Foreign ministry in hot seat over pressure from Harris

'Local economy may falter if U.S.-China trade friction drags on'

By Lee Min-hyung

The Ministry of Foreign Affairs is in the hot seat over Washington's growing pressure to join the anti-Huawei campaign.

With the trade dispute between the United States and China showing no imminent sign of ending, the ministry appears to be stranded without a clear way out.

The latest in Washington-led pressure came last week when U.S. Ambassador to South Korea Harry Harris rebutted Cheong Wa Dae's recent claim that Huawei's telecommunications equipment does not raise security concerns for the defense alliance between Seoul and Washington.

In a local media interview, Harris declined to accept the argument from the presidential office, saying it is worth paying close attention to equipment sales from the Chinese company.

The ongoing campaign against the Chinese firm is being spearheaded by the U.S. intelligence and military establishment, which regards Chinese technological development as a “national security” threat.

The foreign ministry, which recently established a special taskforce to monitor the U.S.-China trade dispute, is walking on eggshells between the two countries.

“Regarding the network-related dispute, the government will continue to come up with measures to ensure the security of military telecommunications here, while at the same time guaranteeing the freedom of companies,” a ministry official said.

The ministry declined to comment further, saying only that it will negotiate details with related countries, such as the U.S. and China, in handling the controversy.

Harris stepped up pressure on the Korean government this month, urging it to handle the 5G network issue wisely.

At an IT conference in Seoul last week, Harris said cyber security in the 5G era is critical to protecting telecommunication systems among allies. He said any decisions on the emerging network systems will affect national security for decades.

Government's handling raises concerns

The Korean government is at present not giving local companies clear guidelines on how to handle the Huawei conflict between Washington and Beijing.

The foreign ministry's low-key strategy is not helping local industry, officials said.

If the conflict continued for an extended period, it could deal a severe blow to the local economy, they said.

Huawei is not just a seller of telecommunications equipment, but an important buyer of parts from major Korean IT suppliers. The Chinese firm pays “billions of dollars” to Samsung Electronics and SK hynix annually for highly advanced memory chips for its low-end smartphones and data centers.

“The political uncertainty in the wake of the trade war will continue to weigh on the companies and if the dispute keeps dragging on, this will pose a negative impact on sales and profits of the Korean companies,” according to an industry watcher.

Chinese authorities may apply additional retaliatory measures against Korean firms if the Korean government's ongoing “strategic ambiguity” tactic between the two countries provokes Beijing, according to a political analyst in Seoul. Samsung and SK are being investigated by Chinese authorities over allegations the world's two largest memory chip suppliers manipulated prices.

“The Korean government needs to be careful not to provoke China,” the analyst said. “But the government should also keep in mind that the U.S. is its strongest ally at any time.

“There appears to be no clear solution for the Korean government to adopt, other than the tactic of strategic ambiguity, to minimize possible political backlashes from the two interested parties over the dispute.”