본문으로 바로가기

close
Modern-day Age of Exploration: US-Sino Global Supply Chain War
KIEP Perspective Modern-day Age of Exploration: US-Sino Global Supply Chain War

In the mid-13th century, Venice enjoyed great prosperity by practically monopolizing the supply of spices, which was a major trade item of the times. Consequently, many Western European countries sought to find other channels through which.....

Heungchong Kim​
How Can South Korea Teach, Lead, and Help in Asia’s Quest for Smart Cities?
World Economy Brief How Can South Korea Teach, Lead, and Help in Asia’s Quest for Smart Cities?

As of 2021, virtually every country in Asia has announced some plan for standing up their own smart cities, with national- and/or city-level governments launching either pilot projects or official strategies to coordinate activities and investment across different stakeholder groups. In this context, South Korea could (and does) play a positive role in how countries across the region might be able to realize these plans. This includes through not only providing direct financial, technical, and development support, but also sharing its own lessons learned and practices in promoting sustainable, secure, and inclusive smart cities. Even so, both South Korean and Asian interests could benefit from greater attention to expanding South Korea-Asia engagements and cooperative mechanisms on digital development issues, as a means of better supporting and bolstering ongoing regional priorities.

Clara Gillispie
Toward Better Cooperation with Indonesia under the New Southern Policy Plus
KIEP Opinion Toward Better Cooperation with Indonesia under the New Southern Policy Plus

Last year the Republic of Korea (ROK) announced the “NSP Plus” – an upgrade version of the New Southern Policy (NSP) – to better respond to newly unfolding changes in the international environment. It is necessary to talk about how to promote NSP Plus with each ASEAN counterpart. COVID-19 is different from the past shocks we have experienced. Unlike previous crises, one of the most troubling changes is that lost jobs may not be recovered permanently because of the structural changes intertwined with the COVID-19 shock. The economic shock has led to massive layoffs, but the economic recovery will only create fewer jobs than before due to digital-based investment and automation. As most Southeast Asian countries, including Indonesia, serve as production bases for multinational corporations, middle-skilled and middle-wage jobs could disappear even sooner than expected. Without thorough preparation for the loss of these jobs, inequality will worsen on multiple dimensions – not only on the economic front, but in political and social terms, and so on. We need, thus, both re-skilling and up-skilling programs for the workers in a hurry. This issue is covered by one of the seven NSP Plus initiatives. Industrial advancement in Indonesia requires more high-quality human resources than simple production workers. The high-quality human resources are also an innovation engine that can avoid the so-called “middle-income trap.” In Indonesia, the ICT and healthcare sectors grew while most industries remained sluggish due to COVID-19 last year. The growth of the information and communication field is remarkable. A large number of investments by U.S. tech giants in Indonesia demonstrate the growth potential of the digital economy in Indonesia despite the spread of COVID-19. In response to this potential seen in Indonesia, the NSP Plus initiative “Cooperate in future industries for common prosperity” emphasizes cooperation in areas related to the Fourth Industrial Revolution. Since the 7 NSP Plus initiatives aim to include as much as possible the demands of ASEAN people, collected through public surveys, it seems to be good to make better cooperation with Indonesia. However, there is still a need for much closer communication to produce better outcomes while reducing the bias resulting from a limited scope of survey respondents.

Sungil Kwak
Plans to Activate Investment between Korea and Russia during Putin's Fourth Term – Focusing on High Value-added Industries
World Economy Brief Plans to Activate Investment between Korea and Russia during Putin's Fourth Term – Focusing on High Value-added Industries

The main goal of this study is to identify policy implications for investment cooperation between Korea and Russia in the 4th term of President Putin and to seek ways to increase mutual investment. In particular, case studies were conducted of various investment cooperation projects by Russia with other countries amid the ongoing fourth industrial revolution, aiming to suggest more practical approaches to increase Korean investment in Russia. Marking the 30 years since establishment of diplomatic relations between Korea and Russia, we need to look back on economic cooperation between the two countries and seek ways to develop cooperation one step further. We are seeing fundamental changes in the industrial structure due to reorganization of the international order and digital transformation – such as competition be-tween the United States and China, the establishment of strategic cooperative relations between China and Russia (the so-called fourth industrial revolution), ecosystem disturbances due to climate change and the COVID-19 pandemic, etc. It is necessary to prepare a new type of cooperation strategy in consideration of the fundamental change of paradigm.

Joungho Park, Seok Hwan Kim, Minhyeon Jeong, Boogyun Kang, Cho Rong Kim, Sergei Sutyrin, Olga Trofimenko and Irina Korgun
EU CBAM: Legal Issues and Implications for Korea
KIEP Opinion EU CBAM: Legal Issues and Implications for Korea

Following the announcement of the European Green Deal in 2019, the European Commission announced on 14 July 2021 a proposal for establishment of the Carbon Border Adjustment Mechanism or "CBAM" as part of its “Fit for 55” legislative package. The Commission explained that in order to avoid carbon leakage and to level the playing field for EU producers it needs a mechanism to impose on imported carbon-intensive products the equivalent amount of carbon price as paid by EU producers. According to the proposal, for the first three years from 1 January 2023 to 31 December 2025, EU importers of carbon-intensive products will be required to notify a competent authority of an EU Member State of the amount of embedded carbon emissions from their imported products. Starting from January 1, 2026, they will additionally be required to purchase and surrender "CBAM certificates" according to the amount of embedded emissions in their imported products. The EU alleges that the CBAM intends to avoid carbon leakage and induce voluntary climate mitigation efforts on the part of its trade partners. However, since the CBAM is not only an environmental but a trade measure, there is a controversy over its consistency with WTO law. This would not be the first instance where the EU's environmental ambition has set off international trade disputes, as have been witnessed in WTO disputes such as EU and Certain Member States - Palm Oil (Malaysia)(DS600) and EU - Palm Oil (Indonesia)(DS593), and also in the EU’s previous attempt to incorporate international aviation into the EU ETS. Further, there will likely be significant "trade risks" for interested parties once the Commission's proposal becomes more materialized through the EU's ordinary legislative procedure. Against this backdrop, this Opinion examines essential elements of the Commission’s CBAM proposal and its compatibility with WTO law, and discusses some strategic implications for Korea’s future negotiations with the EU.

Cheon-Kee Lee
The Impact of Unilateral Trade Policy on International Trade Structure
World Economy Brief The Impact of Unilateral Trade Policy on International Trade Structure

Uncertainty grows with the diffusion of unilateral trade policies. In particular, the average value of the World Uncertainty Index increased by four to fivefold compared to 1990. Recently, unilateral trade policies are spreading internationally. Non-tariff measures including anti-dumping, countervailing measures, SPS and TBT are increasing. Moreover, both developing and developed countries are adopting trade-disruptive measures and these are rapidly increasing. This report analyzes the widespread diffusion of unilateral trade policies and changes in trade structures.

Moonhee Cho
Russian Economy and the COVID-19 Pandemic: The Past, Current and Afterwards
KIEP Opinion Russian Economy and the COVID-19 Pandemic: The Past, Current and Afterwards

This manuscript summarizes the economic impacts the COVID-19 brought to the Russian economy and assesses the Russian government's responding actions to the vehement spread of the unexpected epidemic. It also discusses briefly whether or not the Russian economy will continue to recover.

Minhyeon Jeong

Publications