Monday, April 17, 2017

U.S.-South Korea Relations

The Republic of Korea or ROK is one of the United States’ most important strategic and economic partners in Asia. First, the U.S.-ROK Mutual Defense Treaty commits the United States to help South Korea defend itself, particularly against any aggression from North Korea. Approximately 28,500 U.S. troops are based in the ROK, which is included under the U.S. “nuclear umbrella.” Second, Washington and Seoul cooperate in addressing the challenges posed by North Korea. Third, the two countries’ economies are closely entwined and are joined by the Korea-U.S. Free Trade Agreement (KORUS FTA). South Korea is the United States’ seventh-largest trading partner and the United States is South Korea’s second-largest trading partner.

Between 2009 and the end of 2016, relations between the two countries reached their most robust state in decades. Political changes in both countries in 2017 have introduced new factors and brought some uncertainty to the relationship. Many analysts expect core elements of the military alliance to endure. At the same time, tensions could emerge in other areas. South Korean President Park Geun-hye was impeached in December 2016 and removed from office in March 2017. A new president is scheduled to be elected on May 9, 2017. Some of the leading candidates favor policy approaches, particularly toward North Korea, China, and Japan, that could be at odds with U.S. policy. Additionally, if the United States pursues new policies with regard to North Korea, alliance cost-sharing, and economic policies, bilateral tensions could re-emerge.

Coordination of North Korea Policy

Dealing with North Korea is the dominant strategic concern of the U.S.-South Korean relationship. From 2009 to 2016 Seoul and Washington maintained a joint approach that contained elements of both pressure and engagement. In response to Pyongyang’s intransigence, Washington and Seoul emphasized the harder elements of their approach, particularly following North Korea’s nuclear tests and multiple missile launches in 2016.

As of late March 2017, the Trump Administration had yet publicly to set forth a fully detailed North Korea policy. Statements by Administration officials appear to indicate an increased emphasis on pressure, including sanctions, against Pyongyang. Among South Korea’s presidential candidates, leading contenders in opinion polls support opening more avenues of dialogue, economic engagement, and humanitarian cooperation with North Korea than did President Park.

The U.S.-ROK Alliance

Since 2009, the United States and South Korea have accelerated steps to reform their alliance. Washington and Seoul are relocating U.S. troops on the Korean Peninsula and boosting ROK defense capabilities. Provocations from North Korea have propelled more integrated bilateral contingency planning, for instance by adopting policies to respond more swiftly and forcefully to attacks and by deploying the Theater High Altitude Area Defense (THAAD) system in South Korea. China has protested the THAAD deployment and has appeared to have taken some retaliatory measures against South Korean companies and economic interests.

According to U.S. military officials, South Korea pays roughly half of the non-personnel costs of stationing U.S. troops in South Korea. Many analysts think that the Trump Administration will demand that South Korea increase its cost-sharing payments.

Bilateral Economic Relations

The Administration has stated that it will examine and potentially renegotiate existing U.S. FTAs. KORUS entered into force in 2012, and views on its economic outcomes are mixed. Though many U.S. businesses highlight improved market access and a more robust mechanism for dispute resolution, the size of the trade deficit with South Korea - the seventh largest U.S. bilateral trade deficit in 2016 - coupled with its growth following KORUS’ implementation, could mean that the Trump Administration may closely review the U.S.-Korea trade pact.

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