The urea water crisis and trust-building diplomacy

By Song Kyung-jin

A "urea water" crisis has swept through Korea and its ripple effects are still very much underway. For industrial use, urea is a byproduct of the combustion of natural gas and coal. Korea has borne the brunt of China's recent export ban on urea, as it depends on the neighboring country for almost all of its urea imports. From January to September of this year, Korea imported 97.6 percent of its urea from China, according to the Ministry of Trade, Industry and Energy here.

The direct cause of the crisis has much to do with China's drastic cut in coal production, in line with its 2030-2060 carbon neutrality target. China's 2030-2060 pledge is to see a peak of carbon dioxide emissions by 2030, but achieve carbon neutrality by 2060 by obtaining 80 percent of its energy from non-fossil fuel sources.

China's economic recovery this year has required more power, which has been complicated by shortages. Global urea prices hit a 13-year high at $719 per ton last month, and prices are forecast to remain high or go even higher in 2022. Panic buying is widespread in fear of a delay in the resumption of imports and also due to a lack of trust in government action.

The urea water, or diesel exhaust fluid (DEF) crisis revealed that uncertainties in global supply chains as well as the unintended side effects of carbon neutrality commitments can transform previously easy-to-get, cheap materials into strategic ones. These circumstances quickly bring up again the critical importance of import-export diversification.

Diversification has been a long-standing industrial policy of the Korean government, the scorecard of which does not look very promising at this juncture. Diversification means moving away from inertia. It is a very difficult process and takes an enormous effort by the whole nation. But the "diversification" rhetoric of the Korean government and businesses often miss making a blueprint for this strenuous process. There is little time to stay surrendered to inertia, but we must get serious and lay out a blueprint for delivery.

The unfolding of this crisis has also started me thinking again about diplomacy. This certainly is not a cure-all, but it must play its fair role in addressing national and international issues. Apparently, there were multiple warning signs about the shortage of urea, which the Korean diplomatic establishments in China failed to grasp quickly and accurately. The failure of diplomacy, together with the extremely heavy dependence on China for urea imports, worsened the crisis.

A failure of diplomacy involves the neglect ― advertent or inadvertent ― of the importance of human relations. In the absence or lack of human relations, building trust with counterparts is extremely challenging. Diplomatic missions abroad need to step up their efforts to create channels or mechanisms with counterpart governments and a wide array of opinion leaders for the regular and continued exchange of views and information. With this sort of trust-building or trust-based mechanism in place, the Korean diplomatic missions in China could have acted upon it much more quickly.

Ideally, the same has to be initiated at home by the Korean government, the Ministry of Foreign Affairs in particular. Without an exception, it is always embarrassing and painstaking to listen to diplomats say how difficult it is to access the authorities and officials concerned when an issue of urgency arises. Successful diplomacy hinges much on making counterparts valuable friends and partners. When in-person meetings and communications are limited, you cannot make good friends. Diplomacy needs an open mind, patience and attentive ears, among other qualities.

The focus on four great powers ― the United States, China, Japan and Russia ― is considered a unique feature of Korea's diplomacy because of geopolitical and geo-economic factors. While it has its own merits and challenges, it has produced the unintended consequence of making diplomats and representatives of other powers feel isolated and less important.

Their voices need to be duly heard and the host country Korea should help them. In this perspective, I propose the idea of providing a regular avenue for diplomats and representatives to address issues of bilateral and multilateral importance. I am grateful to a group of like-minded lawmakers for taking my idea and initiating the launch of a venue for this purpose in good will. We need to make more of such mechanisms of communication and exchange. The Ministry of Foreign Affairs should take the lead.

Korea's public diplomacy needs an across-the-board evaluation for an overhaul and upgrade. For example, many of the Korea Foundation's projects are still very much only Korea- and Koreans-oriented, lacking any global perspective. The underlying tenet is as much export-oriented as the Korean economy. Inject more global perspectives into the program to ensure that taxpayers' money is well spent. I propose that the Korea Foundation create an annual global young leaders' forum, a sure way for Korea to make friends.

Friendship cannot be bought overnight when a vote is needed. Build trust and make friends.

Dr. Song Kyung-jin (kj_song@hotmail.com) led the Institute for Global Economics (IGE), based in Seoul, and served as special adviser to the chairman of the Presidential Committee for the Seoul G20 Summit in the Office of the President. Now, she chairs the international cooperation committee called the Innovative Economy Forum.