Analysis of South Korea-U.S. and China-Russia-Japan diplomatic strategies after Lee Jae-myung's phone call with Trump
Direction of South Korea-US Cooperation in North Korea Policy
On June 6, through a phone call, the leaders of the two countries reaffirmed their commitment to strengthening the Korea-U.S. alliance however, a somewhat subtle difference in temperature emerged in their North Korea policy. The Trump administration, in its second term, is likely to pursue a dual strategy aiming for the complete denuclearization (CVID) of North Korea based on personal diplomacy between leaders and a top-down approach, while also considering the easing of sanctions under certain dialogue conditions. In contrast, President Lee Jae-myung emphasizes gradual denuclearization and the realization of a peace economy between North and South Korea, proposing a principle of gradual and simultaneous actions. During his presidential campaign, he mentioned building trust through a 'small deal' approach along with humanitarian support and the resumption of inter-Korean exchanges. Both leaders show a positive stance toward the resumption of U.S.-North Korea dialogue, but there are differences in their methods. President Trump hinted at making bold proposals by suggesting a summit with Chairman Kim Jong-un, while President Lee aims to induce gradual dialogue through the restoration of practical channels and humanitarian measures. Currently, North Korea still defines South Korea as an 'enemy' and adopts an uncooperative attitude towards dialogue however, both the U.S. and South Korea show a willingness to break the deadlock in U.S.-North Korea relations, indicating that there is momentum for dialogue. Proposed conditions for resuming dialogue include the cessation of additional provocations from North Korea, a temporary suspension of nuclear and missile tests, and promises for gradual sanctions relief. The U.S. prefers a combination of preemptive measures and rewards, while South Korea is likely to coordinate humanitarian support and simultaneous actions. However, as the deepening of trilateral cooperation among the U.S., Russia, and North Korea threatens security on the Korean Peninsula, the need for enhanced cooperation among South Korea, the U.S., and Japan is also increasing.
Changes in North Korea Sanctions and Assistance Policy
The Yoon Seok-yeol government agrees to the principle of sanctions against North Korea while keeping the possibility of 'conditional easing' open. In the past, President Yoon emphasized the 'snapback' principle, whereby sanctions could be lifted and then reimposed based on North Korea's nuclear advancements, instead of proposing a reduction in U.S. troops stationed in South Korea. Accordingly, in the initial phase, there will likely be a resumption of limited humanitarian support (food, medical supplies, etc.) within the framework of UN and U.S. sanctions, as well as an effort to signal economic cooperation to North Korea. The key is to provide gradual incentives based on the progress of denuclearization. The extent of sanctions relief will depend on North Korea's response, but it is expected that deviating from the current international sanctions regime will not be easy.
Economic and Trade Cooperation
Outlook for tariff negotiations: The leaders of the two countries have agreed during a call to 'swiftly conclude tariff discussions,' but practical negotiations are expected to take place in a challenging environment. President Trump indicated on April 2 that he would impose a 25% tariff on South Korea, setting a deadline of July 9. The U.S., mindful of an estimated trade surplus of about $55.7 billion in 2024, officially demanded the elimination of non-tariff barriers, such as beef import restrictions and GMO limitations. Former USTR representative Robert Lighthizer stated that a comprehensive renegotiation of the FTA is not being considered, but he prefers a 'small deal' approach focusing on 4 to 5 key issues. As a result, a strategy will unfold aimed at encouraging South Korean companies to expand their investments in the U.S. on the condition of tariff reductions for certain items. In fact, CSIS analyzed that 'reaching a trade agreement with the Trump administration is urgent for the recovery of the South Korean economy.'
Negotiation Scenario
By the deadline on July 9, the two countries plan to focus on discussing tariff and non-tariff issues. South Korea aims to lower tariffs on key items such as automobiles and steel while accommodating some of the United States' demands, and the U.S. will likely request the opening of agricultural, fisheries, and technology sectors to address the trade imbalance. The Trump administration will pay attention to South Korea's 'Alliance with the U.S. and Balance with China' approach and is expected to include cooperation on supply chain restructuring to counter China at the negotiation table.
Advanced Industry and AI Collaboration
Alongside the trade negotiations, substantial cooperation is expected to be promoted in the fields of semiconductors, electric vehicles, batteries, AI, and digital technologies. At the 7th Korea-U.S. Public-Private Economic Forum held in May, these industries were designated as the economic drivers and core elements for security and green transition for both countries. In response to the Biden administration's CHIPS and Inflation Reduction Act, discussions on expanding investment by Korean companies in the U.S. and technological cooperation are also anticipated. In particular, in the AI sector, the establishment of the National Artificial Intelligence Commission and the appointment of a policy chief under the Lee Jae-myung administration's active drive may lead to discussions on technology cooperation and standard-setting with the U.S. Overall, cooperation in joint R&D, personnel exchanges, and joint standard development is expected to take place within the framework of the Korea-U.S. FTA.
Economic Security Alliances and Supply Chain Strategies
In the midst of the global supply chain crisis, South Korea and the United States have declared the strengthening of their economic security alliance, deepening cooperation in key industries. The United States has promised support for major investments by companies such as Samsung and SK, while South Korea is considering expanding the procurement of U.S. parts and materials. The White House and State Department have stated that 'billions of dollars in investment between South Korea and the U.S. will create 70,000 jobs,' and the two countries plan to continue cooperation in multilateral platforms such as IPEF, MSP, and APEC. In summary, alongside tariff negotiations and small deals, economic security cooperation centered on strategic industries and the reconfiguration of supply chains will emerge as key agendas.
Surrounding countries' response and diplomatic strategy
The Chinese U.S. White House stated immediately after Lee Jae-myung's election as president that "the Korea-U.S. alliance will be maintained solidly," unusually mentioning concerns about Chinese election interference. This can be interpreted as a countermeasure against the 'pro-U.S. and pro-China' stance, as the Trump administration demands an expanded role for its Asian allies. In contrast, China may pressure to restore the 'balanced diplomacy' policy of the Moon Jae-in administration and may attempt to contain South Korea through inter-Korean exchanges and collaboration with North Korea and Russia. While emphasizing the Korea-U.S. alliance, President Lee will need to maintain diplomatic balance by fine-tuning messages directed at China. Following the announcement of a 'strategic partnership' between Putin and Kim Jong-un in 2024, military cooperation between North Korea and Russia is expected to become even closer. VOA analyzed that if North Korea continues to send troops to Ukraine, the North Korea-Russia relationship will strengthen further, prompting the U.S. and South Korea to respond by enhancing Korea-U.S.-Japan security cooperation and improving deterrence against North Korea. Japanese Prime Minister Shigeru Ishiba mentioned the Korea-Japan relationship as a "strategic neighbor and partner" through a congratulatory message, emphasizing the importance of trilateral cooperation among the U.S., South Korea, and Japan. Japanese media are positively evaluating the South Korean government's willingness to improve relations, and the possibility of a Korea-Japan summit during the G7 or NATO meetings in June has also been raised. However, Japan is sensitive to issues regarding the past, particularly regarding comfort women and the Dokdo issue, which could act as variables in expanding cooperation.
Comprehensive Outlook
The United States and South Korea will focus on tariff and security negotiations in the short term, while emphasizing cooperation in advanced industries, restructuring of supply chains, and responses to neighboring countries in the medium to long term. For example, at the G7 summit scheduled for the end of this month, cooperation among South Korea, the United States, and Japan is likely to emerge as a major agenda item, and there is a possibility that working-level negotiations between the two countries could be concluded around the tariff deadline of July 9. In this process, various negotiation cards may be utilized, including investments in semiconductor and electric vehicle factories and adjustments in defense cost-sharing. In this way, the South Korean government has the task of finely balancing its diplomatic relations with neighboring countries while reinforcing the South Korea-U.S. alliance.
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