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

The newly established Office of Industrial and Resource Security, created through a recent organizational restructuring by the Ministry of Trade, Industry and Energy, will begin operations on December 30. This move strengthens the nation's economic security capabilities. The office will oversee the work previously managed separately by the Resource Industry Policy Bureau, the Industrial Supply Chain Policy Bureau, and the Trade Security Policy Bureau, integrating responsibilities related to resources, supply chains, and trade security under the leadership of the Director of Industrial and Resource Security.

This strategy is seen as the ministry's effort to bolster its ability to respond swiftly in the era of economic security by organically combining the securing of import-dependent resources, stable supply chain management, and increasingly stringent export control and trade security policies.

Donald Trump, who was inaugurated as President of the United States earlier this year, has promoted policies such as "de-risking from China," technology security for advanced strategic industries, and comprehensive strengthening of export controls. These policies cannot be effective without the participation of allies, so the U.S. has been unilaterally imposing high tariffs and demanding policy cooperation in exchange for partial tariff reductions.

For the new Office of Industrial and Resource Security to effectively respond to this U.S. strategy, further enhancement of its functions and organizational reinforcement will be necessary going forward.

The success of the Office of Industrial and Resource Security will depend largely on how well it can integrate the work of its three subordinate bureaus. The office must focus on finding ways to maximize synergies among the three bureaus from the perspective of economic security.

Furthermore, since the work of all departments within the ministry is directly linked to economic security, the Office of Industrial and Resource Security must strengthen its connections with the ministry's overall work. Advanced industries such as semiconductors, electric vehicles, batteries, artificial intelligence (AI), and biotechnology are core areas of technology security. Retired personnel have been transferring domestic DRAM semiconductor technology in its entirety to Chinese companies. While export controls on 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 the bureau level to reduce national wealth losses caused by illegal technology outflows.

In addition, it is essential to enhance synergy between economic security and trade negotiation work. With the Office of Industrial and Resource Security now under the jurisdiction of the Vice Minister of the ministry, the Trade Security Bureau will be separated from the existing Trade Negotiations Headquarters. As seen in the tariff agreement texts the U.S. has signed 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, aims to create a trade order favorable to the United States using tariffs as leverage. Economic security targeting China is a core element of this strategy.

It is also important to develop plans for the office to function as a nationwide control tower for economic security. Although the recent restructuring has secured one first-level director within the ministry, there is a lack of measures to coordinate or integrate economic security work that is 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 development and fiscal and financial support for 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, it is understandable that multiple ministries are involved, but a nationwide control tower is necessary. While the third deputy director of the National Security Office at the Presidential Office is responsible for economic security, it is the ministry that should systematically support these efforts at the government level.

China is pressuring the United States by weaponizing rare earths and leveraging the suspension of imports of certain agricultural products such as soybeans. However, due to domestic political considerations that require avoiding excessive trade conflict with China ahead of next year's midterm elections, President Trump has extended the "tariff truce" with China until next year. As a result, the U.S.-China relationship is being maintained more smoothly than initially expected.

This is only temporary, and the U.S.'s hardline policy toward China remains unchanged. In this context, the establishment of the Office of Industrial and Resource Security is expected to contribute to strengthening South Korea's economic security capabilities. However, policy support is needed to enable the office to play a more substantial and practical role.

Jung Ing-gyo, Professor of International Trade at Inha University (Former Head of the Trade Negotiations Headquarters)