The intensifying US-China confrontation has just taken a new twist. Reportedly, Washington is asking Seoul to join its anti-Huawei alliance. The reason is security concerns posed by the Chinese IT giant.
This latest development puts South Korea in a difficult spot again. Korea is confronted with what it dreads most: choosing sides in a decisive manner.
It is one thing to worry about the G2 confrontation and its overall economic impact. It is quite another to be forced to choose sides openly and officially. Whatever choice is made will not satisfy both trading partners. Worse yet, it may displease both.
To put it bluntly, the real concern is retaliation. It is a deja vu moment from the still-unending THAAD drama. One estimate puts Korea’s overall loss from China’s retaliatory moves at 15 trillion won and counting.
Yes, the situation is way different now -- but mostly for the worse, as the mood is more confrontational and divisive than it was several years ago. The confrontation between the US and China has intensified to an unprecedented level. It was not this contentious when the missile defense system was an issue several years back. Further thickening the plot is the fact that if Korea sides with either country and the other retaliates, it is Korean IT companies that stand to feel the sting. Any restrictions in the sector will hit Korea in a sore spot.
So, how do we handle this catch-22 situation? A modest Plan B is to take a principled stance, or at least something resembling one. As in dealings with personal friends, you cannot please everyone all the time. But at least you can try to embrace your own principles and stick to them as much as possible. Angry moments are inevitable at first, but over time you can loosen the vise grip.
Well, let’s come back to the question again. One way to handle this latest problem is to underscore the private nature of the transactions. The sales and purchasing decisions of IT companies and telecommunication service providers are their own. There is little, if anything, the government can do about private business affairs. Perhaps, at most, it can engage in discussions, or offer suggestions or recommendations. But the ultimate decisions fall outside the purview of the government.
To add a little bit more flavor and flesh to a principled approach, legal explanations may lend a helping hand. Government requests directed to private entities either to do or refrain from doing business with a particular entity may entail their own legal consequences. Just look no further than recent domestic legal proceedings -- powerful people who intervened in private decision-making processes have found themselves criminally implicated or charged. Direct intervention may also have implications for trade agreements and investment agreements. So there are reasons here for the government to be cautious in taking action.
Granted, issues surrounding the G2 trade war extend well beyond the legal realm. No question about it. But if Korea is called upon to explain its decision -- whatever that might be -- offering some sort of rationale will help make the other states more receptive and understanding.
Here is one way to arrive at a principled approach on the Huawei issue: When pressed, the government can listen to requests from the two states, but should explain that the ultimate decisions are to be made by companies. And then it should let the companies make the best decisions possible under the circumstances.
Regrettably, this will not solve the problem nor erase the dilemma Korea faces. And inevitably, there will be negative consequences as well. But at least this approach could reduce or minimize such consequences. If you cannot please both sides, an alternative is to try to anger both sides less.
A prolonged G2 confrontation is Korea’s worst nightmare. Unfortunately, this nightmare is becoming a reality.
Lee Jae-min
Lee Jae-min is a professor of law at Seoul National University. He can be reached at jaemin@snu.ac.kr. -- Ed.
