Although Northeast Asia functions as a core axis of the global economy, it faces a structural dilemma where economic cooperation is restricted due to political and security tensions between regional states. This study focuses on the cruise industry as a strategic alternative to break through this rigid environment. Due to its nature as a tourism sector, the cruise industry carries a relatively low political burden. However, it generates significant economic ripple effects across both upstream and downstream industries, ranging from port infrastructure development to the advancement of service sectors. Consequently, the industry can serve as a strategic medium for strengthening economic cooperation between nations.

The primary objective of this study is to establish a multilateral cooperation model for Northeast Asia by leveraging the cruise industry and to evaluate its practical feasibility. To do this, cruise trends in global and Northeast Asian markets and policy environments were analyzed, alongside a review of North Korea’s tourism strategies and relevant cases. Furthermore, by analyzing the limitations of existing shipping routes and regional consultative bodies, improvement tasks were derived. Ultimately, by establishing South Korea as a core hub and mediator of the Northeast Asian cruise network, this study proposes a phased policy roadmap to entice North Korea into a multilateral cooperation framework and achieve the advancement of the regional cruise industry.

Unlike previous studies that approached individual topics such as market analysis, national policy comparisons, or inter-Korean tourism in a fragmented manner, this study integrates these to analyze a comprehensive cooperation system connecting the ‘Global-Northeast Asia-North Korea-Multilateral’ levels. In particular, this study offers policy implications that differ from existing research by specifying phased scenarios for connecting North Korean ports of call, while accounting for realistic constraints such as sanctions. Furthermore, it proposes the formation of a working group as a multilateral governance mechanism to support the implementation of these scenarios.

The main contents of each chapter are as follows. Chapter 2 provides an analysis of cruise industry trends and the policy responses of Northeast Asian countries. The global cruise market recorded 34.6 million tourists in 2024, surpassing pre-pandemic levels, but Northeast Asian countries are showing differing policy stances in response. South Korea is moving away from past quantitative growth-oriented approaches and is pursuing the “2nd Basic Plan for Cruise Industry Promotion (2023-2027)” with the goal of a “qualitative transition.” With a vision of “Cruise in Daily Life,” it is focusing on industrial recovery and structural improvement by expanding the domestic demand base, supporting the launch of national cruise lines, and expanding the “Fly & Cruise” model linking air and sea travel. Japan aims to recover to 2.5 million inbound cruise tourists by 2025, significantly strengthening port receptivity and seeking to improve infrastructure and standardize CIQ (Customs, Immigration, and Quarantine) procedures. China aims to transition into a “Cruise Manufacturing Powerhouse,” succeeding in building its own large-scale cruise ships and implementing aggressive market expansion strategies, such as the full implementation of a 15-day visa-free entry policy for foreign tour groups. Russia has established its own development strategy for cruise tourism in response to Western sanctions and is attempting to reorganize its industry around domestic markets and friendly nations. It is concentrating its policy capabilities on modernizing old infrastructure and developing new routes along the Far East and Black Sea coasts.

Meanwhile, existing consultative bodies such as the Greater Tumen Initiative (GTI) and Asia Cruise Cooperation (ACC) are facing difficulties in leading substantial policy coordination due to structural incompleteness— failing to encompass all major regional stakeholders—and a lack of legal binding force. Therefore, the creation of a new dedicated body to supplement these is required.

Chapter 3 reviews North Korea’s tourism development strategy and cruise tourism cases. Under the Kim Jong-un regime, North Korea maintains a stance of “Managed Openness,” utilizing tourism as a means of securing foreign currency and promoting the regime. The recently enacted “Tourism Law” (2023) and “Wonsan-Kalma Coastal Tourism Special Zone Law” (2025) provide institutional support for this strategy. Analysis of past cases, such as the Mt. Kumgang cruises (1998–2004) and the Rason-Mt. Kumgang pilot operation, confirmed that while rich tourism resources and the special zone system are positive factors, vulnerabilities such as lack of infrastructure (port depth, terminals), unfavorable profit structures, and safety issues still persist. This suggests that future cooperation should be designed to compensate for these structural constraints.

Chapter 4 specifies plans for expanding Northeast Asian multilateral cooperation. The core is the construction of a “Multi-nodal Loop Route” that connects four to five countries, going beyond simple bilateral round trips. In the West Sea region, a short-distance circulation model connecting Incheon-Nampo-China (Dalian/Dandong) was proposed, and in the East Sea region, a northern logistics-tourism complex route connecting Sokcho/Busan-North Korea (Wonsan/Rason)-Russia (Vladivostok)-Japan (Sakaiminato) was suggested. In doing so, the operation of small and medium-sized cruise ships and the application of the “Fly & Cruise” model are essential, considering sanctions against North Korea and the shallow water depth (8–11m) of North Korean ports.

Furthermore, to provide an incentive for North Korea’s participation, the study presented an alternative of guaranteeing indirect foreign currency income—within a range that does not violate sanctions—by charging a “Port Stay Fee” on a per-ship or per-passenger basis upon entry. As a governance mechanism to implement this, the establishment of a “Northeast Asia Cruise Cooperation Working Group” under the GTI Tourism Committee, involving member countries such as Korea, China, Russia, and Mongolia, as well as Japan and North Korea, was proposed.

Northeast Asian cruise cooperation should be promoted in stages, considering the sanction environment and infrastructure gaps. The short term is a period for laying the foundation for cooperation, activating the “Northeast Asia Cruise Cooperation Working Group” to share port and navigation information and initiating discussions on standardizing CIQ procedures to solidify the basis for cooperation. The medium term is a period for the expansion of cooperation, pursuing the conditional connection of North Korean ports of call only when safety and compliance with sanctions have been verified. The long term is the stage where the cruise network is completed, establishing a multi-nodal maritime tourism belt connecting five Northeast Asian countries (South Korea, North Korea, China, Japan, and Russia) on the premise of sanction relief and normalization of relations, and maximizing network efficiency by diversifying the functions of each country’s ports. South Korea should utilize its geopolitical advantages to play a leading role as a physical hub of the Northeast Asian cruise network and as a mediator that draws North Korea into the arena of multilateral cooperation.

This study is significant in that it designs a practical multilateral cooperation model mediated by the cruise industry, which possesses low political sensitivity and significant economic ripple effects. Amid ongoing geopolitical tensions in Northeast Asia, it presents a policy path for incorporating North Korea into the regional economic cooperation framework through South Korea’s role as a mediator. However, the phased cooperation scenarios derived in this study depend on the cooperative will of each country and volatile external variables such as the easing of sanctions against North Korea and improvement of inter-Korean relations, thus entailing realistic limitations in determining the timing and speed of actual policy execution. Therefore, future research should reflect scenarios of rapidly changing Northeast Asian situations, involve economic feasibility analysis by route, and carry out specific follow-up studies on legal and institutional detailed designs and financing plans to ensure the stable operation of the proposed multilateral consultative body.

Supply chain due diligence emerged in the 1990s, during the rapid advancement of global division of labour, as part of ESG implementation and efforts to create a level playing field. It became institutionalised, primarily in Europe, evolving into a substantive obligation for companies. Furthermore, recent geopolitical factors have led to supply chain due diligence being utilised as a means of supply chain blockading. Supply chain due diligence regulations impact not only the companies subject to the due diligence obligation but also their suppliers within the supply chain, thereby placing a burden on companies in developing countries, too. As most Korean industries rely on developing countries’ production networks for intermediate goods and raw material procurement, strengthening developing countries’ capacity to respond to supply chain due diligence is a critical issue for Korea.

Grievances received through National Contact Points (NCPs) in the 52 countries implementing the ‘OECD Guidelines for Multinational Enterprises’ indicate that implementing supply chain due diligence is recognised as a significant challenge. Companies report difficulties complying with the guidelines across various areas, including human rights, employment, and the environment. While supply chain due diligence systems operate to enhance supply chain transparency and accountability, the capacity for their implementation varies significantly between countries. Such asymmetry could potentially lead to instability in the global value chain. Particularly in mineral supply chains, where geopolitical risks and ESG risks intersect, the proper implementation of supply chain due diligence is increasingly emphasised.

As supply chain due diligence regulations proliferate, the key challenges facing enterprises in developing countries can be categorised as: enhancing regulatory compliance capacity, establishing due diligence systems and infrastructure, and enhancing corporate competitiveness. Firstly, issues such as the administrative and legal procedures of supply chain due diligence, the application of systems suited to developing country conditions, and enforcement capacity within developing countries must be addressed. Secondly, there is a need to improve the fundamental conditions for developing country enterprises to respond to due diligence through the establishment of due diligence systems and infrastructure. Thirdly, developing country enterprises must address the lack of technical know-how required to access relevant data and navigate due diligence frameworks, as well as financing conditions resulting from stringent due diligence requirements.

International cooperation concerning supply chain due diligence is actively progressing. Recent international cooperation has focused on labour-intensive industries such as apparel and textiles, agriculture, and the minerals sector. Cooperation content is fundamentally centred on improving labour conditions, ensuring minimum wages, and strengthening human rights due diligence capabilities. In the minerals sector, cooperation from a resource security perspective is emphasised.

Comprehensive support, including building institutional and data infrastructure in developing countries, strengthening supervisory agency capabilities, providing training and consultancy for SMEs, and offering technical assistance, will be crucial for implementing supply chain due diligence. Considering Korea’s strategic interests and its role in the international community, Korea’s development cooperation policy should consider supply chain due diligence capacity-building projects as a key pillar. Korea’s supply chain due diligence cooperation with developing countries should focus on: ① supporting alignment with international norms and strengthening institutional capacity, ② establishing infrastructure to enhance traceability and transparency in developing countries’ supply chains, and ③ strengthening sustainable competitiveness and eco-friendly production capabilities. This should be pursued by strategically utilising ODA, seeking linkages with trade agreements, and supporting domestic companies’ implementation of supply chain due diligence.

Against the backdrop of growing political, diplomatic, and military- security significance, the strategic value of the Global South has been steadily increasing. The Global South is not an entirely new concept; rather, it constitutes a meta-category encompassing what were previously referred to as the Third World or developing countries, as well as regions sharing geographical commonalities in the Southern Hemisphere and historical experiences of discrimination and structural inequality.

Alongside the rising prominence of the Global South, another critical issue has recently drawn considerable attention in the international community: economic security. This reflects how the economy and security are once again becoming closely linked amid intensifying U.S.–China strategic competition and escalating rivalry over leadership in advanced science and technology. Contemporary discussions of economic security primarily focus on key areas such as supply chain resilience; the enhancement of industrial competitiveness, including the protection of advanced technologies; the prevention of excessive dependence on specific countries through the diversification of trade and investment; and responses to economic coercion (or economic statecraft).

As the importance of both the Global South and economic security has grown, it has become increasingly necessary to conceptualize these two dimensions in an integrated manner and to devise effective policy responses accordingly. Japan and China, both neighboring countries of the Republic of Korea, have already been actively pursuing Global South strategies and linking them closely with their respective economic security policies.

Against this backdrop, this study examines Japan’s and China’s Global South strategies from the perspective of economic security; analyzes the implications of these strategies for Korea’s own Global South strategy; and explores the potential for cooperation among Korea, China, and Japan in areas where economic security policy intersects with Global South strategies.

The analysis suggests that, compared with the Global South strategies of Japan and China, Korea’s approach remains insufficiently systematized. In particular, there appears to be a notable lack of systematic consideration regarding how to formulate and implement a Global South strategy explicitly grounded in economic security concerns. In response, this study offers several policy recommendations.

First, Korea should urgently establish a comprehensive and coherent Global South strategy, supported by a governance framework that brings together actors from government, academia, and the private sector. Policymakers, scholars, and business stakeholders should engage in joint deliberations on how to systematically design and implement a national Global South strategy, culminating in a unified strategic guideline.

Second, the Global South strategy should be closely aligned with economic security considerations and tailored accordingly. Based on a comprehensive assessment of Korea’s economic security environment, detailed analyses are needed to identify priority needs and to determine which Global South countries should be engaged first to strengthen cooperation. In particular, given that stability and progress in inter- Korean relations are crucial for establishing a stable economic security environment, this unique geopolitical context should be actively reflected in the formulation of Korea’s Global South strategy.

Third, institutional frameworks to promote people-to-people exchanges with the Global South should be strengthened. Such exchanges should encompass a wide range of areas, including tourism, international students, and highly skilled talent in science and engineering, and urgent institutional reforms are required to facilitate these interactions.

Fourth, Korea should develop a long-term Global South strategy that can be pursued consistently regardless of changes in political leadership, similar to China’s Belt and Road Initiative and Global Development Initiative (GDI), as well as Japan’s New Policy toward Enhanced Cooperation with Global South Countries.

Along with these implications for Korea’s Global South strategy, it is also necessary to consider cooperation among Korea, China, and Japan. To enhance the effectiveness of their respective Global South policies, the three countries should seek ways to reduce unnecessary competition and expand avenues for mutual cooperation. A representative example is cooperation with African partners. Rather than operating separate and competing platforms for engagement with Africa, the three countries could consider establishing an integrated framework—such as an “Africa + Korea–China–Japan” platform—to pursue more efficient cooperation. However, instead of hastily advancing “Korea–China–Japan + α” cooperation platforms in regions such as Africa or Latin America, a phased approach grounded in a long-term vision would be more appropriate. As an initial area of cooperation, the joint pursuit of secure access to critical minerals—an issue prioritized by all three countries—could be considered.

Finally, it is important to note that trilateral economic security cooperation should not remain confined to institutional or technical dimensions, such as critical mineral supply chains, but should also entail a broader shift in perception. Korea, China, and Japan need to move beyond zero-sum thinking, in which each views the others as competitors or potential threats to national economic security, and instead embrace a win–win perspective that recognizes the possibility of mutual benefit and coexistence. Under such a mindset, the Global South can emerge not as another arena of competition among the three countries, but as a new space for cooperation that generates shared national interests.

Chapter 1. Introduction

Section 1. Research Background and Objectives
The Act on the Conclusion Procedure and Implementation of Commercial Treaties (hereinafter, the “Commerce Treaty Act”) was enacted in 2012 to address the lack of procedural transparency and insufficient public participation revealed during major trade negotiations, notably the Korea–U.S. Free Trade Agreement (FTA). The Act aimed to institutionalize transparency, predictability, and stakeholder participation across all stages—from negotiation to post-entry implementation—while ensuring systematic and democratic oversight of Korea’s trade policy.
Despite its initial promise, several institutional limitations have emerged. Certain procedures risked becoming mere formalities, undermining the Act’s purpose, while rapid shifts in the trade environment, including digital trade, supply chain realignment, and climate-related regulation, exposed gaps in its scope and adaptability. In particular, new forms of economic agreements that diverge from traditional tariff-based liberalization often fall outside the statutory definition of a “trade agreement,” weakening both democratic control and policy responsiveness.
This study therefore seeks to identify reform directions that can strengthen the Commerce Treaty Act’s legal coherence, democratic legitimacy, and practical effectiveness. The research focuses on four main objectives: enhancing institutional coherence, improving democratic transparency and oversight, ensuring effective domestic implementation, and reinforcing the legal framework to address structural changes in global trade governance.

Section 2. Scope and Limitations of the Study
This study examines the historical evolution, legislative intent, and operational performance of the Commerce Treaty Act, alongside a comparative analysis of treaty-making and implementation systems in the United States, the European Union, Japan, and China. Methodologically, it combines doctrinal and empirical approaches through the analysis of statutes, policy documents, and negotiation practices, complemented by expert interviews.
Although the confidentiality of trade negotiations imposes empirical limitations, the study nonetheless offers an analytical and policy framework for reforming Korea’s legal foundations for trade governance. It argues that international trade law research must extend beyond theoretical analysis to inform real policy reform and institutional design.

Chapter 2. Objectives and Legislative History of the Commerce Treaty Act

Section 1. Constitutional and Institutional Background
Article 6(1) of the Constitution of the Republic of Korea grants treaties the same legal effect as domestic statutes. Yet, before 2012, the practical exercise of this principle lacked sufficient checks and balances, as trade negotiations and ratifications were dominated by the executive branch with little parliamentary oversight. As modern trade agreements began to regulate sensitive domestic policy domains—such as environmental standards, labor protection, and investment policy—the need for greater transparency and democratic legitimacy became urgent.
The Commerce Treaty Act was thus established to give effect to constitutional principles of accountability and separation of powers. It introduced procedural obligations for prior, interim, and post-reporting to the National Assembly; mandated public hearings and information disclosure; and required the government to assess both the economic effects and implementation of trade agreements. These mechanisms were designed to secure procedural legitimacy and foster cooperation between the executive, the legislature, and civil society, thereby embedding democratic control into Korea’s trade policy architecture.

Section 2. Key Issues in the Legislative Process and Their Resolution
The legislative history of the Commerce Treaty Act reflects the accumulated tension between democratic oversight and the need for efficiency in foreign-economic negotiations. During the drafting process, lawmakers confronted several unresolved questions that had surfaced in earlier controversies surrounding the Korea–Chile, Korea–U.S., and Korea–EU FTAs. At the heart of the debate lay the appropriate degree of parliamentary participation. Some legislators argued that the National Assembly should possess the authority to approve the opening of negotiations in advance, thereby ensuring democratic legitimacy from the outset. The executive branch, however, warned that such ex ante approval would unduly constrain its flexibility in rapidly changing diplomatic contexts. The final text consequently adopted a compromise: the government would retain discretion to initiate negotiations but would be legally obliged to report to the Assembly at each major stage and to obtain its consent before ratification.
Another contested issue concerned the domestic effect of treaties. Certain early drafts had proposed conditioning the entry into force of an agreement on the prior enactment of implementing legislation, a design that would have delayed Korea’s international commitments until all domestic legal adjustments were complete. Because this approach was considered inconsistent with the country’s monist constitutional order, the provision was ultimately omitted. Instead, the Act emphasizes the timely preparation of necessary implementing legislation before a treaty’s entry into force.
Debates also arose over the definition of “trade agreement” and the treatment of information disclosure. Lawmakers sought to balance transparency with national security by adopting a principle of disclosure subject to narrowly tailored exceptions. When the National Assembly requests access to confidential materials, the executive is obliged to provide them under conditions safeguarding strategic interests. To enhance participatory governance, the Act further established a standing advisory committee composed of experts and industry representatives to channel stakeholder perspectives into negotiation planning. Finally, the Act introduced requirements for ex ante, interim, and ex post assessments of industrial impact and adjustment measures for sectors expected to suffer serious injury. In sum, the law emerged as a negotiated equilibrium between legislative demand for procedural legitimacy and executive insistence on operational flexibility.

Section 3. Assessment and Implications
The Act represents an important institutionalization of democratic control over Korea’s trade policy and a step toward restoring public confidence in governmental transparency. Nevertheless, continuous improvement is required to ensure that these procedures retain substantive meaning. Strengthening parliamentary review, enhancing legislative expertise, and linking trade policymaking to a medium- and long-term national strategy would ensure that democratic oversight remains compatible with efficient diplomacy.

Chapter 3. Treaty-Making and Implementation Systems in Major Jurisdictions

Section 1. United States
The United States operates under a dual system balancing executive flexibility and congressional authority. The Trade Promotion Authority (TPA) grants the President the power to negotiate trade agreements, subject to detailed congressional oversight and an expedited “up-or-down” approval procedure. While this enhances efficiency, it also preserves accountability through continuous consultation and reporting. The U.S. distinction between self-executing and non-self-executing treaties ensures that Congress retains control over domestic implementation. In comparison, Korea’s rigid parliamentary consent model provides clarity but can limit agility in fast-moving negotiations.

Section 2. European Union
The European Union’s common commercial policy, grounded in Articles 3 and 207 of the Treaty on the Functioning of the EU, constitutes an area of exclusive EU competence. The European Commission negotiates under mandates authorized by the Council, with the European Parliament exercising oversight and consent. Implementation occurs through the ordinary legislative procedure. Transparency is achieved through public negotiation directives, stakeholder consultations, Domestic Advisory Groups (DAGs), and annual implementation reports. The Chief Trade Enforcement Officer (CTEO) and Single Entry Point mechanism centralize enforcement. Korea could selectively adopt these practices—particularly in transparency, structured stakeholder participation, and integrated enforcement—to enhance the legitimacy and coherence of its trade governance.

Section 3. Japan
Japan, although lacking a dedicated statute equivalent to Korea’s Commerce Treaty Act, ensures coherence between international and domestic law through concurrent submission of implementing legislation and trade agreements to the Diet. This practice minimizes legal gaps between approval and enforceability, offering a pragmatic model that Korea could emulate to strengthen policy coordination.

Section 4. China
China maintains a dual ratification system shared between the State Council and the Standing Committee of the National People’s Congress. While WTO obligations are generally implemented through domestic legislation, many free trade agreements have achieved quasi-direct effect, reflecting pragmatic adaptation. China’s emerging mechanisms for treaty compliance review highlight the importance of maintaining internal consistency between domestic law and international commitments—a lesson equally relevant for Korea’s institutional development.

Chapter 4. Core Provisions and Practical Operation of the Commerce Treaty Act

Section 1. Analysis of Key Provisions
The Commerce Treaty Act regulates the entire life cycle of trade agreements—pre-negotiation, negotiation, ratification, and post-implementation—with the goal of embedding democratic control in each phase.
At the pre-negotiation stage, the Act mandates public hearings, parliamentary reporting, and economic feasibility assessments. These mechanisms were designed to make early-stage decision-making transparent and participatory. In practice, however, hearings have often been perfunctory and conducted with limited disclosure of substantive information. The absence of uniform standards regarding timing, content, and participant selection has weakened their legitimacy. Future reform should specify minimum procedural guarantees, require publication of background materials in advance, and ensure that stakeholder comments are publicly addressed. Economic feasibility studies, though conceptually sound, frequently rely on government-led modeling that omits sustainability variables such as labor and environmental impacts; they would benefit from independent review and mandatory submission to the National Assembly.
During the negotiation phase, the Act entrusts the executive with the duty to report material developments and to receive the Assembly’s opinions. While this arrangement represents progress toward legislative oversight, ambiguity persists as to what qualifies as a “material” change, and there is no binding obligation for the executive to incorporate parliamentary feedback. Establishing phased reporting—before, during, and near the conclusion of negotiations—could transform these exchanges from formality into genuine deliberation.
At the ratification stage, the government must submit a comprehensive impact assessment together with the agreement for legislative consent. Yet the current focus on macro-economic indicators limits the analysis of social or environmental consequences. Because assessments are usually completed after negotiations are substantially finished, opportunities for meaningful revision are scarce. Introducing interim assessments during negotiations, as practiced in the European Union, would allow earlier corrective action.
Furthermore, explanatory sessions that accompany ratification have often functioned as one-way briefings. Converting them into structured dialogues involving experts, labor, and industry would enhance transparency and accountability.
After a treaty enters into force, the Act requires evaluation of its economic effects and the adequacy of adjustment measures within ten years. This long-term review is commendable but administratively burdensome. Developing standardized templates, prioritization criteria, and shorter review cycles could improve feasibility. Publication of evaluation results must also strike a balance between public transparency and the protection of sensitive negotiating information. Finally, evaluations should expand beyond compliance metrics to include distributive and regional impacts, thus linking the Act’s procedural legitimacy with tangible socio-economic outcomes.

Section 2. Practical Application and Assessment
The experiences accumulated through the Korea–Chile FTA, the Korea–U.S. FTA, and the Korea–EU FTA demonstrated the growing importance of procedural transparency. However, even after the Act’s adoption, its implementation revealed persistent weaknesses. Parliamentary engagement remained limited, public hearings were criticized as symbolic, and ex post evaluations were inconsistent. The rise of new-generation trade instruments such as the Digital Economy Partnership Agreement (DEPA) and the Indo-Pacific Economic Framework (IPEF) further exposed definitional blind spots, as these agreements often escaped the Act’s procedural requirements.
To address these issues, the study proposes expanding the Act’s definition of “trade agreement” to include economic security–oriented instruments and digital cooperation agreements, introducing a procedural trigger system based on anticipated economic and social impact, and institutionalizing regular post-entry evaluations to strengthen both accountability and adaptability.

Chapter 5. Key Issues and Reform Proposals Concerning the Commerce Treaty Act

Section 1. Definition of “Trade Agreement”
The Act’s current definition focuses narrowly on comprehensive market- opening treaties, excluding new economic instruments that substantially influence Korea’s domestic economy. The definition should be broadened to encompass agreements addressing digital trade, supply chain resilience, or economic cooperation. By creating an extended category—“trade agreements and related economic arrangements”—the law would ensure that emerging instruments are subject to democratic oversight and transparency obligations.

Section 2. Trade Negotiation Structure and Policy Formation
Korea’s trade policymaking remains fragmented among ministries, including the Ministry of Trade, Industry and Resources and the Ministry of Economy and Finance. This dispersion hinders coordination. A reinforced inter- ministerial mechanism that allows early joint decision-making is necessary. At the legislative level, oversight should be shared among relevant committees—such as foreign affairs, agriculture, and environment—to reflect the multi- sectoral nature of trade policy. Integration between evaluation and adjustment mechanisms should also be codified within the Act to clarify responsibility and accelerate remedial responses.

Section 3. Implementation and Evaluation
Despite the Act’s commitment to transparency, negotiation stages remain opaque due to frequent claims of confidentiality. Public hearings occur infrequently, and stakeholder input rarely influences outcomes. Introducing interim disclosure and assessment procedures would enable real-time accountability. The government should be obliged to respond substantively to public submissions, and standing consultation platforms involving industry, labor, and academia should be established to ensure continuous dialogue. These reforms would enhance policy credibility and predictability.

Section 4. Additional Considerations under the Act
Article 20 of the Commerce Treaty Act allows for reciprocal measures when a counterpart fails to comply with obligations. However, it lacks operational clarity. Establishing detailed conditions, proportionality criteria, and termination procedures would improve enforceability. Likewise, Articles 16 through 19, which provide for domestic relief, should be supplemented with enforceable timelines and inter-ministerial coordination duties to ensure that adjustment measures function effectively.

Chapter 6. Conclusion

Since its adoption in 2012, the Commerce Treaty Act has provided Korea with an essential procedural framework for democratizing trade policy. By institutionalizing public hearings, economic feasibility analyses, and parliamentary reporting, it has strengthened legislative oversight and partially restored public trust that was eroded by earlier non-transparent negotiations. Nevertheless, profound transformations in global trade—ranging from digitalization and data governance to supply-chain security and climate policy—have exposed the limits of a statute conceived in the era of traditional FTAs.
The study therefore concludes that the Act must evolve from a procedural instrument into a comprehensive Trade Governance Integration Act. This re-envisioned framework should expand its legal coverage to include digital, environmental, and economic-security agreements, thereby ensuring that all significant external economic instruments are subject to democratic scrutiny. It should incorporate a differentiated procedural trigger system calibrated to the anticipated economic and social impact of each agreement, enabling agility without sacrificing accountability. Parliamentary oversight should be broadened across multiple committees so that trade’s cross-sectoral effects are adequately examined, while confidential information-sharing mechanisms safeguard national interests. At the executive level, the Act should codify explicit accountability through structured reporting and establish a permanent advisory council representing industry, labor, and civil society. Implementing legislation should be reviewed in parallel with treaty ratification to minimize the temporal and legal gap between international obligations and domestic enforceability. The linkage between post-entry evaluations and adjustment measures must be formalized to ensure that assessment results translate into concrete policy responses. Finally, the reciprocity clause should be operationalized through clear procedures for proportional countermeasures, aligning Korea’s enforcement capacity with global standards.
Through these reforms, the Commerce Treaty Act could assume the character of a quasi-constitutional foundation for Korea’s trade policy—a framework that unites democratic legitimacy, legal coherence, and strategic flexibility. By embedding the guiding principles of legal comprehensiveness, procedural democracy, coherent implementation, and international credibility, Korea would reinforce its position as an advanced trade state capable of navigating the intertwined domains of digital transformation, economic security, and sustainable development in the twenty-first-century trading system.

Since the early 2020s, a series of global economic disruptions—including the escalation of the U.S.–China trade conflict, the outbreak of the COVID-19 pandemic, the Russia–Ukraine war, and persistent political instability in the Middle East—has heightened geopolitical risks across East Asia and intensified the pressure for a restructuring of global value chains. In particular, following the inauguration of the second Trump administration in 2025, deepening political and economic tensions between the United States and China have exerted a substantial impact on the Korean economy, which had long relied on China as a pivotal component of its value chain. Under these circumstances, ASEAN has emerged as an alternative production base to China, underscoring its growing significance as a potential partner for more dynamic and diversified value chain integration with Korea.

Major research on international supply chains and value chains between Korea and ASEAN can broadly be classified into two categories:
(1) studies that analyze the overall industrial structures of Korea and ASEAN member states to identify complementarities and substitutabilities between the two regions, and (2) studies that investigate the general patterns of trade relations between Korea and ASEAN.

Empirical analyses drawing on more than two decades of statistical data indicate that trade and investment flows between Korea and ASEAN have expanded significantly, leading to the formation of complementary value chains shaped by differences in per capita income levels, wage structures, and resource endowments.

However, as most existing studies concentrate on national and industrial levels, they do not directly examine the activities or organizational structures of firms—the fundamental entities that constitute supply chains. These studies also fail to differentiate among various types of firms, including large corporations, small and medium-sized enterprises (SMEs), and foreign-invested companies operating within ASEAN. The present study seeks to address this limitation by conducting a firm-level analysis of ASEAN enterprises in order to identify the structural patterns and distinctive characteristics of value chains linking Korea and ASEAN.

The scarcity of firm-level analyses on Korea–ASEAN value chains can be attributed to several factors. First, comprehensive datasets and statistics on individual firms are largely unavailable in most ASEAN countries. Owing to relatively low income levels and limited corporate transparency, substantial portions of firm-level information are not publicly disclosed. Although listed companies are required to publish data in accordance with stock exchange regulations, the absence of well-established international accounting standards reduces the reliability of these statistics. Furthermore, a considerable number of firms remain unlisted and are therefore under no legal obligation to disclose their financial or operational information.

Second, even when firm-level data are obtainable at the national level, the process of compiling and analyzing regional datasets encompassing all ASEAN member states remains an extensive and resource-intensive undertaking. Given that ASEAN comprises ten countries, each with a vast number of enterprises, the collection and harmonization of such data represent a formidable challenge that is both time-consuming and difficult for individual researchers to execute independently.

To overcome these constraints, the present study assembled a comprehensive dataset on ASEAN firms and conducted the following analyses. First, financial information from listed companies across nine ASEAN stock exchanges was collected and systematically examined. The available data primarily encompassed indicators such as assets, liabilities, and profitability. A standardized analytical framework based on these financial metrics was employed to facilitate cross-country comparisons.

Second, for unlisted large firms, major representative companies in each country were selected, and publicly available information—such as newspapers, magazines, promotional materials, and websites—was used, given the lack of systematic financial data. For SMEs, the study relied on existing research on their characteristics and expert interviews.

Third, to examine the potential for cooperation between Korean and ASEAN firms, the presence and activities of Japanese and Chinese firms operating in ASEAN were also reviewed. Although most of these foreign companies were unlisted and reliable statistical data were limited, publicly accessible information sources were used.

The results of the analysis are as follows:
First, listed firms in ASEAN are mainly concentrated in (a) the domestic service sector, (b) the manufacturing sector—particularly food production, and (c) export-oriented mining and resource development. Within manufacturing, food processing had the highest share, followed by chemicals, basic metals, and rubber/plastics—indicating a focus on agro-processing and natural resource–based industries.

Second, unlisted large firms in ASEAN mainly focus on (i) domestic- oriented businesses and (ii) resource development. Specifically, they dominate sectors such as retail, real estate, and food production on the domestic side, and energy and resource extraction (e.g., oil, coal, cobalt, lithium) on the export side. These firms often operate as monopolies or oligopolies with close political ties and family-based management, resulting in non-transparent governance structures.

Third, while definitions vary by country, ASEAN SMEs are generally small in scale and concentrated in the service sector. They face limited access to finance, weak technological foundations, insufficient use of digital technology, and low productivity.

Fourth, Japanese and Chinese firms in ASEAN show distinct characteristics. Japanese firms have been active since the early 1990s, building regional value chains in electronics and automotive sectors, while also investing in local infrastructure and human resource training. In contrast, Chinese firms entered later, mainly after the 2010s, driven by the Belt and Road Initiative and China’s efforts to mitigate trade frictions with the U.S. Their investments have focused on large-scale, resource-related infrastructure projects financed by Chinese banks.

Fifth, Korean firms in ASEAN exhibit the following characteristics. Their initial entry in the 1990s was led by labor-intensive industries that were declining in Korea, expanded in the 2000s, and more recently diversified into electronics and automotive manufacturing, sometimes leveraging local natural resources. Large Korean firms operate local plants mainly in manufacturing, importing intermediate goods from Korea and exporting finished products to third countries. Many Korean SMEs and mid-sized firms function as suppliers to these large Korean firms, providing components and intermediate goods through local operations. However, cooperation with Japanese, Chinese, or local firms for parts procurement remains limited.

Future changes in Korea–ASEAN supply chains will depend on the evolution of ASEAN firms’ industries and roles. If ASEAN firms continue their current business models without expanding into manufacturing, Korea’s regional supply chains and value chains will likely continue to rely primarily on Korean firms operating locally.

In this case, the Korean government should implement policies to improve the productivity of Korean firms in ASEAN. Rising wages, land rents, and transport costs could erode profitability and even drive firms to relocate to other regions. As Latin America, India, and Africa are not yet viable alternatives, Korea must pursue policies that enhance labor productivity and business efficiency in ASEAN.

The most practical approach is to increase local labor productivity and reduce costs such as logistics.
1. Education and training for ASEAN workers are needed to upgrade them from unskilled to skilled or semi-skilled labor with higher productivity.
2. Management consulting should be provided to improve the productivity of both Korean and local firms in ASEAN.
3. Cooperation between large and small Korean firms should be strengthened to enhance overall supply chain efficiency.
4. Infrastructure support is crucial to control rising logistics costs—through port and road construction, customs digitalization, and energy system improvements.
5. New industrial parks and free trade zones should be established to mitigate rent and logistics cost increases.

To effectively promote these policies, several urgent tasks must be addressed: First, the Korean government and the public must recognize that supporting Korean firms in ASEAN is part of building global supply chains and value chains that contribute directly to Korea’s economic growth. Many policymakers and citizens still perceive international trade as simply exporting domestically produced goods abroad, overlooking the complex cooperation among firms across borders. Public communication and education should emphasize that supporting Korean firms in ASEAN ultimately strengthens Korea’s own industrial base.

Second, Korea should actively utilize ODA (Official Development Assistance) funds in ASEAN. Currently, about 23.8% of Korea’s ODA goes to ASEAN countries—five of which (Indonesia, Vietnam, Cambodia, the Philippines, and Laos) rank among Korea’s top ten ODA recipients. If ODA projects are designed to include participation by Korean firms in ASEAN, the effects of value chain formation could be maximized.

Third, political and business exchanges between Korea and ASEAN should be expanded through regular forums and seminars to build mutual understanding and cooperation.

Finally, youth and academic exchanges between Korea and ASEAN should be encouraged, as young people will be the future leaders of business collaboration between the two regions.

The study examines methodologies for quantitatively analyzing the impact of global supply chain fragmentation and applies these approaches to scenarios involving critical minerals. It identifies two primary analytical approaches: microeconomic and macroeconomic.

Microeconomic methods provide detailed insights at the item or firm level but face challenges due to limited access to specific supply chain data. Macroeconomic methods, while suitable for industry- or national-level analysis, often rely on unrealistic assumptions when applied to item-level fragmentation. Despite the significant macroeconomic effects of disruptions in critical supply chains, existing item-level analysis techniques struggle to capture these impacts accurately. For instance, efforts to link item-level analysis with GDP using linear programming or inoperability input-output analysis often encounter limitations due to rigid assumptions about input-output structures. High-tech items, in particular, pose challenges due to their complex supply chain interdependencies and their significant influence on final production.

To address these issues, the study proposes an integrated methodology combining machine learning techniques for microeconomic analysis with the OECD METRO model for macroeconomic evaluation. This approach considers key issues and transmission channels identified in previous research. The study also reviews critical mineral management policies in major economies such as the United States, European Union, China, and Korea. The United States identifies critical minerals essential for economic and national security through legislative measures like the 2020 Energy Act and has implemented strategies to strengthen North American supply chain resilience. The European Union has updated its critical raw materials list every three years since 2008 and enacted the Critical Raw Materials Act in 2024 to expand production capacity and enhance international cooperation. China, despite lacking a clear legal definition of critical minerals, strengthens its resource management through export controls and cooperation with resource-rich countries. Korea designated 33 minerals as critical through its 2023 Critical Minerals Securing Strategy, prioritizing 10 strategic minerals essential for industries like electric vehicles and semiconductors. However, Korea’s reliance on imports for most critical minerals highlights its vulnerability.

The study conducts a vulnerability analysis of Korea’s critical mineral supply chains using indicators such as the Trade Specialization Index (TSI) and Herfindahl-Hirschman Index (HHI). It identifies high global supply chain concentration in minerals like cobalt, lithium, and neodymium, which are crucial for secondary batteries and electric vehicles. To assess geopolitical risks, it examines import trends from China across seven countries from 2017 to 2023. Sharp declines in imports of gallium, graphite, and rare earth elements suggest potential disruptions due to trade conflicts or export controls.

The study employs a Dual-Stage Attention-Based Recurrent Neural Network (DA-RNN) model to predict the impact of critical mineral fragmentation on Korea’s exports of key items like batteries and semiconductors under three scenarios involving germanium, graphite, and rare earth elements. The results show significant decreases in export values across all scenarios. For example, restrictions on germanium imports led to a 3.9% decline in battery exports, while rare earth element shortages caused a 10.8% drop.

Using the OECD METRO model, the study evaluates the macroeconomic impact of critical mineral fragmentation under two approaches: direct analysis of import disruptions (Approach 1) and integration of microeconomic results into macroeconomic simulations (Approach 2). The findings indicate that germanium fragmentation could reduce Korea’s real GDP by 0.15%, while graphite and rare earth element disruptions could lead to decreases of 0.14% and 0.89%, respectively.

Based on these findings, the study recommends strengthening supply chain monitoring systems by integrating fragmented platforms across government agencies and establishing a centralized control tower. It also suggests diversifying procurement strategies, promoting R&D for substitute materials, and supporting SMEs through digital-based supply chain management platforms. Additionally, it emphasizes harmonizing policies with major economies to prevent over-securitization and redundant investments while expanding international cooperation for joint mineral exploration and development projects.

Amid accelerating global trend of green transformation to address climate change and digital transformation driven by technological progress, this report proposes Korea’s development cooperation strategies to promote an integrated green digital transformation in developing countries. Digital technologies are powerful enablers of green transformation—enhancing climate early warning systems, improving energy efficiency, and advancing smart grids—yet they also create new environmental pressures, such as rising energy demand and electronic waste. This duality calls for an integrated approach – the “green digital transformation” - that simultaneously advances “climate response by digital technologies” and the “decarbonization and greening of digital transformation” itself.

Although middle- and high-income developing countries increasingly demand both green and digital transformation, strategies and support for green digital transformation remain limited. This study aims to identify Korea’s policy directions as a member of the international community by analyzing international discussions, other donors’ approaches, and developing countries’ demands and needs. The analysis draws on cross-country indices, correlation analysis, donor policy and case reviews, and field-based studies. Chapter 2 identifies global disparities in transformation levels through cross-analysis of international indices. Advanced economies—especially in Northern Europe—perform well in both green and digital dimensions, while many emerging and developing countries remain unbalanced or lag behind. Correlation analysis reveals that higher levels of digital transformation are associated with increased per capita greenhouse gas emissions, but this effect diminishes when green transformation progresses concurrently. This finding underscores the importance of pursuing both transformations together to offset the environmental costs of digitalization. Countries with strong policy momentum and institutional coherence achieve better green transformation outcomes, confirming that political will and institutional strength are decisive factors. These results reaffirm that green digital transformation is not only a technological or industrial policy but also a core development agenda for sustainable and inclusive growth, emphasizing the essential role of development cooperation in bridging transformation gaps.

Chapter 3 examines post-pandemic development cooperation strategies of major donor countries. Australia and the United Kingdom position climate as a central development priority and digital transformation as an implementation tool, embedding climate safeguards into digital infrastructure projects. Germany treats both dimensions with equal priorities, supporting the application of innovative digital technologies for climate action while addressing digital divides. Donors increasingly link renewable energy expansion with digital monitoring, promote circular e-waste management, and engage startups through public–private partnerships. For Korea, digital transformation is a comparative strength within its ODA portfolio, yet integration with green initiatives remains limited. There is significant potential to expand cooperation in private-sector engagement, energy management, circular economy, and digital-climate governance.

Chapter 4 analyzes developing countries’ needs and constraints. While green and digital initiatives are often pursued in parallel, integration remains weak due to infrastructure, institutional, and financial barriers. Nonetheless, common demands are evident in areas such as smart grids and AI-based energy forecasting for renewable energy management, satellite and drone applications for climate monitoring, and greening ICT infrastructure through green data centers. Smart cities are emerging as integrated platforms combining both transformations. Korea’s experience in digital government, data governance, energy management, and environmental data systems provides a strong comparative advantage for cooperation in climate data platforms, renewable energy monitoring, e-waste management, and green data centers.

Based on these insights, Chapter 5 proposes a three-phase cooperation strategy for Korea. In Phase 1, efforts should focus on creating an enabling environment and mobilizing resources through policy and legal reforms, institutional capacity-building, and market awareness initiatives. Korea should offer policy advisory support on renewable energy, data governance, and e-waste management, linking these with pilot projects. Introducing a “green filter” into digital ODA programs can ensure systematic assessment of decarbonization potential, energy efficiency, and sustainability. Financially, Korea should strengthen ties with global climate funds and establish a Korea-led Green Digital Initiative as a cooperation platform.

In Phase 2, pilot projects financed by public funds can demonstrate feasibility and then be scaled up through matching funds, concessional loans, or PPP models. This phased approach allows public institutions to absorb initial risks while fostering private-sector participation. Priority countries should be selected among Korea’s key ODA partners with adequate digital and energy infrastructure, active KOICA or EDCF offices, and strong political commitment. Priority areas include energy, circular economy, and climate adaptation, including smart grids, AI-based forecasting, green data centers, and e-waste management.

In Phase 3, sustainability should be ensured through localization of operations and maintenance, performance-based grants, and public–private co-management models. Technology transfer and joint development of AI-, IoT-, and blockchain-based green solutions should be promoted, supported by intellectual property protection and long-term education and training systems linking universities, vocational institutions, and industries. Promoting startup and SME participation will help establish local innovation ecosystems. Finally, performance indicators for green digital transformation should be developed to support monitoring, reinvestment, and knowledge sharing through South–South cooperation and toolkits.

In conclusion, digital transformation has the potential to increase emissions, but when combined with green transformation, emissions decline significantly—demonstrating the value of integration. Political will and institutional coherence are essential for success, and development cooperation is pivotal in narrowing transformation gaps. By mainstreaming climate into digital development, mobilizing blended finance, and institutionalizing long-term integrated programs, Korea can diversity its coooperation approachees and contribute to balanced and sustainable green digital transformation worldwide.

Along with other major economies, India is actively promoting strategic industries as its broader efforts to secure supply chains and accelerate industrialization. Strategic sectors play a pivotal role in advancing the country’s long-term economic resilience and technology self-reliance.

This report focuses on six strategic industries: biotechnology, space, smart infrastructure, defence, electric vehicles, and semiconductors. It first examines data on trade, foreign investment, and research and development expenditure. With the exception of the biotechnology sector, India’s current trade competitiveness in these industries remains limited. However, recent foreign investment inflows and research development spending indicate strong potential for substantial growth across all six sectors.

An in-depth analysis of the Indian government’s industrial policies reveals a clear and proactive approach to fostering these sectors. The government has established comprehensive sectoral strategies and detailed implementation plans, while allocating significant resources through production- and consumption-linked subsidies, direct investment, and public procurement. Designated institutions have been tasked with managing and coordinating these efforts. A notable feature in India’s policy stance is its strong emphasis on mobilizing private investment, notably by easing restrictions on foreign direct investment inflows and vitalizing the startup ecosystem.

To date, cooperation between Korea and India in strategic industries has been limited. While several engagements took place before and after Summits in the 2010s, most projects lost momentum. Unlike other major countries, Korea currently lacks a bilateral framework or blueprint guiding cooperation with India in strategic sectors.

The report provides three policy suggestions.

First, establish a ‘Korea-India Strategic Industry Cooperation Initiative.’ This initiative should articulate the shared vision, principles, and objectives of the two countries, while identifying potential cooperation areas and responsible institutions. As a part of the initiative, Korea and India should also hold regular high-level policy dialogues to ensure sustained coordination and strategic alignment.

Second, support Korean companies’ participation in India’s strategic industries. Korean firms are showing growing interest in India’s strategic sector but continue to face regulatory and administrative hurdles. The Korean government should play an active role in addressing issues that individual companies cannot resolve on their own by engaging in close consultation with Indian counterparts. It should also assist Korean firms in accessing India’s industrial subsidies and foster stronger business networks by organizing regular events that connect Korean companies with key players in India’s strategic industries.

Finally, leverage development finance to promote industrial cooperation. Korea can use development finance to support projects that advance India’s strategic industries, particularly those related to smart infrastructure and industrial corridors. Such projects would not only contribute to India’s development goals but also create new opportunities for Korean companies seeking to expand their presence in India. Additionally, human resource development and startup support in strategic industries represent promising areas for Korea’s development finance engagement.

The purpose of this study is to assess the supply chain risks of critical minerals that form the foundation of strategic industries such as electric vehicle batteries, semiconductors, and renewable energy equipment. Focusing on Korea’s “Top 10 Strategic Critical Minerals,” it identifies the import dependency structure and key partner countries, and proposes ways to strengthen supply chains through trade agreements. The analytical scope of this report follows the classification of Kowalski and Legendre (2023) and links raw materials, intermediates, and scrap by HS6 codes for each of Korea’s ten strategic critical minerals. The report consists of two main parts: a global supply chain and risk analysis, including Korea’s import structure (Chapters 2-3), and an agreement network, clause analysis, and strategic proposals (Chapters 4-6).

Chapter 2 analyzes the global supply chain structures and risks of Korea’s ten critical minerals. Lithium is supplied as raw ore from Australia and Chile, while China handles refining. Argentina and Zimbabwe have recently emerged as new suppliers, and the United States is pursuing localization efforts under the IRA. Nickel is mainly supplied by the Philippines and New Caledonia, while Indonesia has restricted ore exports and expanded intermediate production. The intermediates are exported to China for refining, and the final high-value-added products such as alloys are produced mainly in the United States and Europe. The Democratic Republic of Congo monopolizes cobalt ore production, with Canada and Finland handling most refining. In 2023, excess supply and weak demand contracted the market, while recycling activities centered in the United States and the United Kingdom expanded. Manganese production is concentrated in South Africa, Gabon, and Australia. China leads intermediate production but has reduced exports due to domestic prioritization. Japan and Spain supply high-purity refined products, while Indonesia and South Africa are expanding their smelting capacities. China dominates both natural and synthetic graphite production but began tightening export controls in 2023, prompting supply diversification. Tanzania and Madagascar have emerged as alternative sources, while Japan and Germany are expanding production of synthetic graphite based on technological advantages. For rare earths, China maintains dominance across all stages—from mining to permanent magnet manufacturing. In response, the United States and the EU have strengthened cooperation with Australia and Vietnam, while Malaysia has become a refining hub, and Myanmar and Laos have developed as chemical compound exporters.

Chapter 3 examines Korea’s import dependency for the ten critical minerals, classified by FTA status and supply chain stage. For lithium, imports are almost entirely from FTA partner countries, with dependence reaching about 99 percent for both lithium hydroxide and lithium carbonate as of 2023. While lithium hydroxide imports rely heavily on China, imports from Chile are increasing. Lithium carbonate remains concentrated in Chile and China. Nickel shows high dependence on non-FTA countries for ore imports but high FTA dependence for compounds. Nickel oxide and hydroxide are fully imported from FTA partners, while nickel sulfate and chloride record 93 and 85 percent dependence, respectively. Intermediates are largely imported from non-FTA countries such as Indonesia and Türkiye, and unalloyed nickel shows lower dependence (about 65 percent) on FTA partners. Overall, dependence on Chinese-refined nickel compounds stands out across product stages. Cobalt imports are mostly from FTA partners but are concentrated in a few countries. Concentrates, oxides/hydroxides, and scrap are wholly imported from FTA partners, while intermediates such as matte are 86 percent FTA-sourced. Imports of oxides/hydroxides are mainly from China and Belgium. Manganese ore and concentrate imports come 98 percent from non-FTA countries, predominantly South Africa; however, refined products such as manganese dioxide are nearly all imported from FTA partners, mainly China, Japan, and the United States. Graphite imports are highly concentrated by product in either China or the United States: natural graphite relies 97 percent on China, while “other forms” depend 80 percent on U.S. imports. Synthetic graphite imports show nearly full FTA dependence (over 98 percent), though electrode-grade imports are concentrated among a few countries, and other types remain China-dependent. Rare earth imports are almost entirely FTA-sourced, but actual supply remains concentrated in China and Japan, limiting effective diversification.

Chapter 4 analyzes the structure and evolution of global critical mineral agreement networks using IEA data. Before 2010, such agreements were few, but since 2021, networks have expanded rapidly through multilateral frameworks such as the Mineral Security Partnership (MSP) and the Indo-Pacific Economic Framework (IPEF), alongside numerous bilateral MOUs. Network analysis shows that the EU exhibits the highest centrality, acting as a core hub connecting resource producers and consumers. This indicates the EU’s elevation as a central actor in mineral supply chain governance, grounded in its extensive network of FTAs. The EU has introduced “Energy and Raw Materials (ERM)” chapters within FTAs that include export tax bans, non-discrimination in pricing, and binding ESG compliance obligations. Japan incorporates mineral-related provisions within Economic Partnership Agreements (EPAs), exemplified by the Australia-Japan EPA, which bans export restrictions to secure supply stability. Japan is also expanding mega-FTA negotiations with Latin American countries to enhance resource access. The United States has shifted from traditional FTA reliance toward leading multilateral initiatives such as the MSP or IPEF. The most notable development is the U.S.-Japan Critical Minerals Agreement (CMA), established in March 2023 under the Inflation Reduction Act (IRA). The CMA grants Japan FTA-equivalent status under U.S. law for EV subsidy eligibility and institutionalizes bilateral cooperation on critical minerals. Post-agreement data indicate a shift in Japan’s sourcing of five key minerals (cobalt, graphite, lithium, manganese, nickel) toward the United States and Canada, particularly in nickel and manganese imports. Following the IRA and CMA, Japanese investment in U.S. battery and material sectors increased markedly in late 2022 and 2023, while joint patent applications in mining, refining, and recycling also rose, reflecting deepening technological integration. These trends demonstrate that the CMA functions not only as a trade mechanism but as a combined platform for trade, investment, and technology cooperation aimed at realigning allied supply chains.

Chapter 5 proposes directions for agreement provisions supporting Korea’s critical mineral supply chain stabilization, investment protection, and skilled labor mobility.

First, institutional measures are required to mitigate sudden export restrictions by resource-holding countries. Cases such as Indonesia’s nickel ore export ban and China’s graphite export controls disrupt supply planning and investment decisions. Agreements should mandate advance notification (6-12 months) for new restrictions and provide a 2-3-year grace period for existing investors. Rapid consultation mechanisms—for instance, ministerial meetings convened within five days of a supply disruption—should be institutionalized to enable joint responses. Violations of export restriction obligations should be subject to dispute settlement under the WTO or the agreement itself.

Second, legal safeguards are needed to protect Korean investors against growing political and institutional uncertainty in emerging resource economies. Agreements should prohibit retroactive application of new regulations to pre-existing investments, define licensing procedures and responsible authorities across exploration, mining, and refining, and ensure transparency. Investor-state dispute settlement (ISDS) provisions must be included to address expropriation or unfair, inequitable treatment.

Third, mobility clauses are required to ensure deployment of technical personnel essential to projects. Due to labor and visa barriers, Korean skilled engineers often face delays in facility construction and commissioning abroad. Agreements should create special visa and work permit quotas for “core technical personnel” and establish mutual recognition agreements (MRAs) for Korea’s national technical licenses. While respecting local employment obligations, Korean specialists should be allowed to operate on-site for one to two years to provide training and technical transfer, linking labor mobility with capacity-building.

Chapter 6 synthesizes the results from previous analyses to classify potential counterpart countries into three categories and propose differentiated agreement strategies.

The first category, “strategic core partners,” includes Canada, the United States, and Australia—major resource holders and rule- makers in the global mineral governance system, as well as Korea’s key suppliers. Comprehensive, high-standard agreements anchored in international norms are recommended. Drawing from the U.S.- Japan CMA model, these should prohibit export restrictions, establish transparent investment screening and enforceable ISDS procedures, and include regulatory frameworks for MRA-based qualification recognition and fast-track visa issuance.

The second category, “supply chain and network partners,” includes Japan, India, the United Kingdom, Germany, and China. These countries possess advanced processing technologies and significant market influence. Agreements should pursue strategic reciprocity by requiring scientific justification and advance notification for export restrictions, modernizing existing Bilateral Investment Treaties (BITs) to clarify ambiguous clauses, and enhancing stabilization provisions. Labor mobility should focus on expanding joint R&D and technology exchange programs.

The third category, “resource-rich and specialized supply partners,” includes Indonesia, Chile, the Democratic Republic of Congo, South Africa, Brazil, and Vietnam. A development- cooperation-linked approach is most effective: combining Korean investment in refining facilities, technology transfer, and infrastructure assistance with commitments for stable resource supply. Agreements should incorporate MIGA’s political risk insurance (PRI) and link official development assistance (ODA) financing to reduce investment risks. Labor mobility measures should align with local training programs led by dispatched Korean technical experts.

Finally, the report presents overarching recommendations for future negotiation strategies.

First, ESG should be positioned not as a regulatory burden but as a tool for mutual cooperation, contributing to partner countries’ sustainable development while establishing resilient supply chains and responding collectively to G7/EU-led governance frameworks. Second, MIGA’s guarantee schemes should be institutionalized within agreements, embedding ESG compliance into project design phases to lower corporate investment risks.

Third, domestic policy instruments such as the National Resource Security Act should be aligned with external negotiation agendas on critical mineral designation, stockpiling, and recycling targets. Parallel efforts should include establishing HS codes and customs standards for recycled materials such as black mass.

Lastly, Korea should integrate and coordinate numerous MOUs and bilateral committees under a unified framework, ensuring coherence and performance monitoring. Drawing from the Korea-Australia example, accumulated public-private consultative mechanisms should be used to review implementation progress and connect new cooperation initiatives, ensuring that agreements deliver tangible results beyond declarations.

With the expansion of BRICS into BRICS+ in 2024, it has shown the potential for establishing a global order led by Global South countries. BRICs, officially launched in 2009 with four countries (China, Russia, India, Brazil), approved the accession of four new member countries (UAE, Egypt, Iran, Ethiopia) for the first time in 13 years since South Africa joined in 2011, and Indonesia formally joined as a member in 2025. Consequently, as of 2023, BRICS+ is a massive economic bloc, accounting for 28.1% of global GDP and 48.7% of the world’s population. Discussions are underway as to whether it will emerge as a new alternative to Western-centric economic cooperation, such as the G7, and the Bretton Woods financial order.

Particularly as economic and security cooperation with the Global South strengthens, centered around China and Russia, and the so-called Global South rises, BRICS+ is drawing attention as a focal point for Global South cooperation. China is expanding industrial, technological, financial, and supply chain cooperation with developing countries through initiatives like the Belt and Road Initiative (BRI), while Russia is expanding its influence centered on security cooperation. This has led the United States, among others, to closely monitor whether BRICS+ will bring structural changes to the international order. Especially in the 2020s, amid complex crises such as the COVID-19 pandemic, the Russia-Ukraine War, and the Israel-Hamas conflict, coupled with the escalating US-China competition, Global South countries are adopting diplomatic strategies that seek their own national interests by balancing between the US and China/Russia to diversify risks. Global South countries, including the new members, aim to achieve various goals — such as attracting domestic industries, acquiring technology, and securing stable supply chains — by strategically utilizing BRICS+. Recently, cases of South-South cooperation centered on BRICS+ member countries have also been increasing.

Against this backdrop, this study aims to derive policy implications for South Korea’s foreign economic policy by answering the following questions: (1) Why is BRICS+ expanding, and what are the motivations of the countries to join BRICS+? (2) Is strategic interdependence among BRICS+ countries increasing? (3) Will the economic power of BRICS+ in the global market be strengthened? (4) What are the future directions and challenges for BRICS+? Accordingly, this study focuses on 11 countries: the 10 BRICS+ nations and Saudi Arabia, which deferred its accession.

The expansion of BRICS+ was influenced by the rise of the Global South and the backlash against the Western-led international order. In particular, intensified Western containment of China and Russia provided the motivation for them to pursue the expansion of BRICS. The weakening of multilateralism and disappointment with Western leadership post-pandemic activated the discourse on the ‘rise of the Global South’, which led to high interest and positive responses from emerging countries regarding BRICS expansion. As Russia and China use BRICS+ as part of their strategy to counter the US, there is a view that sees BRICS+ as an anti-Western bloc. However, this dichotomous perspective has limitations, as it oversimplifies the complex participation motives of other BRICS+ members. It is true that BRICS+ member states are dissatisfied with the current order led by a few advanced nations. However, for original members like India, Brazil, and South Africa, as well as the new members, BRICS+ functions not as participation in an anti-Western coalition, but as a consultative body to reform the global governance system — which is unfair to developing countries — and to secure their own strategic and economic interests. Amid growing uncertainty in the international order due to the US-China strategic competition and the Russia- Ukraine War, many member states seek to use BRICS+ as a means for economic and diplomatic diversification. For example, BRICS+ provides Iran with a channel to bypass economic isolation, and offers Egypt and Ethiopia opportunities to receive financial support without relying on the IMF or World Bank. Furthermore, BRICS+ serves as a platform for countries like the UAE, which have felt marginalized in the Western-centric system, to enhance their global standing.

Above all, BRICS+ is becoming a key consultative body driving international cooperation that reflects the demands of the Global South. Member states are strengthening cooperation on common challenges for developing countries, such as climate change, health, and the eradication of hunger and poverty, in addition to calling for increased representation for developing countries at the IMF and reform of the UN Security Council. At the 2025 Rio Summit, they emphasized cooperation to protect the interests of the Global South, including a partnership to eradicate poverty, a declaration on climate finance, and the establishment of inclusive and fair global AI governance. This shows that BRICS+ is evolving from its existing financial cooperation into a multidimensional cooperative body representing the interests of the Global South across a wide range of fields, including health, climate, digital, and new technologies. Meanwhile, BRICS+ movements toward local currency settlement, the establishment of a grain exchange board, and cooperation in energy and advanced technology suggest the potential for economic solidarity among member states. Recently, the tariff policies of the Trump administration have also acted as an external factor promoting intra-bloc cooperation within BRICS+.

BRICS+ countries exert significant influence in the energy, critical minerals, and grain markets, as the membership includes major producers of crude oil, natural gas, and grains, as well as exporters of critical minerals. What is particularly noteworthy is the gradual increase in commodity trade among BRICS+ countries and the very low volume of trade with G7 nations. In other words, commodity trade between the G7 and BRICS+ is not active, which also suggests that the space for BRICS+ to align with the G7 during a complex crisis is diminishing. Meanwhile, commodity trade between non-BRICS+ Global South countries and BRICS+ is on an upward trend, which can be interpreted as the strengthening of BRICS+’s economic influence over the wider Global South. BRICS+ is strengthening cooperation on agriculture, energy, and critical minerals, and bilateral cooperation is also becoming more active.

In the manufacturing sector, China plays a core role in BRICS+ production, with over 83% of BRICS+ manufacturing exports originating from China. The countries with the next highest manufacturing export shares are India and the UAE, but their shares are very low compared to China’s. Consequently, manufacturing cooperation within BRICS+ is centered on China, and it should be seen that the Partnership on New Industrial Revolution (PartNIR), the Strategy for BRICS Economic Partnership, and the BRICS Industry Ministers’ Meeting are also, in effect, led by China. BRICS+ has expanded its export share to other BRICS+ members and third countries, centered on traditional manufacturing sectors like electrical/electronic equipment, machinery, and automobiles, with the export share of intermediate goods gradually increasing between 2013 and 2023. However, unlike the G7, the export share of capital goods has stagnated, suggesting that BRICS+ countries are engaged in cooperation closer to building a supply chain through intermediate goods trade, rather than acting as an export base.

Investment inflow into BRICS+ amounts to $330.6 billion (as of 2024), accounting for 21.9% of total global investment. Of this, China’s share alone accounts for 7.7% of the global total. In contrast, investment outflow from BRICS+ is only 15.1%, indicating a significant net investment inflow. The BRICS+ investment cooperation strategy is mainly composed of financial support through the multilateral financial institution, the New Development Bank (NDB), and investment cooperation via platforms (Business Council, Business Forum, PartNIR). In 2015 and 2021, they also agreed to promote investment among BRICS countries through the Strategy for BRICS Economic Partnership.

Meanwhile, contrary to concerns, bilateral investment among BRICS+ members is not large compared to their investments in the G7, and the investment sectors are also limited. An analysis of policy-driven investment trends, centered on sovereign wealth funds (SWFs), to gauge the investment policy direction of each BRICS+ government shows that major countries such as China, Russia, the UAE, and Saudi Arabia have recently been expanding their investments, focusing on advanced industries such as IT and bio industry. However, due to the nature of policy finance — seeking long-term returns — investments are heavily concentrated in politically stable and large markets like the G7 (especially the US and UK), suggesting limitations to bilateral investment cooperation within BRICS+. The reason for this phenomenon is that China and India are effectively the only countries within BRICS+ with high technological levels and large consumer markets, while the remaining countries have high demand for infrastructure and resource development. Financial cooperation among BRICS countries stems from the belief that their voting power in major multilateral financial institutions like the IMF and World Bank is low, and that the dollar-centric settlement structure can be disadvantageous due to factors like foreign exchange losses. In particular, after the financial crisis, restrictions on the voice of developing countries in the IMF and World Bank heightened the sense of crisis that the supply of international financial liquidity could operate primarily for the benefit of advanced nations. Consequently, China has long attempted to internationalize the RMB to reduce its financial dependence on the US, and RMB transactions have indeed increased slightly. In addition to traditional finance, BRICS+ countries have formalized the establishment of a BRICS digital payment network to expand digital financial cooperation, which is also linked to building a financial settlement safety net. Accordingly, the original five countries are leading the development and commercialization of CBDCs. BRICS financial cooperation is divided into emergency liquidity support (e.g., currency swaps, Contingent Reserve Arrangement), development finance through the NDB, and digital financial cooperation, and has produced various achievements.

However, as US countermeasures intensify in response to expanded financial cooperation, and the US formalizes the launch of stablecoins, challenges for BRICS+ financial cooperation are coming to the fore. Above all, the main challenges include: right-sizing the CRA fund to reflect the expanded membership and improving the efficiency of the risk management system; streamlining NDB voting rights; and building the digital infrastructure for the digital finance system centered on BRICS Pay and BRICS Bridge, as well as responding to stablecoins. Furthermore, the fact that countries like the UAE and Saudi Arabia use a dollar peg, and that their positions differ from those of Russia and Iran, which advocate for de-dollarization, is another factor to consider in the advancement of financial cooperation.

Based on previous analysis, this study suggests directions for cooperation between South Korea and BRICS+ countries, focusing on the future development path and challenges of BRICS+. First, BRICS+ is expected to develop in a direction that reduces economic dependence on the West. This can be seen as BRICS+ acting as an alternative cooperative body rather than an exclusive bloc. Accordingly, cooperation is expected to expand around: (1) strengthening economic cooperation in traditional industries, (2) leading global agendas that reflect the voices of developing countries (e.g., climate change, energy security, SDGs, poverty), and (3) expanding cooperation in advanced industries and technology. It is projected that the bloc-formation of BRICS+ will not threaten the existing international order system, contrary to some concerns. This is also linked to the following challenges. The main challenges facing BRICS+ are that member states have differing positions on the future direction of BRICS+, as well as on their stance toward the US, the accession of new members, and de-dollarization. The fact that they face US countermeasures, which also require a response, is another challenge. However, it is anticipated that as US containment of BRICS+ countries becomes more overt and its economic impact grows, it will create a space for BRICS+ countries to-solidify their solidarity.

Therefore, South Korea needs to strengthen: (1) expansion of minilateral cooperation, (2) joint responses to global agendas, (3) reinforcement of commodity supply chain cooperation, and (4) expansion of “software” cooperation to build cooperative networks with BRICS+ countries. However, rather than engaging with BRICS+ as a single bloc, it is necessary to maintain a direction that pursues South Korea’s economic interests through minilateral and bilateral cooperation with individual countries, while simultaneously expanding Korea’s economic footprint within the BRICS+ nations.