Ahead of the launch of the second Trump administration, the 'Latin America and Oceania Trade Division,' which was operated as a temporary organization under the Ministry of Trade, Industry and Energy, will become a formal division starting Jan. 1. Additionally, a new organization related to artificial intelligence (AI) will be established and operated as a temporary organization.
According to an official from the Ministry of Trade, Industry and Energy, on the 13th, the ministry will integrate the Latin America and Oceania Trade Division, which was previously operated as an 'independent entity' on a 6-month to 1-year basis, into its formal structure and run it as the 'Latin America and Oceania Trade Team.' Furthermore, a new organization will be created to foster the AI industry, filling the vacancy left by the Latin America and Oceania Trade Division as it transitions out of an independent entity status.
The 'independent entity' system, established in 2022, operates temporary organizations that are not part of the formal structure, subject to evaluation and renewal every six months. Each ministry can use the 'aggregate personnel expenditure system' to create up to two independent entities, utilizing budget savings from personnel costs for staffing and independent entities.
The Ministry of the Interior and Safety examines whether independent entities and formal structures align with government organizational management directions, if there is a need for direct government implementation, if there is no duplication with other ministries, and how foreign cases are handled.
Within the Ministry of Trade, Industry and Energy, the Advanced Civil-Military Cooperation Support Division, established in February this year, and the Latin America and Oceania Trade Division, created in January 2022, have been operated as independent entities.
However, with the necessity to strengthen Latin America and Oceania trade before the advent of the second Trump administration next January, the Latin America and Oceania Trade part will be formally established as a team. Latin America is a vast market, accounting for about 8% of the world's population, with approximately 670 million people residing there. Over the past 20 years, trade volume between the two regions has more than quadrupled, and South Korea's direct investment in Latin America has increased approximately 16 times.
This year, taking the opportunity of the Asia-Pacific Economic Cooperation (APEC) and the Group of 20 (G20) summit meetings, Korea's head of state visited Peru and Brazil last month, facilitating active high-level exchanges.
However, as the second Trump administration is poised to begin, concerns are mounting among our corporations doing business locally. This is due to Trump's declaration to impose a 25% tariff on all items from Mexico and the intensification of protectionism in major Latin American countries such as Brazil.
The potential intensification of the U.S.'s 'China bashing' raises supply chain diversification as a major preparedness area. Notably, Australia holds key minerals such as lithium, gallium, and rare earths, to which our country has a high dependency. Following a free trade agreement (FTA) signed with our country in 2014, Australia became our fifth-largest trading partner last year.
The Ministry of Trade, Industry and Energy has incorporated the Latin America and Oceania trade response into its formal structure through consultation with the Ministry of the Interior and Safety, in order to ensure that it becomes a stable organization rather than one subject to semi-annual evaluations. An example of another temporary organization incorporated into the formal structure is the Nuclear Power Export Cooperation Division, prompted by the rising importance of nuclear power exports to countries like the Czech Republic.
With the formal incorporation of the Latin America and Oceania Trade Team, the vacated space is expected to be filled by the Industrial Artificial Intelligence (AI) Innovation Division. In response to Trump's indication of easing AI and autonomous driving regulations to foster related industries, we also plan to strengthen support for these industries.
An official from the Ministry of Trade, Industry and Energy said, “Given changes in U.S. trade policies, it is necessary to strengthen trade functions so that our corporations operating in Latin America and Australia do not suffer disadvantages. In light of this, there has been a consensus to restructure the Latin America and Oceania Trade Division, which was operated as a temporary organization, into a formal structure and create a new organization related to AI, seen as a future industry.”