SOUTH Korea is tapping into a multinational framework to review export controls for sensitive products such as semiconductor-related equipment, the country’s trade minister said, an approach that may complicate United States efforts to curtail China’s influence on technology supply chains.  

Washington is seeking to reduce Beijing’s access to advanced chip-making gear that could help it challenge the US for global influence. South Korea, a semiconductor powerhouse, has come under pressure because it is both a key American ally and relies on China as its biggest trading partner.

Trade Minister Cheong Inkyo told reporters on Thursday (Mar 21) that the government is engaged in discussions about which items should be subject to export controls through the Wassenaar Arrangement. China is not a member of the 42-country Wassenaar organisation established in 1996 to bolster global security through non-proliferation agreements.

It will take months for South Korea to implement any curbs, he said. Export controls would not necessarily mean a ban, he added.

“The best thing would be to minimise repercussions on our domestic industries while fulfilling international obligations,” he said.

Cheong emphasised South Korea is not targeting China or any other country. He declined to confirm whether South Korea is holding talks separately with the US about chip-related export controls. Opting for a multilateral approach suggests a cautious stance among Korean policymakers about imposing curbs without wider consultation.

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The minister said South Korea is exposed to an array of geopolitical risks and “choke points” and seeks to draw on its own strengths to ride them out. The country is among the largest exporters of technological devices embedded in global supply chains.

After taking up his position in January, Cheong visited Washington earlier this month for talks with senior officials, including Trade Representative Katherine Tai. South Korean companies including Samsung Electronics have bolstered their presence in the US in recent years as Washington offers subsidies that could help attract foreign businesses away from China.

Cheong pointed to growing South Korean investment and manufacturing in the US and said that is likely to lead to more shipments of intermediate goods from his country. That means the gap between the US and China could continue to close as the destination for South Korean exports, he said. BLOOMBERG