February 2008
U.S.-South Korean Relations: A New Era of Cooperation?
South Korean president Lee Myung-bak took office on February 25, 2008. A member of the conservative Grand National Party and former executive of the Hyundai Corporation, Lee won the December 2007 contest by the largest margin since the advent of competitive democratic elections in the Republic of Korea (ROK) in the late 1980s. This landslide victory clearly reflects widespread dissatisfaction with the policies and practices of the outgoing South Korean president, populist Roh Moo-hyun. But what does this change mean for U.S.-ROK relations? How will it affect key issues on the Washington-Seoul agenda, such as the North Korean problem, the U.S.-ROK military alliance, and the pending free trade agreement known as KORUS? On February 19, 2008, Bruce Bechtol, professor of international relations at the Marine Corps Command and Staff College; Marcus Noland, senior fellow at the Peterson Institute for International Economics; and Ambassador Charles L. Pritchard, president of the Korea Economic Institute, joined AEI scholars Michael Auslin and Nicholas Eberstadt in assessing the implications of the impending change in South Korean leadership for the longstanding U.S.-ROK partnership.
Marcus Noland
Peterson Institute for International Economics
South Korea has achieved remarkable economic growth, averaging 6 percent real per-capita growth every year between 1963 and 1997. In the last two decades, the country has gone from being a military dictatorship to having a centrist civilian president. Building on this success, Lee has a plan that he hopes will raise the growth rate to 7 percent a year, making South Korea the seventh largest economy in the world.
Although South Korea has promising labor and capital growth, it faces real problems with service-sector productivity. Total factor productivity growth within the service sector for the last twenty-five years has actually declined, while growth outside of the service sector has been rising. The U.S.-South Korea Free Trade Agreement (KORUS) is a mechanism that would introduce competition into the South Korean market, especially in the service sectors. This agreement would also draw the United States and South Korea closer together in many ways, working as a hedge against contingencies arising in the North.
Lee has emphasized that he will ground North-South relations more firmly in the principles of reciprocity. He has outlined an ambitious plan for North Korean economic growth but is likely to require North Korea to give concessions, such as real progress in nuclear disarmament, before it receives economic assistance from South Korea.
Bruce Bechtol
Marine Corps Command and Staff College
Security policies of previous ROK administrations have damaged South Korea's ability to act as a deterrent to North Korea. The Roh administration declined to acquire missile defense systems to defend South Korea from the large inventory of missiles stockpiled by North Korea. Further, Roh was reluctant to develop capabilities for joint command, control, and communications between the United States and South Korea in the event of an attack from the North.
During his election campaign, Lee pledged to turn the South Korean military into an efficient, high-tech force. To do this, he will need to address the North Korean threat as what it is and not as many would wish it to be. Lee should also emphasize a renewed pursuit of interoperability with U.S. forces. It will be important for South Korea to develop plans to significantly upgrade systems and sensors that will give the ROK military enhanced independent capabilities and the ability to fully integrate with U.S. systems.
Lee has announced that he is reconsidering joining the Proliferation Security Initiative (PSI), which Roh decided not to participate in to keep from angering Pyongyang. North Korean nuclear proliferation is a very serious matter, and South Korea should signal that it will not tolerate this behavior by joining PSI. Lee should also make commitments to developing closer technical cooperation with the United States, increased training and education cooperation, and make the fiscal allocations to support defense requirements.
Charles L. Pritchard
Korea Economic Institute
Lee is in position to have a good relationship with the Bush administration, which has already discussed meeting with the new South Korean president shortly after he takes office. Lee can use a good relationship with the United States to encourage a more transparent cooperation between the two countries. The compatibility of interests between Bush and Lee will end the mismatch administrations that we experienced previously.
Lee is considered a pragmatic leader. He has placed his views on North Korea in terms of his relationship with the United States and the importance of economic growth. While he is unlikely to cut off humanitarian aid to North Korea, he will begin to link rewards to actual progress made in the denuclearization process. This is welcome news to the United States, which has been frustrated by South Korea providing economic support to North Korea that undermines sanctions and other economic measures used by the international community to signal displeasure with North Korea's activities.
Lee should begin his administration by changing the previous administration's approach to North Korea and improving relations with Japan--actions that will bring it closer to the United States. It should be recognized, however, that the policies that bring Lee closer to the Bush administration will only benefit relations between the two countries until the next U.S. president takes office.
AEI research assistant Jennifer Gregg and intern Sachiyo Miwa prepared this summary.
