{"id":2199034,"date":"2022-09-26T09:13:52","date_gmt":"2022-09-26T09:13:52","guid":{"rendered":"https:\/\/www.nknews.org\/koreapro\/?p=2199034"},"modified":"2023-04-05T16:11:33","modified_gmt":"2023-04-05T07:11:33","slug":"south-korea-eyes-closer-ties-with-canada-as-it-seeks-to-shore-up-supply-chains","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2022\/09\/south-korea-eyes-closer-ties-with-canada-as-it-seeks-to-shore-up-supply-chains\/","title":{"rendered":"South Korea eyes closer ties with Canada as it seeks to shore up supply chains"},"content":{"rendered":"
South Korean President Yoon Suk-yeol met with Canadian Prime Minister Justin Trudeau in Ottawa last week, discussing ways that the two countries can strengthen their trade relationship and security ties and discussing topics ranging from electric vehicle batteries and critical minerals to supply chains.<\/span><\/p>\n The summit comes at a critical time for South Korea. Seoul is scrambling to find more trade partners as it faces <\/span>economic<\/span><\/a> uncertainty<\/span><\/a>, and few offer the same potential as Canada. Not only does the country possess rich natural resources that ROK manufacturers use to make semiconductors and a range of other goods, but Seoul and Ottawa are aligned on a range of issues from <\/span>climate exchange<\/span><\/a> to North Korea.<\/span><\/p>\n There is certainly room to grow. According to the Observatory of Economic Complexity (<\/span>OEC<\/span><\/a>), South Korea\u2019s exports to Canada in 2020 amounted to about $6.49 billion, whereas Canada\u2019s exports to South Korea that same year were around $3.86 billion. By comparison, the recent <\/span>arms deal<\/span><\/a> that South Korea struck with Poland may exceed $15 billion.<\/span><\/p>\n Working in Canada\u2019s favor is that China does not perceive it as the same military or economic threat as the U.S., meaning outreach efforts likely won\u2019t arouse suspicion or scrutiny in the same way. While Canada is a much smaller market, the private sector can take advantage of the U.S.-Mexico-Canada Agreement (<\/span>USMCA<\/span><\/a>) and the Inflation Reduction Act (<\/span>IRA<\/span><\/a>) to access the U.S. consumer market.<\/span><\/p>\n South Korean firms are already moving in. For example, LG Energy Solution just signed <\/span>separate partnership agreements<\/span><\/a> with three major critical mineral suppliers in Canada to secure lithium and cobalt \u2014 minerals necessary to produce batteries that can power electric vehicles. LG Energy Solutions and Stellantis have entered into a <\/span>joint venture<\/span><\/a> to construct a $4 billion battery plant in Ontario as well.\u00a0<\/span><\/p>\n Those agreements are not only a way to help counter U.S. <\/span>tax penalties<\/span><\/a> on foreign-made electric vehicles, but represent a much-needed step toward diversifying South Korea\u2019s supply chain. The ROK accounts for <\/span>almost half<\/span><\/a> of the world\u2019s production of rechargeable batteries. But to produce those batteries, South Korea relies heavily on imported materials \u2014 particularly <\/span>rare earth minerals from China<\/span><\/a> \u2014 which leaves South Korea <\/span>vulnerable<\/span><\/a> to trade tensions in an increasingly volatile region.\u00a0<\/span><\/p>\n And it\u2019s not just China. South Korea\u2019s other neighbor, Japan, imposed <\/span>export controls<\/span><\/a> on several industrial materials necessary to produce semiconductors and displays. By ensuring alternate supplies, such as from Canada, South Korea can reduce its dependence on China while assuring global markets of its ability to supply batteries.<\/span><\/p>\n