Strategic SME Responses to Non-Tariff Barriers: Korean Adaptation to the US MoCRA and FSVP

This study explores how South Korean small and medium-sized enterprises (SMEs) in the cosmetics, food, and seafood sectors adapt to US nontariff barriers (NTBs), particularly the Modernization of Cosmetics Regulation Act (MoCRA) and the Foreign Supplier Verification Program (FSVP). Drawing on case studies of Dot Spring, WithOn9, and Khee Trading, the analysis highlights the everyday challenges that SMEs face, including duplicative certification, heavy documentation requirements, and shipment delays, as well as the adaptive strategies they employ to sustain market access. These strategies include outsourcing compliance tasks to specialized partners, investing in digital traceability tools, and adopting phased compliance approaches for selected product lines. The findings demonstrate that SMEs are not passive victims of regulatory complexity but active problem-solvers that reconfigure business models to integrate compliance functions. At the same time, resource disparities create uneven outcomes across firms, underscoring the limits of firm-level adaptation. For practitioners, the study offers lessons on treating compliance as a core strategic function, building strong partnerships, and anticipating redundancy as part of export planning. For policymakers, it emphasizes the need for systemic reforms such as Mutual Recognition Agreements (MRAs) and expanded digital compliance infrastructure to level the playing field. By linking firm-level practices with institutional gaps, this research provides actionable insights for exporters, regulators, and trade policymakers navigating the growing impact of NTBs on global markets.