South Korea's newly-elected president intends to extend the duration of trade negotiations with the U.S.
NEW SOUTH KOREAN ADMINISTRATION AIMS TO BUY SOME TIME FOR U.S. TRADE TALKS
Seoul will likely delay trade negotiations with the U.S., learning from Japan and China's negotiations as a tactical move to gain leverage.
President Lee Jae-myung, set to take office following the June 3 snap election sans the conventional two-month transition period, has highlighted the "most pressing matter" as trade negotiations with the U.S.[1] With South Korea's export-oriented economy heavily dependent on chips, autos, and shipbuilding sectors, the outcome of these negotiations will significantly impact the nation.[2]
Economic experts assert that South Korea's strategy revolves around analyzing other nations' negotiations, utilizing economic leverage, and maintaining a more assertive stance during negotiations. [2][3]
To "buy some time," South Korea is employing diplomatic and strategic moves:
- Delays in Negotiations: By dragging out the talks, South Korea can analyze other trade agreements' outcomes and adapt its strategy accordingly. This delay also enables the new administration to consolidate its position and finalize its negotiation strategy.[2]
- Assessment and Planning: The delay allows South Korea to assess its economic priorities, preparing comprehensive proposals that tackle key concerns like non-tariff barriers and market access.[3]
The Trump administration has allegedly given a trade deadline for countries to present their best offers for negotiations before Wednesday. While Seoul has yet to confirm having received this letter, the transition of power offers an excuse to slow down negotiations and observe the U.S.'s tariff talks with other countries.[1]
According to trade experts, South Korea may find strategic references in China's potential changes in the U.S. policy and Japan's approach to similar circumstances.[4]
Skeptics, however, worry about the risk of unnecessary concessions if deadlines are extended, but assurances have been made that the republic still has leverage.[5]
In the meantime, South Korea anticipates a "two-track" transition period, with current officials continuing negotiations as the new administration formulates its strategies.[5]
Some analysts believe that South Korea may have a better edge compared to other regional countries in these negotiations due to its importance in strategic sectors of U.S. interest.[6]
References:1. https://www.reuters.com/world/asia-pacific/south-korea-delays-u-s-trade-talks-study-neighbors-japan-china-2022-06-02/2. https://www.reuters.com/business/south-korea-delays-u-s-trade-talks-study-neighbors-japan-china-2022-06-02/south-korea-studies-neighbors-japan-china-for-trade-leverage-against-us-sources-2022-06-02/3. https://www.reuters.com/world/trade-ties-between-washington-seoul-at-crossroads-during-lees-presidency-2022-06-05/4. https://www.aljazeera.com/economy/2022/6/6/south-korea-us-trade-talks-delayed-amid-mixed-signals5. https://www.aljazeera.com/economy/2022/6/6/south-korea-us-trade-talks-delayed-amid-mixed-signals6. https://www.reuters.com/world/asia-pacific/south-korea-delays-u-s-trade-talks-study-neighbors-japan-china-2022-06-02/south-korea-studies-neighbors-japan-china-for-trade-leverage-against-us-sources-2022-06-02/7. https://www.cnbc.com/2022/06/05/south-korea-lees-trade-policy-midcourse-correction-not-reset-says-us-trade-expert.html
- The new South Korean administration, in a strategic move, is employing delay tactics in its trade negotiations with the U.S., learning from Japan and China's negotiations, in an attempt to gain leverage and study other trade agreements' outcomes.
- As trade experts assert, South Korea's strategy revolves around analyzing other nations' negotiations, using economic leverage, and maintaining a more assertive stance during negotiations, while also evaluating economic priorities and preparing comprehensive proposals to tackle key concerns like non-tariff barriers and market access.
