Korea is emerging as a so-called "rule maker" in the international economic security supply chain system. This follows its selection as the inaugural chair of the Crisis Response Network (CRN), one of the three implementation bodies of the Indo-Pacific Economic Framework (IPEF)1) supply chain agreement. According to the Ministry of Trade, Industry and Energy, at a virtual meeting held last year, all 14 member countries, including the United States, Japan, Australia and New Zealand, unanimously chose Korea as the chair. The government said Korea's experience in swiftly responding to global supply chain disruptions and its establishment of policy foundations such as the "three supply chain laws" were recognized internationally.
CRN is the first multilateral supply chain crisis management platform that operates in actual crises amid unprecedented supply chain instability. Accordingly, Korea's role as the chair is significant. The IPEF supply chain agreement offers Korea both new opportunities and strategic challenges. As the central body of IPEF supply chain cooperation, CRN serves as a control tower that coordinates rapid information sharing, policy coordination and joint responses among member countries when supply chain disruptions occur. In the event of a crisis, the 14 member countries—the United States, Korea, Australia, Brunei, India, Japan, Malaysia, Singapore, Thailand and others—convene an emergency meeting to discuss concrete responses such as securing alternative suppliers, joint procurement, identifying bypass routes and expedited customs clearance. Even a single country's request requires a meeting to be held within 15 days, and if the situation worsens, the meeting is elevated to the Minister or leader level. As the chair, Korea leads meeting management and information sharing and coordinates solutions to resolve the crisis.
The IPEF supply chain CRN tabletop exercise led by Korea on Oct. 22 is an extension of this role. The exercise held in Seoul was a scenario-based tabletop drill assuming a disruption in the supply of critical minerals, which step-by-step simulated a situation where many member countries face shortages and surging prices due to shutdowns in critical mineral refining and processing countries. Participating countries examined in real time the entire crisis response process, from sharing supply chain conditions to convening a Minister-level meeting and adopting a joint statement, testing the operability of the cooperation system. This was the third joint exercise since the IPEF supply chain agreement took effect. The person who drafted the scenario and conducted the exercise was Yang Ju-young, head of the Economic Security and Trade Strategy Office at the Korea Institute for Industrial Economics & Trade (KIET). We asked Deputy Minister Yang about the background of the IPEF supply chain crisis response network's launch, the purpose and significance of the tabletop exercise, and the outlook. The following is a Q&A.
—Why was CRN launched?
"As supply chain disruptions became constant due to the COVID-19 pandemic, geopolitical tensions, export controls and logistics paralysis, a consensus formed that existing multilateral consultative bodies alone made it difficult to respond swiftly in a crisis. Against this backdrop, the 14 IPEF member countries agreed to 'at minimum ensure immediate contact in a crisis and make it structurally clear who can provide what support,' leading to the launch of the CRN. CRN is the world's first supply-chain-dedicated crisis management platform that enables immediate communication and joint response among member countries when a supply chain crisis occurs. The core goal is to function as an 'emergency headquarters' that operates in real crises, going beyond a simple discussion body."
—What led to Korea's selection as the inaugural CRN chair?
"Korea earned the trust of member countries as a global supply chain hub for key manufacturing sectors like semiconductors, batteries and electronics, and as a country that has built close value chains with Japan, Australia and Southeast Asia. In addition, its experience in building early warning systems (EWS) and crisis response systems for supply chains, its active leadership on supply chain agendas since IPEF's inception, and its leadership in partner capacity-building programs were factors behind its selection as chair."
—What roles does Korea perform as chair?
"Korea will: adjust core agendas such as crisis types, procedures and data-sharing methods and establish operating standards; and act as a mediator to align the interests among resource, manufacturing and logistics countries. It will also institutionalize crisis response systems such as stockpiling, customs and logistics fast tracks, and lead education and training programs based on data analysis and early warning experience. In fact, in the critical minerals TTX (Tabletop Exercise)2) held in Seoul, Korea oversaw everything from scenario design to interest coordination among member countries and deriving outcomes, verifying the CRN's operational effectiveness in practice."
—How does it differ from existing multilateral frameworks such as the World Trade Organization (WTO), Asia-Pacific Economic Cooperation (APEC) and Regional Comprehensive Economic Partnership (RCEP)?
"While existing consultative bodies focus mainly on refining the free trade system, such as lowering tariffs and setting trade norms, CRN emphasizes actual response capability. Specifically, when a crisis occurs, it convenes an emergency meeting within 15 days of a member's request to seek actionable methods such as information sharing, early warning, joint stockpiling and customs fast tracks. Regular TTX to check response capabilities is a core function. For this reason, CRN is distinct as an execution-centered, practice-oriented network rather than a rule-setting body."
—What is the significance of the critical minerals supply chain TTX held in Seoul, and what role will Korea play as chair?
"This critical minerals supply chain TTX is significant in that it was designed to more closely resemble an actual crisis, based on past experience. The exercise revealed each country's supply chain vulnerabilities and strengths. It also fleshed out policy options that can be used in practice, such as mobilizing stockpiles, expedited customs, joint purchasing and stockpiling, and adjusting logistics hubs. Above all, it was a success that member countries shared the consensus that CRN is a 'practical platform for jointly building a crisis response manual.' As the inaugural chair, Korea plans to take the lead in designing the CRN's operating foundation, including institutionalizing TTX, building data and dashboards, and running member capacity-building programs."
—What supply chain risks do IPEF members commonly recognize, and what solutions can CRN offer?
"The supply chain risks that members are most concerned about are concentration of materials and parts with high dependence on a specific country, midstream bottlenecks where refining and processing are concentrated in a few countries, opacity in stockpile, inventory and logistics information, and the ripple effects of policy shocks such as export restrictions and subsidies. To address these issues, CRN faces the task of building an emergency information-sharing and warning system, linking stockpile and inventory information, introducing customs fast tracks, and creating a consultative framework to jointly review the secondary effects of policy shocks in advance."
—What scenario did this critical minerals supply chain TTX assume, and what risk factors were examined?
"We assumed a situation in which refining capacity plummets in a short period due to an unexpected shutdown in a critical minerals refining country. We then examined, step by step, the shock path in which both supplying and consuming countries are simultaneously hit. The main risks were set as: shutdowns of refining facilities; price surges and heightened volatility; potential export restrictions by some countries; customs and logistics bottlenecks; and overreactions due to lack of information. The exercise proceeded as: sharing the impact of the shock (phase 1); discussing stockpiles, inventories, logistics and matching (phase 2); and designing a long-term cooperation framework as well as data and mechanisms (phase 3), checking member countries' response procedures as if in a real situation."
—What were the biggest supply chain vulnerabilities revealed by this exercise, and what should be improved?
"Three vulnerabilities stood out. First, critical minerals refining and processing are concentrated in a few countries, so when refining facilities stop, the entire region is shaken. Second, government and private stockpiling systems are inadequate, leaving an insufficient shared inventory pool in a crisis. Third, links among logistics, customs and data are weak, and systems are lacking to determine which cargo to prioritize and which ports to use as hubs in an emergency. Member countries agreed on the need to improve stockpile management, introduce customs fast tracks for emergencies, establish logistics hub functions, and strengthen research and development (R&D) and IP protection for critical minerals."
—How effective is CRN's information-sharing and warning system?
"This exercise showed that CRN's information-sharing and warning system has a solid basic structure and that member countries have strong willingness to participate. This is because the process of sharing a common scenario and discussing policy response options proceeded smoothly in a short time. However, to operate more precisely in a real crisis, additional elements are needed, such as real-time data and dashboards, links to corporations' inventory and contract information, and pre-agreed criteria for releasing and allocating stockpiles."
—What policy and industrial effects does CRN have, and what practical benefits can Korea's corporations gain?
"On the policy side, advantages include concretizing crisis response tools, clarifying the division of supply chain roles within the region, and securing a testbed to inform future policy design. For industry and corporations, in a crisis they can quickly secure new supply and logistics routes, and expedited customs fast tracks and priority handling at logistics hubs are expected to reduce expense and time. In the long term, new business opportunities are expected to expand, such as joint investment, joint stockpiling and long-term contracts for procuring critical minerals and parts."
—What functions will Korea perform if an actual supply chain crisis occurs?
"If a crisis occurs and a member country requests it, Korea will: convene an emergency meeting within 15 days and organize the agenda; serve as a data hub that compiles and analyzes members' supply, demand and stockpile data; coordinate rapid matching among supplying countries, consuming countries and logistics support countries; and coordinate policy recommendations such as improving customs and logistics or refraining from export restrictions."
—How might the IPEF network change corporations' production and investment decisions?
"In the long term, the IPEF network may influence corporations to prefer regions where they can receive support in a crisis when choosing production bases, sources of procurement and logistics routes. This means regions where information sharing, stockpiling and policy coordination are possible could emerge as new attractive investment destinations beyond simple expense considerations. To prepare, Korea needs to: strengthen alignment between national strategic industry policy and the IPEF supply chain strategy; enhance corporations' capabilities in data and risk management related to inventories, suppliers and logistics; and secure cooperation models such as joint investment, joint stockpiling and long-term contracts with resource countries like Australia, India and Indonesia."
—What is the key message you want to emphasize in closing?
"CRN is not a device that eliminates crises; it is a system that makes crises 'manageable.' Supply chain risks will continue, but if a response system equipped with rapid information sharing, division of roles, and common principles and tools operates in a crisis, the shocks felt by corporations and the public can be greatly reduced. As the chair and a global manufacturing and technology hub, Korea will continue to work with IPEF partners to build a more predictable and resilient supply chain order."
Glossary
1) Indo-Pacific Economic Framework (IPEF)
Led by the Biden administration and launched in 2022, this economic cooperation body is a new form of multilateral platform created to strengthen cooperation among 14 countries in the Indo-Pacific region in four areas: supply chain stability; clean energy and decarbonization; digital and trade norms; and fair economy. Unlike traditional free trade agreements (FTAs), it focuses on building norms and cooperation structures around emerging agendas such as supply chains, climate and digital, rather than tariff reductions.
2) TTX (Tabletop Exercise)
A tabletop exercise refers to a drill in which relevant agencies and countries simulate, step by step, response procedures "at the table" assuming an actual disaster or crisis. It proceeds in a scenario-based discussion format without deploying field equipment or personnel and is used to check decision-making processes, division of roles and information-sharing systems during a crisis. Recently, it has been widely used as an international cooperation exercise to test response capabilities to compound crises such as supply chain disruptions, cyberattacks and the spread of infectious diseases.
※ This article appeared in the December issue of the monthly 'Trade.' Search for 'Monthly Trade' on Naver.