South Korea fused trade, industrial policy and defence into a single high-stakes bargain with Washington. Canada’s defensive posture now looks dangerously inadequate. (Policy Options)
Consequences of the recent annual meeting of Asia-Pacific Economic Cooperation (APEC) leaders in Gyeongju, South Korea, are already radiating outward — and Ottawa would be wise to take heed. The headline out of Gyeongju was the conclusion of U.S.–South Korea tariff talks. But this was not a standard trade deal. It was a grand bargain. In exchange for a US$350-billion package of industrial investments, including money targeted specifically to shipbuilding, Seoul secured a cut in tariffs on automobile exports to the U.S. and more favourable treatment for its semiconductor sector. The real breakthrough, however, was on the security side: U.S. President Donald Trump publicly supported South Korea’s plan to build and operate nuclear-powered submarines. Despite earlier reports that the submarines would be built at a shipyard in Philadelphia, South Korean officials say the subs are to be built locally with U.S. co-operation in gaining access to nuclear fuel. This deal has implications for two...