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| Minister for Trade Ahn Duk-geun, seventh from left, poses with participants of the Indo-Pacific Economic Framework for Prosperity ministerial meeting in Detroit, Saturday (local time). Courtesy of Ministry of Trade, Industry and Energy |
IPEF nations agree to strengthen supply chain
By Park Jae-hyuk
Korea took a cautious stance once again between the U.S. and China during a series of trade ministerial meetings in Detroit last weekend, in an apparent attempt to avoid provoking either country amid the intensifying chip war between the world's two largest economies.
Following the Asia-Pacific Economic Cooperation (APEC) trade ministers' meeting from Thursday to Friday, the Korean government issued a press release which does not mention its semiconductor industry cooperation with China. This release came after the Chinese government claimed that the two countries' trade ministers discussed this issue during their meeting.
"Minister for Trade Ahn Duk-geun met with China's Commerce Minister Wang Wentao and discussed ways to boost the two countries' economic cooperation based on mutual respect," the trade ministry said in its press release. "Ahn asked China to support peaceful trade and stabilize the supply of core raw materials and components. He also asked for China's cooperation to create a predictable business environment for Korean companies investing in China."
Although the Chinese commerce ministry claimed that the ministers agreed to enhance talks and cooperation in the semiconductor sector, a Korean trade ministry official said that China had only mentioned the necessity of such cooperation, without reaching an agreement with Korea.
Industry officials interpret Beijing's unilateral announcement as part of its efforts to attract the Korean chipmakers, amid China's conflict with the U.S. over semiconductor supply chains.
Last Tuesday, the Korean government also denied a report that it gave the green light to Samsung Electronics and SK hynix to fill the void left by China's ban on U.S. chipmaker Micron Technology, in the situation where U.S. Congress is urging Korea not to take advantage of the situation.
U.S. Secretary of Commerce Gina Raimondo also renewed criticism at China, saying that the U.S. "won't tolerate" the ban and that the country is working closely with allies including Korea to address such "economic coercion." She made the remarks after Saturday's ministerial meeting of the members of the Indo-Pacific Economic Framework for Prosperity (IPEF) in Detroit.
The U.S.-led IPEF is basically aimed at containing the China-led Regional Comprehensive Economic Partnership (RCEP).
Following Saturday's ministerial meeting, the framework's 14 members including Korea announced the substantial conclusion of the negotiations on a first-of-its-kind international IPEF Supply Chain Agreement.
They agreed to improve crisis coordination and response to supply chain disruptions and work together to support the timely delivery of affected goods during a crisis. They also decided to establish the Supply Chain Council to facilitate cooperation among the IPEF partners on supply chain issues.
However, the agreement by the IPEF members, most of which rely heavily on trade with China, did not include terms such as "decoupling" or "derisking," which could provoke China. The Korean government also emphasized the agreement does not include elements that could draw a backlash from China.
"China is the No. 1 trade partner for 10 out of the 14 IPEF nations," a trade ministry official told reporters. "Korea and China are important trade and investment partners for each other, so we will continue to maintain close ties with China."
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