According to Yonhap News,

South Korea will push for the signing of a free trade agreement (FTA) with China in the service sector and seek affiliation with a Japan-led multilateral trade pact to maintain the country's strong export momentum, the industry ministry said Wednesday.

The plan, part of the Ministry of Trade, Industry and Resources' broader initiative aimed at transforming its export and trade strategy, was announced during the ministry's policy briefing to President Lee Jae Myung in the central administrative city of Sejong.

While responding to trade issues with the United States, including Seoul's US$350 billion investment pledge in American manufacturing, the government will work to deepen strategic partnerships with Japan, the European Union and the Association of Southeast Asian Nations (ASEAN) in supply chains, digital economy and advanced industries.

A service sector FTA with China will open up new markets for Korean service products and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a multilateral trade pact led by Tokyo, can help Korea respond to continued trade tensions, the ministry assessed.

To maintain South Korea's export momentum, the ministry plans to support the diversification of key export items, promote the growth of nuclear energy, food, defense and electric equipment markets, and offer a record 275 trillion won (US$186.2 billion) in trade insurance next year.

It will also begin issuing regular reports on foreign trade barriers in 2026, akin to the National Trade Estimate Report annually issued by the office of the U.S. Trade Representative.

Korea's exports are expected to reach the $700 billion milestone this year, driven by the robust performance of semiconductors, automobiles, ships and bio-health products.

As another major policy item for next year, the ministry pointed to the artificial intelligence (AI) transformation of the manufacturing sector.

The Manufacturing AX Alliance, which set sail in September, is aiming to build 500 AI factories by 2030, including 100 next year, and develop 15 AI foundation models that companies can use.

To boost the competitiveness of advanced industries, the ministry said it will support the semiconductor industry's efforts to build advanced manufacturing facilities in Korea, develop AI chips for the automobile, home appliances, robotics and other sectors, and expand the domestic fabless capacity by tenfold.

The ministry will support 180 billion won for the research and development of next-generation battery technologies and 74.3 billion won for the development of three core technologies for future mobility -- AI algorithms for self-driving, automobile semiconductors and software-defined vehicles.

The ministry also plans to help the shipbuilding industry come up with shipbuilding cooperation projects with the U.S. as agreed under Seoul's tariff deal with Washington.

In addition, for balanced regional growth, the ministry said it will review a special subsidy program for corporate investment in different regions, while working to create semiconductor and battery clusters in the southern regions.



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Source: Yonhap News (December 17, 2025)