South Korea, US reaffirm economic ties

The two sides agreed to build an early warning system about potential supply chain constraints and work on key minerals and semiconductors.

Choi Si-young

Choi Si-young

The Korea Herald


Second Vice Foreign Minister Lee Do-hoon (right) and Jose Fernandez, US undersecretary of state for economic growth, energy and the environment, hold a press briefing after talks in Seoul on Tuesday. (Yonhap)

January 11, 2023

SEOUL – South Korea and the United States are “indispensable partners” that share such universal values as freedom and human rights — the commitment central to their economic solidarity, Second Vice Foreign Minister Lee Do-hoon said Tuesday ahead of marking the allies’ 70 years of security ties in October.

Lee and his US counterpart, Undersecretary of State for Economic Growth, Energy and the Environment Jose Fernandez, discussed bolstering support for economic security or plans to deal with economics disruptions like supply bottlenecks prompted by the war in Ukraine at a meeting in Seoul earlier in the day. Fernandez, set to leave for Japan after wrapping up his three-day stay Wednesday, said the two allies are now “looking at high tech as the next stage of our alliance.”

Concrete steps the two sides have agreed to immediately enforce include building an early warning system about potential supply chain constraints and more closely working together on key minerals and semiconductors — Korea’s most valuable export item delivered by Samsung Electronics, the world’s largest memory chipmaker.

The timing of Tuesday’s meeting, a follow-up on their previous engagement a month earlier on a similar agenda, “could not be better,” Lee said, referring to not only the alliance’s anniversary this year, but also President Yoon Suk Yeol’s New Year’s speech in which he described economic security as the top priority in his foreign policy goals to achieve in 2023.

Yoon has said his administration has eyes set on revitalizing Asia’s fourth-largest economy as it navigates global headwinds, chiefly inflation and a supply chain squeeze amid the escalating US-China rivalry. The conservative leader seeking tighter ties with the US revealed a month ago his signature Indo-Pacific strategy — a policy summary of steps needed to expand Seoul’s global imprint alongside Washington.

The approach, according to Lee, offers the kind of framework required to tackle broader global issues, including the COVID-19 pandemic, climate change and energy and food crisis, with the US. But neither Lee nor Fernandez elaborated on what their joint work on such issues would look like.

Meanwhile, Lee noted the two countries are still working on easing tax rules in the US Inflation Reduction Act, which leaves out Hyundai Motor and its affiliate Kia from federal tax credits because they do not make electric vehicles there. The US has gathered public input about the contentious law, effective since August last year, in a bid to calm allies including Japan and European Union countries. They say the rules are discriminatory.

“We’ve taken, and we continue to take the ROK concerns about the law seriously. And we will continue to work together on the ROK’s and other allies’ IRA-related concerns as we move to implement the legislation,” Fernandez said, using South Korea’s official name, the Republic of Korea.

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