Seoul said any critical supply chain adjustments would be made through peer reviews by all 14 IPEF nations rather than unilaterally. — Reuters
SEOUL: South Korea is embracing a greater role in a US-led trade pact in Asia to root out the threat of spats with Japan that weighed on global supply chains for semiconductors.
South Korea’s semiconductor production came under pressure in 2019 when it became the target of Japan’s export controls on chipmaking materials such as photoresist.
While the dispute has been resolved since a summit last year between the two nations, the threat of fresh disruptions has lingered in a region fraught with political and historical tensions.
Now as South Korea takes the helm of a so-called Crisis Response Network for supply chains within the Indo-Pacific Economic Framework (IPEF) and with Japan elected co-chair this month, Seoul said any critical supply chain adjustments would be made through peer reviews by all 14 IPEF nations rather than unilaterally.
“This reduces the potential for trade spats between South Korea and Japan that we have seen in the past,” Sim Jinsu, director general for new trade strategy and policy, said.
“It strengthens the stability of ties between the two.”
The IPEF commits each member to minimising unnecessary restrictions that create barriers affecting supply chains.
If Japan imposed export controls unilaterally, it would amount to a violation of the agreement, according to Sim.
While it doesn’t completely guarantee a future free of trade spats, the pact is supposed to make it harder for the two countries to put up trade restrictions against each other.
For the United States, the leadership roles taken by South Korea and Japan can help advance its agenda of solidifying cooperative ties between its two biggest Asian allies that have at times seen their ties strained. — Bloomberg
