|Minister of Trade Yeo Han-koo, left, shakes hands with U.S. Trade Representative Katherine Tai at the Korea-U.S. FTA Joint Committee meeting held at Shilla Hotel in central Seoul, Friday. Yonhap|
Experts point to need to reduce China dependency
By Kim Bo-eun
Korea is increasingly being squeezed as the United States and China continue their power struggle. U.S. Trade Representative Katherine Tai's visit to Seoul last week was part of the No. 1 economy's strategy to confirm its alliance with major countries in Asia to contain China's growing influence.
Tai met with Minister of Trade Yeo Han-koo, Friday, and business leaders the following day, to ask Seoul to align with Washington's efforts to build a U.S.-centered global supply chain. The U.S. trade chief also made visits to Japan and India during her Asia trip. U.S. Secretary of Commerce Gina Raimondo last week also completed a trip to Japan, Singapore and Malaysia to introduce the new, U.S.-led Indo-Pacific economic framework.
The Korea-U.S. FTA was set as the agenda of Yeo and Tai's meeting, but they are also said to have discussed strengthening Korea's role in the global supply chain for key sectors, such as semiconductors. The U.S. trade chief, in her meeting with business leaders here, highlighted the Biden Administration's plan to develop a U.S.-centered economic framework for the region of Asia.
The U.S. has stepped up the pressure on its allies to show greater commitment to economic cooperation. The No. 1 economy has sought for Korean companies to build production plants on U.S. territory for key items such as semiconductors and electric vehicle batteries, as part of its efforts to build a U.S.-centered supply chain.
|U.S. Trade Representative Katherine Tai, second from left, poses at a reception with business leaders held at the Four Seasons Hotel in central Seoul, Saturday. From left are American Chamber of Commerce in Korea (AMCHAM) Chairman James Kim, Tai, Federation of Korean Industries Chairman Huh Chang-soo and acting U.S. Ambassador to Korea Christopher Del Corso. Courtesy of AMCHAM|
Korea ― for which China is its largest trading partner, but relies heavily on the U.S. for national defense capabilities ― has been stuck in a difficult situation, given that it cannot side completely with only one of the two competing powers.
"The latest visit was to introduce a forum for economic cooperation among the economies in Asia. Once the plan materializes, Korea will be called on to commit to greater levels of cooperation, which will seem like they are trying to contain China, so it is clear that the burden for Korea is growing," said Park Won-gon, a professor of North Korean Studies at Ewha Womans University.
Experts say that one way of dealing with the situation would be to reduce the country's trade dependency on China. China accounts for 33 percent of Korea's trade, while the U.S. accounts for 14 percent.
"As could be seen from the urea water solution shortage situation, Korea should reduce its dependency on trade with China. Korea should do this by increasing trade with countries in Southeast Asia and South America," a Sejong University professor of Business Administration, Kim Dae-jong said.
"Korea should also join multilateral trade pacts such as the CPTPP to diversify trade, and create leveraging power with the U.S.," he said.
An Asia expert who spoke on the condition of anonymity said, "The U.S. is basically showing an authoritarian attitude that intends on making sure its allies do not step out of line."
"From the perspective of private companies, such requests can be taken as a threat given that they are being asked to give up profit (with regards to China's market)."