Deputy Prime Minister Choi Sang-mok chaired the first Supply Chain Stabilization Committee meeting at the Government Complex-Seoul on June 27.
The committee, established under the Framework Act on Supply Chain Stabilization Support for Economic Security (hereinafter “Framework Act on Supply Chain”), serves as an intergovernmental control tower for the government’s supply chain stabilization policies. Today (June 27), marking the implementation of the Framework Act on Supply Chain, the committee held its inaugural meeting.
In the meeting, discussions focused on ①the Supply Chain Stabilization Strategy, ②the designation of economic security items and services (proposal), and ③the composition and operation direction of the Supply Chain Stabilization Committee.
The following are key messages of DPM Choi’s remarks.
The government has amended and introduced three supply chain-related laws to bolster economic security and supply chains in response to multiple global crisis and supply chain disruptions. For the first time, the government is convening the Supply Chain Committee meeting to decide on the Supply Chain Stabilization Strategy, which includes four policy directions. Going forward, the committee is expected to act as the helmsman of an aircraft carrier, navigating through the turbulent waters of global supply chain risks.
First of all, much endeavors will be made to stabilize the supply and demand of key product items. The government will increase the number of economic security items from around 200 to 300. As for critical industrial items such as semiconductors and secondary batteries, measures for self-reliance and diversification will be devised, with the government’s support and strengthened monitoring concentrated on these areas. In addition, the government will first provide a 5 trillion won the Supply Chain Stabilization Fund this year to private companies (leading enterprises) that contribute to supply stability while expanding public stockpiling to gain the golden time in the event of crisis.
Second, the government aims to reinforce the supply chain ecosystem by expanding domestic manufacturing capabilities. To this end, companies that produce economic security items will be exempted from the obligation to reduce overseas business operations, thus encouraging them to start domestic production; the requirements for investment tax credits related to acquiring overseas resources will also be eased to support enterprises in securing mineral resources. Furthermore, the supply chain links will be strengthened to secure raw materials and intermediate goods, R&D, and transportation of key product items, while developing tailored support measures for SMEs that are relatively vulnerable to supply chain disruptions. Not only that, the government will consider supporting domestic production of items with unstable supply, such as urea and graphite.
Third, with an aim to localize core supply chain technologies and shore up technology protection, the government will continuously step up its financial support for R&D in advanced strategic industries and core technologies, and consider including core supply chain technologies in the new growth, fundamental, and national strategic technologies that currently receive tax benefits. In order to prevent the leakage of technologies and patents in the defense and key industries, relevant regulations will be tightened including appropriate penalties.
Last but not least, concerted efforts will be made to actively promote international cooperation through agreements like the IPEF Supply Chain Agreement and Mineral Security Partnership (MSP), while exploring cooperation projects through the Supply Chain Stabilization Fund and official development assistance such as the Economic Development Cooperation Fund (EDCF).
Based on these strategies, the government will establish the “Supply Chain Stabilization Master Plan” in the second half of the year, which includes an action plan for the next three years. This plan will cover effective measures across a variety of sectors, ranging from key product items, advanced industries, food, and logistics.
Please refer to the attached files.
