[Economy Pulse] What the Newly Established Industrial Resources and Security Office Needs to Play a Bigger Role

The Industrial Resources and Security Office, newly established through a reorganization by the Ministry of Trade, Industry and Energy, will begin operations on December 30. This move is expected to strengthen the nation's economic security capabilities. The head of the Industrial Resources and Security Office will now oversee the work related to resources, supply chains, and trade security, which were previously managed separately by the Resource Industry Policy Bureau, the Industrial Supply Chain Policy Division, and the Trade Security Policy Division.

This strategy by the Ministry aims to enhance the ability to respond swiftly in the era of economic security by organically integrating the securing of import-dependent resources, stable management of supply chains, and the increasingly stringent export control and trade security policies.

Donald Trump, who took office as President of the United States earlier this year, has advocated for a "de-China supply chain," technological security for advanced strategic industries, and comprehensive strengthening of export controls. These policies cannot be effective without the participation of allied countries, so the United States is unilaterally imposing high tariffs and demanding policy cooperation in exchange for partial tariff reductions.

For the newly launched Industrial Resources and Security Office to effectively respond to these U.S. strategies, it will require significant functional enhancements and organizational reinforcement going forward.

The success of the Industrial Resources and Security Office hinges on how integratively it can manage the work of its three subordinate divisions. The main focus should be on finding ways to generate synergy among the three divisions from an economic security perspective.

Furthermore, since the entire work of the Ministry's departments is directly linked to economic security, the Industrial Resources and Security Office must strengthen its connection with the ministry's overall operations. Advanced industries such as semiconductors, electric vehicles, batteries, artificial intelligence (AI), and biotechnology are core areas of technological security. Retired personnel are transferring domestic DRAM semiconductor technology wholesale to Chinese companies. While export controls for strategic goods and dual-use items are already established, the issue of technology leakage through personnel remains serious. The Technology Security Division within the Trade Security Bureau should be expanded to a bureau-level organization to reduce national wealth losses caused by illegal technology outflow.

In addition, it is necessary to enhance synergy between economic security and trade negotiation work. With the Industrial Resources and Security Office now under the jurisdiction of the Vice Minister of the Ministry, the Trade Security Bureau will leave the existing Trade Negotiation Headquarters. As seen in the tariff negotiation agreements the United States has reached with major countries, policy cooperation in the field of economic security is as important as tariffs. The "Trump Round" declared by Jamieson Greer, the U.S. Trade Representative (USTR), aims to establish a trade order favorable to the United States through tariffs. Economic security targeting China is a key component of this strategy.

It is also important to develop plans for the office to evolve into a nationwide economic security control tower. While securing a first-grade director within the Ministry through this reorganization is significant, there is a lack of content regarding the coordination or integration of economic security work dispersed across the Ministry of Economy and Finance, the Ministry of Foreign Affairs, and others. The Ministry of Economy and Finance is responsible for macroeconomic policy and fiscal and financial support in supply chain stabilization, while the Ministry of Trade, Industry and Energy manages global supply chain risks, maintaining a collaborative structure. The Ministry of Foreign Affairs monitors and analyzes global supply chain risks.

Given the broad scope and national importance of economic security work, multiple ministries may be involved, but a nationwide control tower is necessary. While the third deputy director of the National Security Office in the Presidential Office is in charge of economic security, the Ministry of Trade, Industry and Energy should play the role of systematically supporting this at the government level.

China is pressuring the United States by weaponizing rare earths and using measures such as suspending imports of certain agricultural products like soybeans. However, due to the domestic political situation in which President Trump must avoid provoking trade conflicts with China ahead of next year's midterm elections, he has extended the "tariff truce" with China until next year. As a result, U.S.-China relations are being maintained more smoothly than initially expected.

This is only temporary, and the United States' hardline stance toward China remains unchanged. In this context, the establishment of the Industrial Resources and Security Office is expected to contribute to strengthening South Korea's economic security capabilities. However, policy support is needed so that it can play a more substantial and practical role.

Jung Ingyo, Professor of International Trade at Inha University (former Head of the Trade Negotiation Headquarters)