As the international environment rapidly changes due to developments such as the war in Ukraine and the competition for hegemony between the U.S. and China, major countries are pursuing new forms of economic security policies such as reorganizing supply chains, fostering industries, and strengthening research security. The study aims to examine the threats and opportunity factors posed by economic security policies of the U.S., China, and the EU, particularly in the areas of supply chain and science and technology diplomacy, amid growing uncertainty in the economic security environment. It goes on to suggest countermeasures, focusing on items and technology areas that are expected to have a significant impact on Korea’s economic security.

Chapter 2 describes the geopolitical conflicts and changes in the international order over the past 30 years since the dissolution of the Soviet Union in 1991, focusing on the revival of competition between major powers due to China’s rise, the weaponization of interdependence and rise of “de-risking” strategies, and bloc formation and solidarity competition. In particular, while the international order that prevailed in the post-Cold War era for more than 30 years was characterized by global free trade and economic interdependence, the focus has now been placed on network reorganization to find and unite with more sustainable and reliable supply chain and economic exchange partners, since 2018 as the world experienced U.S.-China competition, the COVID-19 pandemic, and the war in Ukraine. In addition, the background and implications of supply chain stabilization policies were a government-led increase in industrial policies and trade threat measures, the weaponization of interdependence, and the effect of supply chain gateways. Finally, it was suggested that most countries faced changes in science and technology cooperation, pursuing diplomatic strategies based on their own interests and making fostering key emerging technologies a top priority for economic security.

In Chapter 3, supply chain policies of the United States, the EU, and China were analyzed, focusing on semiconductors, secondary batteries, and core minerals, and trade threats were examined. In the semiconductor field, both the U.S. Semiconductor and Science Act and the EU’s European Semiconductor Act are based on a multilateral export control system. However, despite cooperation in export controls through the decisions of a multilateral council, there is a possibility that competition for subsidies will intensify in the future as the EU and the United States prioritize the fostering of their own industries. China has not enacted a support law specifying semiconductors, but in order to cope with U.S. export regulations, it is continuing to promote support policies to create an ecosystem of semiconductor industries in China and strengthen innovation.

With the enactment of the Inflation Reduction Act (IRA) in 2022, the U.S. is pushing to foster the secondary battery industry within its borders, also introducing Section 13401, which stipulates the requirements for critical minerals and secondary battery components for tax credits related to eco-friendly vehicles. The clause is currently under discussion, for instance regarding the expansion of regional conditions for the mining and processing of critical minerals to countries with close economic cooperation relations with the U.S. and that have signed key mineral-related agreements through subsequent implementation guidelines (drafts), but the economic impact of detailed implementation measures is expected to increase as the scale of tax credits is expected to be implemented on a larger scale, contrary to estimates from the U.S. Congressional Budget Office. The EU is focusing its policy capabilities on attracting companies in the region, presenting the target ratio of manufacturing capacity in the region through the Climate Neutral Industry Act. In particular, while leading the establishment of a circular economy related to secondary batteries, it is rushing to support companies by easing subsidies for companies in the region through the Temporary Crisis and Transition Framework (TCTF). Since 2009, China has expanded demand and created an ecosystem for the secondary battery industry by distributing eco-friendly cars in China, and local Chinese companies are seeking to enter the global market with lithium iron phosphate (LFP) battery technology supported by the government from the beginning of the technology.

In the critical mineral sector, unlike semiconductors and secondary batteries, China is trying to control exports in some resources, such as rare earths, gallium and magnesium, which have international influence, but considering that China has also been converted into the largest consumer of critical minerals in the course of its economic development, China is unlikely to pursue a policy to weaponize critical minerals. However, the overlap in lists of critical minerals in each country, and the difficulty of diversifying supply chains due to the regional ubiquity of some minerals, could pose new trade threats.

When considering the above, caution is required in that China, the EU, and the United States are pursuing various industrial policies to stabilize the supply chain, with the possibility of this developing into a trade conflict between the EU and the United States in the future. In addition, the United States is considered to be the leading country in supply chain management. In particular, the United States collected opinions from various stakeholders by releasing a list of key supply chain items as part of follow-up measures to an executive order, and it is expected that a new policy will soon be implemented that contains the direction of supply chain management based on the final list. Since the items in these lists are likely to be managed as items related to economic security in major countries in the future, an import dependence analysis was conducted in Chapter 5.

Chapter 4 analyzes the science and technology foreign policies of major countries. Although cooperation between the United States and EU member states is actively conducted in areas of ICT technology which include nuclear power and cybersecurity and dual-purpose technology, cooperation between the EU and the United States and China in the area of technology has been reduced. In particular, the United States has been gradually expanding technological cooperation since 2021 through agreements in nuclear and space-related technologies with European countries, similar countries such as Korea and Japan, rather than with the countries of concern. In addition, through the Trade and Technology Commission (TTC) with the EU, it is pursuing a strategy to secure leadership in areas that are expected to have a significant impact in the future by promoting the enactment of international standards for artificial intelligence and genetic biotechnology.

We examined the current state of science and technology diplomacy being promoted by the EU through Horizon 2020, the EU’s international science and technology cooperation project. In terms of project implementation, 89.1% was executed by EU member states, 9.1% by quasi-member states, and 1.8% by third countries without quasi- member status. This demonstrates the importance of non-EU member states joining as quasi-member states for science and technology cooperation with the EU. The scale of science and technology cooperation between the EU and China through Horizon 2020 has been greatly reduced, but cooperation is still underway to address global issues such as climate change and pandemic response. China has also reduced its technological cooperation with the EU and the United States, but is conducting joint research with the United States to respond to climate change.

Taken together, we can see the trend of bloc formation proceeding in areas of cooperation in key technologies (AI, quantum computing, next-generation information communication, etc.) that the U.S., EU, and China are competitively fostering, while technological cooperation to solve global problems such as climate change and biodiversity is still being promoted between even the U.S. and China. In this regard, it is necessary to examine Korea’s technological influence in key technology areas where cooperation with similar countries is becoming increasingly important, strengthen domestic technological competitiveness, and seek cooperative countries in each field. Accordingly, by compiling the technological impact assessment indices of major countries, including Korea, in core technology fields, mid- to long-term cooperation partners necessary from the perspective of economic security were presented in Chapter 5.

Chapter 5 analyzes Korea’s supply chain and its influence in key technology fields, focusing on the items and technology fields presented in Chapters 3 and 4. Supply chain analysis was conducted with the aim of identifying Korea’s supply chain problems by analyzing Korea’s dependence on imports from the world by item unit. When looking at the import dependence by selecting the items related to the economic security-related policies of major countries among Korea’s semiconductor imports, the amount of imports for the relevant items is gradually rising, while the proportion of total imports has decreased. Korea mainly imports the items from Japan and China, but its dependence on imports from a single country by item is mostly in the 60% range or less, and there are at least one alternative importing country. However, caution is required as the proportion of the items among Korea’s semiconductor imports is gradually increasing.

Korea’s imports of secondary battery items have been increasing rapidly in recent years, and the proportion of imports related to secondary battery materials and parts has increased. Among Korea’s secondary battery imports, the number and amount of items related to the economic security policies of major countries are increasing rapidly. In particular, Korea’s imports of these items are largely from China, and its dependence is also becoming more pronounced. Therefore, Korea needs to carefully examine the policies of major countries related to secondary batteries.

As a result of analyzing the indicators that evaluated the impact of key technologies, Korea was evaluated to have a greater technological impact in the energy, environment, and advanced information and communication fields than in others, but it was evaluated to have a lower impact in quantum-related technologies and detection and navigation technologies. In addition, six technology fields with low technological influence in Korea and large differences in influence between the top countries with high technological influence were selected among the core technology fields, and the need to strengthen domestic technological competitiveness and mid- to long-term cooperation targets was suggested from the perspective of economic security.

Chapter 6 summarizes Korea’s economic security policy, focusing on the designation of key technologies through legislation, promotion of supply chain stabilization, and the status of international cooperation. As policy implications, measures for economic security cooperation with major countries were suggested. First, as a cooperation plan with the United States, it was suggested to facilitate the movement of manpower in key areas, establishing a coordinating mechanism related to bilateral supply chains, together with cooperation in the development of critical minerals. Other suggestions were to participate in the EU’s Global Gateway initiative, concentrate capabilities in joining Horizon Europe as a quasi-member, and to re-establish relations with the EU by revising provisions on supply chain cooperation within the Korea-EU FTA. It was also suggested to promote cooperation through ODA, supply chain dialogue channels, and green transformation cooperation with developing countries (ASEAN, India, Mexico and China), which are important in Korea’s supply chain, in addition to developed countries. Other implications of the study to promote Korea’s economic security included: establishing a communication system between ministries to promote active economic security policy, promoting the supply of premium intermediate goods in the global supply chain, and promoting cooperation with key partner countries (Japan, Germany, the United Kingdom, Italy, etc.) that comprehensively considers the supply chain and critical technology competitiveness.