"Rapid Growth in Digital Trade... Korea Needs a Sustainable Trade Strategy"

KCCI SGI Report: "Digital Trade and Korea's Response"
"Taking a Leading Role in International Standardization Through APEC"

With the spread of digital services such as artificial intelligence (AI) and cloud computing, and the rapid growth of digital trade, there have been calls for South Korea to establish a sustainable trade strategy in line with these trends.

According to the report "Current Issues in Digital Trade and Korea's Response," released on the 9th by the Sustainable Growth Initiative (SGI) of the Korea Chamber of Commerce and Industry, exports of digital transmission services increased more than threefold, from 539.1 billion dollars in 2010 to 1.6209 trillion dollars in 2024.

During the same period, while goods exports fluctuated, digital transmission services continued to expand steadily, even in the face of external shocks such as the global financial crisis and COVID-19. The report also noted that, alongside the growth of digital trade, national regulations surrounding data transfer and utilization are becoming increasingly complex. The United States and Japan prioritize data liberalization, while the European Union (EU) emphasizes personal data protection and strengthening digital sovereignty, and China places top priority on data localization and security.

In contrast, South Korea is analyzed to occupy an "intermediate position," where the level of regulation is interpreted differently depending on the perspective of the counterpart country. According to the OECD Digital Services Trade Restrictiveness Index, South Korea's regulations are somewhat stricter than those of the United States (+0.02) and Japan (+0.04), but more open than those of the EU (-0.02) and China (-0.26).

In response, SGI stated, "South Korea must establish a sustainable trade strategy in the digital trade sector," presenting three key tasks: balancing openness and technological sovereignty, ensuring consistency with international norms, and leading international standardization. The report particularly emphasized the importance of distinguishing between fields where openness and cooperation are essential, such as AI, cloud computing, and autonomous driving, and core technologies that require protection for national security and strategic industries, in order to find an appropriate balance.

The report also pointed out the need to ensure that domestic laws and systems do not conflict with international norms, and to maintain consistency among domestic regulations to prevent regulatory fragmentation and duplication. In this regard, the Asia-Pacific Economic Cooperation (APEC) CEO Summit and Leaders' Meeting, as well as the Digital Economy Forum to be held as an APEC side event later this month, are expected to provide opportunities to discuss digital trade norms.

The Korea Chamber of Commerce and Industry stated, "South Korea needs to play a leading role in the international standardization of digital norms through APEC," adding, "By adopting the government's 'APEC AI Initiative,' this will serve as a concrete opportunity to share the major tasks proposed by South Korea with the international community."