The South Korean government will provide a combined $6 billion in financial support to Middle Eastern countries facing liquidity crises amid prolonged wars in the region.
Koo Yun-cheol, Deputy Prime Minister and Minister of Economy and Finance, announced the plan at the 268th Ministerial Meeting on International Economic Affairs on Friday, saying the government would "discuss cooperation measures with major Middle Eastern countries struggling due to prolonged wars." Through the Export-Import Bank of Korea and the Korea Trade Insurance Corporation, the government plans to supply $3 billion each, totaling $6 billion, in emergency operating funds and other pre-financing to major Middle Eastern ordering bodies.
"Countries that have had close ties to Korea's economic development are now facing temporary liquidity difficulties due to war," Koo said. "As the saying goes, 'a friend in need is a friend indeed,' and we are pushing forward with financial support for Middle Eastern countries." The government is reportedly discussing cooperation measures centered on six Gulf countries, including Qatar.
The government will also support domestic production by linking production promotion tax incentives with subsidies, and will review new stockpiling of essential industrial and consumer goods. For items that are difficult to produce or stockpile domestically, the government will respond by securing overseas production bases and diversifying import sources. The goal is to reduce dependence on specific countries for economic security items to a maximum of 50% or less by 2030.
The government will also actively respond to the European Union's recent moves to tighten steel import regulations. The EU is pushing to reduce quota volumes and strengthen tariffs on excess volumes, citing the need to address the global oversupply of steel. The government plans to actively consult with the EU while working closely with the industry to prepare countermeasures.
The government is also accelerating the expansion of trade agreements. It plans to advance supplementary negotiations with China, India, ASEAN, and Singapore, and to expand agreements with emerging markets. In particular, the government aims to swiftly conclude FTA negotiations with Serbia, which has an automotive and parts industry base, and use the country as a bridgehead for entering the European market.
Regarding the U.S. Section 301 investigation under the Trade Act, Koo said, "We will actively explain our position that the previously agreed balance of interests should not be undermined," adding, "We will respond calmly through bilateral consultation procedures with the U.S. government going forward."
