{"id":2201100,"date":"2023-05-22T20:12:28","date_gmt":"2023-05-22T11:12:28","guid":{"rendered":"https:\/\/koreapro.org\/?p=2201100"},"modified":"2023-05-23T19:16:07","modified_gmt":"2023-05-23T10:16:07","slug":"after-us-and-japan-summits-seoul-looks-farther-afield-for-economic-cooperation","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2023\/05\/after-us-and-japan-summits-seoul-looks-farther-afield-for-economic-cooperation\/","title":{"rendered":"After US and Japan summits, Seoul looks farther afield for economic cooperation"},"content":{"rendered":"

President Yoon Suk-yeol\u2019s first year in office has been marked by substantial improvements in South Korea\u2019s diplomatic ties with the U.S. and Japan, a major shift from the dynamics observed under the previous administration.<\/span><\/p>\n

Capitalizing on this momentum, the Yoon administration has launched a second phase of foreign policy objectives centered around enhancing the ROK\u2019s relations with other regional democracies.\u00a0<\/span><\/p>\n

But it is unclear when this diplomatic initiative will translate to concrete gains as ongoing trade and legal disputes remain an impediment.\u00a0<\/span><\/p>\n

EUROPE<\/b><\/p>\n

After concluding a series of successful summit meetings with U.S. President Joe Biden and Japanese Prime Minister Fumio Kishida, Yoon\u2019s outreach to Washington and Tokyo culminated in a trilateral meeting at the G7 summit, at which the three leaders pledged to <\/span>elevate<\/span><\/a> their cooperation to \u201ca new level.\u201d\u00a0<\/span><\/p>\n

While the meeting was cut short due to Biden\u2019s obligations back in Washington, he reportedly <\/span>invited<\/span><\/a> Yoon and Kishida to a future meeting in the U.S. capital.<\/span><\/p>\n

With Washington and Tokyo on an even keel, Seoul appears to have the bandwidth to shift its diplomatic agenda elsewhere. The next phase of its foreign policy aims at fostering economic cooperation with other regional democracies.<\/span><\/p>\n

Among these countries is the United Kingdom. During the G7 summit, Yoon and British Prime Minister Rishi Sunak <\/span>discussed<\/span><\/a> opportunities for collaboration in the nuclear power and technology sectors. This conversation was timely, following an <\/span>energy agreement<\/span><\/a> between the two countries signed in April.<\/span><\/p>\n

The agreement paves the way for increased cooperation in nuclear energy, potentially involving South Korean businesses in constructing new plants in the U.K. High-level talks between South Korea\u2019s Minister of Trade, Industry and Energy Lee Chang-yang and his British counterpart Grant Shapps outlined potential areas of collaboration in the nuclear power sector.<\/span><\/p>\n

With the U.K. striving for complete decarbonization by 2035 and South Korea\u2019s intensified efforts to export its <\/span>APR-1400 reactor technology<\/span><\/a>, the stage is set for increased participation from Korea Electric Power Corporation (KEPCO) in constructing new nuclear power plants in the island nation.<\/span><\/p>\n

Given South Korea\u2019s successful export of nuclear reactors to the <\/span>United Arab Emirates<\/span><\/a> (UAE) and its ongoing assistance in building plants in <\/span>Egypt<\/span><\/a>, coupled with the U.K.\u2019s proficiency in <\/span>nuclear fuel production<\/span><\/a>, both countries stand to gain from a shared relationship in the nuclear energy industry.<\/span><\/p>\n

However, South Korea\u2019s nuclear power export plans have faced <\/span>setbacks<\/span><\/a> from a lawsuit by U.S. nuclear energy company Westinghouse, which claims the APR-1400 reactor technology as its <\/span>intellectual property<\/span><\/a>.<\/span><\/p>\n

\"\"

South Korean President Yoon Suk-yeol and German Chancellor Olaf Scholz shaking hands during the press conference after holding a bilateral summit on May 21, 2023 | Image: ROK Presidential Office<\/a><\/em><\/p><\/div>\n

Germany is another European country that the ROK aims to improve economic relations with. German Chancellor Olaf Scholz became the first German leader to visit South Korea for bilateral talks since Helmut Kohl visited in 1993.<\/span><\/p>\n

While the two nations have <\/span>committed<\/span><\/a> to cooperate for the smooth operation of defense industry supply chains, the seemingly competitive nature of the defense sectors in Seoul and Berlin suggests that their partnership in this realm may be confined to rhetoric. Both nations have set their sights on supplying <\/span>armored vehicles<\/span><\/a> and <\/span>naval vessels<\/span><\/a> to comparable markets, thus inevitably sparring for the same opportunities.<\/span><\/p>\n

The true potential of their collaboration lies in cutting-edge sectors like hydrogen, semiconductors, biofuels and clean energy.<\/span><\/p>\n

Investment in South Korea\u2019s semiconductor industry by German companies suggests a path toward collaboration. The Merck Group, a German technology firm, <\/span>announced<\/span><\/a> plans in 2021 to invest approximately $693 million into South Korea\u2019s electronics sector, including semiconductor solutions, over a span of four years.<\/span><\/p>\n

Further bolstering this initiative, the firm declared in 2022 its intention to produce <\/span>chemical mechanical polishing<\/span><\/a> (CMP) slurry, a crucial material in semiconductor manufacturing, in South Korea.<\/span><\/p>\n

Versum Materials, a <\/span>subsidiary<\/span><\/a> of Merck since 2019, is another prominent player enhancing the symbiotic relationship between Germany and South Korea in the semiconductor industry. The company <\/span>provides<\/span><\/a> Samsung Electronics with double patterning technology (DPT) materials essential to protecting semiconductors, and it is preparing to <\/span>produce<\/span><\/a> extreme ultraviolet (EUV) rinse solutions in South Korea.<\/span><\/p>\n

As a powerhouse in chip manufacturing, South Korea\u2019s efforts to lessen its dependency on China for critical components coincides with Germany\u2019s significant role as a supplier of those same materials. Amid the backdrop of global economic instability and geopolitical conflicts, this alignment of interests paves the way for the two countries to collaborate on solidifying supply chain security, ultimately maximizing mutual economic benefit.<\/span><\/p>\n

<\/div>\n
\"\"

South Korean President Yoon Suk-yeol meets with Indian Prime Minister Narendra Modi, May 20, 2023 | Image: ROK Presidential Office<\/a><\/em><\/p><\/div>\n

INDO-PACIFIC<\/b><\/p>\n

In their first in-person encounter, Yoon and Indian Prime Minister Narendra Modi <\/span>agreed<\/span><\/a> to enhance collaboration across several sectors, notably defense, digital technology, biohealth and space.<\/span><\/p>\n

India represents a substantial opportunity for South Korea\u2019s defense industry. Despite India being a significant military power \u2014 one of only six nations worldwide with <\/span>nuclear-powered submarines<\/span><\/a> \u2014 it remains one of the <\/span>largest importers<\/span><\/a> of arms globally. Historically, it has heavily relied on Russia for much of its military equipment.<\/span><\/p>\n

However, in a March <\/span>announcement<\/span><\/a>, India acknowledged that Russia has been unable to fulfill New Delhi\u2019s equipment orders due to its own shortages, stemming from its ongoing invasion of Ukraine and international sanctions. This opens an avenue for alternative suppliers like South Korea to fill this void.<\/span><\/p>\n

India\u2019s defense market is familiar with South Korean products. India has previously purchased 300 units of the <\/span>K9 Vajra self-propelled howitzers<\/span><\/a>, an export version of South Korea\u2019s K9 Thunders.<\/span><\/p>\n

Although the specifics of the prospective defense industry cooperation between India and South Korea haven\u2019t been confirmed, the ongoing border disputes between India and China suggest that South Korean arms exporters will find ample opportunities to expand their business ties with India.<\/span><\/p>\n

Conversely, while Yoon and Modi have agreed to enhance the <\/span>Korea-India Comprehensive Economic Partnership Agreement<\/span><\/a>, implemented in 2010 to boost trade and explore new cooperation areas, concrete discussions addressing <\/span>non-tariff barriers<\/span><\/a> have yet to be finalized. These barriers include requirements for local certification and bio-equivalence tests. <\/span><\/p>\n

\"\"

South Korean President Yoon Suk-yeol and other leaders participating in the G7 Hiroshima summit on May 21, 2023 | Image: ROK Presidential Office<\/a><\/em><\/p><\/div>\n

Yoon also <\/span>met<\/span><\/a> with Indonesian President Joko Widodo, and the two focused on expanding their nations\u2019 cooperation, especially in future industries.<\/span><\/p>\n

As a leading exporter of <\/span>natural gas<\/span><\/a> and a nation abundant in nickel, tin and bituminous coal, Indonesia has emerged as a key partner for South Korea in securing a strategic <\/span>resources supply chain<\/span><\/a>. South Korea\u2019s interest in Indonesia as a trade partner has been amplified given the <\/span>surging<\/span><\/a> electricity and gas prices at home.<\/span><\/p>\n

Widodo encouraged South Korea to invest and collaborate actively with Indonesia on several fronts, including agricultural development, the electric vehicle ecosystem, information and communication technology and small nuclear power plants. He also invited South Korean companies to engage in Indonesia\u2019s long-term project to <\/span>relocate its capital<\/span><\/a> from Jakarta to Nusantara.<\/span><\/p>\n

However, Yoon may face significant hurdles in promoting the benefits of this closer trade relationship with Indonesia to the South Korean public. Previous failed business deals, which have garnered considerable attention in ROK media, have created skepticism.<\/span><\/p>\n

For instance, despite <\/span>exceeding its initial yearly target<\/span><\/a> for orders last year due to rising global demand for <\/span>LNG<\/span><\/a> carriers<\/span><\/a>, Daewoo Shipbuilding & Marine Engineering (DSME) \u2014 one of South Korea\u2019s \u201cBig Three\u201d shipbuilders \u2014 also suffered financially due to <\/span>setbacks<\/span><\/a> in Indonesia\u2019s submarine acquisition program.<\/span><\/p>\n

Indonesia\u2019s <\/span>inconsistent commitment<\/span><\/a> to the joint KF-21 fighter project adds to the complexity of this relationship.\u00a0<\/span><\/p>\n

As the sole international partner on the project, Indonesia initially agreed to cover approximately 20% of the project\u2019s total cost of $6.5 billion (8.8 trillion won). But payments were halted for unclear reasons from Jan. 2019 until their resumption last November.<\/span><\/p>\n

The country reportedly still owes over $607.3 million (800 billion won) for the project, slated for initial completion by 2026.<\/span><\/p>\n

As Yoon Suk-yeol faces mounting pressure to demonstrate tangible economic benefits before the upcoming parliamentary elections next year, he is expected to proceed with the second phase of his foreign policy strategy.\u00a0<\/span><\/p>\n

However, the anticipated advantages of enhancing trade relationships with regional democratic nations may take more time to materialize than Yoon hopes.<\/span><\/p>\n

Edited by Arius Derr<\/span><\/i><\/p>\n

Business & Economy<\/span><\/a>Defense & Security<\/span><\/a>Inter-Korean & Foreign Relations<\/span><\/a>Technology & Cyber<\/span><\/a><\/div>","protected":false},"excerpt":{"rendered":"

President Yoon Suk-yeol\u2019s first year in office has been marked by substantial improvements in South Korea\u2019s diplomatic ties with the U.S. and Japan, a major shift from the dynamics observed under the previous administration. Capitalizing on this momentum, the Yoon administration has launched a second phase of foreign policy objectives centered around enhancing the ROK\u2019s […]<\/p>\n","protected":false},"author":10207,"featured_media":2201101,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21],"tags":[24,26,28,29],"class_list":["post-2201100","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","tag-business-economy","tag-defense-security","tag-inter-korean-foreign-relations","tag-technology-cyber"],"yoast_head":"\nAfter US and Japan summits, Seoul looks farther afield for economic cooperation - KOREA PRO<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/koreapro.org\/2023\/05\/after-us-and-japan-summits-seoul-looks-farther-afield-for-economic-cooperation\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"After US and Japan summits, Seoul looks farther afield for economic cooperation - KOREA PRO\" \/>\n<meta property=\"og:description\" content=\"President Yoon Suk-yeol\u2019s first year in office has been marked by substantial improvements in South Korea\u2019s diplomatic ties with the U.S. and Japan, a major shift from the dynamics observed under the previous administration. 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