June 26, 2020 13:37
The United States is trying to launch the Economic Prosperity Network as a comprehensive alliance of countries, companies, and civil society organizations, that are anchored in principles of openness, rule of law and transparency. Countries that share these values are welcome to be part of the network and enjoy the benefits of partners within the network. It is effectively an attempt to create selective economic interdependence based on common political values.
The EPN aims to reduce reliance of global supply chains on China and to create more predictability and transparency in supply chains through countries that participate. It will probably be a facet of U.S. foreign policy in either a Trump or Biden administration. The COVID-19 pandemic has laid bare the dangers that were already apparent in having supply chains dependent on China, but movement in this direction was apparent before the virus struck.
The U.S. has made clear it wants its democratic allies to join the EPN. But in many cases, these countries are military allies of the U.S. while their top trading partner is China, posing a fundamental dilemma.
The U.S. focus on Korea is unmistakable. Undersecretary Keith Krach, the point person for the EPN, introduced the concept to Korean officials in November 2019 during the Senior Economic Dialogue. He explained the concept with greater specificity in June 2020 to Vice Foreign Minister Lee Tae-ho. The U.S. will probably want an answer from Korea on the EPN by the next Senior Economic Dialogue in the fall of this year.
Korea's response thus far has been decidedly ambivalent. Foreign Ministry officials initially characterized the discussions as largely "conceptual" without much specificity when Krach first raised the idea. They made a point of saying that the U.S. did not specifically ask for Korea support it and that the discussion was general.
As U.S. entreaties became more focused, the Korean government became more non-committal, saying only that it would take a "prudent" approach and that the government has not reached a "conclusive" position. Korean newspaper editorials called the EPN idea "far-fetched" and fretted about Chinese retaliation like the boycott over the Terminal High-Altitude Area Defense controversy.
Yet as much as Korea would like to hedge on the EPN or delay a decision indefinitely, a second Trump administration will likely push the initiative with vigor as it would become part of a broader strategic effort to structurally decouple from China. Sitting on the fence will become harder. There is no "right" answer for Korea when faced with this with this choice. The choice is "zero-sum" in the sense that siding with one of the great power patrons will incur negative repercussions with the other power.
The U.S. has a strategy for China and EPN, but it needs a better strategy for its allies. Demarching counterparts on the need to join the EPN because it aims to create supply chains with countries "trustful" of one another is not enough. If the U.S. expects allies like Korea to make difficult choices against China like accepting THAAD, denying Huawei access to 5G networks, and joining the EPN, then it is absolutely incumbent on Washington to help Seoul manage the consequences of these choices.
This is because China will one hundred percent retaliate against Korea, as it has have done to every country that acts against its will, including Japan, the Philippines, Norway, Australia, and many others. Elsewhere, I have described this as China's "predatory liberalism." If the U.S. cannot promise to support smaller partners like Korea against China's predatory behavior, then it should not ask them to make those choices.
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