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Korean needs sustainable long-term strategy for digital trade: KCCI report

Published: 09 Oct. 2025, 19:12

A photo taken on Sept. 1 shows the letters AI for Artificial Intelligence on a laptop screen, right, next to the logo of the ChatGPT application on a smartphone screen in Frankfurt am Main, western Germany. [AFP/YONHAP]

As the global trade in digital services like AI and cloud computing rapidly expands, experts say Korea must craft a long-term strategy to stay competitive in the evolving digital economy.

The Sustainable Growth Initiative (SGI), a division of the Korea Chamber of Commerce and Industry (KCCI), released a report on Thursday stating that digital trade continues to grow steadily, despite global economic uncertainty, driven by surging demand for AI and cloud-based services.

Titled “Digital Trade Issues and Korea’s Response” (translated), the report argues that Korea needs a "sustainable approach to digital trade to navigate emerging global standards and competing national interests."

Exports of digital transmission services jumped from $539.1 billion in 2010 to $1.62 trillion in 2024, more than tripling in 14 years, according to the report. While exports of traditional goods fluctuated with economic cycles, digital services proved resilient in the face of major global disruptions, such as the 2008 financial crisis and the Covid-19 pandemic.

SGI analyzed the OECD’s Digital Services Trade Restrictiveness Index and categorized Korea’s regulatory stance as “moderate.” The report noted that while Korea enforces stricter regulations than the United States, which scored plus 0.02, and Japan, which scored plus 0.04, it remains more open than the European Union, which scored minus 0.02, and China, which scored minus 0.26.

“The United States and Japan prioritize data liberalization, while the EU focuses on personal data protection and digital sovereignty,” the report said. “China, on the other hand, emphasizes data localization and national security. As digital trade expands, national rules on data transfers and use are becoming more complex and fragmented.”

The ChatGPT logo, a keyboard and robot hands are seen in this illustration taken on Jan. 27. [REUTERS/YONHAP]

“Korea’s position can be seen as either ‘not open enough’ or ‘too deregulated,’ depending on the perspective of its trading partners,” said Park Ga-hee, a researcher at SGI. “That’s why we need a sustainable digital trade strategy.”

Park's remarks align with recent signals from the U.S. State Department. In the department's "2025 Republic of Korea Investment Climate Statement" report, the department welcomed Korea’s efforts to lower regulatory barriers in sectors like fintech. The Republic of Korea (ROK) is the official name for Korea.

"Lowering the ROK’s regulatory barriers is crucial for maximizing market access and improving the investment climate for U.S. services and related industries such as fintech, legal services and education technology," the statement read.

Analysts say the remark, which did not appear in last year’s investment climate report, reflects growing U.S. expectations for Korea to ease its digital trade regulations.

The U.S. State Department report outlines three main challenges Korea must address in forming its digital trade strategy: openness to and restrictions upon foreign Investment, international regulatory considerations and a regulatory regime with global standards. It also stressed the need to distinguish between sectors that require cross-border cooperation — such as AI, cloud computing and autonomous vehicles — and those that demand tighter protection for reasons of national security or core technology preservation.

The Digital Economy Forum, a side event at the upcoming Asia-Pacific Economic Cooperation (APEC) summit later this month, may serve as a launchpad for these ideas.

"The event offers a chance for the Korean government to share and promote its 'APEC AI Initiative' and other proposals with the international community," the KCCI said.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY KIM SU-MIN [[email protected]]