[The Editors' Verdict] IPEF Must Avoid Becoming a Second THAAD Incident

U.S. President Joe Biden departed for Japan on the 22nd after completing a three-day, two-night visit to South Korea. President Biden began his first itinerary in South Korea on the 20th at Samsung Electronics' semiconductor plant in Pyeongtaek. The protective suit worn by the employee guiding President Biden at the site prominently displayed the name of KLA, not Samsung. KLA is a semiconductor measurement and inspection company headquartered in California, USA.

The presence of the KLA employee symbolically represents the outcome of President Biden's visit, which expanded the U.S.-South Korea military alliance into economic and technological fields. Although South Korea dominates the global memory semiconductor market, it relies heavily on the United States for key equipment.

President Biden's visit came at a time when the importance of economic security is increasing due to the COVID-19 pandemic followed by Russia's invasion of Ukraine. During his visit, President Biden repeatedly emphasized the concept of a "values alliance." This means cooperating with countries that share values such as democracy and human rights in military, economic, and future technology sectors. While checking China and Russia, he praised South Korea as a "close partner sharing values." Although South Korea was recognized as a values ally, there was also implicit pressure to "stand on our side."

The first tangible outcome of the values alliance is expected to be the official launch of the Indo-Pacific Economic Framework (IPEF) during President Biden's visit to Japan. President Yoon Suk-yeol explicitly expressed support and cooperation for IPEF in the joint statement of the South Korea-U.S. summit on the 21st. The launch of IPEF is likely to provoke China. China has openly expressed displeasure with IPEF, mentioning "decoupling."

Voices of concern about Chinese retaliation are already emerging in the industry. There is fear that a second THAAD (Terminal High Altitude Area Defense) incident could occur. The automobile, retail, and gaming industries, which suffered damage during the THAAD incident, are anxiously worried about potential fallout again.

[Image source=Yonhap News]

However, the damage South Korea would suffer if it is not incorporated into the U.S.-centered supply chain would be even more severe. Although China may be South Korea's largest trading partner, securing core technologies that will sustain the country in the future is difficult without cooperation with the United States. The agreement in the joint statement for cooperation in various fields?from advanced semiconductors to electric vehicle batteries, artificial intelligence, quantum technology, biotechnology, and autonomous robots?was possible because both countries share the perception of being economic allies.

That said, strengthening the South Korea-U.S. alliance should not unnecessarily provoke or exclude China. Since China remains a major trading partner, South Korea does not need to choose sides or narrow its position. Sophisticated diplomatic balancing with China will be essential in this process. The mention of openness, transparency, and inclusiveness as principles of IPEF in the joint statement can also be interpreted as a measure to avoid provoking China.

There is no need to be overly cautious out of fear of Chinese retaliation. When President Yoon took office, China sent Vice President Wang Qishan, the right-hand man of President Xi Jinping, as a congratulatory envoy, which is highly significant. Vice President Wang was the highest-ranking official among major countries. While this was likely intended to check the strengthening of the South Korea-U.S. alliance, it can also be interpreted as evidence that China desperately needs South Korea's help. Increasing our value and speaking up earn respect from counterparts.