Trade
Great power rivalries push South Korea and ASEAN closer
Authors: Nurliana Kamaruddin and Aaron Denison Deivasagayam, University of Malaya
South Korea has spent much of its history caught in the middle of external power struggles. China, Japan, Russia and the United States have all played a hand in shaping the country’s current geopolitical reality. South Korea’s ability to rise above these circumstances to achieve its current economic success makes the country’s continued growth quite exceptional.
But South Korea continues to find itself ensconced in the power politics of the region. Currently, South Korea is caught up in ongoing disputes with China and Japan. Historical animosities stem from the issue of Japanese compensation for South Korean forced labourers put to work during Japan’s occupation of South Korea. South Korea’s decision to deploy the Terminal High Altitude Area Defence (THAAD) anti-ballistic missile system also prompted Chinese security concerns. Both Japan and China have implemented retaliatory trade measures against South Korea.
As a result, South Korea is taking serious steps to grow its trade and diplomatic relations with other partners. Under President Moon Jae-in, the South Korean government introduced the New Southern Policy (NSP) as part of its Northeast Asia Plus Community of Responsibility in November 2017. The NSP places the importance of South Korea’s relations with ASEAN on par with its relationships with the United States, China, Japan and Russia.
South Korea’s relationship with ASEAN is small compared with some of ASEAN’s other dialogue partners, especially Japan and China. South Korea did not become a full dialogue partner until 1991 — in contrast, Japan formalised relations in 1977. But under Moon, South Korea is making an effort to increase its presence in the region. During a September 2019 tour of Thailand, Myanmar and Laos, Moon signed a number of high profile deals including a US$1 billion aid offer to Myanmar, a military intelligence pact with Thailand and a business partnership with Laos.
Though engagement with ASEAN is not a new initiative for South Korea, this sustained approach has been the difference. Previous presidents typically placed some emphasis on ASEAN policy early in their tenure — but this did not last long, as issues on the Korean Peninsula and South Korea’s relations with major powers pushed ASEAN-related policies aside. For example, although former president Lee Myung-bak made overtures to balance South Korea’s foreign policy through his own engagement with ASEAN in the ‘New Asia Initiative’, the policy remained focussed on a few countries of geostrategic importance.
Unlike his predecessors, Moon is continuously engaging with ASEAN. The institutionalisation of government agencies such as the Presidential Committee on New Southern Policy demonstrates his commitment to ASEAN engagement. More importantly, South Korea continues to strengthen research networks that help facilitate sustainable policies and initiatives in the region. These include not only the established ASEAN–Korea Centre, but also people-to-people projects such as the ASEAN–Korea Youth Network Workshop, the ASEAN–Korea Academic Conference and the Council of ASEAN Professors in Korea.
ASEAN serves as a lynchpin for greater engagement in East Asia. Its emphasis on non-alignment and non-interference has allowed it to continue engaging with both China and the United States despite the rivalry between the two. And ASEAN countries have served as neutral mediators for dialogue, as demonstrated by Singapore and Vietnam’s role as hosts for the North Korea–US Summits.
For South Korea, better rapport with ASEAN countries also serves to drive up international support for its own approach to resolving the inter-Korean conflict. Until the 1990s, North Korea was more engaged with ASEAN than South Korea. Some ASEAN countries have maintained channels for political dialogue with North Korea, either through party-to-party relations or mutual high-profile interactions such as trade. This is made possible by ASEAN’s emphasis on neutrality and inclusivity.
Improved relations with ASEAN would also benefit South Korea economically. Its disputes with Japan and China have made it clear that its dependency on bigger trading partners is a vulnerability. Southeast Asia’s growing economy presents not only alternative markets, but also a potential source of natural and human resources.
Although South Korea has cultivated strong trade relations with some ASEAN countries like Vietnam, it lags behind in trade and investment when it…
Trade
Self-Reliance and Openness: Core Principles of China’s Third Plenary Session
The Third Plenum communique from the CCP indicates a prioritization of stability and compromise in response to China’s economic challenges. It highlights the concept of Chinese-style modernization and establishes political guidelines for balancing regulation and market forces.
The CCP’s Third Plenum communique signals a focus on stability and compromise in the face of China’s economic challenges. It emphasises Chinese-style modernisation and sets political directions for balancing regulation and market forces. While not as groundbreaking as previous plenums, it acknowledges the importance of market mechanisms and technological self-reliance, aiming to address issues like high youth unemployment and private sector uncertainty. The communique seeks to navigate the complexities of global competition and domestic innovation, potentially reshaping global supply chains and trade dynamics. Overall, it presents a pragmatic blueprint for China’s economic future.
Source : Self-reliance and openness central pillars of China’s Third Plenum | East Asia Forum
Trade
Trade Prevails Over Political Persuasions in China-Germany Relations
China and Germany maintain a strong bilateral relationship, rooted in economic cooperation despite ideological differences. Recent visits and agreements focus on expanding trade and addressing mutual concerns, navigating challenges while nurturing ties.
Evolving Bilateral Ties
China and Germany share a strong bilateral relationship, rooted in history since 1972. This connection has seen moments of cooperation intertwined with periods of tension. German Chancellor Olaf Scholz’s April 2024 visit underscores Germany’s commitment to fostering this partnership, reflecting a mutual interest in maintaining economic ties despite ideological differences.
Economic Pragmatism
As the second and third largest global economies, China and Germany’s economic interdependence is crucial. Germany emerged as China’s primary trading partner in 2023, with trade values reaching €254.4 billion (US$280 billion). In response to global scrutiny, Germany has taken a balanced approach, emphasizing economic stability over political discord. This was evident during Scholz’s prior visit in November 2022, where his diplomatic tone contrasted with broader EU sentiments.
Facing Challenges Together
Despite increasing public skepticism in Germany regarding China’s global influence and human rights issues, both nations continue to seek common ground. Their October 2023 Joint Statement highlights intentions to pursue cooperation in areas like carbon neutrality and open markets. To navigate these complex terrains, Germany can utilize its institutional frameworks to enhance dialogue, while also considering supply chain diversification to reduce dependency on China. The intertwining nature of their economies suggests that, despite challenges, both countries will continue to prioritize their substantial trade relations.
Source : Trade trumps political persuasions in China–Germany relations
Trade
Fixing fragmentation in the settlement of international trade disputes
Fragmentation in global trade due to the lack of development in multilateral trade rules at the WTO has led to an increase in FTAs. The Appellate Body impasse has further exacerbated fragmentation, requiring a multilateral approach for reform.
Fragmentation in Global Trade
Fragmentation in global trade is not new. With the slow development of multilateral trade rules at the World Trade Organization (WTO), governments have turned to free trade agreements (FTAs). As of 2023, almost 600 bilateral and regional trade agreements have been notified to the WTO, leading to growing fragmentation in trade rules, business activities, and international relations. But until recently, trade dispute settlements have predominantly remained within the WTO.
Challenges with WTO Dispute Settlement
The demise of the Appellate Body increased fragmentation in both the interpretation and enforcement of trade law. A small number of WTO Members created the Multi-Party Interim Appeal Arbitration Arrangement (MPIA) as a temporary solution, but in its current form, it cannot properly address fragmentation. Since its creation in 2020, the MPIA has only attracted 26 parties, and its rulings have not been consistent with previous decisions made by the Appellate Body, rendering WTO case law increasingly fragmented.
The Path Forward for Global Trade
Maintaining the integrity and predictability of the global trading system while reducing fragmentation requires restoring the WTO’s authority. At the 12th WTO Ministerial Conference in 2022, governments agreed to re-establish a functional dispute settlement system by 2024. Reaching a consensus will be difficult, and negotiations will take time. A critical mass-based, open plurilateral approach provides a viable alternative way to reform the appellate mechanism, as WTO Members are committed to reforming the dispute settlement system.
Source : Fixing fragmentation in the settlement of international trade disputes
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