Anastasia O. Barannikova,
Admiral Nevelskoy Maritime State University, Vladivostok
Abstract: The coronavirus pandemic has had a devastating impact on global trade and transport and logistics chains. It also had an impact on multilateral economic cooperation projects, such as Belt and Road Initiative, Eurasia Initiative, Trans-Korean projects etc. However, upon closer examination, it turns out that the implementation of these projects was stalled even before the pandemic and the global shifts it caused. The reason lies in the excessive politicization of economic cooperation. A situation where economic cooperation is made dependent on a policy that is volatile in nature is obviously a failed one since the countries are deprived of opportunity to achieve sustainable economic development and prosperity, which in turn could have a positive impact on political ties and stabilize security. In this, the countries contradict themselves, because one of the goals of any economic cooperation project, which is not too advertised, is to obtain precisely political benefits. This article examines the main global and regional political trends that hinder the implementation of multilateral economic cooperation projects with the participation of the countries of the Korean Peninsula – the DPRK and the Republic of Korea.
Key words: BRI; EAI; Trans-Korean projects; great powers rivalry; economic cooperation
The coronavirus pandemic has put many economic and logistical cooperation projects on hold. Only by the end of 2021, the signs of restoration of at least part of the transport and logistics chains emerged. However, there has not yet been a hint of progress in the implementation of multilateral economic cooperation projects. First of all, the projects of economic cooperation involving the countries of Korean Peninsula are implied: large projects such as segment of the Chinese Belt and Road Initiative (BRI), Eurasia Initiative (EAI) of the ROK and Trans-Korean projects promoted by Russia, and smaller projects of bilateral cooperation between Russia and Korean states.
In addition to the inability of the international community to cope with the ongoing global pandemic and adjust to new reality, the implementation of multilateral economic projects is hampered by a number of regional and global political trends. Current geopolitical competition between great powers and groups of countries does not only influence global economy but also threatens existing links and economic ties. Big countries fight each other for global dominance and resources while smaller states are inevitably pulled into the orbit of great powers, which results in reduced space for maneuvering and difficulties in their cooperation with neighbors. This is especially noticeable in the case of ROK-China and ROK- Russia cooperation in the context of geopolitical US-China rivalry and confrontation between Russia and collective West. Currently these are the main global trends determining the current state of cooperation including bilateral ties and projects.
Geopolitical US-China rivalry
US – China relations have never been smooth. However, while during Bush and Obama administration the US pursued tactic of both hedging and engagement toward China , the things changed sharply in 2017, when D. Trump came to power in the US. He immediately replaced China policy of engaging and hedging with confrontation and started trade war with China in 2018. President Biden continued Trump’s policy of confronting China. The founding of AUKUS, the revival of the Quad including India and US military withdrawal from Afghanistan among other goals is aimed at intensifying Sino-American rivalry . The crisis around Ukraine did not divert the US attention from China – Washington is demonstrating it by actively playing Taiwan card . There are also no signs of loosening ties within “older” US-led alliances. On the contrary, the parties to those alliances, particularly, ROK and Japan, advocate more intensive cooperation with the United States.
Meanwhile, ROK relations with the United States determine its willingness and readiness to cooperate with China within the framework of BRI and other projects. The specifics of the relations between the ROK and US and even open pressure from the United States resulted in uncertain position of ROK on participation in China’s megaproject even under Moon Jae-in presidency. It is not surprising, given the perception of China as a threat to the US and negative attitude of the US towards the Chinese initiative. Moreover, in addition to enhancing cooperation with China, participation in BRI projects implied the development of cooperation with the DPRK, which is still considered by the US a “rogue state”.
The new president of the ROK Yoon Seok-youl went further and took an unequivocal position of further rapprochement with the United States and development of relations within the trilateral alliance . Naturally, due to the dependence of the South Korean economy on China, one should not expect a sharp reduction in bilateral cooperation and joining all US anti-Chinese initiatives by the ROK. However, over time, even this long-term dependence may weaken. The ROK is making attempts to reorient the flow of exports of its goods from China to Europe and the US. According to the Korea International Trade Association (KITA), the share of China in the total foreign trade of Korea is gradually declining, while the share of the United States is increasing. The balance of trade with China has been in deficit for two months in a row . China’s shift to a domestic-oriented strategy could also play its role.
While the ROK faces a difficult choice, the DPRK, on the contrary, benefits from the rivalry of the big powers. True, so far only politically. Despite increasing value of the DPRK as a partner and buffer for China dealing with the US, Sino-North Korean economic cooperation is unlikely to develop rapidly. China is not interested in an economically strong and independent DPRK and will just keep North Korean economy afloat at the same time limiting its economic development and cooperation with other countries.
Collective West-Russia confrontation
This year open confrontation between collective West and Russia added to the US-China rivalry. This confrontation, which escalated in 2014, has entered an open phase this year and has significantly impacted Russia’s economic ties with Asian allies of the US. The ROK faced serious difficulties in cooperation with Russia. The transition of the conflict around Ukraine to the acute phase coincided with the departure of the Democrats and the arrival of a Conservative government in ROK. All this created serious obstacles to bilateral economic cooperation, not to mention the fact that Trans-Korean projects remained on pause.
At the end of last year two countries were optimistic about future cooperation and planned further development of bilateral economic cooperation within the 9 Bridges initiative. Bilateral turnover increased by 60% for 9 months of 2021 and amounted to
However already in March of 2022 ROK has joined the sanctions against Russia. Whether the ROK will join further US anti-Russian initiatives remains an open question. On one side of the scale is the position of the new president and the country’s obligations within the alliance, on the other side are interests of South Korean business, which does not want to abandon ties with Russia and is looking for workarounds to continue cooperation . However, the level of bilateral cooperation is likely to be modest in the near future. It will not soon return to its previous levels, and one can forget about multilateral economic cooperation projects for a while.
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