S. Korea launches task force on economic security amid supply chain disruptions

South Korea has established a new task force to support the pan-governmental campaign to build resilient supply chains of key items and tackle pandemic-driven economic challenges, the foreign ministry announced Thursday.

The “economic security” team was launched earlier this week to collaborate with other government agencies in helping local companies’ efforts to resolve ongoing supply chain issues, which has emerged as a hot-button global issue, especially amid the protracted COVID-19 pandemic.

The global supply chain is bearing the brunt of chip shortages, high transportation expenses and shipping delays, which have posed challenges to electronics, auto and consumer sectors.

The ministry said the team is aimed at redoubling efforts to deal with the imminent supply chain issues and mitigate risks in security and businesses in response to the growing uncertainties in the global economy.

“Government agencies, including the foreign ministry, have made concerted efforts to utilize all available resources to deal with the global supply chain issues,” the ministry’s spokesperson Choi Young-sam said in a briefing. “In addition, the ministry decided to launch the task force on the judgment that more intensive, professional responses are needed to handle a wide range of issues, including economy, security and technology.”

The new team will be operated under the bilateral economic relations department to handle the pending economic issues and could be expanded later to cover a broader range of areas in line with a growing importance of supply chain management, according to a senior ministry official. The official said the ministry has asked for an increased budget for next year to expand the scope of economic diplomacy.

Washington’s call has spawned worries about the possible leak of what the firms consider major trade secrets and raised questions on how to answer those sensitive questions while complying with filings and information disclosure rules.

The U.S. has also ratcheted up pressure on its allies to join its efforts to reshape the global supply chain to be less dependent on China.

South Korean President Moon Jae-in attended a global supply chain summit convened by U.S. President Joe Biden on the sidelines of the Group of 20 summit in Rome on Sunday and vowed Seoul’s greater role in tackling challenges affecting global trade.

In their summit in May, Moon and Biden agreed to step up bilateral cooperation in securing stable supply chains on chips, batteries and other key goods.

Seoul officials stress the need to broaden the scope of the alliance with the U.S. to cover economic diplomacy, in line with Washington’s shifting focus on trade and investment ties.

As part of efforts, a high-level economic dialogue is scheduled next month to discuss follow-up measures on the supply chain issues, according to the ministry official.

The ministry said it has also been in consultations with the Chinese side to alleviate concerns over the shortage of urea water solution, which is used in diesel vehicles to reduce emissions.

Prices of the fluid have soared in recent weeks, as China has been restricting its shipments of the raw materials essential for various industries, weighing on the domestic logistics sector.

“The Korean embassy in China has been providing support to help simplify the inspection process and early delivery of the stockpile that had been already signed,” Choi said. “The ministry and embassy will continue diplomatic efforts to resolve the issue.”