This study examines recent changes in the European Union’s (EU) mid- to-long-term trade strategy. The trade environment has been greatly affected by the weakening of multilateralism, intensification of the US-China strategic competition, COVID-19 pandemic, and the outbreak of the Russian-Ukrainian war. In response, the EU has announced new strategies. This study categorizes the motivations of these strategies into internal and external ones, and identifies ways for Korea and the EU to cooperate in these areas. Specifically, the EU is currently focusing on policy areas such as supply chain reorganization, digital transformation, and climate change response due to internal motivations, and it is passively responding to external pressures in policy areas like the energy crisis and pandemic response.
Chapter 2 analyzes the EU’s supply chain reorganization, which includes policies to increase the competitiveness of intra-EU companies in strategic industries and reduce extra-EU dependence. This chapter examines a series of EU policies to strengthen semiconductor and battery supply chains, including the Single Market Emergency Instruments and the Critical Raw Materials Act. To ensure that Korea’s participation in the EU’s reorganization of offshore supply chains increases, it is necessary to actively promote the idea that Korea is a reliable partner. Supporting Korean companies to invest in the EU to strengthen cooperation in the semiconductor industry and actively reflecting the position of Korean companies in setting international standards for batteries are also worth considering. Technical exchanges with relevant organizations and companies in the EU should be actively promoted. Bilateral cooperation in critical minerals, which are necessary to combat climate change, is also promising. EU experts suggest linking respective early warning systems and monitoring of critical minerals to share information and promote joint purchases.
Chapter 3 examines the priority areas for digital cooperation between Korea and the EU, based on the EU’s key digital policies and agreements. The chapter identifies several potential areas for cooperation, including the Korea-EU Digital Partnership, which is expected to encompass emerging technologies such as 5G/6G, high-performance computing, quantum technology, artificial intelligence, and blockchain, as well as regulatory areas such as privacy, cybersecurity, online platforms, and data movement. Additionally, the chapter suggests that modernizing e-commerce provisions in the Korea-EU FTA could help facilitate digital trade and strengthen digital economic cooperation. Another area for cooperation is in creating a regulatory environment that enables the digital market to grow appropriately, as digital-related regulations are strengthened in each country. Finally, the chapter recommends upgrading cooperation in digital and information and communication technology (ICT) infrastructure and technical cooperation, including future networks such as 6G, high-performance computing, artificial intelligence, cybersecurity, ICT supply chains, e-government, and R&D. By leveraging their advanced digital technologies and shared interests in promoting and developing these areas, Korea and the EU can deepen their digital cooperation.
Chapter 4 examines the key issues of the EU’s climate change response and proposes possible areas of cooperation between Korea and the EU. The EU is implementing one of the world’s most advanced and forward- thinking environmental policies. With the recent announcement of the “Fit-for-55” legislation, the EU is accelerating its eco-friendly structural transformation by reducing carbon emissions by 55% compared to 1990 levels by 2030. Additionally, the EU will ban internal combustion engine vehicles from 2035, raise the target for renewable energy, expand the scope of the emissions trading system, phase out free allowances, and introduce a carbon border adjustment system for offshore countries. Chapter 4 suggests three areas of cooperation: first, cooperative programs to jointly develop eco-friendly technologies; second, joint participation in multilateral discussions on climate change response; and third, joint participation in supporting climate change response and adaptation in developing countries. Climate change is beyond the scope of individual national governments or bilateral issues, and effective responses can only be achieved through multilateral cooperation.
Chapter 5 examines the energy situation in the EU and its major member states, and then examines the energy security policies implemented before and after the Russian-Ukrainian war. In response to the green transition discussed in Chapter 4, major European countries have generally sought to expand renewable energy sources such as solar and wind power. However, their stance on nuclear power and natural gas has varied across member states. It is expected that the reliance on nuclear power generation will remain high for the time being, as the deadline for operating or retiring nuclear power plants has been extended to resolve short-term energy supply and demand imbalances. In response, Korea should continue energy cooperation with major EU member states such as Germany, France, and Poland, but consider alternatives for cooperation that are consistent with each country’s policy.
Chapter 6 proposes potential avenues for cooperation between the EU and South Korea in the area of public health, based on the EU’s COVID-19 response. The COVID-19 pandemic has significantly impacted the EU, resulting in high numbers of infections and deaths as well as a sharp decline in economic growth. To combat the pandemic, the EU has implemented various policies, including establishing joint response procedures among member states, jointly purchasing and distributing vaccines, providing financial support at the EU level, and actively participating in multilateral cooperation. Korea can continue to cooperate with the EU in three key areas: first, promoting bilateral cooperation to respond to future infectious disease crises; second, jointly participating in multilateral organizations as similarly situated countries; and third, providing technical cooperation in the pharmaceutical field. By improving relevant provisions within the EU-Korea FTA and strengthening cooperation through diplomatic channels, the EU and Korea can continue their cooperation in the health sector.
Overall, this study highlights various ways in which Korea and the EU can strengthen their cooperation in areas such as supply chain reorganization, digital transformation, climate change response, and energy security. By working together, both sides can achieve their common goals and respond more effectively to global challenges.