By Terrence Matsuo

Under the Trump administration, the U.S. has breathed new life into the concept of the Quad, which includes Australia, Japan, and India. There has been media speculation that the grouping will expand to other states, such as South Korea, because of its shared interests with Quad members. Experts say that while South Korea is unlikely to join the Quad, there are opportunities for it to partner with the bloc.

Just as the Trump administration’s “Free and Open Indo-Pacific” strategy has roots in earlier concepts, the Quad is another initiative with older roots. During an online webinar hosted by the Sejong Institute and the Heritage Foundation, Deputy Assistant Secretary for Korea and Japan Marc Knapper said that the U.S., Japan, India, and Australia first came together to cooperate in humanitarian relief actions after the 2004 Indian Ocean earthquake and tsunami. “This grouping’s kind of waxed and waned over the years, but I think it’s now waxing, and it’s now growing out of a recognition that we do have shared challenges,” he said.

South Korean officials have indicated their concerns about the Quad, emphasizing that they have not been invited to participate in those discussions. Speaking to the Asia Society at the end of September, Foreign Minister Kang Kyung-wha said: “We don’t think anything that ultimately shuts out, and is exclusive of the interests of others is a good idea.” Director-General Ko Yun-ju of the North American Affairs bureau in the Ministry of Foreign Affairs echoed the foreign minister’s remarks, saying that Korea is focused on transparency, openness, and inclusiveness. “We are following those principles when we take consideration of the new initiative from the other countries of the regional cooperation,” he said, during the Sejong/Heritage event.

Officially, members of the Quad have identified a wide range of issues where they believe they can deepen cooperation. According to remarks before their meeting in Tokyo earlier in October, the foreign ministers identified topics like the coronavirus pandemic, infrastructure and economic development, and regional stability. Col. David Maxwell, a senior fellow at the Foundation for Defense of Democracies said that this wider interest differentiates the Quad from NATO, an organization it has been compared to. “To have the Quad built on a foundation that is more than just military cooperation is what will make the Quad strong and longer lasting, to the mutual benefit of all the participants,” he said.

Pointing to similarities between the American Free and Open Indo-Pacific strategy and the Korean New Southern Policy, Col. Maxwell said that maintaining freedom of access in the region, and cybersecurity are possible areas where Korea could partner with the Quad. “Since South Korea is the only nation to go from a major aid recipient to a major donor nation, I think that it would participate in other kinds of humanitarian and economic development in the region as part of a Quad Plus,” he added.

But not all experts are so optimistic about South Korea participating in activities led by the Quad. “A lot of these other issues – environmental, economic, dealing with the pandemic – need to be dealt with by far more than just the four countries of the Quad,” observed Dr. Gregg A. Brazinsky, the director of the Asia Studies Program at George Washington University.

The reason Korea has kept the Quad at arms length is because of its implicit focus on addressing China. Although it is unusual for diplomatic initiatives to specifically target a particular state, Dr. Brazinsky says, “I think you have to read the writing on the wall a little bit with something like this.” He pointed to recent clashes on the border between India and China, and longstanding Japanese concerns over Chinese incursions into its territorial waters. “When I look at the Quad, it seems that there are other areas where they can cooperate, but it also seems that the most prominent, common objective that the countries who are members have is containing China,” said Dr. Brazinsky.

Some Korean commentators warn Seoul against participating in the Quad because of this focus on China and a brewing cold war between Beijing and Washington. Professor Moon Chung-in, an advisor to the Blue House has said Korea’s participation in the Quad could force an “existential dilemma” that would put Korea “on the front line of a new Cold War era.”

“During the 45 years of the Cold War, Koreans suffered from the division of the peninsula and the ensuing war, an entrenched military standoff, and the limitations of a divided country,” writes Professor Moon in a column for the Hankyoreh. “Thus, they’re hardly about to welcome yet another cold war.”

But experts say Korea may not be able to maintain its midway point between the U.S. and China. “When you think about Korean history, it’s a disaster,” said Dr. Michael Green, of the Center for Strategic and International Studies, during an online webinar. He pointed out that when Korea tried to maintain strategic ambiguity between Qing China and Imperial Japan, Tokyo invaded. When U.S.-Korea relations were ambiguous after World War II, North Korea invaded. “History shows that when Korea tries to play this strategic ambiguity game between the big powers, it doesn’t end well,” Dr. Green said.

Calls for Korea to reconsider its strategic position between Beijing and Washington are not coming only from the U.S. side. A CSIS survey of Korean thought leaders found that 80% of respondents believed South Korea should prioritize security cooperation with the U.S. over relations with China. “Seoul now needs to recognize that continuing to keep an ambiguous stance between the US and China might make it the biggest victim of the intensifying rivalry between the two superpowers,” said a recent editorial in The Korean Herald, an English-language newspaper in Korea. “Its economic interests with China cannot be allowed to undermine its vital security alliance with the US.”

Former Deputy Assistant Secretary of Defense for East Asia Abraham Denmark says that the Quad is just part of the larger challenge facing Korea. “If the United States is going to be increasingly focused on China in our geopolitics, then Korea’s going to need to figure out how it’s going to orient towards that,” he said. “How does the U.S.-Korea alliance handle the China question, be it in the Quad, outside the Quad, bilaterally, unilaterally, whatever it may be.”

Because of Korean ambivalence towards the Quad, experts say diplomats in both Washington and Seoul will need subtle diplomacy to manage stress in the bilateral relationship. “I think it’s important that there be some avenue for consulting with South Korea about what is going on in the Quad,” said Dr. Brazinsky. “But at the same time, I think it’s important that the United States doesn’t push South Korea too hard to be part of [the Quad].”

“There’s got to be open communication, built on a foundation of trust between the US and South Korea,” said Col. Maxwell. “Both sides have to be upfront about the challenges that they face, a clear articulation of their interests, and they’ve got to make decisions based on trust and transparency.”

Terrence Matsuo is a writer and analyst of American foreign policy in the Indo-Pacific region and a Contributing Author for The Peninsula. The views expressed here are the author’s alone. 

Photo from the U.S. Department of State’s photostream on flickr Creative Commons.

By Neha Cariappa

South Korea’s pop culture wave (or Hallyu) is making its mark in India. As recently as five years ago, Indians would have only recognized singer PSY and his hit song “Gangnam Style.” Now, the K-pop genre has become more “mainstream” and it’s not unusual for Indians living in cities to express interest in K-pop and other Korean cultural content. In a survey conducted by the Korean government about how people in other countries saw Korea, almost 92% of Indian respondents answered that K-pop was the most agreeable initiation to Korea and its culture.

To explore the kind of influence that Hallyu is having on young Indians today, I conducted an online survey of Indian fans of Korean cultural content. I received a total of 142 responses with 95% of them identifying as female and the rest identifying as male. The imbalance in the respondents’ gender may be attributed to prejudice against listening to music that is not Western or South Asian or the prevalent stereotype of Korean men being “feminine”. Despite this, K-pop has now seeped into the lives of Indian Zoomers, with teens being more accepting of previously unconventional music as well as of global cultures. There were 81 participants in their 20s, 59 participants in their teens, and 2 participants over the age of 40. Through the survey, I was able to critically analyze and observe the various aspects of daily life of Indian fans that are influenced by Korean culture. Two notable aspects stood out—fashion and beauty.

The Korean Fashion Ensemble

An increasing number of Korean celebrities are being invited to global fashion shows, and have made an impression in the fashion world. For instance, Vogue named the Korean boy group EXO’s youngest member Sehun the “best-dressed man” at Louis Vuitton’s fashion shows in 2018 and 2019. As fan sites for K-pop idols multiply alongside hundreds of pictures showcasing their style, fans all over the world are paying greater attention to the fashion sense of these idols. According to an article published by Vox, a representative of K-Style Files – an online database of K-pop fashion – noted that “many [fans] aspire to imitate their favorite K-pop idols by dressing like them, so they use fashion search engines…to buy or seek inspiration from the exact pieces their idols are wearing.”

Nearly 95% of the respondents in my survey claimed that their personal style in fashion was influenced by Korean content, with many finding inspiration from outfits worn by their favorite idols, as well as by those they see in K-dramas. In my survey, the male respondents stated that they were influenced by specific male celebrities whose fashion sense appealed to them. In the case of female fans, many of the respondents claimed to follow the fashion of both male and female idols. The most common choices were BTS members Jungkook and V, and Black Pink members Lisa and Jennie, whose looks resonated the most with this sample of Indian fans. “I find their sense of fashion effortlessly good. They make anything look good and comfortable,” as quoted in my survey. In this case, it is not just their fashion sense that charms the fans. The inherent aesthetic sense of style portrayed by the Korean entertainment industry captures new viewers not only through its fashionably styled outfits but also the visually appealing music videos.

The Hallyu Beauty

While South Korea is considered a plastic surgery capital and procedures to look more similar to K-pop idols are not uncommon in Korea, international fans do not appear to have adopted this trend.

In the case of India, fans seem to be averse to getting any plastic surgery. 90% of the respondents in my survey asserted that they wouldn’t want to get plastic surgery. At the same time, around 25% of them added that they accept and respect the fact that their favorite idols might have undergone surgery. Some even revealed that they didn’t like their darker skin color, but would never get surgery to change it. This attitude may itself be influenced by a specific boy group, BTS. Indian fans from my survey seem to be highly influenced by BTS’s mantra of “Love Yourself”, with many of them emphasizing this as their reason for learning to be content with one’s own unique attributes. One particular respondent said: “I wanted to get plastic surgery…but I changed my mind because of BTS as they taught me how to love yourself as you are.”

In an interview with Prerna Tiwari, the Admin of Korean Culture India Fan Club, I asked about her experience with Indian fans. According to Tiwari, “Indian Fans are a bundle of energy and enthusiasm when it comes to attending and hosting events such as celebrating the birthdays of idols and the anniversaries of groups, as well as acting as volunteers and supporters in Korean cultural events.” She placed particular emphasis on the impact of statements made by BTS on issues like body positivity and self-confidence, which is potent among younger Indian fans.

Given the focus on skincare in contemporary Korean culture, many Indian fans in the survey were encouraged to try Korean brands in the pursuit of what they called “flawless skin” of Korean personalities. Korean celebrity endorsements for Korean skincare and makeup products have encouraged more Indian fans to purchase them. Viki, a global streaming site with subtitled TV shows from various countries all over the world, realized that viewers were commenting in real-time about the makeup and fashion that actors and actresses were using in the K-dramas. With this data, Viki began to offer products highlighted in comments on their own shopping platform.

When it comes to skincare brands, Indian fans tend to use Innisfree, The FaceShop and Mediheal the most. Innisfree is the most readily available Korean skincare brand in India, but they only have stores in big cities like Delhi, Bengaluru, and Chennai. Some of the survey respondents even expressed disappointment about not being able to use Korean products either because it is expensive or because it is not accessible to them. But even then, they try to use at least one Korean beauty product to feel more closely connected with their idols.

Nykaa, India’s most popular online beauty business was the first to make Korean beauty products more easily available. While Korean products were introduced to India in 2013, demand for their products began to grow around 2015. The popularity of Korean products cannot be attributed solely to the widespread recognition of Korean pop culture. A spokesperson of another popular Indian retail company, Flipkart, claimed that Korean beauty brands are sought after thanks to “the right balance between value, variety, and trendiness.” Their easy skin regimes and a wide range of sheet masks have added value too. Innisfree, Laneige, and The Face Shop are now among the most popular Korean brands in Indian markets.

As a result of all these factors, K-beauty brands are received favorably in India. Indian beauty websites and journalists also continue to write articles about Korean skincare regimes, and where to order Korean products. In addition, famous makeup artists on YouTube, like Pony, continue to attract more fans of Korean makeup.

Hallyu in India

As the K-pop industry continues to captivate global audiences with their dazzling outfits and artistic music videos, young citizens of India, and their peers in other South Asian countries, continue to grow as a target market for Korean cultural products. As of December 2019, the number of Indian tourists to South Korea since December 2017 grew by almost 36%. And while Indians may still consume American and other English content, Korean music is spreading in India as more and more people are eager to learn the Korean language, eat Korean food, and visit Korea. With such a large young population, there is no doubt that India has the potential to become an appealing market for the Korean entertainment industry.

Neha Cariappa earned an MA in Asia Pacific Studies from the University of San Francisco. Her research focus is on Korean culture and the feminist movement in South Korea.

Picture from flickr user Republic of Korea

By Kyle Ferrier and Sang Hyun Back

Established in 1953 in response to the North Korean threat, the significance of the U.S.-South Korea alliance today extends far beyond the Peninsula. As like-minded democratic and advanced economies, both countries work closely on a diverse array of issues around the world such as climate change, global health, and cyber security. South Korea also deployed troops in support of U.S. military efforts in Iraq and Afghanistan. New strategies from Seoul and Washington for engaging with Southeast and South Asia also now provide new opportunities to further expand the relationship.

The U.S. championed, multi-stakeholder-driven “Free and Open Indo-Pacific Strategy” was first outlined by U.S. President Donald Trump at the 2017 APEC Summit in Vietnam. Joining the U.S. in advancing the strategy are Japan, Australia, and India – collectively known as “the Quad.” The strategy is predicated on the desire for freedom from coercion – notably from China – and the promotion of good governance among countries in the Asia-Pacific and South Asia. It is also built on three pillars: economics, governance, and security. While there is a general agreement among the Quad about what values they are seeking to promote in the region, each seems to have different priorities. Thus, despite some activity to implement shared ideals, the strategy is still an evolving one.

Although South Korea’s diplomatic values align with the Quad’s, Seoul’s strategic positioning between Washington and Beijing complicates its interest in the Indo-Pacific Strategy. Despite a need to protect itself from economic coercion from Beijing – best represented by China’s retaliation against the deployment of the Terminal High Altitude Area Defense (THAAD) missile defense system, costing South Korean companies over $10 billion – Seoul is also reliant on Beijing’s help to resolve the North Korea issue and on China as an export market. Consequently, Seoul has been cautious about joining efforts that could be interpreted as “containing” China or could eventually force its hand to choose between Beijing and Washington.

Arguably the most significant cause for trepidation for South Korean President Moon Jae-in is the regional security architecture the U.S. plans to roll out focused on countering Beijing’s claims in the South China Sea. South Korea has largely avoided getting embroiled in this issue to prevent further complicating relations with China. However, the Indo-Pacific Strategy still not only resonates with the Moon government’s “New Southern Policy,” but can also augment the ability of all parties to achieve their goals.

At a recent event in Washington, D.C. hosted by KEI and co-sponsored by the U.S. State Department and South Korea’s Ministry of Foreign Affairs, Park Jae-kyung, Senior Coordinator for South Korea’s Presidential Committee on the New Southern Policy, attributed the policy’s origins to a set of push and pull factors. On the push side is a need to diversify diplomatic and economic ties, highlighted by Beijing’s retaliation over THAAD, and on the pull side is the growing size of the already large ASEAN and South Asian economies. The policy centers on three Ps: prosperity, people, and peace – all three of which can easily further U.S.-South Korea interests.

The overlapping “prosperity” component of the New Southern Policy and the “economic” pillar of the Indo-Pacific Strategy are the clearest areas for the U.S. and South Korea to work together in implementing their respective approaches. Both focus on working with local governments and businesses to foster an environment conducive to sustainable economic growth, most notably through infrastructure development.

The Quad hopes to offer large, high-standard loans to compete with China’s Belt and Road projects. South Korea’s preference for lending to big projects in Southeast Asia, the quality and cooperative nature of its loans, as well as recent government efforts to direct more development assistance to ASEAN countries and India make Seoul an ideal partner in achieving these goals. Moreover, the competitiveness of Korean firms in building modern technology infrastructure, such as 5G, should make South Korea an even more attractive partner.

Even if not directly collaborating on the “people” and “peace” legs of the New Southern Policy, the U.S. and South Korea can both benefit from the other’s heightened engagement in the region in these areas. “People” entails new multiple entry visas, more aid for capacity building, and new government scholarships to attract students from the region to South Korea. While this will build stronger bilateral relationships, it again coincides with the aspirations of the Indo-Pacific Strategy by developing human capital and strengthening civil society in Southeast and South Asia.

South Korea’s increased security cooperation with ASEAN and India as part of the New Southern Policy’s “peace” element, though not formally part of the Indo-Pacific Strategy, can still advance U.S. regional strategic interests. As part of Moon’s policy, Seoul plans to be more active on cooperating with its southern neighbors on shared security issues and non-traditional threats such as cyber security. South Korea has already stepped up its multilateral, joining the Indian Ocean Rim Association, and bilateral, convening a defense dialogue in Vietnam, engagement in recent months to carry out this agenda. These developments should be welcomed in Washington as facilitating the transition from an outdated “hub and spokes” model of U.S. alliances in the region to one where there is greater engagement among allies.

Delivering remarks at the recent KEI-hosted event, Acting Deputy Assistant Secretary of State for Japan and Korea Marc Knapper, said there “a lot of great things our two countries could do together by putting our heads together in figuring out how these two policies, these two visions, can complement each other.” As both of these visions continue to take shape, the shared values underlying the U.S.-South Korea alliance can present greater opportunities to advance the shared interests of both countries, regardless of label or even direct cooperation.

Kyle Ferrier is the Director of Academic Affairs and Research at the Korea Economic Institute of America. Sang Hyun Back is a graduate student with the Asian Studies program at George Washington University and an Intern at the Korea Economic Institute of America. The views expressed here are the authors’ alone.

Photo from the Republic of Korea’s photostream on flickr Creative Commons.

By Troy Stangarone

As we look back at the events that helped to shape the Korean peninsula in 2015, it is also an opportunity to review the events we highlighted on The Peninsula in our annual 10 Issues to Watch For on The Korean Peninsula in 2015 blog and the key events that we did not predict.

Looking back at the 10 issues raised in last year’s blog, all have resonated on the Korean peninsula this year, but not all in the ways we thought they might. On five of the issues, things have largely played out as we expected, while one did not and for four others the outcomes are less clear.

Here’s a brief look back at the 10 issues and what happened:

1.      Dealing with North Korea: Understanding North Korea is never easy and it is only made more difficult by the regime’s continued pursuit of nuclear weapons. One area we highlighted to watch in 2015 was progress on North Korea’s weapons programs and discussion of the deployment of the U.S. Thermal High Altitude Area Defense (THAAD) system in South Korea to protect against the nuclear and missile threat from North Korea. While North Korea took a major step towards developing submarine launched ballistic missiles, which would give it a second strike capability, South Korea has indicated it will not be discussing the deployment of THAAD with the United States. On this issue, our prediction was half right as North Korea has continued developing its weapons programs, but there has been less progress on deploying THAAD, or some other missile defense system than we expected.

2.      Key Summits in 2015: Here we highlighted a series of key summits for the year ahead. While Kim Jong-un ultimately did not go to Russia for the May 9^th ceremony commemorating the end of World War II or make any international visits, thus eliminating the prospect of a meeting with South Korean President Park Geun-hye, each of the summits played a key role this year. Japanese Prime Minister Abe Shinzo did make a positive statement on issue of history with the 70^th anniversary of the end of World War II approaching, even if it did not meet everyone’s hopes. Trilateral summits among Korea, China, and Japan also resumed. Lastly, Indian Prime Minister Narendra Modi held a bilateral summit meeting with President Park in what could become an important relationship in the future.

3.      Korea-Russia Relations: In 2014, North Korea began courting Russia and our expectation was that greater cooperation would be announced at a meeting between Kim Jong-un and Russian President Vladimir Putin. However, that meeting never happened and cooperation between the two seems to have fizzled. Though, Russia and South Korea did announce efforts to expand relations at the end of the year.

4.      Better Relations Between Korea and Japan: Here our key insight was correct, as the bilateral summit meeting took place between President Park and Prime Minister Abe after Prime Minister Abe had issued his statement on World War II. At the summit meeting, both sides agreed to work on resolving the Comfort Women issue and recently announced that resolution laying the groundwork for improved relations between the two countries.

5.      Constructing Legacies: With President Barack Obama’s term in office coming towards an end, our expectation for 2015 was that he would seek to build on his legacy as president, but not look to North Korea for a potential legacy issue. While President Obama has cemented deals on Iran’s nuclear program and climate change, there has been no progress on North Korea. For President Park, the agreement reached with North Korea in August to reduce tensions seemed to be a way forward, but subsequent talks with North Korea failed to make progress.

6.      Two Major Moves on Trade: South Korea has had an ambitious free trade agenda  that we expected to continue in 2015 with two major efforts – concluding and implementing an FTA with China and making efforts to join the Trans-Pacific Partnership (TPP). The FTA with China was implemented in December, but while South Korea has continued to express interest in joining TPP, the agreement’s late conclusion has limited Seoul’s ability to join.

7.      A New Nuclear Energy Cooperation Agreement: The United States and South Korea were looking to conclude a new agreement on civilian nuclear cooperation, or 123 agreement, to replace an extension to the 1974 agreement that was set to expire next year. The two sides successfully reached an agreement in June of 2015 and updated agreement is now in effect.

8.      The Diversification of South Korea’s Energy Supplies: South Korea is highly dependent on imported fuel with more than 85 percent of its petroleum imports passing through the Strait of Hormuz. Our expectation was that in 2015 South Korea would begin to diversify those supplies. While there have been efforts to import more condensate from the United States, low petroleum prices have made imports of U.S. LNG less attractive. However, now that Congress has passed legislation allowing for the export of oil, this will be an issue to continue to watch in the years ahead.

9.      Samsung’s Future and Its Frenemy Relationship with Apple: After a loss of market share in key markets such as China and India for its smartphones, as well as falling revenues and profits, 2015 was expected to be an important year for Samsung to reverse its fortunes while managing its beneficial and competitive relationship with Apple. While Samsung saw an increase in profits in the 3^rd quarter, it was due to strong results in the semiconductor and display sectors as its smartphone segment continued to face challenges. It relationship with Apple continued to remain complex as Samsung has appealed part of their legal case with Apple to the U.S. Supreme Court, but also been chosen by Apple to supply microprocessors and displays for the iPhone.

10.  Feeling the Effects of Social Change in Korea: This was perhaps our most bold insight for 2015 and in truth one that reflected more long-term trends rather than issues that might specifically come to a head over the past year. As South Korea ages and continues to grow in prosperity, it will face the social changes that come with those trends. The level of social welfare and the definition of what it means to be Korean are issues that will continue to shape South Korea. Some social issues, such as public health, came to the fore in 2015 due to outside events such as the spread of Middle East Repertory Syndrome.

Beyond the issues we expected to see addressed in 2015, other important developments included:

1.      North Korea’s Provocation in the DMZ: On August 4, two South Korean soldiers were maimed after stepping on landmines placed by North Korea in areas of the DMZ that are known to be patrolled by South Korea. This raised tensions along the DMZ as South Korea responded by resuming broadcasts from loudspeakers across the DMZ and North Korea threatened to attack the loudspeakers. The crisis was ultimately resolved as the two sides reached an agreement for North Korea to apologize, South Korea to suspend the broadcasts, and the two sides to arrange for a reunion of separated families.

2.      October Family Reunions: One of the positive outcomes of the August provocation was the two sets of family reunions held in October. The first family reunion saw some 100 South Koreans meet their family members for the first time since the Korean War and another 250 were able to do so during the second reunion.

3.      Agreement on the Comfort Women: While not accepted by all of the Comfort Women, the agreement by Japan to issue an apology and provide compensation was one of the major unforeseen events of 2015.

4.      Middle East Repertory Syndrome (MERS): South Korea faced a medical emergency earlier this year as MERS spread through the country causing the death of 38 individuals and another 16,000 to be quarantined.

5.      The Passing of Kim Young-sam: A former activist for democracy who later became president of South Korea passed away at the age of 87.

Troy Stangarone is the Senior Director for Congressional Affairs and Trade at the Korea Economic Institute of America. The views expressed here are the author’s alone.

Photo from Eugene Lim’s photostream on flickr Creative Commons.

By Linda Butcher

How can we move forward with a Korea-India-U.S. trilateral dialogue?

Yesterday, the Korea Economic Institute of America (KEI) held a program with top experts to discuss just that.

Ambassador Kathleen Stephens who served as U.S. Ambassador to the Republic of Korea and U.S. Chargé d’Affaires in India, is optimistic, stating that the political leadership of all three countries are motivated to grow and deepen relations with their counterparts.

This was echoed by Ashley Tellis of Carnegie Endowment for International Peace and Scott Snyder of Council on Foreign Relations, who stated that while Korea and India are natural partners and have an interest in protecting the liberal order, it is important that the U.S. is involved for multiple reasons.

Additional key points that were raised in the program included:

• South Korea and India Live in Parallel Universes: while South Korea has been dealing with North Korea, India has been dealing with Pakistan; and both countries are working with the U.S. on its “rebalance to Asia.”
• India views South Korea and Japan as Natural Partners: India finds that these countries have shared values and are interested in shaping the region to reflect these values.
• Symbiotic Relationship: India and South Korea should continue to deepen their relationship for strategic, economic and cultural gains. Prime Minister Modi has already expressed interest in strengthening economic relations with South Korea as he believes India can learn from South Korea’s manufacturing achievements.

While it is clear that bilateral relations between the countries will continue to grow, the panel of experts agreed that leaders need to begin thinking about a trilateral dialogue because it is not a dialogue that will necessarily come naturally.

Linda Butcher is the Director of Media Relations and Public Affairs at the Korea Economic Institute of America. The view expressed here are the author’s alone.

Photo from Michael Foley’s photostream on flickr Creative Commons.

By Nicholas Hamisevicz

This week KEI is hosting an event examining India and Korea as increasingly important countries in a rising Asia. Even though much attention has been placed on China this month as some world leaders recently visited Beijing for its military parade celebrating the end of World War II and with Xi Jinping’s upcoming visit to the United States, the focus on countries like Korea and India remind everyone that it is the success of many countries in Asia, not just China, that makes this century an Asia-Pacific one. Korea and India are growing in stature on the regional and global stages, have steadily upgraded their bilateral ties, and have important relations with the United States. Moreover, many of the issues, both old and new, the world will face the next 100 years can be seen in the Korea-India relationship and in the United States’ interaction with both countries.

Economics is a main factor in the rise of Asia and in bringing countries like Korea and India together despite the lack of historical connections, a common threat, or geographic proximity. Both India and Korea are trying to tackle the traditional difficulty of growing their country’s economy so they can continue to develop. In addition, both countries are also striving to avoid traps that would damage their economic influence and growth. Korea is attempting to avoid the stagnation that plagued Japan, and India wants to avoid missing the economic opportunity of an increased population and developing nation.

Korea and India have also engaged in the type of economic diplomacy that has also defined this era of Asia. Both Korea and India have sought out bilateral trade deals, including a Comprehensive Economic Partnership Agreement between the two sides themselves. More recently, countries in Asia have attempted to develop broader, multilateral economic arrangements to help maximize the economic gains from this dynamic region. Here is where the role of India and Korea will be vitally important, especially for the United States. Both Korea and India are in the China led Asian Infrastructure Investment Bank as well as the Regional Comprehensive Economic Partnership Agreement. Each arrangement is still being formed and will not initially include the United States. Korea and India will need to be influential in pushing for high-quality agreements that allow both to benefit the most people and not just individual countries, while also preventing either from becoming anti-U.S. forums.

When examining the security domain, the policies of Korea and India also illustrate some of the traditional concerns combined with newer issues that complicate the Asia-Pacific century. Korea and India have to deal with difficult neighbors in North Korea and Pakistan, respectively. Both of these threats dictate conventional deterrence measures of large militaries, new defense technologies, as well as Korea being a part of the United States nuclear umbrella and India having developed its own nuclear program. Yet Korea and India have also dealt with newer threats of lower level provocations that make it difficult for an immediate conventional military response. These lower level provocations put pressure on the respective Korean and Indian governments as well as on their respective relationship with the United States as a security partner for Korea and as a security player in South Asia for India. These traditional and newer threats have been a large part of the security aspect to date in the Asia-Pacific century.

The future of the Asia-Pacific century will also be defined by the future role of the United States in Asia. The U.S.-Korea alliance and the U.S.-India strategic partnership are important avenues for keeping the U.S. involved in Asia and are important vehicles for demonstrating U.S. leadership in the region as well. In general, both governments in India and Korea want to keep the established U.S. leadership and presence that has helped create  opportunities for the emergence of Asia.

However, there is also a desire in each country for a more independent foreign policy. India has a history of a non-aligned foreign policy that  can still influence current affairs toward the U.S., and Korea desires a more equal relationship with its alliance partner. Moreover, internal dynamics in each country, combined with uncertainties over the U.S. staying power in Asia and the future direction and forcefulness of China’s foreign policy, have a CNAS report noting that countries in Asia like South Korea and India are “hedging against these uncertainties by deepening engagement with like-minded states to diversify their political, security and economic relationships.” Thus, Korea and India have more options to pursue than just increasing relations with the United States.

KEI has a fascinating lineup of speakers this week that can expertly explore these topics and much more that stem from a conversation about Korea, India, and the United States. The mixture of traditional issues plus newer challenges dominating Asia can be examined through the growing importance of Korea and India along with the U.S.’s relationship to them. Understanding these issues, discussing the policies of these important crucial countries, and creating new ideas in events like KEI’s this week will help make the Asia-Pacific century peaceful and prosperous.

Nicholas Hamisevicz is currently undertaking a PhD in World Politics at Catholic University. Previously he was the Director of Research and Academic Affairs for the Korea Economic Institute of America. The views represented here are his own.

Photo from the Republic of Korea’s photostream on flickr Creative Commons.

By Mark Tokola, Troy Stangarone, and Nicholas Hamisevicz

Last year saw a series of significant events on the Korean peninsula. On the economic front, South Korea concluded free trade agreements with Canada, New Zealand, Australia, and Vietnam, and reached substantial conclusion on a deal with its largest trading partner, China. While inter-Korean relations avoided the pitfalls of 2013 when the Kaesong Industrial Complex was closed for nearly half a year, the hope that a surprise visit by senior North Korean officials to the Incheon Games would lead to deeper dialogue with North Korea has yet to be fulfilled. With more work to be done on the trade front and in inter-Korean relations, here are 10 economic and foreign policy issues to follow in the year ahead:

Dealing with North Korea in 2015

It has been said that the more things change, the more they stay the same and 2014 was a year where relations with North Korea often seemed like change but more of the same. From the family reunions to the visit to the Incheon games by senior North Korean officials, opportunities to build on the relationship soon fell back to familiar patterns. Will 2015 will be another year such year for the U.S.-ROK alliance and its relations with North Korea?

While North and South Korea are trying to find ways to have inter-Korean meetings, the two sides are having trouble agreeing to terms for the meetings. Once more military exercises start up, it will be even more difficult for inter-Korean relations to progress.

At the same time, reports suggest North Korea continues to improve its missile and nuclear weapons capabilities. Last year the United States indicated it would like to deploy THAAD, Terminal High Altitude Defense, systems on the Korean Peninsula to help protect U.S. troops and South Korea from missile attacks by North Korea. This prompted debates in South Korea about if the deployment of U.S. missile defenses would make South Korea safer, more vulnerable to attack, or draw it into bilateral tensions between the United States and China, as well as Russia to a lesser extent. South Koreans also discussed whether their country should build their own missile defense system. A slight compromise would be to have the systems on U.S. bases in South Korea. Whatever the determination is for the U.S.-Korea alliance, North Korea will likely continue to improve its missile and nuclear weapon technology and therefore keeping the issue of missile defense at the forefront in 2015.

Key Summits in 2015

This year will also bring a series of potentially critical summits between the leaders of Asia. Possibly the most intriguing is the potential for Kim Jong-un to make his first overseas visit as the leader of North Korea. Russia invited Kim Jong-un to attend a ceremony in Moscow on May 9^th celebrating the end of World War II. Reports suggest Kim Jong-un has likely accepted the invitation. At the same time, Russia has indicated that it has extended an invited Park Geun-hye and Xi Jinping as well, raising the question of whether either would choose to meet with Kim Jong-un bilaterally.

What are the prospects for a Park Geun-hye – Kim Jong-un summit in 2015? The Russia visit would be the best opportunity, but that might be politically difficult for Park despite more than 80 percent of Koreans indicating in a recent Asan Institute survey that an inter-Korean summit is necessary.

In May, Japan’s Prime Minister Abe Shinzo will likely visit the United States. If he visits, the U.S. is likely to quietly encourage Abe to make a positive statement on the anniversary of World War II that would help bring countries closer together rather than remain distant because of historical issues. Korea will be watching this visit closely for comparison with Park Geun-hye’s visit in 2013 and interpreting the level of support the U.S. gives to Japan.

Another summit to look for is a trilateral summit between Korea, China, and Japan. At the end of 2014, Park Geun-hye suggested the resumption of trilateral summits. This would be a welcome move, especially because both Xi and Park seem uncomfortable with a bilateral meeting with Abe. If this occurs before Abe’s statement on World War II, the hope would be the two sides actually try to talk about areas of cooperation moving forward, especially a China-Korea-Japan FTA. However, a discussion that only focused on the historical challenges in the region could encourage Abe to make a statement more to his personal belief rather than for the betterment of Japan both domestically and in foreign relations.

It will also be interesting to see if India’s Prime Minister Narendra Modi makes it back to Northeast Asia in 2015. His positive relationship with Abe is well known. Park Geun-hye has only met Modi on the sidelines of an East Asia Summit meeting in November, where she invited him to South Korea. South Korea and India have been doing a better job of having high level meetings between officials, and a summit meeting between the two leaders would demonstrate a commitment to that effort and to improving relations.

Korea-Russian Relations

Russia may find tactical advantages in its recent diplomatic outreach to North Korea.  Russian spokesmen have confirmed that an invitation has been issued to Kim Jong-un to visit Moscow on May 9 to attend the 70^th anniversary of the end of World War II.  Russian gestures towards North Korea demonstrate to foreign countries and to the Russian public that Russia is not without friends, despite its increasing isolation.  The outreach may also be intended to signal to U.S. and to the EU that their economic sanctions against Russia carry global costs.  Russia can hope for an economic lifeline from China in terms of energy contracts, and can offer North Korea a lifeline of its own to counterbalance the diplomatic and economic pressure the DPRK is experiencing from the West.

However, Russia’s long-term strategic interest is better served by a cooperative relationship with South Korea rather than the DPRK.  Russia’s trade with South Korea is vastly more important to the Russian economy than are its ties to North Korea.  Furthermore, as China has experienced, being associated with the DPRK’s eccentric, brutal and uncooperative regime bears an ongoing reputational cost in world opinion.  For its part, the ROK would like to ensure that Russia does not serve as an impediment to its project to peacefully unify the Korean peninsula.  Behind the headlines of Kim Jong-un’s possible visit to Moscow, look for increasing, practical cooperation between Russia and the ROK in 2015.

Relations Between Korea and Japan

This year marks the 50^th anniversary of diplomatic relations between South Korea and Japan. Combined with 2015 being the 70^th anniversary of the end of World War II, there is anticipation and hope that these two occasions can be an impetuses for better relations in Asia, especially between Korea and Japan. The biggest hope is for a bilateral summit meeting between South Korean President Park Geun-hye and Japanese Prime Minister Abe Shinzo. With Prime Minister Abe promising a statement on the anniversary of the end of World War II, it wouldn’t be surprising if President Park waited until after the assessment of that statement to consider meeting with Abe. There is a sense from some on both sides that each country is willing to wait for a new counterpart. However, with the LDP’s victory in the elections in December, it is almost certain that these will be the two leaders for the next three years.

Just before Christmas, the U.S. brokered a deal for a trilateral intelligence sharing arrangement with its two allies in Northeast Asia. From the U.S. perspective, the hope was this trilateral agreement would both satisfy some of the current security needs not being met because of a lack of a GSOMNIA agreement between Korea and Japan as well as being an catalyst for Korea and Japan officially signing and completing a bilateral GSOMNIA between themselves.

Constructing Legacies

In his State of the Union address, President Obama acknowledged he had only a short time left as president. These are important times for any U.S. president as they try to shore up a legacy and accomplish goals they have set for themselves and for the country. Often, these years are marked by efforts in foreign policy. In Asia, U.S. presidents in their last years in office have attempted to reach out and engage North Korea. There is some speculation that this could happen again with the Obama administration; however, recent events make that seem unlikely. Moreover, at a time in his presidency where there could be a possible outreach, North Korea once again has undertaken actions that have antagonized the United States, forced the Obama administration to respond in a tough manner, and reduced the likelihood of the Obama administration having the willingness and political capital to engage North Korea in a positive way. North Korea greeted both President Obama’s election and reelection with missile and nuclear tests, and now they began his last two years in office with the cyber attacks on Sony Pictures. While there could be some engagement, the U.S.-North Korea relationship is more likely to remain antagonistic, especially in 2015.

South Korean President Park Geun-hye will also be thinking about her legacy as she enters the third year of her constitutionally mandated one term, five year presidency. The third year is typically when South Korean presidents try to make their legacy moves as they still have time to implement their plans and the next election cycle has not yet begun. This is especially the case for Park Geun-hye. The year has started off with the focus on inter-Korean relations with the hope that something can come of the annual New Year’s statements that offer openings for dialogue between the two Koreas, but the two sides currently appear unable to find common ground. In addition to North Korea, many will be looking to see if Park Geun-hye can make the moves and reforms necessary in the domestic economy to increase growth.

Two Major Moves on Trade

At the APEC summit in Beijing last year, China and South Korea announced the substantial conclusion of the Korea-China FTA. With expectations that the final details on the agreement will be concluded early this year, the implementation of the Korea-China FTA will place South Korea in the unique position of having FTAs with the United States, the European Union, and China – the world’s three largest economic actors.

In addition to South Korea’s FTAs with the United States, the EU, and China, we should expect to see movement on South Korea’s efforts to join the Trans-Pacific Partnership agreement. South Korea announced its interest in joining the agreement being negotiated among Pacific Rim nations in late 2012, but with the increasing prospect of President Obama receiving the Trade Promotion Authority that he needs to conclude the agreement South Korea will likely push to join the talks prior to their conclusion later this year.

A New Nuclear Energy Cooperation Agreement

The U.S.-South Korea 123 Agreement of 1974, or nuclear cooperation agreement, was extended for two years in 2013. The agreement was set to expire in March of 2014 and governs civilian nuclear cooperation between the United States and South Korea. With the agreement set to expire in 2016, the two sides will be looking to conclude a new agreement in 2015.

The major issue in the talks centers around South Korea’s desire to enrich uranium at the front end of the nuclear fuel cycle and to reprocess spent nuclear fuel on the back end. For reasons of non-proliferation, the United States has opposed enrichment and reprocessing provisions in new 123 agreements. With the deadline to extend the current agreement approaching, the two sides will be searching for a way to address the United States’ non-proliferation concerns while also meeting South Korea’s nuclear power ambitions. Some potential outcomes include another short-term extension, long-term agreements that either include or do not include enrichment and reprocessing rights, or an agreement tied to a joint pyroprocessing study to develop a more proliferation resistant reprocessing technology.

The Diversification of South Korea’s Energy Suppliers

While South Korea has trace amounts of fossil fuels, it is dependent on imports of fuel from unstable regions to drive its economy. As of 2012, petroleum and other liquid fuels accounted for 41 percent of South Korea’s primary energy consumption, while natural gas accounted for another 17 percent. More than 85 percent of its petroleum imports came from inside the Strait of Hormuz and more than 50 percent of its liquefied natural gas (LNG) comes from the Middle East as well.

That should begin to change in 2015. In 2014, South Korea put in place incentives for refiners to import oil from regions other than the Middle East to diversify the sources of Korea’s petroleum imports, while the United States issued a notification that exports of condensates, a form of ultra-light crude oil, would be allowed.  The combination of these two changes, along with South Korea’s ability to import LNG from the United States under the KORUS FTA, should help South Korea begin a process of diversifying the sources of its energy imports in 2015.

Samsung’s Future and Its Frenemy Relationship with Apple

After a year in which Samsung lost its smartphone lead in key markets such as China and India, and faced a renewed challenge from Apple which introduced widescreen models to compete with the larger Samsung models, especially the Samsung Galaxy Notes, 2015 will be an important year for the South Korean conglomerate. At the same time, American business news followers likely will be confused by alternating headlines which one week will describe ongoing legal battles between Apple and Samsung regarding intellectual property rights, and which the next week will talk about business cooperation between the two companies, such as Apple’s reported use of Samsung processors in its next generation of iPhones.  So, are the two companies rivals or business partners?

As Samsung seeks to turn around declining smartphone sales that saw its corporate profits drop for the first time since 2011 and navigate a leadership transition to Lee Jae Yong, they will likely be both. We saw a similar situation in the past, in which two other companies came to dominate a market, while appearing to be simultaneously competing and cooperating.  Boeing and Airbus have filed countless trade actions against one another, arguing unfair competitive practices.  Boeing generally focuses on what it considers Airbus’ non-commercial financing arrangements with European governments; while Airbus charges that Boeing has been given an unfair advantage through U.S. government military contracting.

In reality, the relationship between extremely large companies such as Apple and Samsung, and Boeing and Airbus, is complex.  They will fundamentally seek to “out compete” each other while at the same time cooperating when it is in their interest to do so to maintain their market position.  We should expect more of this in 2015.

Feeling the Effects of Social Change in Korea

As South Korea’s population ages, increases in wealth, and becomes more socially tolerant and diverse, the effects of those changes will have noticeable effects, even during the short term of the year 2015.  The increasing percentage of the population born in the two decades following the end of the Korean War (the Korean “baby boom”) will put increasing pressure on the ROK’s health care and pension systems.  It may also lead to a reexamination of Korea’s history during the 1960’s and 70’s.  The demographic shift could even create a market for nostalgia-themed popular entertainment and culture as a counterpoint to K-pop.

The increase in wealth is likely to lead to an increased focus on quality of life, particularly among recent college graduates.  Safety and health issues, including Korea’s high suicide rate, are likely to become bigger political topics.  The trend, discernable among all of the world’s advanced economies, towards an increasing acceptance of diversity, and growing concern for the well-being of minorities, immigrant populations, and refugees, will fuel debate in South Korea about the speed of change, and will put further distance between South Korea and North Korea.  As the 2017 national elections begin to appear on the horizon, 2015 will see political debate regarding whether the right can regain broad, popular support, whether the left can unify around a common platform and leadership, and whether a third political force will emerge.  Social change will create the shifting ground upon which all of these debates will take place in 2015.

Mark Tokola is the Vice President of the Korea Economic Institute, Troy Stangarone is the Senior Director for Congressional Affairs and Trade, and Nicholas Hamisevicz is the Director of Research and Academic Affairs. The views expressed here are the authors’ alone.

Image created by Sang Kim of the Korea Economic Institute of America.

By Nicholas Hamisevicz

Recently, there was a big setback in Korea-India relations. The deal that was made back in 2011 for India to purchase eight minesweepers from South Korea is currently on hold and may soon be scuttled. It was announced that India’s Ministry of Defense launched an inquiry into the claim that the Kangnam Corporation, the South Korean company that won the deal, used middle men to help facilitate the winning contract. Using middle men for defense deals is prohibited by India’s military procurement laws. This is another high profile interaction that has had problems, diminishing the larger potential impact for Korea-India relations. In general, bilateral ties between South Korea and India are improving at a solid pace, yet the two sides still need a significant achievement to help push the relationship to a new level and sustain the advancement of interactions.

South Korea’s Kangnam Corporation concluded the deal with India back in October 2011; however, an Italian company that lost out complained about the South Korean bid and the use of middle men. A BJP lawmaker also inquired about the deal to then defense minister AK Antony. The Indian Ministry of Defense tried to quietly put the agreement on hold. The case came up again after Park Geun-hye’s visit to India in January where she raised the issue with then Prime Minister Manmohan Singh. This made the Indian defense ministry look further into the arrangement, and it ultimately found “deviations in procedure.” Moreover, the defense ministry cashed the check of 30 million Indian rupees the Kangnam Corporation had to provide as part of an “Integrity Pact” saying the Kangnam Corporation would not offer bribes to win the bid. The Indian defense ministry also kicked the case to India’s new Attorney General Mukul Rohatgi.

If it sounds complicated, that’s because it is. Complicated is often a word used when working with India. Unfortunately, complications and setbacks have arisen in the higher profiles cases in Korea -India relations. POSCO was supposed to have the one of the largest investments in India, which should have been a big success to catapult South Korea-India ties, especially in the economic realm. However, nine years of delays in providing permits, disputes with the federal and state governments, and local protests have all contributed to POSCO still being unable to fully implement its desired and agreed upon goals for its investment work in Odisha, India.

On the military side, South Korea was close to getting a contract before. Its KT-1 fighter trainers were finalists for a bid but lost out to a Swiss company; the South Korean company was unsuccessful with its appeal as well. Moreover, while it wasn’t part of a bilateral deal, the Indian Supreme Court decision to call for Samsung’s chairman to come to India to face charges for a complex dispute between a Samsung subsidiary and a small Indian firm doesn’t help the relationship or bilateral business environment either.

At a Brookings event last week on India in the Asia-Pacific, I stated that South Korea-India relations need a big win to drive their relationship forward. Korea and India have appropriate structures to steadily improve their strategic partnership. However, to keep up with a fast-paced region and to more permanently and consistently strengthen ties, a high profile success story is essential. Unfortunately, the delays in POSCO’s facilities in Odisha, losing out on the KT-1 fighter contract, and the current uncertainty with the minesweeper deal means that these connections can’t provide the needed boost to a new level for Korea and India. The momentum and immediate impact that could have been gained from these interactions is lost. Now, with Prime Minister Narendra Modi’s strong personal connection with Japan’s Prime Minister Shinzo Abe, greater focus and activity between India and Japan will likely occur. For South Korea and India, a new bilateral project will be necessary to propel the South Korea-India strategic partnership to a higher intensity of relations.

Nicholas Hamisevicz is the Director of Research and Academic Affairs for the Korea Economic Institute. The views represented here are his own.

Photo from Thomas  McDonald’s photostream on flickr Creative Commons.

By Nicholas Hamisevicz

South Korean President Park Geun-hye travelled to India this week for her first overseas trip in 2014. After meeting with Indian Prime Minister Manmohan Singh on January 16, the two sides issued a “Joint Statement for Expansion of the Strategic Partnership.” Expansion is an accurate way to describe current relations between South Korea and India as government meetings, economic activity, and cultural recognition between the two countries has been on the rise since the beginning of the Korea-India strategic partnership in 2010. However, despite these growing ties, both sides feel they have not met the full potential of the relationship.

President Park’s visit brought about some new areas of cooperation between the two sides and an impetus to find ways for better economic and political cooperation. Yet, it will be up to both governments to consistently meet and to continue to push for greater access for the private sector in both countries in order gain the full benefits of bilateral relations.

Korea’s cooperation with India has gained momentum after each summit meeting since 2000. The summits help move the relationship along and provide the catalyst for important bilateral meetings to take place. Prior to Park Geun-hye’s visit there were multiple meetings, such as the trade and finance ministers meetings a few weeks earlier and the India-Japan-Korea trilateral track II dialogue in November 2013, that helped to move the relationship forward.

It is especially important that Korea-India relations gain renewed emphasis and attention in 2014 with India set to hold elections later this year, likely resulting in a new leader. Progress with South Korea-India relations in early 2014, along with scheduled and expected meetings as a result of the summit, will help cement the necessity of the relationship in the minds of the potential new leaders in India.

Enhancing economic cooperation and opportunities between Korea and India was a large theme during this trip. Both Korea and India have strong economies that have not done as well as people would have hoped in recent years. Moreover, economic interaction between the two countries has also been underperforming. Korea and India are well short of the pace needed to hit the previously stated goal of $40 billion in trade by 2015. The two sides might be moving the goal posts back as a new target of $100 billion in trade by 2020 was discussed in Park Geun-hye’s interview with Doordarshan TV before she left for India.

An updated Comprehensive Economic Partnership Agreement (CEPA), better market access for both countries, increased nuclear cooperation, and a few new military contracts will all likely be needed to hit the new 2020 target. Much of the work prior to the visit helped produce agreements on avoiding double taxation, banking cooperation, and smoother travel and visa processes to try to increase economic interaction between the two countries.

Park Geun-hye spent much of her day in India on January 17 in various economic and business meetings trying to encourage greater economic cooperation. Moving forward, Korea and India have the appropriate meetings and processes to develop a better economic environment for increased activity between the two sides; it will just be a matter of having enough political and economic will on the respective domestic fronts to make it happen.

Beyond economics, the two sides wanted to demonstrate their political and security cooperation initiatives as well. Korea and India signed an agreement on the protection of classified military information. This agreement will lead to further speculation that South Korea and India are sharing intelligence on North Korea and Pakistan, their two respective neighbors that have a history of proliferation with each other. This exchange of information on Pakistan and North Korea was thought to have already taken place after a visit to South Korea from India’s National Security Advisor Shivshankar Menon last year. Even if both sides haven’t exchanged information on their neighbors yet, this new agreement and increased security dialogues between South Korea and India make it more likely issues on Pakistan and North Korea will come up in conversation.

With both countries’ economies relying heavily on information technology and facing cyber threats, cyber security will be another area for expanded collaboration between Korea and India. An agreement on cyber security cooperation was signed between the Korea Computer Emergency Response Team Coordination Center in the Korea Internet and Security Agency and India’s Computer Emergency Response Team in its Ministry of Communications and Information Technology.

Another interesting political aspect between Korea and India is their positions on United Nations Security Council (UNSC) reform. India has pushed for a permanent seat on the UNSC, and often worked with Japan, who is also seeking a permanent seat, toward this goal. The recent Joint Statement said the two leaders “recognized the need for comprehensive UN reforms including Security Council expansion to make the body more representative, accountable and effective.” The statement doesn’t fully give Korea’s support for a permanent seat for India. Moreover, Park Geun-hye said in that same Doordarshan TV interview that she would rather see an “increase the non-permanent membership of the UNSC when reforming the Security Council,” a possible way to avoid having Japan as a permanent member of the UNSC. Look for the differences in the UNSC narrative after Japan’s Prime Minister Shinzo Abe visits as the main guest on India’s Republic Day in a couple of weeks.

The unlikelihood of reaching the $40 billion in trade goal by 2015 is a symbol of the unfulfilled potential of Korea-India relations; however, the likely new target of $100 billion by 2020 demonstrates the aspirations and belief in the possibilities for this strategic partnership. President Park’s first visit to India will likely continue the trend of summit meetings resulting in greater interaction between the two governments in the near future. New initiatives were started and ongoing projects were emphasized. Korea and India have avenues for greater cooperation and room for growth, but finding more areas of cooperation, common visions for the future, and moving through political and economic obstacles will still be necessary for greater ties between South Korea and India.

Nicholas Hamisevicz is the Director of Academic Affairs and Research at the Korea Economic Institute of America. The views expressed here are the author’s alone.

Photo from The Prime Minister’s Office (Number 10)’s photo stream on flickr Creative Commons. 

By Nicholas Hamisevicz

The fear that North Korea’s suspension of activities at the Kaesong Industrial Complex would have broader implications began to materialize last week when Daewha Fuel Pump Industrial Ltd. announced it failed to deliver parts in time to its Indian customer. Other companies are beginning to publicize their setbacks as well. The economic challenges for businesses like Daewha from the suspension of operations at Kaesong could have spillover effects for future investments in Kaesong and South Korea’s trade negotiation strategy. Moreover, the announcement from Daewha puts another South Korea – India economic connection into the spotlight. President Park Geun-hye and the businesses involved in Kaesong need to have patience, luck, and some business acumen in order to regain confidence from investors, economic benefits for customers, and opportunities for expansion when Kaesong is reopened.

The announcement from Daewha about its inability to maintain a steady supply to a customer was the fear of many supporters of the Kaesong operation. Without the ability to constantly supply customers, the strategic and economic advantages for Kaesong begin to dwindle for many Korean companies.

As one of the last remaining inter-Korean connections, Kaesong also helped provide an avenue for South Korea to communicate with North Korea as well as try to lay the groundwork for peaceful unification. However, with Daewha’s loss and troubles beginning to emerge with other companies, the opportunities available in Kaesong have again been questioned.

A part of those strategic and economic advantages were the potential future opportunities. Because of Kaesong’s previous success, some experts recommended that South Korea build more complexes like Kaesong. The Park Geun-hye administration also had plans to try to internationalize Kaesong and attract firms from other countries to set up in the industrial zone. Recent events will be an impediment for that goal. To revive the potential for expansion at the complex the Park administration will need a combination of good public relations (PR) and economic successes to ease the concerns of investors once Kaesong is up and running again.

Further potentially complicated by the work stoppage and the Daewha news is South Korea’s trade negotiation strategy to include language allowing for goods from Kaesong to be part of their trade deals. Future partners are now likely more aware of the political risks of increasing access to goods from Kaesong. One potential outcome from could be countries asking for language similar to the KORUS FTA that points to the development of specific conditions on the Korean peninsula before access for goods from Kaesong would be granted [Annex 22B]. This may require South Korean negotiators to repackage how they convince their counterparts to allow clauses potentially permitting goods produced in Kaesong to be included in their bilateral trade deals.

The news from Daewha was also tough PR for South Korea-India relations. Economics has been a major avenue for the two countries to work together. However, the cancellation of the partnership provides another example of an economic opportunity being damaged by political difficulties. While the Daewha example is on a much smaller economic scale than POSCO’s investment in Odisha, India, both illustrate politics affecting economic interaction between South Korea and India.

Moreover, India and South Korea are trying to reach their stated goal of $40 billion in total trade by 2015. Yet two way trade was still just below $19 billion in 2012. Even though Daewha claimed the deal was less than one percent of its sales last year, misfortunes of this nature also hold back the expanding economic relationship.

North Korea’s threats and initial suspension of the Kaesong Industrial Complex raised questions about the ability of companies to complete their orders and the future of investment opportunities in Kaesong. Unfortunately, a couple of weeks into the suspension, the impact is becoming real and damaging economic interactions beyond South Korea. These setbacks have only heighted the scrutiny of the consequences of operating in Kaesong, making it more difficult for the Park Geun-hye administration to attract investors to the complex, support the businesses there, and create opportunities for expanding the strategic and economic possibilities of Kaesong.

Nicholas Hamisevicz is the Director of Research and Academic Affairs for the Korea Economic Institute. The views represented here are his own.

Photo from Korea Economic Institute of America.