Less certainty on other partners; little hope for reunification | By Anne Holzman (Fall 2024)
A touring team of scholars and diplomats made a mid-September stop in Minnesota to speak on the importance of U.S.- South Korea economic relations. The panel of U.S. and South Korean experts discussed the trade balance from both countries’ perspectives, the growth of the technology industry in the U.S. and South Korea since the Biden infrastructure initiative and the CHIPS Act, Northeast Asia tensions and regional security, and even the soft power diplomacy of the Korean Wave trend, along with other political and cultural topics.
The centerpiece of the tour was an event, sponsored by Global Minnesota, titled The Future of U.S.-South Korea Relations. The panel included Andy Hong from the Korea Economic Institute (KEI), Keome Rowe from the U.S. Department of State, and Jiho Lee from the South Korean Embassy. Retired diplomat Anne Linnee moderated the discussion at St. Paul College on September 18.
This was one of KEI’s half-dozen annual nationwide outreach visits of the organization’s Washington, DC office. Hong explained that KEI conducts research and cultivates “public diplomacy” in the U.S. on behalf of South Korea, where it is based. KEI also publishes the journal Korea Policy.
Hong spoke about the importance of reaching out to students and scholars to build understanding between societies. Rowe steered straight to the military and political relationship, identifying South Korea as a linchpin of regional security, especially in northeast Asia. He mentioned that South Korean President Suk Yeol Yoon was received by President Joe Biden in an April 2023 official state visit, and that Yoon and Japan’s Prime Minister Fumio Kishida met with U.S. leadership at Camp David later that year.
Rowe said Yoon was back in Washington in July 2024, that time for a NATO summit; South Korea is not a NATO member, he said, but “they want to be in the room” in view of the bloc’s focus on China and concerns about China’s warming relationship with Russia. He said that the U.S. military currently has about 28,000 troops in South Korea. He acknowledged “huge concern with what’s going on” in North Korea. He stated a that the U.S. has committed to “extended deterrence” on behalf of South Korea.
Lee said he spends a lot of his time working with members of Congress and their staff. He said the chief areas of discussion are the North Korea nuclear threat, trade disputes among the various partners, and regional security, with a focus on China’s intentions concerning Taiwan.
All three panelists hedged on a question about the impending U.S. presidential election. Hong said, “The candidates are pretty split,” predicting that the U.S. troop presence in South Korea will resurface as an issue. He talked about the recent investments of Korean companies in U.S. industry and said, “South Korea isn’t necessarily beholden to this patron-client relationship.” Hong said the rhetoric from campaigns about shifting jobs back to the U.S. does pose challenges for South Korean exports.
At the same time, he said, Koreans have invested heavily in the U.S. economy, spotting opportunities in the 2022 CHIPS Act that poured money into developing U.S. semi-conductor manufacturing and sourcing of essential technology components from U.S. companies. Indeed, the day before this event, Amanda Chu of the Financial Times reported, “U.S. project commitments from South Korean companies totaled $21.5 billion last year, more than any other country and surpassing Taiwan, which was the largest investor in 2022, according to data from the UN Conference on Trade and Development analyzed by the Financial Times.”
Concerning the election, Rowe took a longer view, citing “seven decades of alliance.” He added that regardless of who wins, people all over the world will watch to see who gets the first phone calls, and the first invitations to visit the White House.
Lee echoed Rowe and summarized, “I don’t worry about it!” Both will of course need to carry on their official duties for their respective countries regardless of which party controls the White House and Congress as of January.
Linnee followed up by acknowledging that we in the U.S. have a habit of viewing relationships bilaterally. She asked the panelists to speak about the region more broadly. Hong said U.S. economic policy toward China sometimes interferes with South Korean business. He said that for example, the Inflation Reduction Act restricts Chinese-made batteries in electric vehicles, but Korean manufacturers depend on China for many of the raw materials for their own electric vehicle production. He added that South Korea’s relationship with Japan is going well at present but that the U.S. still needs to bear in mind the deep historical issues between the two.
Rowe said China and the U.S. are both important trade partners for South Korea: “It’s a delicate balancing act.” He said that in the period since the 2012 U.S.-Korea Free Trade Agreement was signed, trade has risen by 75 percent between the two countries. And while South Korea is the fastest-growing foreign investor in the U.S., the U.S. accounts for 30 percent of foreign investment in Korea. In 2023, Rowe said, the U.S. passed China as the largest investor in South Korea. Lee said that South Korea, the U.S., Japan and Russia are “deeply intertwined” from Korea’s perspective, so that “U.S. sanctions on Russia can impact South Korea companies.”
Linnee inquired about culture and international relations, noting a large donation here in Minnesota from a South Korean citizen to enhance the Korean camp at Concordia Language Villages, Sup Sogui Hosu. (Note: Kenny Park of the Simone Corporation, donated $5 million in 2018 for new buildings at the camp, noting at the time that the Simone Corporation, which makes luxury handbags, gets about 80 percent of its business from the U.S.)
Lee, who seemed animated by this question, spoke with pride about the spread of Korean music, drama and food around the world and said the popular culture trend has drawn tourism and made a big economic impact. “The Korean Wave – the BTS effect, we call it,” he said with a chuckle, referring to the famous K-pop group. He added that Korean diaspora communities contribute greatly to economic development in South Korea.
Hong said his institute conducts an annual poll that includes questions about American awareness of Korean culture and noted a robust number of exchange students between the two countries. He said that in an era of declining interest in foreign languages among American students, Korean stands out as an exception with increased enrollment in recent years.
Moving on to questions submitted by the audience, Linnee asked about the demographic challenges in South Korea. Lee said the country’s population likely peaked a few years ago and many policies have been proposed to stem the population decline. “We are considering everything!” he exclaimed. He said the importance of the situation is reflected in the fact that the country has added a Department of Population to its administration.
Hong said his institute has done extensive research on the issue, including a 2023 study by Randall Jones that included foreign workers as a component of a strategy to overcome the country’s labor shortages.
Another audience question referred to South Korean nuclear power being exported to Czechia. Hong said that South Korea has led development of small modular nuclear power plants. “This is an area that Korea excels at,” he said. Lee said Korea has been “seeking partnership with the U.S.” in this venture. Hong said that Russia is also developing such plants and that competitors “shouldn’t lose that edge.”
Rowe added that there are ongoing conversations in his department about nuclear power security and capacity “and being a good actor with civilian nuclear.”
Asked about relations between Japan and Korea, Rowe said his desk for South Korea and Mongolia shares office space with the Japan desk, making collaboration easy. “That’s part of my job on a daily basis,” he said. He cited a comment from a Japan colleague to the effect that relations with Korea “are a hundred-year problem, but with China, a thousand-year problem.” Lee reframed the relationship as “three thousand years with China, two thousand years with Japan.”
Offering the final question of the event, Linnee asked about the chances of reunification of the two Koreas. There was a pause, and then Hong responded, “I wouldn’t hold my breath. It’s increasingly becoming a challenge.” He said nuclear weapons capability continues to make it harder.
Rowe said, “It’s going to be a tall order given some of the behavior” in the North, plus their growing ties with Russia. “We can aim to continue [reunification] as an aspiration,” he said, “but we also have to be realistic.” He said this is one of those questions that has to be viewed multilaterally, noting that in a recent meeting, U.S. National Security Adviser Jake Sullivan reminded Chinese President Xi Jin Ping of the importance of peace on the peninsula. “Our communications with China are at an all-time low,” Rowe said, and the emphasis is on avoiding accidents.
Rowe said the U.S. has told China that North Korea is a major threat globally – “evolving into something that every country has a role to play.” Hong said another factor is “a breakdown at the UN Security Council.”
Lee closed the session with what he said was his personal opinion, delivered with emotion. “We are getting more and more frustrated by Kim Jong Un’s actions,” he said. “He’s trying to redefine international relations.” Lee continued, “We just keep doing our job, opening dialogue. Still, we need to get prepared for invasion.”
Editor’s note: The 2023 KEI study by Randall Jones on foreign workers and other workforce considerations can be found at this link. The September 17 Financial Times article about South Korea’s U.S. investments can be found at this link.
