The defense, aviation, and space industries have traditionally been subject to export controls, security regulations, and technology transfer restrictions . However, recent FTAs have highlighted new provisions for cooperation in defense technology, procurement, and MRO (maintenance, repair, and overhaul)
. By 2025-2026, Korea's status as a mid-sized defense exporter is expected to be strengthened, with export contracts expanding to countries such as Poland, the UAE, Australia, and Indonesia
. However, the ITA, Wassenaar, and US ITAR regulations , as well as the CBAM and SAF regulations, pose additional burdens.
Risk factors | 2025-2026 Outlook | Influence (1~5) | Implications |
|---|---|---|---|
| Technology transfer restrictions (ITAR, etc.) | Continuous strengthening | 5 | Local joint ventures and technology licensing cooperation are essential. |
| Defense Export Standards | Wassenaar and EU regulations continue | 4 | Actively utilize procurement provisions within the CEPA and Korea-EU FTAs. |
| Carbon-Saving Aviation Fuel (SAF) | Strengthening EU and ICAO standards | 3 | The need to respond to the SAF and emissions trading systems |
| parts supply chain | Dependence on avionics and carbon composite materials | 4 | FTA cumulative origin utilization is necessary. |
| Space industry investment | Growth centered on low-orbit satellites and launch vehicles | 3 | Expanding technology sharing channels through FTAs |
FTAs provide new avenues for technological cooperation and open procurement markets
for traditionally "controlled" industries in the defense and aviation sectors. In particular, the Korea-UAE CEPA, the Korea-EU FTA, and the RCEP expanded mutual recognition of tariffs and technology standards, focusing on exchanges in MRO, aircraft parts, and satellite technology.
field | FTA applicability | Major challenges | Management Points |
|---|---|---|---|
| Defense equipment (HS9301~9306) | Gradual opening through CEPA and RCEP | Export control and licensing procedures | A simultaneous CE and ITAR certification system is required. |
| Aircraft parts (HS8803) | Korea-EU FTA and CEPA | Differences in certification and technical standards | AS9100·EASA parallel certification |
| Satellites and launch vehicles | CEPA and technical provisions can be utilized | IPR·Security Provisions | Local joint venture and technology transfer agreements are required. |
| MRO·Aircraft Maintenance | Opening of the service market | Public procurement restrictions | Actively utilize the procurement chapter within CEPA |
The defense, aviation, and space industries are largely high-value-added, low-tariff products, but procurement, security, and technology regulations act as trade restrictions.
FTAs are effective in alleviating these non-tariff barriers.
market | Main items | MFN (basic rate) | When FTA is applied | non-tariff barriers | Comments |
|---|---|---|---|---|---|
| EU | Aircraft and parts | 0~3% | 0% | EASA·SAF certification | Entry into the EU procurement market is possible. |
| UAE | Defense Industry/MRO | 5~10% | Phase-out through CEPA | Military procurement and technology transfer requirements | Local assembly and partnerships are advantageous |
| Poland | Combat vehicles and self-propelled guns | 3~8% | EUFTA application | Procurement and Quality Audit | Parallel local production and technical cooperation |
| ASEAN | Parts and Maintenance | 3~5% | RCEP cumulative utilization | Differences in safety and aviation certification | Advantages of building an MRO center |
| USA | Aircraft and parts | 0~2.5% | Low rates within FTA | ITAR·Buy America | Technology licensing and joint production required |
The trend toward carbon-neutral, safe aviation fuel (SAF), and environmentally sustainable procurement is spreading across the aviation, shipbuilding, and defense industries .
The EU and ICAO plan to increase the mandatory SAF (Smart Aviation Fuel) usage ratio to 10% by 2030.
System/Issue | Core requirements | Influence (1~5) | react |
|---|---|---|---|
| SAF system | Obligation to use low-carbon fuels | 4 | Establishment of SAF R&D and certification system |
| CBAM | Indirect impact on steel and aluminum equipment | 3 | Application of LCA and emission management systems |
| ESG procurement | Ethics, Safety, and Environmental Standards | 4 | ESG Report, ISO45001, 14001 |
| Defense ethics | Arms Exports and Human Rights Regulations | 4 | EU Code of Ethics Compliance and Transparent Reporting |
| Space ESG | Projectile debris and resource recycling | 3 | Securing space debris reduction technology |
Korea: Defense exports increase, led by KAI, Hanwha Aerospace, and LIG Nex1, securing proprietary satellite and launch vehicle technologies.
UAE: Expanding Defense Assembly and MRO Cooperation Based on CEPA
EU: Expanding Exchanges of Aviation Components and SAF Technology
ASEAN: Building a MRO, Training, and Parts Manufacturing Infrastructure
US: Strengthening cooperation in avionics and space technology based on the ROK-US alliance
Korea: Defense exports increase, led by KAI, Hanwha Aerospace, and LIG Nex1, securing proprietary satellite and launch vehicle technologies.
UAE: Expanding Defense Assembly and MRO Cooperation Based on CEPA
EU: Expanding Exchanges of Aviation Components and SAF Technology
ASEAN: Building a MRO, Training, and Parts Manufacturing Infrastructure
US: Strengthening cooperation in avionics and space technology based on the ROK-US alliance
News sentiment (α), global military procurement index (β), and sector sentiment (λ) are integrated.
Exports in the defense, aerospace, and space sectors maintain a moderate growth trend thanks to the maintenance of export contracts with Poland, the UAE, and ASEAN.
variable | Δ(%) or exponent | analysis |
|---|---|---|
| ΔExport_now | +2.9 | Expanding defense and aviation parts exports |
| ΔImport_now | +1.3 | Increase in imports of technical components and materials |
| ΔPrice_now | +0.7 | Reflecting rising material and fuel costs |
| ΔSignal_now | +0.038 | Export Contract News and Positive Momentum |
| ΔFTAEffect | +0.35 | Reflecting the procurement effects of CEPA and EUFTA |
| Forecast_3M | +0.61 | 3-month gradual rise forecast |
Formula (summary): Forecast_3M = 0.5·ΔSignal + 0.3·ΔFTAEffect + 0.2·ΔPrice
field | Suggestion | Executor | Expected effect |
|---|---|---|---|
| FTA·CEPA | Promoting the establishment of a new defense technology and procurement chapter | Trade Headquarters/Broadcasting Agency | Expanding export markets |
| SAF·ESG | Establishing an aviation fuel and ESG certification system | Ministry of Trade, Industry and Energy and Ministry of Environment | Strengthening competitiveness based on carbon neutrality |
| MRO industry | Simplifying international standard certification and procurement procedures | Ministry of Land, Infrastructure and Transport, KAI, and Korea Aerospace Industries Association | Profitable MRO hub |
| space industry | Creation of a CEPA-based technology sharing fund | Ministry of Science and ICT and Korea Aerospace Research Institute | Growth of the private space industry |
| Human Resources and Technology | Global Engineer Exchange System | Ministry of Employment and Labor/Human Resources Development Service of Korea | Enhancing technological independence and production capacity |
FTA directly contributes to technological cooperation, entry into procurement markets, and stabilization of parts supply chains in the defense, aviation, and space industries .
Forecast_3M: +0.61 — Reflecting the effects of CEPA and RCEP, and continued export contracts with Poland and the UAE.
Recommended strategies: ① Utilize CEPA and Korea-EU procurement, ② Establish SAF and ESG systems, ③ Strengthen MRO and space technology cooperation, and ④ Establish technology security and licensing systems through international cooperation.
