KF뉴스레터-Korea-US Relations at the Crossroads

Korea-US Relations at the Crossroads

The Korea-US 21st Century Council meeting was held in Washington DC on October 21 and 22. Many politically and economically delicate matters needed to be discussed this year. These pressing issues included the rearrangement of US Forces in Korea, North Korean nuclear problem, the dispatch of additional Korean troops to Iraq, exchange rate adjustment and the delay in completing a Bilateral Investment Treaty (BIT). The meeting was attended by about twenty Korean participants led by SaKong Il, the Chairman of the Institute for Global Economics, and about thirty US participants including Deputy Secretary of Defense P. Wolfowitz and Senator C. Dooley.

I think that meeting with influential US leaders, who can sway public opinion and make policy decisions that concern Korea, to discuss and find ways to solve impending issues contributes greatly to the development of bilateral relations. It is clear that meetings such as this one help experts from both countries to deepen their understanding about each other.

Political, Security and Economic Issues
International conferences that deal with issues of politics and security are usually held separately from those that deal with issues of economy and trade. I have rarely seen a conference where discussions on politics and economy run concurrently. While participating in the 21st Century Council meeting, however, I realized how deeply political and security interests were intertwined with economic issues. For instance, the Korean government welcomed and supported the dispatch of additional Korean forces to Iraq, expecting such a dispatch to serve as an opportunity to strengthen economic, military, and security cooperation between the two countries. The logic behind such a move is that political stability in the Middle East would be helpful to Korea, who depends on the region for most of its oil supply. A reconfirmed military alliance between Korea and the US would contribute to the security of the Korean peninsula and would have a positive impact on US companies wishing to have more of a presence in Korea.

The issue of the recently proposed adjustment
of the exchange rate by US administration was smoothed over by making clear to Korean delegates that the proposal targeted the revaluation of the Chinese yuan and did not directly aim at the Korean won. In addition, both countries agreed that they should make a mutual concession on Korea's screen quota system for the completion of the BIT in an effort to strengthen economic cooperation.

The Free Trade Agreement
The proposed Free Trade Agreement (FTA) has seen an increase in its own economic importance over the past several years. Participants of both countries agreed that they should work on completing a free trade agreement but showed different opinions on when such an agreement might be completed and what, specifically, would be included in it. The US is currently working on FTAs with Australia and Thailand, and has not fully studied the possibility of signing an FTA with Korea. They did say, however, that agriculture should be included in an agreement that would be considered after the completion of a bilateral investment treaty. Korean delegates explained that an FTA should be considered from strategic and geopolitical perspectives rather than just economic ones. They emphasized that the US needs to sign an FTA with Korea to secure their interests in economic integration in Northeast and East Asia. They also said that agriculture and the screen quota system might be obstacles to signing an FTA and that these issues should be solved gradually through the free trade pact.

Communication between the Two Countries' Policy-makers
All of the topics discussed at this one and a half-day meeting were of great interest to both countries, and I expect that the constructive ideas that were exchanged among the participants will serve as valuable references in policy-making for both countries. In addition, the 21st Century Council meeting, which was not open to the public, enabled the participants to exchange their opinions frankly. This format for meetings will contribute to better communication between the two countries' policy-makers. Finally, as relations with the US, our traditional ally and most important economic partner, have a great impact on Korea, the Korean government should nurture experts on US-Korea relations to make early analyses of US policies and to set up appropriate countermeasures.

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Korea-US Relations at the Crossroads

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Korea-US Relations at the Crossroads

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