Recently, not only responses to various major economic and trade issues, but also discussions at the global level to prepare measures for cooperation in the international community for each issue are taking place, centering on the U.S. Due to external shocks at the global level, such as the hegemony competition between the U.S. and China and the COVID-19 pandemic, the U.S. and other major countries have begun to consider ways to change their existing supply chains based on cost-efficiency to resilient supply chains for major materials essential to their national security. In addition, the intensifying spread of the coronavirus has prompted the expansion of non-face-to-face economic activities such as telecommuting and online shopping. Accordingly, it has become more important to discuss standard digital trade norms to support a digital platform economy. Moreover, the Biden administration announced its 2050 carbon net-zero goal to respond to climate change while implementing related policies and leading discussions on climate change response in the global community. Lastly, as each country's policy measures are being used to recover from the economic damage caused by the COVID-19 pandemic, major countries including the U.S. and South Korea have paid more attention to development cooperation policies targeting developing countries. Therefore, this study tried to derive South Korea's future trade strategy and cooperation measures with the U.S. by identifying the U.S. position and response strategy for each of the major economic and trade issues previously mentioned.
First, we present the U.S. policy responses related to the semiconductor and battery sectors and their implications in terms of the U.S.-centered supply chain reorganization policy. In particular, semiconductors and large-capacity batteries are important industries in which Korea holds an important position in the global supply chain. Based on the U.S.-centered supply chain policy, Korea needs to expand local investment and production within the U.S. in the semiconductor and battery sectors, and seek ways to maximize national interests through close cooperation between the government and companies. In addition, in the process of Korean companies entering the U.S., it is necessary to explore ways to cooperate in technology, such as promoting joint R&D with the U.S. Furthermore, it is essential to carefully review whether there are any trade legal problems in relation to the detailed regulations of the IRA implemented by the U.S., and consider the possibility of legal response as well as institutional arrangements to compensate for damages that may be suffered by companies within or connected with the domestic electric vehicle industry following the implementation of the IRA.
Next, in the field of digital trade, as the trend of digital transformation continues to gain pace worldwide, we review major digital transformation and trade policies of the U.S. to strengthen cooperation in the digital field between Korea and the U.S. Moreover, we derive cooperation plans between the two countries based on each country’s policy measures. First of all, Korea needs to actively participate in international discussions led by the U.S. to establish advanced communication network standards such as 5G and 6G as essential infrastructure in the process of global digital transformation. In addition, to overcome the limitations of the digital trade rules stipulated in the KORUS FTA and to strengthen cooperation with the U.S., Korea should actively lead discussions on trade pillar working groups within the IPEF to prepare a roadmap for digital trade rules with participating countries.
In the field of climate change response, we review the current status of major related policies being promoted in the U.S. and Korea and important technologies as targets for cooperation between the two countries. Furthermore, we present a plan for cooperation between Korea and the U.S. based on this. Carbon reduction and next-generation nuclear power technology were focused on as major technology fields for cooperation between Korea and the U.S. First, as carbon reduction technology is included in the 10 climate innovation technologies selected by the Biden administration, R&D on the technology to be used in various sectors such as buildings, energy storage systems, and vehicles is expected to be promoted. In addition, the Biden administration has allocated a large budget to the old nuclear power plant support program, citing nuclear power as a realistic alternative that can stabilize electricity rates while reducing fossil fuel use. Korea, like the U.S., plans to select carbon-neutral technologies such as secondary batteries and hydrogen as “national strategic technologies” and provide extensive R&D support. Thus, the Korean government will provide various programs and budget support for these sectors.
Finally, in the field of development cooperation, we review policies promoted in Korea and the U.S., and provide measures for cooperation between the two countries. First, it is necessary to expand infrastructure investment in developing countries in the region and to share know-how and experiences of success in development through the IPEF, which is promoted by the U.S. to check China's influence in the Indo-Pacific region. In addition, Korea, along with the U.S., needs to strengthen the joint support system for Pacific Island countries exposed to climate change and with small economies and low levels of economic development. Lastly, we need to clearly define what can be done in cooperation with the U.S. by expanding support through international development finance organizations such as the World Bank and IDB for Guatemala, El Salvador, and Honduras, which are part of the Central American “Northern Triangle”, and by actively responding to the efforts of the U.S.