By Karl Friedhoff and Grace Kim
On June 29 – 30, South Korean President Moon Jae-In will visit the White House for the first US-South Korea bilateral summit since Donald Trump and Mr. Moon took office. The meeting comes amidst heightened tensions on the Korean Peninsula following North Korean missile tests and the death of Otto Warmbier—an Ohio native imprisoned for more than one year in North Korea.
The agenda will be dense. With continuing nuclear threats from the North, a debate on the missile defense system, and trade imbalances, Seoul and Washington face challenges ahead. This week’s Trump–Moon summit is expected to establish the direction of the bilateral relationship for the coming years. While most expect a smooth set of meetings, divergences will be magnified due to the looming threat of North Korea.
Publics in Both Countries Support the Alliance
Despite disagreement between Washington and Seoul on various issues, public opinion in both countries puts high priority on the alliance. A Gallup Korea survey in June 2017 showed that a majority (55%) of South Koreans perceive the US as the most important country for peace in the Korean Peninsula—20 percentage points higher than China. In the United States, a clear majority (70%) thought the US should keep its long-term bases in South Korea (2016 Chicago Council Survey). Even with the uncertainty due to leadership changes in both countries, this strong support is expected to continue. But there is one important caveat: South Koreans have very little confidence in Donald Trump. In a Pew survey, just 17 percent in South Korea say they have confidence in Mr. Trump to make right decisions regarding world affairs. That number was 88 percent under President Obama.
Two-Track Diplomacy on North Korea
North Korea policy is the most important agenda item for Washington and Seoul. President Moon’s two-track approach of “engagement and pressure” is similar to Trump’s “maximum pressure and engagement,” and both have said they are willing to talk to Kim Jong-Un under the right circumstances. However, there is divergence on what would qualify as the right circumstances. The White House—like past US administrations—has clearly stated that a denuclearized North Korea is the goal of engaging with Pyongyang; on the other hand, Moon Chung-In, Special Advisor to President Moon for Unification, National Security, and Foreign Policy, has mentioned freezing nuclear and missile activities as a starting point of a “step-by-step” engagement strategy.
The biggest problem for both Moon and Trump is that Kim Jong-Un does not seem interested in either of these plans. Pyongyang has complained about Moon’s two-track policy, noting that “talks and fights are incompatible.” Indeed, an uncooperative North Korea may derail Mr. Moon’s engagement-oriented approach. In response to North Korea’s May 14 missile launch—on the third day of Moon’s presidency—Mr. Moon warned that provocations had to stop before inter-Korean peace talks could begin.
THAAD: Almost There?
Another major discussion point on the agenda is the deployment of THAAD (Terminal High-Altitude Area Defense) in Korea. The original agreement between the United States and South Korea was to deploy the missile defense system by the end of 2017. A majority of South Koreans have consistently favored THAAD deployment. However, facing 30 percent domestic opposition—mostly from the left—and economic retaliation from China, President Moon announced his plan to postpone placing additional THAAD launchers until proper procedures can be completed, including a year-long environmental impact assessment. He has said he hopes the US government will “fully consider these [domestic] issues,” in addition to “the aggravated foreign relations” involving THAAD. The South Korean government has assured that this is a postponement, not a reversal of the decision to deploy THAAD.
KORUS FTA: Termination Unlikely; Renegotiation a Possibility
The US trade deficit with South Korea has doubled since the bilateral free trade agreement (KORUS FTA) took effect—from $13 billion in 2011 to $27 billion in 2016. President Trump has promised to end this “horrible deal.” Vice President Mike Pence reaffirmed the President’s agenda during his visit to Seoul, saying that the White House will “review and reform” the trade agreement which has “created barriers to American businesses.”
But Korean experts say the US has not been losing out as much as Washington fears. Last year’s South Korean investment in the US—at least $7 billion—was the largest in the last 6 years and nearly twice the US investment in Korea in the same year. Business leaders have stressed how the FTA has been a mutually beneficial agreement rather than a winner-takes-all deal. Although a termination of the agreement seems unlikely, South Korean officials have hinted that they could prepare for a separate negotiation on the FTA after the summit.
Defense Cost-Sharing Agreement: Who’s paying and how much?
The US and Korea will soon start negotiating the Special Measures Agreement (SMA) for fiscal years 2019-2023, which will determine how much each country pays to keep US Forces Korea (USFK) in the country. Since his election campaign, Trump has argued that US allies—including NATO member states and Japan—are “not paying their fair share” for their defense. South Korea, one of the four countries in which the US has permanent military bases, might be the next target.
The South Korean public has not been supportive of increasing government expenditure towards USFK. Currently, South Korean contributions cover roughly 50% of the cost of stationing US forces in South Korea. A survey conducted by the Asan Institute for Policy Studies in 2013 found that 57 percent of Koreans felt the $850 million Korean contribution was too high, while less than 2 percent responded that Korea is paying too little. Still, South Korean funding for USFK has steadily risen and was $932 million in 2015. Experts say that Korea’s burden will likely increase again because of the Trump administration’s firm stance on defense cost-sharing.
Issues facing Trump and Moon are difficult and complex. However, few of these agenda items are new to the alliance that has spanned more than 60 years. Disagreements on North Korea and bilateral trade have persisted even in the best of times. With supportive public opinion, and a positive outcome from the upcoming summit, there are hopes that the US-Korea alliance can continue to strengthen in the following years. But if the summit goes poorly—especially because of poor dynamics between the two leaders—these disagreements may turn into road blocks.