As the United States escalates various digital trade issues targeting major countries including South Korea, differentiated response strategies for each issue are needed to prevent trade friction, according to a new analysis. The report also suggested that rather than limiting digital trade issues to external trade disputes, Korea should use them as an opportunity to strengthen digital competitiveness through digital trade agreements with promising partner countries.
According to the report "Country-by-Country Comparison of US Digital Trade Issues and Implications" released Wednesday by the Korea International Trade Association's (KITA) Institute for International Trade, digital trade issues have emerged as key agenda items in the Trump administration's second-term tariff negotiations with major countries. In fact, during negotiations with the US, the European Union agreed not to introduce network usage fees and to maintain zero tariffs on electronic transmissions, while Canada decided to withdraw its digital services tax.
For South Korea, the US has pointed to network usage fees, online platform regulations, and data localization as major digital trade barriers through the Korea-US Joint Fact Sheet and the National Trade Estimate Report (NTE).
The report compared and analyzed digital trade issues that the US is raising with major countries including Korea, the EU, Canada, China, and Japan, categorizing them from Korea's perspective into three types: similar overseas issues, potential issues requiring attention, and Korea-specific issues.
First, similar overseas issues—where regulations comparable to Korea's are being addressed in major countries—include digital market competition policies (EU Digital Markets Act, Korea's Online Platform Act), digital service safety regulations (EU Digital Services Act, Korea's Information and Communications Network Act), and data localization. The report emphasized that to respond to such issues, Korea needs to establish systems that are highly consistent with international norms and discussions, and when different regulations are unavoidable, build clear persuasive logic explaining Korea's unique circumstances.
Digital services tax and artificial intelligence (AI) regulations were presented as potential issues requiring attention—not yet prominent trade issues domestically but being addressed importantly in major countries. The report noted that with Korea's AI Basic Act taking effect this year and numerous AI-related bills pending in the National Assembly, Korea needs to closely analyze the US's objections to the EU AI Act and develop response strategies.
Korea-specific issues that are being raised only in Korea include network usage fees and the overseas transfer of location-based data. The report argued that since these issues have already been agreed upon for discussion in the Korea-US trade and investment agreement, Korea must seek a balance between securing digital sovereignty and minimizing trade friction.
Additionally, Korea's OECD Digital Services Trade Restrictiveness Index (DSTRI) stands at 0.083, lower than the OECD average of 0.10, but there is room for improvement compared to competitors such as Japan (0.04) and Canada (0.00). "As the economy and industry become more digitally advanced, related trade frictions will continue to occur," said Jeon Yun-sik, senior researcher at KITA. "In responding to digital trade issues, while protecting domestic industries and consumers as a premise, we also need to consider the medium- to long-term practical benefits of enhancing digital competitiveness and managing trade risks."