Wednesday, July 19, 2017 15:00-17:00
KFAS Conference Hall
On July 19, 2017, Korea Foundation for Advanced Studies invited the delegation from The Korea Society to host a U.S.-Korea relations symposium titled “US-Korea Relations under the New US and ROK Administrations.” From the US side, former Deputy Secretary of State and Ambassador John Negroponte, former U.S. Ambassador to Korea Thomas Hubbard, and President Thomas Byrne of The Korea Society joined the symposium. From the Korean side, Professor Kim Sung-han of Korea University and Professor Ahn Dukgeun of Seoul National University participated as discussants.
The symposium began with a keynote address by Ambassador John Negroponte. Noting that the Trump administration’s attitudes towards North Korea seem to have “normalized,” Ambassador Negroponte pointed out that the recent summit between President Moon Jae-in and President Trump reaffirmed the significance of the U.S.-ROK alliance. He argued that the alliance has remained and remains staunch, first “battle-tested” and now “paramount” in addressing security threats such as the North Korean nuclear issue. Emphasizing that “the greatest asset” in addressing such issues is the “faith and friendship” between one another, Ambassador Negroponte called for a solution that involves all key regional interests, and to work through diplomacy. He concluded by noting that the U.S.-ROK alliance must continue to maintain the “most determined posture” and expend the “most audacious efforts to peacefully resolve…the most pressing security challenge of our time.”
Next, Ambassador Hubbard provided his thoughts and opinions on the issue of renegotiating the KORUS FTA, and the recently scrapped Trans-Pacific Partnership (TPP). Noting that the U.S. has already called for a special session stipulated under the KORUS FTA, Ambassador Hubbard argued that trade talks “are always difficult,” and laid out four scenarios that could unfold in the future. First, the two sides could quickly figure out ways to improve performance under the agreement and make improvements that would not require any new legislation on the U.S. side. Second, the negotiations could drag on for a long time. Third, the U.S. Congress, mandated to address trade-related issues with its Trade Promotion Authority, could get involved, making the process more contentious. Lastly, the talks could fail completely and the agreement could be terminated. Ambassador Hubbard admitted that the last scenario is very unlikely, and he explained that a few factors, such as Congress, the details of the broader alliance between the two countries, and the business leaders’ opinion, could hamper a successful renegotiation as envisioned by the Trump administration.
President Thomas Byrne of The Korea Society, former Senior Vice President at Moody’s Investor Services, provided an overview of Korea’s economic fundamentals. Noting that Korea no longer maintains a growth rate higher than the world average, he explicated the positive and the negative elements present in South Korea’s economy. On the positive side were ample monetary and fiscal policy space Korea maintains, a strong fiscal fundamental with relatively low debt, and a large amount of net assets accumulated after the Global Financial Crisis of 2008. On the negative side were the high household debt, sluggish growth in global trade, and the acceleration of monetary policy normalization by the U.S. Federal Reserve. Lastly, he emphasized that the Bank of Korea has started to monitor the North Korean geopolitical risk, and pointed out that the cost of insuring a KTB has actually risen in 2017, implying that geopolitics could be a new factor weighing down on Korea’s annual growth rate.
Afterwards, a discussion followed between the three speakers and Korean professors, moderated by President Park In-kook of KFAS. Professor Kim Sung-han of Korea University asked whether the right conditions have been formed to initiate the military talks recently proposed by the Moon Jae-in government. Ambassador Negroponte responded that he saw the proposal as more of an attempt to reestablish the most basic military to military communication between the two Koreas. Professor Kim also asked about the apparent reluctance of U.S. officials to publicly call for a two-staged approach proposed by Korea, in which the North Korean nuclear program is first frozen, and then denuclearized. Ambassador Hubbard gave his opinion that Americans may be reluctant to use the word ‘freeze’ because it can be interpreted as accepting North Korea as a de facto nuclear weapons state. Americans would be prepared to think about such an approach when the right conditions for productive talks have been created, he added.
Professor Ahn Dukgeun, commenting on the issue of the renegotiation of KORUS FTA, added that the trade deficit in merchandise goods that President Trump supposedly plans to tackle should also be looked at as a service trade surplus for the U.S. economy. Therefore, the renegotiation will likely conclude with a mutually beneficial outcome. He also asked whether the TPP could be revived in the future, to which Ambassador Hubbard answered in the negative. Though he expressed his personal support for the trade deal, he admitted that there is much opposition in American politics to TPP. President Byrne also agreed that TPP would have been good for the U.S.
The North Korean issue was also touched upon. When asked about the efficacy of sanctions against North Korea, Ambassador Hubbard reaffirmed that sanctions must stay a part of our punitive approach. On China’s role, Ambassador Negroponte recounted how Chinese officials would tell him not to exaggerate China’s influence over North Korea. He argued that this may need to be taken more seriously, for the Chinese certainly say it consistently. Lastly, on Russia’s involvement in the issue, Ambassador Negroponte maintained that Russia could very possibly become more involved due to its geographic and political interests, and that this involvement “could be a positive thing.”