U.S. Under Secretary of State for Economic Growth, Energy, and the Environment Keith Krach on Thursday asked South Korea to join the Economic Prosperity Network (EPN), a U.S.-led economic bloc initiative against China. In his words, the United States would do whatever it takes to help South Korea handle any retaliatory action that China may take. Krach made it clear that it is not a matter of choice between the United States and China, emphasizing that everyone has their own choice but it all comes down to trust.
The gist of Under Secretary Krach’s request is that Seoul should be supportive of the EPN initiative and a series of anti-Huawei campaigns that Washington has pushed for. The EPN initiative aims to build a new U.S.-centric global supply chain with China out of the picture. The U.S. government has promoted an economic rival of China's One Belt One Road (OBOR), the pivot of growing Chinese influence across the world, whereas the Indo-Pacific Strategy has served as Washington's anti-China national security scheme. Against the backdrop, South Korea is, in effect, being pressed into taking the U.S. side as one of its allies.
The United States reiterates how significant it is for liberal capitalist countries to unite to uphold democracy, human rights, transparency and intellectual property rights against China's nationalist capitalism. However, the point is that the EPN initiative still seems to be nothing more than unripe fruit. Not much of details has been specified as to in what way its binding force takes effect or in what field cooperation works, except the overarching principle of keeping China out. This only makes it all the clearer that the U.S. strategically schemes to ostracize China, a.k.a. the world's factory, from the global supply chain.
Washington promises to participating countries, which are concerned about any retaliatory action that Beijing may take, that it will do whatever it takes to help them. Theoretically, they may be able to wield strong power against China's backlash and ensure sufficient compensation if the U.S. has their back. However, involvement in the EPN initiative is likely to come with the direct damage caused by China's retaliatory measures and demand industry-wise structural change. What is hurtful to South Korea, in retrospect, is the attitude that the United States showed toward China’s retaliation against its ally regarding the Terminal High Altitude Area Defense (THAAD) issue.
Obviously, South Korea as an U.S. ally has every reason to take part in an international coalition to safeguard freedom and democracy as Washington puts it. With the EPN in place, it may increase chances of diversifying export and production routes that are heavily dependent on China. However, it is a far-fetched plot for South Korea to turn its back on its No.1 trade partner and the world’s largest consumer market. Also, Washington will less likely push it to that level. It is time to collect opinions across the South Korean government and industries and make thorough preparations while pondering upon the rationality of joining the EPN initiative, depth of participation and global trends.