National Assembly postpones supply chain law by over a year

Bills to grow and support high-tech industries are accumulating as they haven’t been passed by the National Assembly. The bill to support the stabilization of the supply chain, which includes measures to stably secure essential minerals used for electric car batteries, has been pending since it was first proposed in October last year. Despite major countries’ actions to weaponize their resources, building an institutional framework to address them is being delayed. Seventeen bills have been waiting at the National Assembly for over a year, among the major bills regarding future industries.

The supply chain stabilization bill deals with the establishment of a supply chain stabilization committee, which will play the role of a control tower for the management of items essential for economic security, such as minerals and raw materials, writing a manual in response to supply chain crisis, and setting up a stabilization fund. The bill needs to be quickly processed as the stable sourcing of essential minerals and parts is critical to the semiconductor and battery industries, over which South Korea has global leadership. However, it was put on the back burner as the ruling and opposition parties couldn’t agree on under which ministry the committee should be established.

Meanwhile, China imposed an export control on gallium and germanium in August and added graphite, an essential material for batteries’ anode material, to the list in October. The country is also expected to strengthen its control over rare-earth elements as it requested export details from the exporters. The global supply chain risk is rapidly increasing as the U.S. and China engage in competition for technology hegemony, economic retaliation, and counter-retaliation. If the supply of essential minerals, 80 percent of which South Korea is dependent on China, is suspended, a potential worst-case scenario is that all activities in related industries will stop.

Bills related to other industries are not much different. The special law for talent reform in high-tech industries, which intends to support companies in setting up their corporate graduate schools to nurture talents in high-tech industries, was first proposed in May but is still stuck on the standing committee. Discussions on the special law for the installation of the space and aviation agency are getting prolonged due to disagreement on where it should be located. This slow pace is complacent as the bills deal with the areas that require legislative support to handle global competition and attract large-scale investment.

Even after a bill is passed, it takes quite a long time to take detailed follow-up measures and achieve actual impact. Major countries are making quick efforts to secure minerals and are busy uniting or scattering to this end. Failure to set up a basic foundation for the government and companies to deal with the current situation is a dereliction of duty of the National Assembly. There is no time for the ruling and opposition parties to turn away from the urgency of processing relevant bills and simply argue over politically contentious ones. It is the minimum they can do for the public to pass non-contentious bills that will drive the country’s future growth in a timely manner.