Tag Archive | "china"

South Korea Commits to Transparency as it Looks to Contain the Wuhan Coronavirus

This briefing comes from Korea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receive little attention in the United States. If you would like to sign up, please find the online form here.

What Happened

  • The Wuhan virus has spread to six different countries, leaving more than 630 infected and 17 deaths.
  • As of January 27, there were four confirmed cases of the coronavirus in South Korea. There have not been any fatalities.
  • Korea Center for Disease Control and Prevention has heightened the disease alert level from blue to yellow, and have banned travel to Wuhan and the surrounding region.
  • Local quarantine authorities are taking preventative measures by asking airport and sea ferry authorities to scan travelers’ body temperatures and symptoms of the virus.

Implications: Despite concerns that it might cause a panic, the Moon Jae-in administration is opting to inform the public on the potential severity of the Wuhan virus as it seeks to prevent the disease from reaching the general public. This is consistent with President Moon’s overall emphasis on greater transparency when enacting public policy. The government’s ability to be upfront about the public health risk was partly facilitated by the fact that the first domestic case of the virus was successfully quarantined at the airport. The Moon administration is likely looking to avoid comparisons to the previous administration, whose slow response to the outbreak of the Middle East Respiratory Syndrome (MERS) in 2015 was severely scrutinized.

Context: South Korea recorded 186 confirmed cases of MERS and 38 fatalities in 2015. The Park Geun-hye administration’s handling of the health emergency was extensively criticized for its improper response in the initial stages of the outbreak. Many health experts have pointed out that the first 14 fatalities in the first week of the outbreak could have been avoided had the government responded with appropriate urgency. The outcry around the government’s delayed response led to the dismissal of the health minister and elevated the public perception that the administration was incompetent.

Korea View was edited by Yong Kwon with the help of Gordon Henning, Soojin Hwang, Hyungim Jang, and Ingyeong Park.

Image from the Republic of Korea Government

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New Prospects for U.S.-Korea-Japan Cooperation

By Emanuel Pastreich

The difficulties in promoting cooperation between Seoul, Tokyo, and Washington, D.C. in response to the rising technological and economic strength of China has been the hot topic of discussion in the United States. The standard answer is to attribute the difficulties to historical issues that have created an emotional gap between these two allies of the United States.

Although the resentment of Koreans regarding the events of the pre-war period are real, and they do occasionally create major obstacles, it is far from certain that they are the primary cause of the divergent views. It is entirely natural that South Korea, Japan, and the United States have divergent geopolitical interests. It is also clear that all three countries are riven domestically by ideological schisms that make a “NATO of Asia” difficult, if not impossible.

The push for collaboration has focused largely on military and security, with China postulated as a potential threat that must be countered through deterrence. Although this perspective has become commonplace in Washington, D.C., it is far from the consensus among experts on security in the United States, let alone in South Korea and Japan. If anything, concerns about nuclear war, climate change, the unprecedented concentration of wealth, and the negative impact of artificial intelligence and automation on human society dwarf any security threat from China, or from North Korea.

Thus, it is no surprise that there is no consensus on forging deeper military ties centered on potential threats from North Korea and China in the three countries.

In addition, we must ask ourselves whether future conflicts will follow familiar patterns. The rapid evolution of new technologies, from 3D printing to micro drones, to next-generation artificial intelligence assures us of a future in which powerful destructive tools will be available to small groups at the same time that internet-based links bring together similar groups around the world for like purposes. Such developments could make many current weapons systems obsolete from the start.

Technological change has also encouraged deep fragmentation within nation-states, at home and abroad.  Simply raising military budgets, or preaching about our alliances, is not going to make us safer. We need to understand the nature of emerging threats that go beyond the schemata we have used previously to define security, and make sure that citizens in all three countries are properly informed.

Whether we are talking about preventing nuclear war, climate catastrophe, or hybrid conflicts at the national, regional and international levels, we need to use our creativity.

Cooperation between the United States, South Korea, and Japan in the security realm, either traditional or non-traditional, can be extremely positive, but it must be the result of a rigorous and robust discussion between the three countries on science, technology, the environment, policy and strategy as well. That discussion will not only assure us that we are spending the tax dollars of citizens on responses to security threats that are up to date and effective, but will also create a broad consensus among the citizens and experts involved in this discussion at every level that will help to avoid misunderstandings in the future.

The economic and technological integration between these three nations is considerable and offers paths for effective cooperation to address emerging challenges.

Rather than force through military-military cooperation which does not grow naturally out of a broader discussion, the three countries need to broaden and deepen cooperation in fields that deeply inform security, but which are not strictly military.


There is tremendous potential for cooperation in education between the United States, South Korea, and Japan which should be pursued in a systematic manner. For example, we can create sister relations between elementary schools, middle schools and high schools at the local level in all three countries that will be the foundations for deep exchanges. Internet-based learning can serve as an opportunity for students in the three countries to meet up with each other on-line, engage in common projects and learn about each other’s neighborhoods, regions and countries.

If those exchanges are carried on long-term, they may evolve into lifetime relationships that will bring the three countries together.

Whether it is American, Korean and Japanese first-graders making presentations about their neighborhoods for each other, or community college students discussing with their peers how we should respond to the threat of nuclear war or the fragmentation of society, these opportunities for direct collaboration in education would be immensely valuable in building lasting ties.


We cannot discuss the future of security unless our discussion is grounded in science. We must encourage the use of the scientific method in all three countries at every level, from discussions among friends up to the formulation of national policy.

Towards this end, we must promote long-term collaboration in scientific research between the three countries which is combined with a broader effort to promote scientific thinking in society as a whole.

There are projects in scientific research that involve researchers in the three nations already, as well as other nations. It would be possible to focus government funding on collaborative research between the three countries for long-term research projects on critical issues that would tie the three together in a stable and predictable manner and promote broader cooperation.

The joint research in biology and bioengineering between Professor Heiwan Lee of Hanyang University and Hara Masahiko of RIKEN that was active from 2010 to 2016 is a model for how joint collaboration can be conducted between Japan and South Korea. Bringing in an American institutional partner to that project would have made it even stronger.

But science is not just about research. It is critical that we invest heavily in increasing the understanding of science among citizens in the three countries and international cooperation in civic education is another critical field. Town Hall forums that encourage a scientific analysis of the challenges facing human society can be planned that link together citizens from the three countries and that provide, through translation, opportunities for deeper exchanges. Shared best practices between the United States, South Korea, and Japan, for example, could be valuable.

Technology and policy

Existing networks for cooperation for the development of technology and for the formulation of policy between the three countries can be enhanced and brought to focus on the needs of society, rather than financial profit.

For example, the development of the technology for next-generation electric batteries, solar cells, or wind-powered generators that will be in the public domain could be undertaken by the three countries. So also, programs for the development of new policies to implement those resilient technologies at the local level could be developed through cooperation between the three countries. The sharing of best practices could be done in the form of sister city/sister state relations, thereby encouraging collaboration between citizens.

The arts and the humanities

Cooperation in the performing arts, film, painting, sculpture, and writing could be a critical means of drawing the three countries together and creating a consensus on current issues. What we think about security in the United States, South Korea, and Japan will be determined by how “security” is represented and discussed. Security is ultimately a cultural, and not a technological, issue. Therefore the humanities are not secondary fields to policy and technology, but rather they are the front line where philosophy, morality, and methods of representation intersect.

The three countries can cooperate in making films that address the concerns of youth, the threat of climate change, the growing inequity in our society and numerous other topics. Providing reliable funding for such efforts can help artists and intellectuals from the three countries to join forces in efforts to create works of art that help citizens to conceive of current threats like climate change and nuclear war and that offer new directions for international collaboration between citizens for security.

Cultural exchanges can do much to deepen current discussions between the three countries. If we include creative activities like writing and music into otherwise dry and formalized discussions about security and trade, we can create an environment in which innovative approaches are possible and a more honest debate conceivable.

I have attended many meetings between high-level figures from government, industry, and research in which the conversation never went beyond the most superficial greetings. Such overly formalized meetings are tremendous loss because often the experts assembled represented a treasure of expertise.

Just having a chance to listen to a musical performance together, or create a work of art together, can transform such meetings into something remarkably positive. The arts and humanities can contribute not only to helping citizens to understand the challenges of our age, but also in facilitating a discourse between policymakers that goes beyond the rituals of state and gives real gravitas to the exchange.


The goal of enhancing cooperation between the United States, South Korea and Japan in the field of security is worthy. Achieving that goal will be a complex process. Identifying what exactly security will mean in the 21st century, and how we can cooperate in our response is a task that will require the three countries to cooperate closely at all levels, from kindergarten to advanced research laboratories, for the long term. Before we start signing any narrow military and intelligence agreements, let us make sure that we have worked together closely as citizens, experts and policy makers to understand scientifically the current challenges and to respond in a constructive and effective manner.

Emanuel Pastreich is the President of The Asia Institute and a Non-Resident Fellow at the Korea Economic Institute. The views expressed here are his own. 

Image from the U.S. State Department flickr account.

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The China-Russia Security Council Resolution Part 2: Chinese Motives

By Stephan Haggard and Liuya Zhang

In the last post on the proposed China-Russia Security Council resolution, we showed that exempting just two product categories—seafood and textiles—would restore as much as 50% of North Korea’s exports. But that does not capture the full extent of China’s ability to keep the regime afloat, even if we set aside the inevitable leakage in the sanctions regime (on that issue, see the August 2019 interim Panel of Experts report).

Harder to estimate is the relief that would come from lifting the ban on labor exports and the repatriation of North Korean workers that was supposed to happen at the end of 2019 (but didn’t; see here and here). U.S. estimates—and they do not strike us as hyperbolic—are that the total foreign exchange earnings from 100,000 workers abroad could total as much as $500,000,000 a year.  These, and other, invisible receipts are much harder to track than trade in goods.

In addition, we have the particular interest that China—and South Korea—have in boosting tourism to the country. Since Xi Jinping’s visit to Pyongyang in June 2019, Chinese tourism to North Korea has increased exponentially. It is hard to think that the uptick is coincidental. Global Times reported that in the wake of Xi’s visit, trains and airlines heading toward Pyongyang were crowded with Chinese tourists and that the large surge of Chinese tourists has even strained capacity at the country’s hotels and resorts; as is well-known, tourism is a pet project of Kim Jong-un’s.  The South China Morning Post has estimated that total Chinese tourists were expected to increase from 200,000 to 350,000 in 2019 and would contribute $175 million to the regime’s coffers this year. South Korea has also seen tourism as a potential icebreaker. In his New Year’s conference press, President Moon signaled that South Korea is seeking to allow individual tours to North Korea and believes that they can be structured in a way which does not violate sanctions.

The resolution offers little insight into the crucial question of what China would like to see in terms of material steps by North Korea on the nuclear front. It does, however, contain a surprising procedural proposal: almost in passing, it mentions that the Six Party Talks or some similar multilateral process be revived. Yet if we treat the proposal as a menu—with rolling back of seafood, textile and labor exports as an opening bid—it offers a measurable metric of what China would be willing to concede to make progress.

Given that the proposal is largely moot given U.S. opposition, what might we glean about Chinese motives? A close read of some of the Chinese press coverage offers some clues. The first is simply an effort to reduce risks of North Korean going rogue. As Kim Jong-un’s self-imposed year-end deadline for the resumption of talks approached, Beijing no doubt had concerns about a resumption of provocations. Press accounts suggest that China has a long list of things to worry about: Kim Jong-un’s visit to Mount Paektu; ongoing short-range missile tests; the convening of the 5th Plenum; North Korea’s UN representative Kim Sung’s remarks on “denuclearization is no longer on the table”; and the widely-cited remarks on delivering a “Christmas gift” to the United States. All of these developments suggested the potential escalation of tensions on the Korean Peninsula and even a return to the crisis atmosphere of late 2017.

Second, however, were a complex of strategic motives. Beijing clearly wanted to seize the high ground—including with its North Korean client—by drawing a sharp contrast between its role in maintaining the peace and stability of the Korean Peninsula and the adverse effects of the ongoing U.S. “maximum pressure” campaign. While openly blaming the U.S. for its inaction on implementing the DPRK-U.S. Singapore Joint Statement or assuaging North Korea’s legitimate security concerns, Beijing could position itself as the honest broker to the conflict.

Finally, there is some evidence that the Chinese leadership views Trump’s approach to North Korea with a significant dose of skepticism. Beijing is perfectly aware of the uncertain political environment in Washington arising from the impeachment process and the onset of the presidential election cycle. The leadership appears to believe that it will be hard for the U.S. to take the initiative in such circumstances because it would be seen as a sign of weakness, including by Democrats; there was previously at least some hope that the U.S. might respond positively.

At a deeper level, though, Beijing appears convinced that the Trump administration’s North Korea policy reflects only a tactical adjustment rather than a strategic policy change. “Maximum pressure” continues to dominate the “…and engagement,” as the policy was initially articulated by Secretary of State Rex Tillerson. For China, the Trump administration might well have taken the initiative on bilateral talks with North Korea to create a personal talking point for the president in the short-run, while continuing the effort to suffocate the North Korea regime using the sanctions tool in the medium or long-term. Under this interpretation, China was clearly aware that the U.S. was unlikely to support the proposal, but it could nonetheless play a useful signaling function not only to the U.S. and North Korea, but to the Moon administration as well.

In this regard, the draft resolution does implicitly argue for a possible course of action that seems relatively costless to us. Given the risks of tinkering with extant UNSC resolutions, the easiest route to partial sanctions relief could run through Seoul. A starting point would be to grant the Moon administration more room to pursue its rail and road surveys. Such surveys may expend resources, but they are marginal and by no means constitute a commitment to proceed; in any case, such a survey would take 18 months if not more to complete. Any further progress would depend on North Korean actions on the nuclear front. Outlining in more concrete detail what a settlement could entail in terms of infrastructure investment seems to carry little risk. Moreover, it would do at least something to ameliorate the strains in the alliance arising from the differences between the Trump and Moon administrations about how to move forward.

Stephan Haggard is a Non-Resident Fellow at the Korea Economic Institute and the Lawrence and Sallye Krause Professor of Korea-Pacific Studies, Director of the Korea-Pacific Program and distinguished professor of political science at the School of Global Policy and Strategy University of California San Diego. Liuya Zhang is a master student at the School of Global Policy and Strategy, University of California, San Diego. She received her Bachelor Degree of Arts from Fudan University and Master’s degree of International Studies from Seoul National University. The views expressed here are the authors’ alone.

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Emerging 5G industry in South Korea amid the U.S.-China Trade Conflict

By Hyoshin Kim and Junsoo Kweon

5G offers faster data speeds than current mobile networks and could transform the global economy through fields like Internet of Things (IoT) and self-driving cars. This network is also critical to a nation’s military capabilities. It can share huge volumes of data across vast distances, allowing governments to track missile launches and transmit real-time drone footage.

Given the security implications of the 5G industry, the U.S. government is concerned with China’s rising dominance in this sector. The Chinese company Huawei is already a leading global information and technology provider. It is also active in South Korea’s telecommunications market. As the U.S. government monitors Huawei, the company’s presence as a 5G vendor in South Korea has created a dilemma.

The Trump Administration has warned allies that Huawei is an untrusted 5G vendor. This is because China’s National Intelligence Law requires all people and entities within China to abide by the decisions of China’s communist government. If the Chinese government wanted some information from Huawei’s networks, all it has to do is ask.

To make the situation worse, The Washington Post reported that Huawei conducted “secret operations to build North Korea’s wireless network”. The company’s history of operating in countries like Iran further intensifies concerns around Huawei’s intentions to become the principal provider of 5G technology to East Asia.

Despite these concerns, South Korea continues to accept Huawei contracts. Huawei’s price-competitiveness has attracted significant attention in the race to develop regional 5G network infrastructure. One of the three mobile phone service providers, LG Uplus, in South Korea has partnered with Huawei to build its 5G network. Meanwhile, the Japanese government decided to ban Huawei, pushing back on any official contracts with Huawei in its telecommunications network.

The U.S. government insists that the risk of information leaking to China through Huawei’s 5G networks could endanger the U.S. alliance with South Korea and Japan. Randall Schriver, the Assistant Secretary of Defense for Asian and Pacific Security Affairs, said “The United States doesn’t want to see a situation arise where we don’t have confidence in sharing sensitive information with our ally and information being safeguarded.”

South Korea, in particular, is caught in between China and the United States. China is geographically closer to South Korea and makes up a larger share of its foreign trade. China accounts for 26.8% of South Korea’s exports. Leveraging this economic clout, the Chinese government is pushing South Korea to continue trading with Huawei.

In response, South Korea has been actively developing its own 5G industry that can compete with Huawei. In June, the government of South Korea launched a 5G plus strategic committee to establish a long-term plan to enhance the Korean companies’ share in the 5G telecommunication equipment market. Furthermore, Korea is actively looking to cooperate with ASEAN markets on 5G network buildout, providing an avenue for Korean technology companies to scale-up its 5G capacity.

With the government’s support, Samsung is expanding its 5G business. Already the world’s biggest supplier of smartphones and computer chips, Samsung plans to utilize its existing infrastructure to give it a competitive edge over Huawei in 2020. In addition, Samsung is a leader in the semiconductor industry, which provides core components for 5G base stations and transmitters. As Samsung develops smaller and faster semiconductors, its 5G wireless technology is also anticipated to improve.

Samsung is also positioning to be a possible partner of the United States. Claude Barfield, a scholar at the American Enterprise Institute, argued “It is not clear if Huawei’s two current competitors — Sweden’s Ericsson and Finland’s Nokia — will be able to match Huawei’s prodigious resources. Samsung could develop into a potent third option over the next several years.” As South Korea looks to bolster its own tech infrastructure while balancing its security needs, it is worth paying greater attention to South Korea’s 5G network.

Hyoshin Kim is an Asan Fellow and an intern at the Korea Economic Institute of America. Junsoo Kweon is an Asan Fellow and intern at the Heritage Foundation. The views expressed here are the authors’ own.

Photo from Kārlis Dambrāns’ photostream on flickr Creative Commons. 

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Fine Dust Continues to Cost South Korea

This briefing comes from Korea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receive little attention in the United States. If you would like to sign up, please find the online form here.

What Happened

  • Earlier this month, South Korea announced new efforts to help combat the country’s worsening fine dust problem.
  • Measures include restrictions on private vehicle usage, reduced work hours at construction sites, and even the declaration of temporary holidays when the dust reaches a “serious” level.
  • Last week Seoul, Incheon, and the surrounding Gyeonggi Province were hit by the first dust wave of the season.

Implications: Since South Korea has yet to identify the source of the fine dust particles, some observers have asked whether the ongoing measures are effectively targeting the problem. The government deployed 700 vehicles to clear the streets of dust and have been actively prohibiting the operation of diesel vehicles in cities with more than 500,000 people. While some of the dust is generated by pollution in South Korea, it is also believed that some particles come from the Gobi desert in Mongolia and China, and some researchers have said 50-60% of the dust is air pollution from China blown across the Yellow Sea. The government has implemented several domestic procedures but has taken minimal steps in coordinating with China.

Context: Regardless of its origin, air pollution is causing massive health and economic consequences for the country. Of the top 100 most polluted cities in OECD countries, 44 were in South Korea, and in 2017, 17,300 deaths were attributed to air pollution. Furthermore, the new protocol of declaring temporary holidays may dampen businesses’ output due to lost work hours. The dust also poses significant financial concerns for residents. An effective, single-use air filtration mask can cost up to 20,000 won (~$17), which can quickly add up to substantial expense for South Koreans.

Korea View was edited by Yong Kwon with the help of Soojin Hwang, Hyoshin Kim, and Rachel Kirsch.

Picture from user taylorandayumi on flickr

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What do China, Japan, and the United Kingdom Have in Common?

By Mark Tokola

Paul-Henri Spaak, the post-war Belgian statesman who served both as one of the founders of the European Union and as Secretary-General of NATO, wrote in his memoirs that “one must also desire the consequences of what one desires.”  In other words, you shouldn’t complain about the foreseeable outcomes of your actions.  One of the striking features of the past few years is that disparate countries have made seemingly conscious decisions to take actions that clearly are not in their own economic interest in pursuit of other national objectives.

China’s economic retaliation against South Korea in reaction to its deployment of the THAAD anti-ballistic missile system, the United Kingdom’s “Brexit” decision to leave the European Union, and Japan’s restrictions on its own exports to South Korea were all foreseeably economically counterproductive—despite thin denials to the contrary—but all were done anyway as matters of national interest.

In the case of China’s actions against South Korea, it is fairly simple for authoritarian regimes to pull economic levers to execute foreign policy decisions.  The Chinese government “inspections” of South Korean company Lotte’s stores in China were simply harassment to push them out of business.  Concert organizers’ decisions to cancel the visit of Korean entertainers and the sudden evaporation of Chinese group tours to Korea were orchestrated by the government despite official claims that Chinese companies and tourists were simply making their own independent decisions.  Such claims seem more ‘for the record,’ than to be taken seriously.  The short-term effect was to damage South Korean economic interests, but the foreseeable consequence was that South Korean corporations are diversifying their operations to lessen their dependence on China and China’s reputation as a reliable place to invest has suffered damage.  China calculated that its need to strike at South Korea was worth the long-term economic consequences.

In the case of Brexit, the consensus among British industry and economists is that the UK has benefitted greatly from being part of a common market along with its major trading partners.  Although some “Brexiteers” argue that leaving the EU will “unleash the British economy” to pursue its own trading relationships and to make its own domestic regulations, they defensively argue at the same time that even if there was an economic cost to leaving the EU, it would be worth paying to claim more British sovereignty.  Watching the years-long debate, it has been obvious that Brexit is not about economics.  The UK has never been wholly comfortable operating within the EU institutional structure.  The irritation of having to obey club rules, even though the UK had a large part in writing them, has always seemed to overshadow the benefits of club membership.  The political—and perhaps psychic—benefits of Brexit have been judged (so far) by a democratic process to outweigh the economic costs that are already being felt within the UK.

No country has benefitted more from the rule and norms based international trading system than Japan.  Its export-driven growth over the past seventy years has made it one of the world’s major economies.  That made it all the more surprising when Japan announced restrictions on exports of three chemicals key to South Korea’s production of semiconductors. That was followed by the removal of South Korea from its “white list” of trusted trading partners.  It is apparent that Japan acted out of frustration with South Korea’s colonial and wartime claims against Japan, particularly the South Korea Supreme Court’s decision at the end of 2018 that Korean forced laborers had the right to sue Japanese companies for unpaid wages.  Setting aside the rights and wrongs of that issue, Japan’s actions are not in its economic self-interest.  Japanese companies also use Korean semiconductors and displays.  Making technology cooperation between Japan and Korea more difficult when both are facing the challenge from China is self-defeating.  Nevertheless, the Japanese government determined that political considerations outweighed economic self-interest.

There have always been cases of countries subordinating economic interests in the face of pressing foreign policy requirements.  Economic sanctions against South Africa, Cuba, Serbia, Russia, North Korea, and other countries have required the sanctioning countries to forego otherwise profitable trade.  National interests came first.  Countries have also maintained control of essential national infrastructure even at a commercial loss.  What is new is that countries, including the United States, have expanded the sphere of what they consider national interests to include areas such as immigration policy, national pride, and the promotion of non-defense related manufacturing sectors.  They have determined that those are pressing national requirements.  The question is whether they are prepared to accept and openly admit to the foreseeable economic consequences.

Mark Tokola is the Vice President of the Korea Economic Institute of America. The views expressed here are his own.

Photo from UK in Japan-FCO’s photostream on flickr Creative Commons.

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State Department Report finds North Korea Policies Encourage Human Trafficking

By Robert R. King

On June 20, 2019, the U.S. Department of State released the 2019 Trafficking in Persons Report. There is a certain irony that at a time when the President of the United States is trading love letters with Kim Jong-un and barely even mentioning human rights issues in their summit conversations, the State Department is issuing frank, tough, and accurate criticisms of North Korea’s abysmal record of human rights abuses.

The United Nations and the U.S. Government define “trafficking in persons” as recruitment, transportation and/or exploitation of persons by coercion, abduction, or deception for the purposes of sexual exploitation or forced labor and slavery. The State Department trafficking report examines all countries and categorizes them into three “tiers” according to how they are meeting standards to eliminate trafficking. Tier 1 countries are fully meeting minimum standards.  Tier 2 countries do not meet minimum standards, but they are making significant efforts to meet those standards. Tier 3 countries do not meet minimum anti-trafficking standards and are not making significant efforts to do so.

The annual Trafficking in Persons Report issued by the U.S. Department of State is required by Congressional mandate in the Trafficking Victims Protection Act of 2001, which has been re-authorized by Congress on several occasions since its original adoption. The legislation created the Office to Monitor and Combat Trafficking in Persons at the Department of State and established the position of Ambassador-at-Large to Monitor and Combat Trafficking in Persons. After a vacancy of 21 months, John Cotton Richmond was confirmed to that post and sworn in on October 1, 2018. He is a co-founder and director of the Human Trafficking Institute, and previously he was a federal prosecutor in the Department of Justice’s Human Trafficking Prosecution Unit.

The Report is only the most recent example of Congressional legislation that requires the U.S. Government to publicly acknowledge human rights conditions in North Korea.

North Korea’s Record on Trafficking

It comes as no surprise that North Korea is a Tier 3 country—one of only 22 countries in the entire world which are making no significant effort to prevent trafficking of its own citizens.  Unfortunately, in the case of North Korea, some government policies actually encourage trafficking, and in other cases the government is complicit. The report determined that Pyongyang “did not demonstrate any efforts to address human trafficking,” and it “continued state-sponsored human trafficking through forced labor in mass mobilizations of adults and children, in prison camps as part of an established system of political repression, in labor training centers, and through its exportation of forced labor to foreign companies. It used proceeds from state-sponsored forced labor to fund government functions . . . [and] it did not protect potential trafficking victims when they were forcibly repatriated from China or other countries.”

It is worth noting that South Korea, in contrast, is a Tier 1 country which meets standards for the elimination of trafficking. The State Department report noted that Seoul “continued to demonstrate serious and sustained efforts . . . including funding and operating facilities to assist trafficking victims, training government officials to address sex trafficking, and cooperating with foreign law enforcement in the investigation of trafficking cases.”

North Korean Defectors are Frequent Victims of Sex Trafficking

One of the worst instances of trafficking involves North Koreans who seek to escape their homeland to find the freedoms that are not available in the repressive North or to join family members who live elsewhere. Because North Korean officials seek to prevent any unsanctioned departures, escaping is particularly difficult. Furthermore, if individuals are apprehended while trying to leave or are returned to North Korea by the Chinese or another government, they are brutally punished. Some 70 percent of North Korean defectors who have successfully fled to China as the first step in their effort to leave the North are women, and they are particularly vulnerable to sex trafficking.

There are many stories of defectors who sought and paid for help from “brokers” to flee to China. In far too many cases, their supposed benefactors have turned out to be traffickers. Instead of moving on to find freedom and family reunion, in China they have been sold into loveless marriages, forced into brothels, or pressed into the cybersex industry.

Just a few days ago, CNN reported on some of these victims forced into the cybersex industry in northeast China, one had spent five years and another eight years in cybersex slavery: “For five years, Lee—whose name has been changed for her safety—says she had been imprisoned with a handful of other girls in a tiny apartment in northeast China, after the broker she trusted to plan her escape from North Korea sold her to a cybersex operator. Her captor allowed her to leave the apartment once every six months. Attempts to escape had failed.”

A British human right group, the Korea Future Initiative, just issued an excellent report based on extensive interviews and rehabilitation work with North Korean women who were trafficked while attempting to escape the North.  The report gives this description of the problem: “North Korean women and girls are passed through the hands of traffickers, brokers and criminal organizations before being pulled into China’s sex trade, where they are exploited and used by men until their bodies are depleted.”

Vulnerable North Korean young women are caught up in the growing demand for sexual services in China. South China Morning Post reported that China’s booming economy has “fueled a prostitution boom.” The Korea Future Initiative report says North Korean women are in great demand because of the low price charged for their bodies, which can be as little as $4 for prostitution services and $146 to purchase a wife.” One survivor of exploitation said, “I was deceived by a broker and sold into marriage for ¥5,000 Chinese Yuan ($720 United States Dollars). I spent six years as a slave.”

The report estimates that overall this “complex and interconnected network of criminality accrues an estimated $105,000,000 United States Dollars annually from the sale of female North Korean bodies.”

Chinese Policy Contributes to Sex Trafficking of North Korean Refugees

The 2019 State Department trafficking report highlighted how Chinese policies and treatment of North Korean would-be defectors actually contribute to the trafficking problem of North Korean victims. The Chinese government refuses to recognize North Korean women as refugees and refuses to grant them legal protections.  This makes the refugees more vulnerable to being trafficked.

China simply returns all North Korean refugees to the North Korean government, where they are subjected to harsh imprisonment, forced labor, and all too frequently death. The fear of being returned to North Korea makes these defectors especially vulnerable.  Unscrupulous brokers simply threaten to turn the victims over to Chinese or North Korean authorities, and being sexually trafficked in China appears to be the lesser evil.

China has voluntarily accepted the obligation to act to prevent and protect trafficking under the Convention on the Elimination of All Forms of Discrimination against Women and also the UN Protocol to Prevent, Suppress and Punish Trafficking in Persons, Especially Women and Children. American authorities have called upon the Chinese to safeguard and protect victims of trafficking. Those requests, however, have largely been ignored. The Chinese have been more involved with international efforts to discourage trafficking in Southeast Asia than it has been in dealing with the serious trafficking problems on its northeast border with North Korea.

Forced Labor in North Korea

Forced labor is the other major area of concern with regard to North Korea’s abysmal trafficking record. The 2019 Trafficking in Persons Report identified North Korea as a country that uses forced labor as part of an established system of political repression and a pillar of its economic system.

The recently released Global Slavery Index states that as many as 2.6 million people—1 out of every 10 North Koreans—are victims of forced labor or modern slavery. The report declares that the North Korean government had the “weakest response to slavery” of all countries covered in the survey, and that the Pyongyang government is directly involved in forced labor both inside and outside the country.

The most pervasive practice of forced labor in North Korea is the use of mass mobilizations—forcing large numbers of people to spend long hours on high-profile politically important projects for no payment, working long hours with little sleep, and receiving only limited amounts of poor quality food to sustain them in their efforts.

Reuters reported on one mobilization in January this year. Thousands of North Korean students traveled to remote Mount Paektu in northwestern North Korea to “voluntarily” work on a project dear to Kim Jong-un—to build apartments, hotels, a ski resort and commercial, cultural, and medical facilities in the alpine town of Samjiyon. This site is on the sacred volcanic mountain on the Chinese-North Korean border.

The work on Samjiyon is given heroic attention in the government-controlled media. Young people are urged to dedicate their “boiling blood of youth” to Kim’s dream of a great show-place on the slopes of Mount Paektu. Families are shown on television packing warm winter clothes, tools, boots and such for the inspiring youth who work on the project.

The reality of the mass mobilizations, however, is much grimmer. One young man became a member of one of these work brigades with much fanfare and festivity when he left the orphanage where he spent his youth to become a member of the brigade. The reality was a textbook example of forced labor in violation of international trafficking norms.  He worked long hours with limited amounts of poor quality food, he saw another young man fell to his death because of unsafe working conditions, and fellow laborers injured themselves to escape from the rigorous labor.

Human rights groups estimate that such work brigades include some 400,000 people. The UN Commission of Inquiry on North Korea human rights in 2014 estimated that such brigades number 20,000 to 100,000 in each municipality depending on size.  Access to party membership, admission to higher education, and other important benefits in the North are dependent on enthusiastic participation in such un-paid mobilizations. The value of such unpaid labor is estimated to total nearly one billion dollars annually.

In addition to this mass mobilization, forced labor is an integral part of the North Korean prison system. An estimated 80,000 to 120,000 political prisoners are held in segregated prison camps, and in these camps, all prisoners, including children, are subject to forced labor. The UN Commission of Inquiry in 2014 provided details of conditions in these political prison camps where individuals are forced to work long hours in physically demanding jobs while they are given insufficient food, forced to live in unhygienic conditions, and subjected to beatings, torture, and rape. Forced labor is also part of the correction regime for individuals in North Korea for routine crimes. Like the political prisons, regular criminal prisons involve forced labor and extremely poor living and working conditions.

Some North Korean workers are also sent abroad under rigid government control to work on contracts with other governments and companies. Many of these workers face forced labor conditions. Salaries are deposited into accounts controlled by the North Korean government and workers receive only a fraction of the payment for their labor. Working conditions are grim, and workers could also face punishment for failure to meet output quotas or for violating behavior expectations.

A report of the Congressional-Executive Commission on China concluded that in the case of China, “The government of the Democratic People’s Republic of Korea (DPRK) reportedly continued to generate revenue by sending DPRK nationals to work in China under conditions that may constitute forced labor.”  Security personnel accompanied the workers going to China and actively monitored them continually. On average the government withheld 70 percent of the workers’ earnings.

Although North Korea is a signatory of United Nations agreements to prevent trafficking and forced labor, the record is quite clear that it has not lived up to its obligations. The just-released 2019 Report on Trafficking in Persons, as well as other recent reports from respected non-government organizations, clearly document North Korea’s human rights violations against its own citizens involving sex trafficking and forced labor.

Robert R. King is a Non-Resident Fellow at the Korea Economic Institute of America. He is former U.S. Special Envoy for North Korea Human Rights.  The views expressed here are his own.  

Picture courtesy of the U.S. Department of State

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Attention on DPRK and China Policies that Result in Sex Trafficking

By Robert R. King

BBC (British Broadcasting Corporation) has just released an excellent report on the trafficking of North Korean defectors:  “The North Korean women who had to escape twice” by BBC Korea editor Su-Min Hwang.  The report gives first-hand details of North Korean defectors in China who were trafficked and provides an account of their heart-wrenching experiences.

This tragedy is the consequence of DPRK policies to prevent and severely punish individuals who attempt to leave.  But the Chinese government is also complicit because North Koreans who are apprehended by Chinese officials are returned to the North with total disregard for the brutal abuse they will assuredly receive when they are forced back across the border.  The Chinese have other options because South Korea is quite willing to take defectors, and most defectors want to go to the South.  This BBC report provides an eloquent image of the horrific humanitarian consequences of these North Korean and Chinese policies.

Since the North Korean famine of the 1990s over 32,000 North Koreans have fled their homeland to seek a better life in South Korea, initially going through China. Most are individuals seeking opportunities to provide for themselves and their families because repressive discrimination based on family connections or presumed political leanings severely limit economic and educational opportunities for the majority of the population who are arbitrarily categorized as part of the so-called “hostile” or “wavering” classes.

In the six years Kim Jong-un has led the DPRK, the number of defectors who have chosen to leave North Korea and have gone to South Korea has declined by more than half from a high of 2,706 in 2011 to only 1,127 in 2017 according to South Korean government statistics.  This is partly the result of tightening border control.  The inter-Korean border—the Demilitarized Zone—is so heavily guarded that it is virtually impossible to cross.  Areas adjacent to the border with China, the only other option for escape, are off-limits to anyone who does not live in the immediate border zone.  North Korean border guards are trained to be tough on defectors, and reports appear frequently of border guards killing would-be defectors. Family members who remain in the North when relatives defect are severely punished and even executed.

Shortly after coming to power, Kim Jong-un sought to make the South appear less attractive to citizens from the North to discourage defections.  Pyongyang media highly publicized “re-defections” by North Koreans who returned from the South with tales about the awful life there.  The major media campaign against defection in 2012-2013 highlighted “re-defectors” giving extended reports about difficult conditions in the South and obsequious praise for Kim Jong-un welcoming them back.  By raising questions about life in the South, regime intended to make Northerners more cautious about the tough choice of abandoning friends and family for an uncertain life in the South.

Those who decide to leave the North and succeed in getting into China still have a very difficult road.  Chinese policy considers all refugees from North Korea to be economic migrants.  Very occasionally China has allowed defectors to go to South Korea in order to punish or pressure the North Korean regime.  The default Chinese position is that all North Koreans are to be returned to the North, although the Chinese know that they will receive harsh punishment, including imprisonment and brutal physical abuse.

North Koreans in China are in a very vulnerable position and subject to exploitation by unscrupulous locals.  In this situation many women defectors—and over two-thirds of all defectors are women—are exploited and trafficked through forced “marriages” to rural Chinese peasants or pressed into the sex trade.

The excellent BBC report gives personal details of the experiences of two defectors who successfully left North Korea with the help of brokers, but were then sold to a sexcam operator just across the border in China. Imprisoned in a tiny apartment where they were guarded twenty-four hours a day, the defectors were forced to work long hours performing pornographic acts daily on a live webcam.  One survived five years and another eight years before they were able to escape and make the precarious journey from northeast China to the Chinese border with Southeast Asia where they were finally able to escape with the help of South Korean non-government organizations and the South Korean government.  Their story is grim, and the defectors’ willingness to share them gives first-hand insight into the brutality of the Kim regime toward its own people and highlights the China’s willing complicity in the inhumane treatment of these victims.

Other accounts by defectors confirm the scope and nature of these abuses.  See reports in the South China Morning Post, Washington Post, Reuters, and The Irish Times.

Robert R. King is a Non-Resident Fellow at the Korea Economic Institute of America. He is former U.S. Special Envoy for North Korea Human Rights.  The views expressed here are his own.

Picture from user Ceosad on Wikimedia Commons

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North Korea’s Pegged Won Wiggles, But Doesn’t Break, Yet

By William B. Brown

North Korea’s won has slipped ever so slightly against the dollar in recent weeks. This is not surprising given the dollar’s worldwide strength but presents an interesting conundrum for the Chosun central bank. It no doubt knows that pegged currencies could break suddenly when a small divergence, a wiggle, catches the public’s attention. Any signs of the country running out of reserves could lead to people dumping the local money in a panic to exchange for safer assets. A self-sustaining downward spiral can occur, eviscerating the currency and causing all kinds of social instability.

North Korea Daily reports the dollar traded at 8,500 won in Pyongyang on 26 December, up from a steady 8,000 won through the middle of the year, a devaluation of 6 percent.

Against the globally weaker yuan, won has been more volatile, but without the trend decline.

An incipient currency crisis began in North Korea in 2009 and stopped only with the execution of the party finance chief and a very rare Worker’s Party apology.  Since then, financial authorities under Kim Jong-un have done an extraordinary job keeping the won stable. Despite the extremely tough sanctions against the economy, free circulation of competing assets – the U.S. dollar and the Chinese yuan – helped moderate the won’s volatility.

The gap between U.S. dollar/yuan exchange rate as measured by their value in the North Korean market (cross rate) and the actual exchange rate value in overseas markets did grow in 2018, indicating the potential for corrosive arbitrage behavior.

But the cross rate implied by the won for dollars and yuan is now exactly consistent with the overseas dollar/yuan rate. This suggests a remarkably free-flowing foreign exchange market in North Korea despite its socialist underpinnings.

Parsimonious printing of notes and limited credit expansion probably contributed to the won’s steadiness as well, although a tight monetary policy adds its own stresses to the state’s economy.

So, the question on every North Korean’s mind, and especially on Kim’s as he travels to Beijing, must be, how long this can last.

One is hesitant to guess what caused the recent dollar uptick, either market forces surrounding the strong dollar overseas or the continuing drain on the country’s foreign exchange exhibited by the huge drop in its exports due to sanctions.  Chinese merchandise trade data suggest a $200 million monthly outflow for most of 2018, unlikely offset by significant services or remittances inflows.

Recent commodity-by-country trade data released by China (with a six-month delay) reveal the conspicuous absence of exports of electrical and non-electrical machinery, and vehicles to North Korea. This may suggest that the country is running out of foreign exchange and can’t afford any investment related purchases.

Alternatively, the authorities may be trying to inoculate the market so that participants do not expect a firm peg. This ensures that future movements are not seen as policy failures or an impending crisis. If this is the case, we should see the dollar fall back to the 8,000 won level quickly as the central bank intervenes and spends dollars for won repurchases.

Another guess, expressed recently by some scholars, is that the won is actually more closely tied to yuan; therefore, the yuan’s decline against the dollar automatically made for the won decline.  As the above graphs show, however, the won’s value against the yuan has tended to be much more volatile than against the dollar.  Alternatively, some kind of basket approach may be in use but that removes the confidence-building features of a simple dollar peg, and confidence is what North Korean markets need more than anything.

What we do know is that anyone holding dollar assets in North Korea over the past few weeks has become relatively better off than those holding dollar liabilities such as apartment mortgages. One might think this could be cause for regime concern. We don’t know but is it enough for a quick trip to Beijing and a friendly chat with President Trump?

William Brown is an Adjunct Professor at the Georgetown University School of Foreign Service and a Non-Resident Fellow at the Korea Economic Institute of America. He is retired from the federal government. The views expressed here are the author’s alone.

The author is indebted to Daily North Korea which diligently reports North Korean prices and exchange rates in its newsletter.  https://www.dailynk.com/ 

Picture from user Price Roy on flickr

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10 Issues to Watch for on the Korean Peninsula in 2019

By Mark Tokola, Phil Eskeland, Troy Stangarone, Kyle Ferrier, Juni Kim, Yong Kwon, and Sang Kim

2018 was a year of dramatic change on the Korean Peninsula. The prospect of war that seemed to growth with each North Korean nuclear or missile test receded as North Korea, the United States, and South Korea moved towards diplomacy which culminated in the historic summit meeting between U.S. President Donald Trump and North Korean Chairman Kim Jong-un in Singapore.

While the move towards diplomacy with North Korea was the top story of 2018, the year also saw South Korea successfully host the 2018 Winter Olympics, South Korean President Moon Jae-in move more directly towards implementing his income lead growth strategy, and K-pop take another significant step towards breaking out in the United States.

As we move into 2019, some of the big questions facing the Korean Peninsula will center around whether real progress can be made with North Korea now that we are beyond the initial stages of diplomacy and what that means for inter-Korean relations. Other key issues for 2019 will be how the U.S.-China trade war plays out and the implications for South Korea, as well as whether income lead growth will be able to overcome some of the initial implementation challenges it has faced.

With that in mind, here are 10 issues related to North Korea, South Korean politics, and U.S.-Korea relations to follow that will have an impact on the Korean peninsula in the year ahead:

Whether a Peace Process Can Develop

It is generally believed that the denuclearization of North Korea will be accompanied by a “peace process” (or peace regime, or peace declaration, or end-of-war declaration – there are many terms being tossed around) but what this would actually mean or whether it would come before or after an agreement on denuclearization is unclear.  The “peace process” may come in pieces.  There is nothing to prevent North and South Korea from declaring on their own that peace has come to the peninsula.  Similarly, the United States and North Korea could issue a joint statement saying that have no hostile intent towards one another.  If such statements can promote denuclearization or decrease tensions, well and good.  The devilish details would be in what concrete steps if any would accompany a declaration of peace.

2019 may well see announcements of peace on the Korean Peninsula.  It would seem like an irresistible flourish to mark Kim Jong-un’s visit to Seoul, or to give an appearance of progress for a second Trump-Kim Summit.  But, watch for the details.  Would a declaration of peace be accompanied by a road map towards denuclearization? A normalization of relations with liaison offices being established in Washington and Pyongyang?  A more wide-ranging commitment by North Korea to restrain its belligerent behavior beyond denuclearization, such as in cyber or other weapons systems?  Would there be a move towards formally ending the Korean War by winding up the armistice? Thinking through what a peace process would mean reveals that there are big issues beyond denuclearization.

Will the United States Lift Sanctions on North Korea?

In his New Year’s Day address, Kim Jong-un called for the United States to lift sanctions if it wants the process of dismantling North Korea’s nuclear weapons to go forward. In the past, the Trump administration has said that North Korea would have to dismantle or substantially dismantle its weapons programs before sanctions relief would be possible. With progress with North Korea stalled, one of the key questions for the Trump administration will be whether it sticks to its stance or accommodates North Korea’s push for sanctions relief.

If the Trump administration decided to move forward on sanctions relief there are four general ways it could look to pursue to move the talks forward and demonstrate good faith. The first area would be to support inter-Korean engagement. Here the administration could support further sanctions waivers to allow inter-Korean economic projects to advance. At the United Nations, the administration could support removing one or more specific sanctions that have been placed on North Korea. Another, more likely option at the UN, would be for the administration to pursue time-limited waivers of sanctions that are contingent on progress by North Korea in dismantling its nuclear programs. The final option would be for the administration to waive one or more specific U.S. sanctions where it has the authority to provide a national interest waiver.

Burden Sharing and the U.S.-Korea Military Relationship

As part of his professed “America First” values, U.S. President Donald Trump has repeatedly criticized South Korea, and other U.S. allies, for what he views as an unfair defense burden to America for stationing U.S. troops. The U.S. has maintained a military presence in South Korea since the Korean War in the 1950s and South Korea currently hosts 28,500 American troops, the third largest number of troops stationed in a foreign country after Japan and Germany. Ten rounds of negotiations occurred throughout 2018 between U.S. and South Korean officials to renew the Special Measures Agreement, a 2014 burden sharing deal that is set to expire at the end of 2018. The latest round failed to reach a deal over demands from the U.S. for South Korea to greatly increase its contribution and has prompted fresh concerns over the U.S.’s commitment to the alliance. Without a new deal in place, Korean workers at U.S. military bases in South Korea are in danger of being put on leave in the New Year. If left unresolved, the ongoing debate over cost-sharing could greatly hinder future U.S.-ROK relations.

The Future of THAAD in South Korea

China’s protest of the deployment of Terminal High Altitude Area Defense (THAAD) batteries, which were provided by the U.S. military, in South Korea in 2017 led to a political and economic row between the two countries. A resulting Chinese ban on tourism to South Korea and South Korean goods eventually gave way to an agreement late last year to normalize trade relations. Although trade and tourism numbers have started to rebound in 2018 after dramatic decreases in 2017, negative repercussions still remain, though the exact cost of the sanctions are hard to definitively quantify South Korea has likely lost more than $13 billion from the decline in tourism alone. In particular, the Korean conglomerate Lotte, which provided the land for THAAD deployment, has suffered from the after-effects of China’s sanctions with its stores in China shuttering due to lost business.

For 2019, it will be worth watching if the numbers continue to recover and how South Korean businesses adapt to the potential risks of dealing with a volatile Chinese market. For Lotte’s part, the company has actively courted Southeast Asian markets to make up for Chinese losses. It will also be worth watching if THAAD becomes part of talks with North Korea or the expected results of a South Korean environmental impact study affect its deployment.

U.S.-Korea Trade Relations – Section 232 Investigation

The past year has seen great progress in ameliorating initial uncertainties:  exports of U.S. goods and services to Korea increased 10 percent; the bilateral trade deficit declined by 43 percent; and agreements were reached and ratified to modify the Korea-U.S. Free Trade Agreement (KORUS FTA) and to limit Korean steel exports to the United States.

Nonetheless, there is still one looming threat – the possible imposition of U.S. tariffs as high as 25 percent on imported motor vehicles and parts from South Korea.  The Commerce Department has until February 17, 2019, to release the results of its Section 232 investigation into the national security implications of imported autos and parts.  If the report concludes that these products are a threat to U.S. national security, the President has until May 17, 2019, to make a final decision on tariffs.  However, because Korea and the U.S. concluded their negotiations on KORUS and steel two months before the Commerce Department launched this investigation, other major auto producers – Canada, Mexico, Japan, and the European Union – received reprieves or waivers on higher tariffs during their trade talks with the United States.  No decision has yet been made to exempt South Korea from higher tariffs even though Korea imposes zero tariffs on motor vehicles imported from the United States; the revisions to KORUS made several changes benefiting U.S. automakers, including a 20-year extension of the 25 percent U.S. tariff on imported pick-up trucks; and the value of U.S. imports of motor vehicles and parts from Korea has steadily declined since 2015.  Imposing a 25 percent tariff on imported cars and parts would also add approximately 10 percent to the production cost of Korean name-plated cars assembled in Georgia and Alabama, making their vehicles less affordable to the American public, resulting in a significant reduction in employment at both their manufacturing facilities and their dealerships.

Compounding the issue is the frustration that President Trump expressed on November 28th regarding the recent announcement of the closure of four GM plants in the U.S. that make auto parts and smaller vehicles.  The President tweeted, “the countries that send us cars have taken advantage of the U.S. for decades,” reflecting a fundamental worldview that he has believed for over 30 years.  Trump added, “if we [imposed a 25 percent tariff on] cars coming in, many more cars would be built here.”  Because Korea still exports some cars to the U.S. that compete against GM, the threat of a higher tariff could be used to pressure Korean car manufacturers to move even more production to the United States.  President Trump also desires that Korea pay much more to continue stationing U.S. troops on the Korean peninsula.  He could use the threat of higher car tariffs as another pressure point on South Korea.  Unless Korea is granted an exemption on the auto tariffs, much of the goodwill in the bilateral trade relationship that has been generated over the past year will quickly dissipate because it will be perceived as bad faith in terms of moving the goalposts in bilateral trade negotiations.

The U.S.-China Trade Conflict

On the surface, tension in U.S.-China trade relations does not appear to affect South Korea too much because South Korea’s economy is more aligned with the United States.  However, because China is now Korea’s largest trading partner, South Korea could be caught in the undertow of the churn in U.S.-China friction.  Some Korean brand consumer electronic products are assembled in China and subsequently exported to the United States, which now has to be re-thought in light of the threat of U.S. tariffs as high as 25 percent on Chinese exports.  Other products assembled in China also contain significant Korean content.  For example, the screen on the new Apple iPhone XS is made by either Samsung or LG.  The Korean stock market frequently gyrates at any movement in U.S.-China trade talks – up when negotiations progress and down when discussions stall.  The two sides have given themselves until March 1, 2019, to conclude a successful agreement.

However, many of the irritants in the U.S.-China trade relationship are deep and foundational problems to the Chinese economy and most likely cannot be cured in less than three months.  If an agreement is reached that just makes marginal changes on the edges, such as a commitment by China to purchase more U.S. products or lowering the tariff on imported autos, then the U.S., and by extension, Korea, will continue to face long-term economic challenges from China.  If the U.S. acts in concert with other nations that have similar concerns about unfair and trade-illegal Chinese practices, then multilateral action can spark necessary reform to China’s economy.  However, if the talks break down and the U.S. continues to act alone by imposing more and more tariffs irrespective of how it affects constituencies in the U.S. or other nations like Korea, China will ironically gain the moral high ground as the defender of free trade and unnecessarily delay the market-oriented changes the free world needs to see take place in China.

U.S.-Korea Cooperation in the Indo-Pacific

The “Free and Open Indo-Pacific Strategy,” first introduced over a year ago, now underlies Washington’s approach to the region. South Korea has yet to officially join the strategy nor is it likely to in 2019 due to concerns in Seoul that it could be interpreted as “containing” China or even forcing its hand to choose between Beijing and Washington. However, the overlapping goals between the Indo-Pacific Strategy and the Moon administration’s “New Southern Policy” provide new opportunities for both the U.S. and South Korea to work together beyond the Peninsula.

Both visions focus on increasing engagement with South and Southeast Asia on many of the same key issues based on the same core values, albeit in different ways. The clearest means to bridge the two is through infrastructure projects. The U.S. is looking to mobilize large, high-standard loans and the quality and cooperative nature of South Korean loans, Seoul’s efforts to direct more development assistance to ASEAN countries and India, and the competitiveness of Korean firms in building modern infrastructure make South Korea an ideal partner in achieving this goal. In 2019, look for Seoul and Washington to cooperate on infrastructure projects in the region as well as highlight their joint efforts.

Improving the Environment in South Korea

Although air pollution arose as an issue during the 2017 presidential election, leading candidates at the time focused largely on expanding dialogue with China and remained quiet on domestic sources of this public health threat. The issue returned with a vengeance this past November when extreme levels of ultrafine dust forced Seoul to restrict the number of vehicles on the road and construction. This comes at a particularly awkward time for the Moon administration, which responded to public concerns following the 2011 Fukushima Daiichi disaster by promising to phase out nuclear power in Korea.

Absent nuclear power, cleaner energy could be drawn from natural gas, which South Korea has been importing in increasing amount – particularly from the United States. However, this exposes Korea to geopolitical issues and market volatility. The Moon government is also making a big push to increase renewable energy capacity.

At this juncture, South Korea may consider looking to Taiwan – voters there rejected the phase-out policy in a referendum this year. With nuclear energy satisfying both clean air and energy security, this issue is poised to be revisited by both the government and the public in 2019.

South Korea’s Income Lead Growth/Job Creation

The state of the economy remains the biggest source of concern for South Koreans. After taking several months to get up and running, the first full year of the Moon administration’s income-led growth agenda has fallen short of its ambitious goals. Responding to his falling approval rating in light of underwhelming initial results that have increasingly become a major issue of public debate, President Moon has devoted more government resources to his economic agenda this year. However, the key question for 2019 is will this be enough to win back public support and reinvigorate the economy?

Moon’s income-led growth strategy is a novel approach to resolving the stubborn structural issues in the economy, but this also means it is largely unproven. The IMF and OECD support the agenda’s increased social spending, particularly given the government’s fiscal space, but these policies must also start creating jobs and bolstering growth to be sustainable. Even if the agenda is on the right path, the window to push it through may be closing. More interest rate hikes by the Federal Reserve and the prospect of worsening trade tensions between China and the U.S., both of which have already impacted the economy, could make it harder for Moon’s agenda to find more success this year.

The #MeToo Movement and Women’s Right 

Heightened advocacy for women’s rights was a global trend in 2018. In South Korea, the #MeToo movement gained momentum with women stepping forward with allegations of sexual harassment and violence against high-profile figures, including presidential-hopeful Ahn Hee-jung, poet Ko Un, and award-winning movie director Kim Ki-duk. However, advocates faced obstacles ranging from a relatively lenient legal code to deeply-entrenched social attitudes. Providing further proof of the current society’s antipathy to women’s concerns, the brave actions of women who came out publicly with testimonies of abuse – despite receiving international attention – resulted in very few prosecutions.

Korean women last year also confronted a proliferation of hidden cameras, which prompted protests demanding stronger punishment for trafficking of digital material that was filmed without consent. In response, the government has so-far announced tougher punishments for trafficking of these materials and announced plans to better police online sex crimes and remove illegal footage from the internet more swiftly. These will go hand-in-hand with broader protections such as extensions to the statute of limitations in sexual abuse cases and measures that would allow victims of harassment and abuse to report these crimes anonymously.

Notwithstanding, many advocates recognize that strengthening the legal system is a necessary but insufficient means to achieve true social change. With many women’s rights organizations now mobilized in the wake of the scandals in 2018, open debates about how cultural attitudes will be reformed will likely intensify in 2019.

Bonus Issue: Will Kim Jong-un Go to Seoul?

At their summit meeting in Pyongyang, Kim Jong-un agreed to Moon Jae-in’s proposal that he visit Seoul before 2018 ended. Kim never took that trip, but in his recent letter to Moon he expressed a desire to meet with Moon frequently in 2019 and “a strong determination to visit Seoul while watching future situation.” Whether Kim makes that trip will be one issue that many will be watching in 2019.

It is not surprising that Kim did not meet with Moon in Seoul in 2018. With progress in talks with the United States stalled and his meeting with Trump postponed until early 2019, there would have been little that Kim could have achieved in Seoul. Any trip to Seoul in 2019 will likely be dependent on how Kim’s next meeting with Trump goes and whether there is any historical progress Kim can make in Seoul. He will likely want to achieve more that than act of a North Korean leader visiting Seoul for the trip to go forward.

Beyond whether Kim will visit Seoul will be the question of how his visit is received. At the moment, Kim’s image has improved in South Korea with the current diplomacy and 60 percent of South Koreans would have supported the trip if he had taken it in December. One issue to watch from any visit will be whether it builds support for inter-Korean ties among South Koreans or causes them to reassess the current opening with North Korea?

Mark Tokola is the Vice President of the Korea Economic Institute of America, Phil Eskeland is the Executive Director of Operations and Policy, Troy Stangarone is the Senior Director for Congressional Affairs and Trade, Yong Kwon is the Director of Communications, Kyle Ferrier is the Director of Academic Affairs and Research, Sang Kim is the Director of Public Affairs and Intern Coordinator, and Juni Kim is the Program Manager and Executive Assistant. The views expressed here are the authors’ alone.

Image created by Juni Kim.

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