May 24, 2022
SEOUL – As South Korea joined the US-led Indo-Pacific Economic Framework for Prosperity on Monday, observers here view the move signals a shift of foreign policy to expand the country’s global presence on the side of the United States, and reduce dependence on China.
On Monday, South Korean President Yoon Suk-yeol virtually attended the launch of the IPEF held in Tokyo, along with 12 other leaders of the founding member countries, including Japan and Singapore.
In his speech, the president vowed “to take the responsibility to open an era of joint prosperity of the Indo-Pacific region,” marking the start of the government’s effort to reorient its foreign policy, experts said.
Korea as ‘rule-maker’ in Indo-Pacific region
Under the previous Moon Jae-in administration, Korea embraced a policy of “strategic ambiguity,” and tried to maintain balance in navigating relations between the US and China.
Largely, South Korea was on the side of the US in security matters, while it sought to connect with China on economy amid the escalating US-China rivalry.
But the Yoon administration will reset its relationship with the US and China as a founding member of the IPEF, and will likely come up with its own Indo-Pacific strategy to expand its presence in the region.
Earlier in the day, South Korea’s Foreign Minster Park Jin said the ministry will be launching an IPEF team and Indo-Pacific Strategy team within its departments to handle the respective topics.
Because the purpose of the IPEF broadly lies in “setting new rules of the game” in the region, Korea’s participation as a founding member reflect its desire to not miss out on the opportunity to participate in the rule-making process, government officials and experts said.
South Korea’s National Security Adviser Kim Sung-han said the government will make efforts to maximize the country’s benefit by joining the initiative as a founding member.
“We will take part in the process (of setting up the regulations and systems of the IPEF) and make an effort to set rules favorable to Korea in the fields of supply chain, trade, digital economy and infrastructure,” Kim said after a summit meeting between US President Joe Biden and Yoon was held in Seoul on Saturday.
“The government decided to become an initial member of the IPEF, since we want to be a ‘rule maker’ rather than a ‘rule taker,’” a Foreign Ministry official said on the condition of anonymity.
While the South Korean government is adamant that IPEF is not intended to keep China in check, its joining of the economic initiative provides the much-needed support for the US, which seeks to counter the increasing economic influence of China in the region.
US President Biden proposed of building the regional economic initiative first in October 2021, which would help the US to regain trust and reinforce its Indo-Pacific strategy in the region.
Since his predecessor Donald Trump withdrew the US from the proposed 12-nation Trans-Pacific Partnership in 2017, the US has been seen to lack of a major trade and economic initiative in the Indo-Pacific region.
China has openly denounced the IPEF, saying it is “doomed to fail,” and is intended to create divisions and to destroy peace.
South Korean government maintains that it is not joining the IPEF to keep distance with China, its biggest trade partner.
“The purpose of the IPEF is not to exclude China nor is targeting any country. We will keep up communication with China,” South Korean Foreign Minister Park Jin reiterated the government’s stance on Monday.
At the same time, the IPEF may provide a way for South Korea to mend the long-strained ties with Japan, as the two countries stand at odds over a series of thorny issues stemming from their shared history.
Park Won-gon, a professor of North Korea studies at Ewha Womans University, also explained that the IPEF membership may play as a tool for South Korea to keep Japan in check as two countries share similar industry structures competing each other.
“As you know, it was the Moon Jae-in administration that kicked off the IPEF negotiation first and I believe they had thought to utilize the initiative to keep Japan in check,” Park said.
“Because Korea and Japan have similar industries competing against each other, the authorities here would have felt the need to stop Japan from having a lead in the rule-making process.”
Lowering economic dependence on China
On the economy front, South Korea would try to reduce the country’s dependence on China, which is its biggest trade partner,
On Monday, a senior official of the Ministry of Trade, Industry and Energy explained of its renewed policy stance towards China.
“Until now, we have pursued the policy to stand with the US on the security front, and work with China on the economy front. But seeing the current situation, we view our economic policies will be solely pursuing our national interest,” the official said.
“Considering how we face a conflict situation with North Korea, we will have to strengthen ties with the US in the security front. But we should move solely for our national interest when it comes to the economy,” the official added.
From joining the IPEF, South Korea will be able to reduce the country’s dependence on China, its biggest trade partner, by diversifying its supply chain, experts say.
The US-led initiative is aimed to set regional standards in four pillars — trade, supply chains, clean energy, decarbonation and infrastructure, and tax and anti-corruption — and reorganize the global supply chain.
As a report from the US Congressional Research Service states, IPEF is not a “traditional trade agreement” that bind countries on trade access commitments, like the Regional Comprehensive Economic Partnership, a China-led initiative.