U.S. and ROK Advance Economic Cooperation at the 5th Senior Economic Dialogue

FACT SHEET
OFFICE OF THE SPOKESPERSON
OCTOBER 16, 2020

“The Republic of Korea is a global economic powerhouse, which shares our same values and democratic principles.  The U.S.-ROK economic partnership, which includes safeguarding a clean 5G infrastructure from untrusted, high-risk vendors, will serve as a linchpin for securing a peaceful and prosperous economic future for our two countries and the world.” —Under Secretary Keith Krach, October 13, 2020

 “We recognize the importance of continuing to bolster our economic partnership amidst the COVID-19 pandemic and global economic uncertainties. Building on our close cooperation in the fight against this pandemic, we will continue our joint efforts in the months to come to prevent this pandemic from disrupting our economic interactions.” —Vice Foreign Minister Lee Tae-ho, October 13, 2020 

The U.S. Department of State hosted the fifth United States (U.S.)-Republic of Korea (ROK) Senior Economic Dialogue (SED) in a virtual format on October 13. Under Secretary of State for Economic Growth, Energy, and the Environment Keith Krach and Ministry of Foreign Affairs 2nd Vice Foreign Minister Lee Tae-ho led the delegations.

The 5th SED provided an opportunity to take stock of progress and explore avenues to further cooperation between the ROK and the United States, particularly in line with the New Southern Policy of the ROK and the Indo-Pacific Strategy of the United States.

Both sides intend to continue their close coordination through the SED to further strengthen bilateral economic ties and enhance their partnership on regional and global issues.

In recognition of the ROK’s ascendance as a leading global economy, Under Secretary Krach highlighted the ways in which the U.S.-ROK economic partnership has expanded its scope of cooperation from bilateral and regional issues to increasing engagement on global issues – including in the areas of economic security, women’s economic empowerment, and protecting sensitive and emerging technologies.

The discussion showcased the strength of the U.S.-ROK economic partnership during a time of unprecedented global economic and public health challenges, and focused on opportunities to expand bilateral cooperation to combat the COVID-19 pandemic, accelerate global economic recovery and supply chain and manufacturing diversification, and advance prosperity across the Indo-Pacific region.

Bilateral Issues: Economic Relationship

  • The United States is the ROK’s only treaty ally and its second largest trading partner. It is also the ROK’s second largest source of foreign investment after Japan. The relationship is about protecting our countries by defending the values and rules that underpin our prosperity, democracy, and way of life.
  • The U.S.-ROK Alliance is built not only on security goals, but also on our commitment to the core principles that have enabled the success of both of our nations – and that includes a strong and enduring economic partnership.
  • The United States is a significant foreign investor in the ROK, a substantial energy supplier, and an enormous export market for Korean goods and services.
  • More than 1,200 American companies operate in the ROK, including flagship enterprises such as Apple, Microsoft, and General Motors.
  • In 2019, the ROK and the United States two-way trade of goods and services totaled more than $170 billion. The ROK is now the United States’ 6th-largest goods trading partner.
  • During the SED, both sides stressed the importance of investment and acknowledged that increasing investment by Korean companies in the United States has contributed to a strong and constructive economic relationship. Major recent investments by Korean firms include:
    • Doosan Bobcat’s $26 million investment in Litchfield, Minnesota
    • Zinus USA’s $108 million investment in McDonough, Georgia
    • SK Innovation’s $830 million investment in Commerce, Georgia
  • The ROK and the United States affirmed the strength of their bilateral economic relationship, a core pillar of U.S.-ROK ties.  Builiding on this firm foundation, both sides committed to continue expanding bilateral economic cooperation.

5G and the Clean Network

  • Both sides noted the importance of our companies having the freedom to innovate and grow in the long-term.
  • The United States believes it is critical for the ROK to join the Clean Network for the sake of its own national security. The Clean Network brings together countries with shared values that underpin their prosperity and their freedom.
  • The United States explained that the Clean Network is a comprehensive approach to addressing the long-term threats to data privacy, security, human rights, and trusted collaboration posed by the Chinese Communist Party (CCP). The Clean Network, which is rooted in internationally accepted Digital Trust Standards, represents the execution of a multi-year, enduring strategy built on a coalition of trusted partners.
  • Many Clean Countries and Clean Telcos, including KT and SK Telecom, and leading Clean Companies like Oracle, HP, Reliance Jio, NEC, Fujitsu, Cisco, NTT, SoftBank and VMware, have joined the Clean Network.
  • Momentum for the Clean Network initiative is accelerating. Like-minded partners in government and industry around the world have joined the growing tide to secure our data from the CCP’s surveillance state. By building a coalition, the United States and its partners are working to enhance the protection of our citizens’ data and our freedoms. We are united in standing up to the CCP’s retaliation.
  • The United States emphasized to the ROK the importance of ensuring that 5G networks are completely free from untrusted vendors. Secretary of State Michael R. Pompeo launched the State Department’s 5G Clean Path initiative on April 29, 2020, so that untrusted IT vendors will have no access to digital cellular telecommunications systems and networks that service U.S. diplomatic communications at home and abroad.  5G Clean Path is designed to help us build trust across 5G standalone networks to safeguard national and economic security as well as data privacy.
  • The United States is asking all allies and partners – including the ROK – to join it in using a 5G Clean Path for their own diplomatic facilities, in addition to ensuring their domestic networks are secure.

Focus on Building a Coalition of Trusted Partners

  • The United States also discussed Clean Infrastructure and Clean Financing with its Blue Dot Network partners – and noted that the ROK could benefit from becoming more involved.
  • Along with several countries, the United States has formed the Energy Resource Governance Initiative (ERGI) in the area of critical minerals. The U.S. intends to integrate the ERGI into a similar initiative with the EU and welcomes closer cooperation with the ROK as well. The potential exists to combine the ERGI with a similar initiative with the United States’ Quad partners and to form a Clean Minerals Network.
  • The United States is also focused on encouraging the private sector to adopt secure and diversified Supply Chains that adhere to Clean Labor Practices and are free from the forced labor of Xinjiang.

Science, Technology, and Environmental Cooperation

  • The United States and the ROK have worked together for over 60 years to protect the environment and are leaders in integrating environmental concerns into our economic growth and development practices.
  • Both sides continue to work together to promote natural resource protection, including by addressing marine debris, promoting clean air, and combatting illegal, unreported, and unregulated fishing.
  • The United States and the ROK intend to finalize the extension of the U.S.-ROK Science and Technology Agreement (STA). The STA provides opportunities for the development of joint contacts and initiatives between U.S. and ROK governmental agencies, universities, research centers, and other institutions and firms.

Energy Cooperation

  • The U.S. Department of State hosted the seventh U.S.-ROK Energy Security Dialogue in a virtual format on August 12.  The discussion reinforced the role energy cooperation plays in strengthening the U.S.-ROK partnership and focused on energy markets post-COVID-19, national energy policies, bilateral cooperation, and areas of mutual cooperation in multilateral fora devoted to energy.  Both sides decided to continue collaboration to enhance energy security in the physical and cyber domains, and to strengthen their energy industries.

COVID-19 Cooperation

  • S. and ROK cooperation in responding to COVID-19 underscores the close partnership between our countries and peoples. In the early months of the pandemic, the United States and the ROK collaborated to establish robust travel screening measures to preserve air linkages between our countries, which also assisted with repatriating each other’s citizens.  The ROK donated essential medical supplies to the United States, including 2.5 million protective masks, and facilitated the export of COVID-19 test kits to the United States.  U.S. and ROK experts and policymakers continue to share best practices on fighting COVID-19.  This kind of close-knit economic and health security cooperation is only possible during a pandemic when there is already a deep and well-established relationship.

Regional Cooperation: New Southern Policy and Indo-Pacific Strategy

  • This last summer, the United States and the ROK held a dialogue focused specifically on the U.S. Indo-Pacific Strategy and the ROK New Southern Policy. Both of these strategies recognize that an open and free Indo-Pacific is vital to the future of the global economy. For the region to flourish economically, it is crucial that there are open investment environments, good governance, and paths for sustainable growth.
  • During the SED, the two countries examined ways to strengthen their economic coordination in the Indo-Pacific Region in the areas of development, energy, and infrastructure cooperation. The United States values its partnership with the ROK on these initiatives and welcomes the ROK’s commitment of $233 million in Official Development Assistance to ASEAN countries in 2020, which complements U.S. development activity in the Indo-Pacific region.  The discussions at the SED on the Indo-Pacific Strategy and the New Southern Policy further advanced the substance of our partnership.

Global Cooperation: Cross-Cutting Issues

  • Reaffirming that cooperation on global issues is an increasingly important and expanding pillar of the ROK-U.S. Alliance, both sides held in-depth discussions on various ways to expand cooperation on global issues including women’s economic empowerment, Information, Communication and Technology (ICT) and emerging technologies, and economic security.

Women’s Economic Empowerment

  • The United States and the ROK are participating, alongside Japan, in the Trilateral Summit on Women’s Leadership in Science, Technology, Engineering and Math (STEM), which will be led by U.S. Ambassador-at-Large for Global Women’s Issues Kelley Currie on October 19-22 in a virtual format.
  • The United States and the ROK also plan to work together to engage relevant U.S. and ROK government agencies and the private sector to identify and highlight best practices for supporting women’s empowerment in the workplace as part of their continued cooperation under the U.S.-ROK Action Plan on Women’s Economic Empowerment.

ICT and Emerging Technologies

  • The United States and the ROK share a commitment to promoting an open, interoperable, secure, and reliable Internet. We are exploring opportunities for collaboration on ICT capacity country assessments, joint training, and related cybersecurity capacity-building.
  • The United States and the ROK discussed 5G network security and recognize the importance of ensuring a secure, resilient, and trustworthy 5G ecosystem.  The two countries continue to work together to promote international collaboration for enhancing 5G security, including in venues such as the Prague 5G Security Conference which was held in September 2020.
  • During the SED session on emerging technologies, the United States and the ROK also noted potential opportunities for cooperation on artificial intelligence and quantum computing.

Economic Security

  • The United States highlighted the work it is doing to assist the private sector in strengthening, diversifying, and insulating supply chains against future crises, and encouraged further cooperation with the ROK to support companies seeking to relocate, diversify, or make new investments in ways that enhance our supply chain security while helping our businesses and workers to thrive.

Future Work

  • Noting that the Senior Economic Dialogue remains the highest economic platform to discuss bilateral, regional, and global cooperation, both sides committed to continue efforts to make progress in the aforementioned areas through this mechanism.
  • The United States and the ROK expect to participate in the 4th Public-Private Economic Forum, which will be hosted by the Atlantic Council in a virtual format. This event provides a platform for multi-stakeholder dialogue and public exchange on the U.S.-ROK economic relationship, and is held annually alongside the SED.  The ROK has proposed to host the 6th SED in Seoul in 2021.