Overhaul tightens supply chains, expands AI policy and US trade ties

Industry Minister Kim Jung-kwan (Yonhap)
Industry Minister Kim Jung-kwan (Yonhap)

South Korea’s Ministry of Trade, Industry and Resources will undertake its largest organizational overhaul in 12 years, as the government moves to bolster economic security, accelerate artificial intelligence policy and tighten trade coordination with the US.

The reorganization plan, approved in a Cabinet meeting on Tuesday, will take effect on Dec. 30.

The overhaul centers on the launch of a new Industry Resources Security Office to oversee supply chains and trade security, alongside one director-level post, four new divisions and 36 additional staff positions, the ministry said.

“With enhanced organizational capabilities, the ministry will help ensure that Korean industries and companies maintain a competitive edge amid intensifying global competition,” Industry Minister Kim Jung-kwan said.

The newly established Industry Resources Security Office will consolidate economic and industrial security functions that had previously been dispersed across the ministry. It will oversee resource industries, supply chain policy and trade security, serving as a control tower as geopolitical tensions, export controls and technology rivalry inject volatility into global supply chains.

The office will coordinate government responses to risks such as restrictions on critical materials, including rare earths, amid intensifying strategic competition between the US and China, the ministry said.

The overhaul also strengthens the government’s push to deploy AI across the manufacturing sector. The ministry will establish a new Industrial Artificial Intelligence Policy Director position to oversee policies under its manufacturing AI transformation initiative, aimed at shoring up Korea’s industrial competitiveness.

Two AI-focused divisions will be created under the new director, while existing machinery, robotics and bio-industry units will be reorganized to integrate AI functions more directly into industrial policy, the ministry explained.

Trade and defense-related capabilities will also be reinforced. The ministry said it will set up a new Korea-US Trade Cooperation Division to bolster bilateral trade and industrial coordination, while a permanent Advanced Civil-Military Cooperation Division will be established to support defense exports and strengthen the defense materials and components ecosystem.

The ministry said it will also upgrade its chemical industry team into a full division to address prolonged weakness in the petrochemical sector.

As its energy function has been transferred to the Ministry of Climate, Energy and Environment, the Industry Ministry is also launching an Industrial-Energy Cooperation Division under its industrial policy bureau to strengthen coordination. It will also create a Resource Safety Team under the resources industry policy bureau to reinforce safety oversight, the ministry added.

As part of a broader realignment, regional economy and mid-sized enterprise policy functions will be transferred to the ministry’s senior industrial policy bureau to improve coordination between industrial strategy and regional growth.

The existing Industrial Infrastructure Office will be renamed the Industrial Growth Office, reflecting an expanded mandate that includes advanced industries such as semiconductors and encompasses regulatory reform.

The ministry will also launch an Industrial Regulatory Innovation Division, consolidating previously fragmented regulatory reform and regulatory sandbox functions to remove obstacles that hinder corporate investment and growth.

Reflecting changes in global trade norms, the ministry will revise the naming of its trade-related organizations, replacing “free trade agreements” with the broader term “trade agreements” as modern pacts increasingly cover digital trade, supply chains and nontariff barriers, the ministry added. The renaming comes 21 years after the ministry first set up a dedicated free trade agreement bureau in 2004.

All unit names are directly translated from Korean. The ministry said official English titles will be finalized ahead of the plan’s implementation.


herim@heraldcorp.com