Korea will join IPEF on its own terms: Finance Minister Choo

Economy

Published: 21 Aug. 2022, 17:02 Updated: 21 Aug. 2022, 18:49

Korea will join IPEF on its own terms: Finance Minister Choo

Finance Minister Choo Kyung-ho in a government meeting discussing IPEF at the government complex in Seoul on Friday. [YONHAP]

Ahead of the inaugural meeting of the Indo-Pacific Economic Framework (IPEF) in the United States next month, Korea is staking out its strategy and getting its plan in order.

The country is seeking to continue to balance interests, between the demands of the liberal world and China's suspicion of any blocs forming that have the potential to be exclusionary.

Korea is an especially delicate position now as it logs trade deficits with China and seeks a return to balance and ultimately surpluses.

The country posted a trade deficit with China for three consecutive months, the first time it has done so in the 30 years since the two countries normalized diplomatic relations.

On Friday, Finance Minister Choo Kyung-ho said that Korea would defend its national interests while maintaining strong relations with all parties during any IPEF discussions.

While it is important to join the group to strengthen supply networks, Korea should "at the same time input our position from the start in forming regulations," he noted.

Choo said one of the government's goals is to complete IPEF meeting preparations, including reporting it to the legislators, this month.

He added that Korea will try to actively stake its claim in all four areas of the IPEF: trade, supply chains, clean energy and fair economy.

According to the government, once the IPEF is formed, the grouping will greatly benefit Korea and the 13 other member states, including the United States, Japan, Australia and India.

The total population of participating states is 2.5 billion, 32.3 percent of the global total. The IPEF grouping generates 40.9 percent of the world's economic activity.

IPEF is not a free trade pact but a cooperative arrangement that seeks to bring the member states together at a high level. It is led by the United States, but as a executive agreement, it will not require congressional approval, meaning that it will lack force of law within the United States and will be at the mercy of changing political winds.

The agreement was proposed by President Joe Biden to reinforce supply networks, especially in terms of batteries and semiconductors.

Korea has been put under pressure by China, especially since defensive missile batteries were deployed by the United States in the country in 2017. The current government has further inspired the wrath of China by taking the stance that the United States can continue to deploy the batteries.

During the meeting Friday, Choo stressed the importance of China as an economic partner and promised to expand cooperation with the country.

"Since 1992, the trade between Korea and China has grown 47 fold and the accumulated investment in China exceeds $100 billion," Choo said. "The economic cooperation between the two countries has developed well.

"As the two countries have been strengthening cooperative momentum, including the meeting of the foreign ministers recently, we need to further vitalize the economic cooperation with China based on mutual respect."

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]