President Lee Jae-myung Declares Restart of Korea-Chile FTA and Alliance on Critical Mineral Supply Chains

Urgency of Restarting Korea-Chile FTA and Forming Critical Mineral Supply Chain Alliance

Chilean President Gabriel Boric cited the famous proverb, "A burden shared is a burden halved," during a recent Korea-Chile summit, emphasizing the critical importance of bilateral mineral cooperation. Aligning with this sentiment, President Lee Jae-myung declared the restart of the Korea-Chile Free Trade Agreement (FTA) after a decade and proclaimed a comprehensive expansion of cooperation in critical mineral supply chains. Securing the abundant mineral resources held by South American nations has emerged as a paramount issue directly linked to the survival of the Korean economy. As the global competition for economic hegemony intensifies and the weaponization of resources becomes frequent, establishing a stable supply chain is not an option but a mandatory task.

Past trade agreements, focused solely on simple exports, are rapidly transforming into mutually beneficial alliances that guarantee the smooth operation of advanced industries. A clear determination drove this shift: national competitiveness cannot be maintained without securing critical minerals that support future mobility industries, such as electric vehicles. Chile, a world-class lithium producer, possesses an industrial structure that meshes perfectly with Korea's battery and semiconductor manufacturing capabilities. The summit between the two leaders is analyzed as a measure to strengthen a substantive economic alliance vying for future technological dominance, going beyond simple diplomatic goodwill.

South America ABC Tour and Full-Scale Economic Security Diplomacy

President Lee Jae-myung's recent South American diplomatic tour, covering the ABC nations—Brazil, Chile, and Argentina—has maximized Korea's resource diplomacy strategy. Notably, his meeting with Brazilian President Luiz Inácio Lula da Silva in Brasilia yielded significant results, including an agreement to jointly develop next-generation civil aircraft. The presence of Hyundai Motor Group Chairman Chung Euisun, who accompanied the delegation as an economic envoy, underscores the business community's serious view of the South American market as a key hub for future growth. A comprehensive economic security diplomacy, where the government and the private sector speak with one voice to tackle resource and technology markets, is now fully on track.

Implications of Global Resource Hegemony War and Investment Outlook

The concrete progress of supply chain cooperation between Korea and Chile is expected to directly benefit domestic battery and secondary battery material companies. Securing stability in raw material procurement will help alleviate supply chain bottlenecks and effectively defend against rising production costs. Furthermore, diversifying economic cooperation with South American nations will reduce high import dependence on specific countries, thereby enhancing the national economy's resilience against external shocks. The performance of domestic advanced manufacturing companies, which will establish a stable raw material supply structure, is expected to improve rapidly.

Government-led efforts to solidify the supply chain are evaluated as a key immunity that boosts corporate value in an investment environment fraught with external uncertainties. Given the geopolitical rapid restructuring of international economic cooperation, head-of-state-level diplomacy for resource acquisition is an essential starting point for enhancing national competitiveness. If the industrial cooperation model between the two countries is advanced, starting with the restart of the Korea-Chile FTA, it will also serve as a bridgehead for expansion into the Southeast Asian market. Detailed aspects of the mineral cooperation are expected to be implemented swiftly through subsequent working-level discussions.