ED High-stakes diplomacy at APEC
Lee must unfurl welcome mat, demonstrate pragmatic diplomacy
A multimedia show takes place at Bomun Lake in Gyeongju to mark the 2025 Asia-Pacific Economic Cooperation summit in Gyeongju, North Gyeongsang Province. Major world leaders including U.S. President Donald Trump, Chinese President Xi Jinping and Japanese Prime Minister Sanae Takaichi will attend summit events this week. Yonhap
Korea has entered a week of high-stakes diplomacy with the Asia-Pacific Economic Cooperation (APEC) Economic Leaders' Meeting slated for Friday and Saturday. The host city of Gyeongju, North Gyeongsang Province, which has updated its facilities and adopted several high-tech features to welcome international guests, will show its full autumn splendor.
The path to APEC has seen encouraging signs. With signs of a slight deescalation of tension between the U.S. and China on trade issues at the recent Association of Southeast Asian Nations summit in Malaysia, world stock markets rallied. The main Korean bourse KOSPI surpassed the 4,000-point mark on Monday, as semiconductor stocks rallied.
Preparing for a major international meeting such as APEC entails a multitude of challenges and tasks. With security and trade issues reshaping the global order, the APEC summit may well be a barometer for the nations attending, but particularly for Korea's economy and security.
U.S. President Donald Trump is set to arrive in Korea on Wednesday and meet with President Lee Jae Myung the same day. A much-anticipated summit between Trump and Chinese President Xi Jinping is slated for Thursday, with the world watching to see whether the sharp rivalry may ease further. This will be Xi's first visit to Korea in 11 years, and a Seoul-Beijing summit is planned for Saturday. Lee has said that he would also like to meet new Japanese Prime Minister Sanae Takaichi when schedules allow.
Playing host to high-stakes meetings is a tall order, but also an opportunity to showcase the host nation's strengths. A difficult task lies ahead for Korea, as the stalemate continues over the details of a tentative deal involving Korea's $350 billion investment in the U.S. and a blanket 15 percent tariff on Korean exports. Under the global APEC spotlight, Lee must focus on finalizing the details of this critical trade negotiation with the United States. As host nation leader, he faces the task of balancing diverse interests in Gyeongju.
The Lee administration is keeping expectations realistic. President Lee in an Oct. 24 interview with Bloomberg said that the talks with the United States were still deadlocked. For his part, Trump signaled his willingness to close a deal. "If Korea is ready, I am ready too," he said.
In Tokyo this week, U.S. Treasury Secretary Scott Bessent said the two sides are not yet close to finalizing the deal. Seoul officials, including the president, emphasized that extended negotiations do not necessarily signal failure.
Recent efforts to finalize a deal ahead of the APEC summit have reached a stage where the U.S. now acknowledges Korea’s foreign reserve situation, according to reports. The two sides remain at odds primarily over how Korea’s pledged $350 billion investment in the U.S. should be structured.
Washington is reportedly pressing Seoul to invest $25 billion annually over eight years, totaling $200 billion. Officials in Seoul, including Bank of Korea Gov. Rhee Chang-yong, have said the country’s annual capacity may be closer to $15 billion or $20 billion, given the limits of its foreign currency reserves. Having endured the Asian financial crisis of the 1990s, Seoul remains cautious about depleting its reserves. As a key ally and trading partner, Washington should take these constraints into account.
When the Lee-Trump dialogue takes place, the two leaders should focus on easing trade tensions in the Asia-Pacific and seek common ground to reach an agreement. Korea remains one of Washington’s strongest allies in a region where many nations struggle to navigate the U.S.-China rivalry. The question is whether the U.S. truly benefits from maintaining tariff disparities with partners.
The U.S. president should recognize that Korea is making a diplomatic concession by not opposing his potential one-on-one meeting with North Korean leader Kim Jong-un. Senior Seoul officials have emphasized that Lee’s presence is not required if Trump meets with Kim. Speaking to reporters aboard Air Force One while en route to Tokyo, Trump said, “I’ll be in South Korea, so I can be right over there,” after earlier expressing that he “would love to” meet the North Korean leader.
Both the Trump-Xi summit and the Lee-Xi meeting will be key moments to watch this week. Lee must demonstrate that he can walk the talk of his pragmatic diplomacy, particularly when it comes to trade negotiations with the U.S. He would be wise to revive pragmatic cooperation and exchanges with China, Japan and other participating economies. A step forward is a start.