American Chamber of Commerce in Korea Chairman James Kim, first from left, moderates a session titled "Economic Security" at the Korea Times Forum, titled "New Challenges for Korea-U.S. Alliance," at the KCCI building in Seoul, Wednesday. The panelists from second from left are Institute of Foreign Affairs and National Security professor Lee Hyo-young, Chung-Ang University professor Lee Seung-joo and Yulchon attorney Shin Tong-chan. Korea Times photo by Choi Won-suk

Stronger Korea-US ties key to tackling supply chain crisis

By Park Jae-hyuk

Two international relations professors and a lawyer specializing in economic sanctions urged the Korean government and conglomerates here to upgrade their ties with U.S. partners, so as to maximize benefits from the recent U.S. trade policies that intend to revitalize the American manufacturing industry by restraining the growth of Chinese firms.

During the 2022 Korea Times Forum titled, "New Challenges for Korea-U.S. Alliance," Wednesday, the three panelists for the forum's first session on economic security agreed that the two countries' bilateral cooperation will make it possible for both of them to overcome difficulties stemming from the growing uncertainties in the global business environment.

American Chamber of Commerce in Korea (AMCHAM) Chairman James Kim, who moderated the panel discussion, also preferred the word, "opportunity," over "challenge," saying he believes in new opportunities for the two countries' alliance.

In this regard, the participants shared the view that it is natural for Samsung Electronics, Hyundai Motor and various other Korean companies to make large-scale investments in the U.S. amid the recent supply chain disruptions.

Chung-Ang University professor Lee Seung-joo speaks during a session titled "Economic Security" at the Korea Times Forum, titled "New Challenges for Korea-U.S. Alliance," at the KCCI building in Seoul, Wednesday. Korea Times photo by Choi Won-suk

"It is highly important to build a supply chain where there is a demand," said Lee Seung-joo, a professor in Chung-Ang University's Department of Political Science and International Relations, refuting the claim that the Korea-U.S. tech alliance only benefits the latter. "In terms of diversification, it may be a good strategy for Korean companies to invest in the U.S., not just in terms of cooperating with the U.S. government's reshoring policy."

Describing the semiconductor and automotive industries as "symbols" of the two countries' bilateral economic ties, Lee advised Korean firms to think about how to transform production cooperation into tech cooperation with the U.S., so that they can tap into the world's most innovative technological ecosystem.

Yulchon attorney Shin Tong-chan speaks during a session titled "Economic Security" at the Korea Times Forum, titled "New Challenges for Korea-U.S. Alliance," at the KCCI building in Seoul, Wednesday. Korea Times photo by Choi Won-suk

Shin Tong-chan, a partner attorney at one of the nation's major law firms, Yulchon, also saw that both Korean and U.S. industries will benefit from Korean firms' investments in the American market.

"Samsung Electronics and Hyundai Motor are already global companies investing in various parts of the world," the lawyer said. "They have heavily relied on supply chains in the overseas market. Due to the tensions between China and the U.S., however, Korean companies cannot rely on the Chinese market or production facilities anymore."

From that standpoint, he said it has become inevitable for Korean companies to accept the U.S. request for friend-shoring, the strategy of building supply chains excluding unfriendly nations.

Institute of Foreign Affairs and National Security professor Lee Hyo-young speaks during a session titled "Economic Security" at the Korea Times Forum, titled "New Challenges for Korea-U.S. Alliance," at the KCCI building in Seoul, Wednesday. Korea Times photo by Choi Won-suk

Lee Hyo-young, an assistant professor of international economy, trade and development studies at the government-run Institute of Foreign Affairs and National Security (IFANS), also regarded Korean firms' investments in the U.S. market as natural. However, she attributed their decisions mainly to the U.S. government's higher import barriers.

"We need to consider that the hollowing out problem can occur in Korea because only large companies can afford those kinds of large investments in the U.S., while the rest of Korean companies cannot afford to do that," she said. "There can be many ways to enhance the technology alliance between the two countries, not only by inducing more investments in the U.S. but also by engaging in more R&D cooperation."