During the meeting, the finance ministers of South Korea, the US, and Japan gathered for the first time. They aimed to recognize the recent changes in economic and financial conditions, including the depreciation of the won and yen and China’s offensive on low-cost products.
They also agreed to continue discussing issues discussed between the three countries’ leaders, such as sanctions against North Korea and Russia.
On April 17th (local time), Deputy Prime Minister and Minister of Economy and Finance Choi Sang Mok, U.S. Treasury Secretary Janet Yellen, and Japanese Finance Minister Shunichi Suzuki convened in Washington, D.C., where they adopted the first-ever Joint Declaration of Finance Ministers of the three countries.
This trilateral finance ministers’ meeting serves as a continuation of the Camp David South Korea-US-Japan Summit in the US last August. It aims to revisit the discussions among the leaders at that time while expanding the established cooperation between the two countries (South Korea, South Korea-Japan) to a trilateral level.
Furthermore, the finance ministers of the three countries stressed the need to address recent changes in the economic and financial situation.
The depreciation of the won and yen is a case in point. The won/dollar exchange rate recently reached 1, the 400-won range intraday for the first time in 17 months, and the yen/dollar exchange rate reached 154- the range for the first time in 34 years, due to the prospect of a delayed U.S. interest rate cut and risk aversion stemming from instability in the Middle East.
In reaction, the day before, the finance ministers of Japan and South Korea had made a joint verbal intervention during their bilateral meeting, saying that they could take appropriate measures to address volatility in the foreign exchange market.
The U.S. also seemed to disagree with the declaration, stating that it “recognized the serious concerns of Japan and South Korea over the recent sharp depreciation of the yen and won.”
They collectively acknowledged that the recent sharp depreciation of the won and the yen was perceived to be out of line with fundamental economic conditions.
This is seen as a reflection of South Korea and Japan’s stances on the US government’s reluctance to intervene in market price determination.
The meeting also addressed China’s overproduction, which the United States has repeatedly raised.
The finance ministers of the three countries said, “We emphasize the importance of working together to overcome the damage that other countries’ non-market economic practices, including supply chain vulnerabilities, economic coercion, and overproduction in key sectors, can have on our economies.”
Although China was not explicitly mentioned, considering recent events such as Secretary Yellen’s visit to China, it can be interpreted that this was targeting China.
During her visit, Secretary Yellen reportedly highlighted concerns about the adverse repercussions of China’s industrial policy and overproduction on the global economy.
MoThehree countries are anticipated to engage in further discussions at the working level and pursue collaboration to address this issue.
Furthermore, the three nations’ finance ministers continued the discussion among leaders at the meeting, such as on sanctions against North Korea and Russia.
They shared the status of their respective sanctions in response to Russia’s war in Ukraine and North Korea’s weapons development. They expressed their intention to continue to cooperate using their respective sanctions tools.
Other issues on the agenda, such as reforming multilateral development banks and supporting the Association of Southeast Asian Nations (ASEAN) and Pacific Island nations, are expected to be further refined and discussed.
The inaugural joint finance ministers’ meeting marks the initial stride in trilateral cooperation, a development esteemed by all three countries.
The three countries seem to put meaning in that the trilateral meeting of finance ministers marks the first-ever joint gathering of its kind, signifying the initial step of trilateral cooperation among South Korea, the United States, and Japan.
Although the regularization of trilateral meetings among finance ministers from South Korea, the United States, and Japan has not been achieved, discussions at the working level are anticipated to continue, with efforts being made to explore the possibility of holding future meetings.
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