[Supply Chain War] ① "From Item Selection to Crisis Response, Manualized... Full Mobilization of Diplomatic Network"

'Supply Chain Framework Act' Aligned with National Assembly Legislation
Establishment of Detailed Supply Chain Management Guidelines by Ministries
Yoon: All Overseas Visits Are Essentially Supply Chain Wars
"Securing Export Routes, Building a Profit-Oriented Economic Structure"

The Yoon Suk-yeol administration's 'supply chain diplomacy' has entered full swing. President Yoon Suk-yeol's 'economy-centered' state policy has now been subdivided into securing supply chains, with all ministries launching efforts to target the global market. Recently, President Yoon told his aides, "The economic breakthrough lies in exports, and the way out of the complex crisis is through strengthening supply chains," identifying practical supply chain cooperation in the international community as the solution to escape the economic recession. The Presidential Office and the government plan to leverage the diplomatic networks of various ministries, in addition to President Yoon's overseas visits, to focus on pioneering new supply chain markets.

According to the Presidential Office and government ministries on the 15th, following the recent approval of the 'Basic Act on Support for Supply Chain Stabilization for Economic Security' (Supply Chain Basic Act) by the National Assembly's Planning and Finance Committee, discussions have begun on establishing a government-level 'Basic Plan for Supply Chain Stabilization.'

Since the bill centers on securing a stabilization fund to support supply chain construction and the review and coordination of related matters, the core lies in creating support measures by ministry. A senior government official explained, "With the establishment of a national-level supply chain management system as a large framework, related ministries such as the Ministry of Economy and Finance and the Ministry of Trade, Industry and Energy will now jointly select key economic security items, expand logistics supply chains, and even establish crisis response manuals."

Initiation of 'Basic Plan for Supply Chain Stabilization'... Improvement of Government-wide Supply Chain Support Measures

The government's immediate move to formulate detailed support measures in line with the Supply Chain Basic Act stems from concerns that supply chain instability, which caused the 'three highs' (high inflation, high interest rates, high exchange rates), may continue into next year. There is a need to support domestic supply chain stability in response to the global spread of protectionism. The industrial sector anticipates that the intensifying confrontation between Western countries such as the U.S. and China and Russia will further stimulate international raw material prices, leading to a prolonged global high inflation phenomenon.

The upcoming government-level 'Basic Plan for Supply Chain Stabilization' will encompass all these concerns and countermeasures. The plan, being prepared mainly by the Ministry of Economy and Finance, will include criteria for selecting key economic security items and support, as well as measures to promote participation from related ministries.

First, specific criteria will be established for designating key economic security items. Until now, the government has monitored the supply and demand status of about 4,000 target items through the Early Warning System (EWS) for raw materials and designated 200 highly important items as 'key economic security items' for protection. However, reflecting criticism that items were selected based on outdated criteria such as import dependency and thus failed to respond adequately to the current crisis, the plan will revise these standards. Currently, semiconductors, secondary batteries, pharmaceuticals, defense, food, and general-purpose goods are expected to be categorized as key sectors for stabilization measures.

A government-wide 'crisis response manual' for supply chain crisis management will also be developed. This will include analysis of the current inter-ministerial and individual ministry EWS operation systems and directions for improving EWS operations for rapid detection of supply chain risks. The process is also expected to cover measures to alleviate private sector burdens post-factum, such as loss compensation for leading businesses in supply chain stabilization.

However, the industrial sector analyzes that concerns regarding the Supply Chain Basic Act approved by the National Assembly require more detailed review. Since supply chain information is considered 'confidential,' sensitive issues such as supply chain status investigations and private members' participation in committees should be approached cautiously.

Focus on Discovering New Markets in Latin America Using Diplomatic Networks... Comparative Analysis of China's Supply Chain Policies

The government is diversifying its supply chain construction strategies based on its diplomatic networks. Since the launch of the Yoon administration last year, ministries and related agencies have continued discussions to expand the previous administration's supply chain system.

Identifying Latin America as a new source of raw materials and food supplies and considering a diplomatic strategy toward Latin America aligns with this approach. The key items are energy, minerals, and food. The reasons for selection include items with high import dependency in Korea, items whose supply disruptions would severely impact supply chains, and items with high international price volatility. The Ministry of Foreign Affairs and others have also discussed plans to compare and analyze specific measures by Japan and China to secure energy, strategic minerals, and food in Latin America.

Policies targeting China, which is pursuing a self-reliant supply chain, are also being developed. Despite ongoing instability in the supply of key items and raw materials due to U.S.-China competition and global supply chain disruptions after COVID-19, the Chinese government is preparing countermeasures through export controls on raw materials and fostering core industries for high value-added advanced technology development. A senior government official added, "Since China's supply chain strengthening policies have a huge impact on our supply chains and the activities of Korean companies operating there, it is necessary to carefully examine China's management policies."

The 'Strategic Cooperation on Key Supply Chains' with the UK, which was merely signed in the previous administration, has been concretized under the current government. Priority tasks include identifying promising items for Korea-UK key supply chain cooperation through analysis of the current status of key supply chain construction in the UK, future market outlook, and the latest UK government policies on key supply chains. Going forward, various cooperation plans on promising items, including multilateral network building and business models, are expected to be discussed.

Additionally, preliminary discussions are underway with Germany to establish the 'Korea-Germany Supply Chain Technology Cooperation Center.' This organization, involving related agencies such as the Korea Institute for Advancement of Technology, aims to discover new international joint research and development projects, expand support through partner matching, and coordinate consulting for domestic companies' overseas expansion.

Supply Chain Hub Securing Diplomacy Led Directly by the President... "Securing Export Routes to Boost the Economy"

President Yoon is also personally focusing on supply chain cooperation with leaders of various countries. At his first overseas visit after inauguration, attending the North Atlantic Treaty Organization (NATO) summit in Madrid, Spain, he stated, "The concept of security is now shifting from political and military security to economic security, including supply chains, and comprehensive security." This marked a declaration that the Yoon administration's diplomatic focus would be on economic security, especially securing supply chains.

Subsequent overseas visits also emphasized securing supply chains. At his debut at the United Nations General Assembly, he stressed inter-country cooperation and solidarity, advocating for 'global supply chain construction.' Earlier this year, at the Davos Forum and during a state visit to the United Arab Emirates (UAE), he laid the foundation for global supply chain cooperation among companies alongside leading domestic business figures.

Last month, the historic first-ever trilateral summit among Korea, the U.S., and Japan produced practical cooperation plans in areas such as security cooperation, advanced technology, and supply chains. The three leaders discussed expanding advanced technology sectors to secure future growth engines for the three countries, as well as strengthening partnerships for joint responses to supply chain and energy supply stability.

Securing supply chains in Europe, including Eastern Europe and NATO countries, has been a key industrial task pursued since the start of the Yoon administration. President Yoon personally engaged in building multi-sector supply chains between Korea and the EU. During his recent visit to France, he noted, "Korea and Europe are partners sharing universal values and have built close supply chains through investments in advanced industries," attracting investments from leading European companies in secondary batteries, electric vehicles, offshore wind power, and advanced materials.

This year's major multilateral diplomatic stages, including NATO, the Association of Southeast Asian Nations (ASEAN), and the Group of Twenty (G20) summits, effectively concluded as 'economic tours' aimed at securing supply chains. Concrete cooperation intentions for supply chains were reached with countries such as Indonesia. Following a business roundtable with Indonesia, the world's largest nickel reserve and producer and a key link in electric vehicle supply, a related memorandum of understanding was signed. A Presidential Office official stated, "With President Yoon's successive economic diplomacy efforts, once basic supply chains are established and routes secured even in sensitive industrial sectors, the economy will develop a structure where both export volume and profits increase."