with businesses, conduct thorough analyses of potential impacts and engage in active outreach programs toward the US.

With Japan, Korea plans to boost strategic cooperation regarding global multilateral trade issues. The ministry will reinforce and further promote the integration of the Early Warning System between Korea, the US and Japan to enable a coordinated response to supply chain disruptions.

The government said it will also boost collaboration with the EU, especially in the field of digital and green transitions. Efforts will focus on coming up with tangible results in particular projects with each country, such as the chip technology development collaboration with the Netherlands.

Parallel to multilateral supply chain cooperation agreements such as the Indo-Pacific Economic Framework, the country will also focus on Supply Chain Partnership Agreements with 5-6 key partner countries including Australia and Indonesia, by 2027 to establish rapid cooperation systems to respond to supply chain disruptions, the ministry said.

For a stable supply of critical minerals, the country will boost its role as the chair of the Critical Minerals Security Partnership, comprising 14 countries including the US, Japan and Canada. The government will also seek business opportunities to help companies expand cooperation with global companies.

In the past two years, the country achieved record-breaking exports of $683.6 billion in 2022, and foreign investment inflows of $32.7 billion in 2023.

By Jo He-rim (herim@heraldcorp.com)