By Oh Seok-min
SEOUL, May 19 (Yonhap) -- South Korea said Thursday it has decided to join the U.S.-led new economic initiative, as it could help diversify and stabilize the country's supply chains amid fast-changing global trade circumstances.
President Yoon Suk-yeol is likely to announce the country's intention to join the Indo-Pacific Economic Framework (IPEF) during his summit with U.S. President Joe Biden in Seoul on Saturday.
Yoon's office said he will virtually attend a summit in Tokyo next week where Biden is poised to formally launch the IPEF.
"Going through the COVID-19 pandemic, how to strengthen the resilience of supply chains to better respond to such issues as climate change, the pandemic and supply chains has emerged as a key trade issue. This is why we are to participate in the IPEF," the Ministry of Trade, Industry and Energy said in a release.
The new platform is expected to help diversify and stabilize supply chains of semiconductors, clean energy, key minerals and other items, and deepening cooperation with major regional players will help strengthen corporate competitiveness and create more chances for overseas businesses, it added.
Participants of the new platform will likely be Japan, Australia, New Zealand and Singapore, and it will cover four key areas of fair trade, supply chain resilience, infrastructure and green technology, and tax and anti-corruption.
South Korea is heavily dependent on a handful of foreign nations for its supply of natural resources and major industry materials, which have often created supply shortages and other issues.
Last year, the country suffered from the supply crunch of urea solution, a key material needed to cut emissions from diesel vehicles, following China's export curbs on urea to ease domestic supply bottlenecks.
As for concerns over possible impacts of the envisioned entry on relations with China, the ministry vowed to further enhance the economic relationship with China through various channels.
"We are vitalizing the RCEP agreement, which involves China, and now pushing to join the CPTPP. We will further cement economic cooperation with China and other nations through various channel," the ministry said.
The IPEF is often viewed as a countermeasure to the Beijing-led mega free trade deal of the Regional Comprehensive Economic Partnership (RCEP). It has 15 members -- South Korea, China, Japan, Australia, New Zealand and 10 ASEAN nations.
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) involves 11 Asia-Pacific nations, including Japan, Australia, Canada, New Zealand and Mexico, and South Korea officially announced its decision to accede to the pact last month.
On Thursday, Kim Tae-hyo, first deputy chief of the presidential National Security Office, said South Korea and China have a bilateral free trade agreement, and discussions are under way with China for a follow-up agreement.
"There is no need to see the IPEF simply as a hostile decoupling of supply chains between great powers," he told reporters.
Display, electronics makers dealt blow by COVID-19 lockdowns in China
S. Korean firms in delicate balancing act over U.S. economic framework
(News Focus) BOK expected to seek further rate hikes but place more weight on growth: experts
Yoon to seek small gov't stance to spur economic growth
Having passed major regulatory hurdle for Intel deal, SK hynix eyes economies of scale, sharper competitive edge