{"id":2203158,"date":"2023-12-18T16:00:07","date_gmt":"2023-12-18T07:00:07","guid":{"rendered":"https:\/\/koreapro.org\/?p=2203158"},"modified":"2023-12-19T16:14:25","modified_gmt":"2023-12-19T07:14:25","slug":"how-south-koreas-industry-minister-nominee-will-implement-yoons-trade-strategy","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2023\/12\/how-south-koreas-industry-minister-nominee-will-implement-yoons-trade-strategy\/","title":{"rendered":"How South Korea\u2019s industry minister nominee will implement Yoon\u2019s trade strategy"},"content":{"rendered":"

Amid global economic uncertainties and shifting trade dynamics, the Yoon Suk-yeol administration nominated its top trade negotiator, <\/span>Ahn Duk-geun<\/span><\/a>, to the role of South Korea\u2019s new Minister of Trade, Industry and Energy.<\/span><\/p>\n

His appointment comes at a time when South Korea\u2019s trade policy faces significant tests, from supply chain disruptions still recovering from the global pandemic to the challenges posed by the U.S.-China trade tensions and growing economic protectionism.<\/span><\/p>\n

Ahn\u2019s primary challenge lies in navigating these complex international waters while ensuring the stability and growth of South Korea\u2019s trade-dependent economy.<\/span><\/p>\n

NAVIGATING TRADE CHALLENGES<\/b><\/p>\n

With an extensive background in international trade law, Ahn, a former academic who taught at the state-run Korea Development Institute\u2019s School of Public Policy and Management, brings a wealth of experience to his new role as industry minister and his appointment to replace the outgoing <\/span>Bang Moon-kyu<\/span><\/a> comes as little surprise.<\/span><\/p>\n

His academic and professional background, particularly in trade negotiations, positions him well for this role. Before his appointment, Ahn\u2019s role as the country\u2019s trade minister included significant involvement in contentious trade-related discussions, including with the U.S. over its <\/span>Inflation Reduction Act<\/span><\/a> and with Japan to overcome the two countries\u2019 <\/span>trade dispute<\/span><\/a> that began in 2019.<\/span><\/p>\n

\u201c[Ahn] is expected to quickly implement the promotion of exports and the development of key strategic industries. Additionally, he is expected to innovate industrial regulations to revitalize the economy and expand Korea\u2019s economic horizons,\u201d ROK Presidential Chief of Staff Kim Dae-ki said Sunday.<\/span><\/p>\n

As industry minister, Ahn will continue to confront the complex conundrum of South Korea\u2019s economy, which is heavily reliant on trade and susceptible to external influences. This includes navigating the effects of the U.S.-China rivalry, <\/span>Seoul\u2019s own tensions with Beijing<\/span><\/a> and the impact of growing <\/span>protectionist industrial policies<\/span><\/a> in the U.S. and Europe. These external factors significantly affect South Korea\u2019s key export sectors, such as semiconductors and automobiles.<\/span><\/p>\n

South Korea\u2019s export sector experienced <\/span>13 months of negative growth<\/span><\/a> until October, a period marked by high interest rates, rising energy costs and a slowdown in the global economy.<\/span><\/p>\n

In response to these challenges and the <\/span>dim projections<\/span><\/a> for global trade, Seoul has prioritized the development of new export avenues. This initiative has been spearheaded by President Yoon Suk-yeol, who has engaged in extensive diplomatic outreach, meeting with over 90 heads of state as the self-professed \u201c<\/span>salesman of Korea<\/span><\/a>.\u201d<\/span><\/p>\n

Given that exports constitute <\/span>more than 40%<\/span><\/a> of South Korea\u2019s gross domestic product, the strategic expansion and diversification of these trade channels are crucial for the nation\u2019s economic stability and growth.<\/span><\/p>\n

FOCUSED TRADE STRATEGIES<\/b><\/p>\n

In response to the evolving global trade environment, Ahn has focused on crafting targeted bilateral deals, particularly in sectors vital for South Korea’s export-dependent growth. This move comes at a time when multilateral institutions and even existing free trade agreements appear to be losing relevance amid rising trade protectionism and technological rivalry.<\/span><\/p>\n

Ahn\u2019s efforts have encompassed building partnerships across diverse regions such as the Middle East, Southeast Asia and Central Europe.<\/span><\/p>\n

One of the factors influencing this shift is South Korea\u2019s non-participation in the <\/span>Comprehensive and Progressive Agreement for Trans-Pacific Partnership<\/span><\/a>, a trade agreement led by Japan. South Korea\u2019s absence from this agreement highlights its need to seek alternative trade alliances and strategies.<\/span><\/p>\n

Similarly, the Indo-Pacific Economic Framework (IPEF), involving 14 countries, including South Korea and Japan, has <\/span>been underwhelming<\/span><\/a>, primarily due to its lack of concrete market access provisions and an enforcement mechanism.<\/span><\/p>\n

\"\"

ROK industry ministry\u2019s head negotiator Ahn Duk-geun presides over the 13th Industrial Technology Protection Conference in Seoul, Nov. 22, 2023 | Image: ROK Ministry of Trade, Industry and Energy<\/a><\/em><\/p><\/div>\n

In a <\/span>keynote speech<\/span><\/a> last month, Ahn recognized the IPEF\u2019s limitations and advocated for more broad-based and customized bilateral deals within the framework. These would be in the form of economic partnership agreements and trade and investment promotion frameworks, aiming to facilitate easier market access and deepen economic ties beyond traditional free trade agreements\u2019 focus on tariff elimination.<\/span><\/p>\n

Recent months have seen Ahn successfully negotiate a series of such agreements. These include a <\/span>semiconductor alliance with the Netherlands<\/span><\/a>, <\/span>mineral supply chain cooperation with Vietnam<\/span><\/a> and South Korea\u2019s first <\/span>bio-sector cooperation model<\/span><\/a> with the United Arab Emirates under their Comprehensive Economic Partnership Agreement.<\/span><\/p>\n

Ahn\u2019s strategy will likely continue to prioritize exclusive agreements that bolster supply chain cooperation for rare minerals and essential materials crucial for South Korea\u2019s high-tech sectors. This approach also extends to forging partnerships in research and development to advance core technologies vital for the country\u2019s <\/span>12 future export cash cows<\/span><\/a>.<\/span><\/p>\n

Additionally, Ahn will strive to diversify South Korea\u2019s economic dependency on semiconductor exports by seeking to procure more orders for defense and energy construction companies. Semiconductors accounted for <\/span>almost 20%<\/span><\/a> of the country\u2019s total exports in 2022.<\/span><\/p>\n

NATIONAL TRADE GOALS<\/b><\/p>\n

In addition to forging international trade agreements, Ahn\u2019s role as industry minister will also focus on enhancing South Korea\u2019s domestic industrial policies. He will focus on amplifying the country\u2019s production capabilities and fostering innovation, particularly in globally competitive sectors.<\/span><\/p>\n

A key aspect of this strategy involves attracting more foreign investment to South Korea\u2019s technological hubs, including the <\/span>$223 billion semiconductor cluster<\/span><\/a>. Ahn has <\/span>stated<\/span><\/a> his ambition to draw increased capital, resources and talent into the country, emphasizing his commitment to bolstering the nation\u2019s technological and industrial base.<\/span><\/p>\n

However, questions remain about his ability to effectuate regulatory reforms conducive to innovative research and development, nurture entrepreneurship and expand talent pools. Such reforms are crucial to enable South Korea\u2019s small and medium-sized enterprises to access international markets, which could diversify and strengthen the country\u2019s economy.<\/span><\/p>\n

Ahn will also face challenges from the administration\u2019s own policies. Yoon\u2019s 2024 budget proposal demands a <\/span>reduction in allocations for research and development<\/span><\/a> by 16.6% \u2014 a move that the main opposition Democratic Party has labeled as \u201creckless.\u201d<\/span><\/p>\n

Upon his nomination on Sunday, Ahn emphasized his intention to \u201cconsolidate domestic strengths with international capabilities to expand exports, stabilize supply chains through an extensive trade network and implement trade policies that bolster corporate interests and economic security.\u201d<\/span><\/p>\n

As Ahn prepares to assume his role as South Korea\u2019s industry minister, a formality lies ahead: a confirmation hearing before the National Assembly.<\/span><\/p>\n

As the South Korean president holds the prerogative to appoint ministers even without parliamentary approval, as exemplified in October when Yoon appointed <\/span>Shin Won-sik<\/span><\/a> as the country\u2019s new defense minister despite Shin not receiving approval from the main opposition Democratic Party, the upcoming hearing for Ahn\u2019s appointment will not prevent his appointment.<\/span><\/p>\n

Ahn\u2019s confirmation and subsequent decisions and policies as industry minister are expected to align closely with Yoon\u2019s export-led trade policy and will likely shape South Korea\u2019s economic trajectory for the foreseeable future.<\/span><\/p>\n

Edited by John Lee<\/span><\/i><\/p>\n

Business & Economy<\/span><\/a>Domestic Politics<\/span><\/a><\/div>","protected":false},"excerpt":{"rendered":"

Amid global economic uncertainties and shifting trade dynamics, the Yoon Suk-yeol administration nominated its top trade negotiator, Ahn Duk-geun, to the role of South Korea\u2019s new Minister of Trade, Industry and Energy. 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