[한·중수교 30주년] The speedily modifying trade environment… Urgent operation of a cross-governing administration export handle tower

A red light-weight has appear on for exports as it is hampered by China’s higher non-tariff barriers. In individual, China is ever more dependent on important supplies this kind of as vehicle batteries, and there are concerns that this could even further threaten the Korean economy. In order to more systematically deal with the fluctuating trade condition with China, it is urgent to implement a trans-governmental ‘export control tower’.

Increasing dependence on China for key elements these types of as car batteries

Dependence on China is expanding. With the enforcement of the Inflation Reduction Act (IRA) in the US, electric powered autos that include huge quantities of Chinese-designed minerals and elements utilised in auto and battery manufacturing will not receive US subsidies from upcoming calendar year. As a result, endeavours to decrease China’s dependence on these essential materials have turn into far more urgent.

According to the Korea Global Trade Association, of the imports (US$ 1.748.29 million) of lithium hydroxide (which includes lithium oxide), a crucial product for secondary batteries, concerning January and July this 12 months, imports from China (US$ 1.476. 37). million) accounting for 84.4%. All through the exact time period, cobalt imports from China accounted for 127.44 million pounds, accounting for 81% of complete imports (157.4 million pounds). Of the full imports of all-natural graphite ($71.95 million), $64.45 million have been manufactured in China, accounting for 89.6%.

The dependence of these assets on Chinese imports is escalating. Reliance on lithium hydroxide imports from China was 64.9% in 2018, but improved by 18.9 percentage points to 83.8% past 12 months. For the duration of the identical interval, cobalt rose 10.9 proportion points from 53.1% to 64.%. All-natural graphite also rose by 3.8 share details from 83.7% to 87.5%, and this year it achieved 90%.

“We must target our policy abilities by developing a offer chain management tower”

As the supply chain crisis spreads because of to the extensive war amongst Russia and Ukraine and the trade ecosystem alterations quickly, some are advising that the Korean govt desires to choose a preemptive reaction.

The Korea Worldwide Trade Affiliation (KITA) just lately argued for the have to have for a authorities-large source chain administration tower by a report titled ‘Changes in the International Trade Ecosystem and Reaction Tasks’. Given that the COVID-19 crisis, the trade ecosystem is switching speedily focusing on △ source chain crisis, △ export quality growth, △ electronic transformation, and △ new trade norms.

In individual, although China has been the key foundation of the international provide chain till now, it is very likely to be reorganized to 3rd countries these types of as Taiwan, Malaysia and Indonesia. The Korea International Trade Association emphasized, “Just as significant nations around the world these kinds of as the United States are concentrating their policy abilities to ensure flexible and stable source chain networks, Korea should also strengthen its responsiveness to emergencies by establishing government-wide source chain administration. tower.”

Hong Ji-sang, a analysis fellow at the Korea Intercontinental Trade Affiliation, stated, “In order to strengthen the trade balance with China, it is vital to be certain a stable import provide chain procedure for crucial elements similar to the upcoming era export industry. . ” He also additional, “We have to have to maintain a technological hole with China in technology-intense industries to be certain a foundation for export competitiveness,” he included.

In this regard, the authorities intends to look at working with current trade cooperation channels alternatively than making a govt-broad manage tower at the moment. An formal from the Ministry of Trade, Industry and Strength mentioned, “Because there are trade cooperation channels that deal with trade barriers, there is no transfer to produce a independent pan-ministerial (control tower).”

There are also voices contacting on the governing administration to take the guide so that exports can jump from quantitative expansion to qualitative advancement. In specific, as the convergence of manufacturing and support industries is crucial, it is pointed out that personalized R&D support is also necessary so that exporting providers can preserve their comparative advantage or boost their technological ability.