[Exclusive] Intensifying Global Climate Regulations... Ministry of Environment Also Drafts 'Trade Strategy'

Announcement of 'Climate Environment Trade Response Strategy' Within the Year
Policy Forum to Be Established Next Month for Active Discussions

As global environmental regulations tighten due to the acceleration of global warming, the Ministry of Environment has decided to directly establish a trade strategy. Although trade policy falls under the jurisdiction of the Ministry of Trade, Industry and Energy, the Ministry of Environment has unusually rolled up its sleeves considering the gravity of the issue.

According to a comprehensive report by Asia Economy on the 29th, the Ministry of Environment plans to form a policy forum including numerous experts to complete the "Climate and Environmental Trade Response Strategy" within the year. This is based on the judgment that it is necessary to professionally review the impact of strengthened trade norms related to climate and environment on Korea amid the accelerated reorganization of the trade order.

The trade strategy will be developed through an expert policy forum led by the Ministry of Environment. The policy forum will be overseen by Lee Chang-heum, Director of the Climate and Carbon Policy Office, with the International Environmental Cooperation Center acting as the secretariat. Operations will begin next month, with forums scheduled for April, July, and November. Considering expertise, the forum will be hosted by the International Environmental Law and Policy Association. However, discussions outside the official forum will also continue as needed.

The advisory group participating in the policy forum consists of 16 members in total. Given the complexity and difficulty of environmental law, most members are lawyers or related researchers. Academic members include Professor Oh Sun-young of Soongsil University, Professor So Byung-cheon of Ajou University, Professor Park Si-won of Kangwon National University, and Research Professor Yoon Ik-jun of Daegu University, all of whom have studied international and environmental law. In the legal sector, international environmental and domestic law specialist lawyers from the law firms Gwangjang and Sejong participate, and in the industry sector, Cho Sung-dae, Director of the Trade Support Center at the Korea International Trade Association, attends as a representative.

"With Strengthened Protectionism, the Ministry of Environment Must Also Engage Trade Experts"

The advisory group is organized into three subcommittees: "New Environmental and Trade Norms," "International Climate and Environmental Policy," and "Environmental Industry and Services." The trade norms subcommittee monitors international trade trends and prospects such as those related to the World Trade Organization (WTO) and bilateral and multilateral agreements. Research topics include the impact of economic security consultative bodies on Korea, cases of environmental trade disputes, and trends in WTO dispute settlement discussions.

The policy subcommittee establishes national responses to climate and environmental regulations such as the European Union’s Carbon Border Adjustment Mechanism (CBAM) and the United States’ Inflation Reduction Act (IRA). It also handles the Intergovernmental Negotiating Committee (INC) preparing international agreements aimed at ending plastic pollution and promoting a circular economy. The subcommittee plans to assess the level of green and transition finance in the international community and propose ways to contribute to domestic carbon neutrality implementation.

The industry and services subcommittee will investigate types of environmental non-tariff barriers and countermeasures, as well as their domestic impacts. It will review domestic and international industrial classification systems of major countries and Korea, examine types of environmental-related non-tariff and trade barriers, and derive solutions. After analyzing major countries’ regulations related to environmental goods and services, it will also develop countermeasures.

The Ministry of Environment’s concern with trade policy stems from the fact that major countries’ environmental regulations have begun to affect domestic industrial competitiveness. A representative regulation is CBAM. Through this system, the EU pressures companies that emit large amounts of greenhouse gases or have lax environmental regulations. Companies that fail to reduce carbon emissions must face measures such as tariffs imposed by the EU. Domestically, this inevitably impacts steel companies with high carbon emissions.

An official from the Ministry of Environment explained, “Protectionism is strengthening worldwide, and carbon neutrality barriers are becoming a new order. Our ministry also needs to strengthen networks with trade and commerce experts and begin discussions.”