ED Progress, trade truce at APEC
A television screen at a train station in Seoul shows a Nov. 1 news broadcast of President Lee Jae Myung with China's President Xi Jinping during a welcoming ceremony as part of the Asia-Pacific Economic Cooperation (APEC) summit in Gyeongju, North Gyeongsang Province. Yonhap
President Lee Jae Myung clinches Korea-US deal at multilateral meeting
The Asia-Pacific Economic Cooperation (APEC) summit hosted last week in Gyeongju, North Gyeongsang Province, ended with tangible successes. It appears President Lee Jae Myung's pragmatic diplomacy has served the nation well.
By bringing together the leaders of 21 member economies for the multilateral meeting — including the rival “G2” powers, the United States and China — and adopting the Gyeongju Declaration, which reaffirmed the members' commitment to a multilateral cooperative framework, Lee provided a measure of reassurance. This was felt by both domestic and international observers.
Yet it will be hard to dismiss concerns about whether the level of goodwill and the agreements reached at Gyeongju will hold. Lee has passed a major diplomatic test, but now he faces more advanced and complex pressures.
Korea was able to reach an agreement with the United States on the implementation of its promised $350 billion investment into the world’s largest economy, in return for a flat tariff rate of 15 percent on Korean goods, including major export items such as cars and car parts.
The main sticking point was cleared, with the two parties agreeing that Korea's $200 billion cash investment will not exceed $20 billion annually. Seoul had requested special consideration in implementing the cash investment, given the size of its foreign currency reserves. The $150 billion that Seoul and Washington agreed on will focus on the joint Make American Shipbuilding Great Again project. Lee also successfully requested that Korea be permitted to build its first nuclear-powered submarine.
Currently, the two sides are working to finalize the joint fact sheets and the memorandum of understanding (MOU). Lee now has an opportunity to demonstrate that his pragmatic diplomacy is not just a headline achievement, but a versatile toolkit capable of navigating the complex challenges that lie ahead.
The trade truce agreed upon Thursday by U.S. President Donald Trump and Chinese President Xi Jinping substantially reduced tensions for regional economies facing pressure from the United States’ evolving trade policies.
The Trump administration cut tariffs on Chinese imports by 10 percentage points and postponed the tougher technology access restrictions on Chinese firms for one year. China also delayed by one year its threatened ban on the export of rare earth minerals. Experts suggest that Trump’s visit to China next April could indicate whether the trade truce will truly hold.
Lee’s meeting with Xi on Saturday produced seven economic MOUs, including a foreign exchange swap deal, despite Trump’s decision to allow Korea to build its first nuclear-powered submarine — which could have heightened the tension.
Lee also agreed with Japan’s new hardline conservative Prime Minister, Sanae Takaichi, to continue regular top-level meetings between the two countries. Seoul should follow up on this.
The biggest tangible gift probably came from Nvidia CEO Jensen Huang, who agreed to supply 260,000 coveted GPU chips to the Korean government and major Korean conglomerates. It is a boon not only for the government’s goal of becoming the world’s top AI powerhouse but also for companies like Samsung, Hyundai Motor and Naver.
The high-level meetings in Gyeongju resulted in many achivements and a trade truce between United States and China. Also palpable was the tense push and pull between Trump’s "America First" policy and multilateral free trade amid the deepening U.S.-China rivalry. Trump’s decision to leave the APEC forum early enabled Xi to claim a more prominent role on the regional stage during his three-day visit to Gyeongju.
Lee’s pragmatic approach to diplomacy is guided by national interest as the top priority. In today’s changing diplomatic landscape, he must advance national interests through flexible negotiation and cooperation, while upholding major bilateral and multilateral commitments.