Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
Industry ministry faces pressure to withdraw from trade, energy, shipbuilding
Employees of the Ministry of Trade, Industry and Energy enter its building at Government Complex Sejong, March 2022. Yonhap
By Park Jae-hyuk
The Ministry of Trade, Industry and Energy (MOTIE) is under growing pressure to relinquish its authority over international trade, energy and shipbuilding under the Lee Jae Myung administration, raising the possibility that it could lose its status as the control tower for overall industrial policy.
According to media reports and government sources, the Presidential Commission on Policy Planning (PCPP) is considering separating the trade minister’s office from MOTIE to strengthen its workforce amid ongoing tariff talks with the United States.
Although the trade minister is introduced as a minister-level official in negotiations with other countries, he holds a vice minister-level position within the government. The commission is reportedly considering promoting him to a minister and placing the office under the direct supervision of the president or prime minister, mirroring the U.S. Trade Representative model.
Another scenario under review is the Ministry of Foreign Affairs reclaiming authority over international trade for the first time since 2013, when the Park Geun-hye administration transferred the role to the industry ministry. The foreign ministry had overseen trade affairs since the Kim Dae-jung government established the Ministry of Foreign Affairs and Trade in 1998.
“The organization handling trade affairs should be restructured as an office led by a minister-level official, with enhanced roles and capabilities,” Kim Heung-chong, a Korea University professor by special appointment, said during a forum with Democratic Party of Korea (DPK) lawmakers on June 17.
Trade Minister Yeo Han-koo enters a meeting room to preside over a task force meeting for U.S. tariff talks at Government Complex Sejong, June 16. Yonhap
On energy policy, the Ministry of Environment is expected to take the initiative with the anticipated launch of a climate and energy ministry, a pledge that Lee made during his presidential campaign.
The government is said to be considering merging the environment ministry with the Office of Energy Policy under the supervision of MOTIE’s vice minister for energy. Lee’s nomination of a three-term lawmaker as environment minister has been interpreted as a move to give momentum to this plan.
“After discussing the most effective way to address climate and energy issues with the presidential office, PCPP, National Assembly and experts, we will determine the direction of government reorganization as soon as possible,” DPK Rep. Kim Sung-whan, the environment minister nominee, said Tuesday.
Chun Jae-soo, the DPK lawmaker nominated as the oceans and fisheries minister, expressed his intention to take over authority for shipbuilding and offshore engineering from the industry ministry.
“A revision to the Government Organization Act is not necessary to transfer the shipbuilding and offshore plant industry division to the oceans ministry from the industry ministry,” he said Wednesday. “For Korea to lead the exploration of the Arctic shipping route, maritime and industry policies should be integrated.”
Given that Chun is tasked with fulfilling the presidential campaign pledge to relocate the oceans ministry to Busan, there is a possibility the administration will support his vision. Busan Mayor Park Heong-joon of the main opposition People Power Party has also called for the transfer of shipbuilding and offshore engineering authority to the oceans ministry.
“Consolidating functions is necessary for the oceans ministry’s relocation to create synergy,” Park said.
Control of the artificial intelligence (AI) industry — the top priority in Lee’s industrial policy — has already been handed to the Ministry of Science and ICT and the Ministry of SMEs and Startups, both of which are facing ministers from major tech firms: LG AI Research Director Bae Kyung-hoon and former Naver CEO Han Seong-sook.
Amid concerns about MOTIE’s weakening role, it remains uncertain who will lead the ministry under the Lee administration.
During a luncheon with business leaders on June 13, the president reportedly told them he would not appoint professors, bureaucrats or politicians as the industry minister, and asked them to recommend suitable candidates.