Speeches and Transcripts

The U.S.-ROK Relationship

Alexander Vershbow
U.S. Ambassador to the Republic of Korea

Remarks at the Seoul–Washington Forum
(Sejong Institute and Brookings Institution)
Seoul Plaza Hotel - May 15, 2007

Ambassador Vershbow at 2007 Seoul-Washington Forum

Thank you for the kind introduction.  It is a pleasure to be here at the Seoul-Washington Forum.  I’m sorry that my old friend and colleague Strobe Talbott had to cancel.  I was reviewing his fascinating memoir Engaging India the other day.  He begins in 1998 when India shocked the world by conducting a nuclear test (just as North Korea did last year).  Strobe, who was then Deputy Secretary of State, describes how the State Department learned about the Indian test from CNN, and the CIA learned about it from the State Department.  His CIA counterpart was ashamed.  As he told Strobe that day, “The only thing worse than being scooped by CNN is being scooped by the State Department.”

KORUS Free Trade Agreement

I know I’m not scooping anybody at this point by telling you that the United States and Korea concluded negotiations on a Korea-U.S. Free Trade Agreement six weeks ago.  Through eight rounds of formal negotiations, Korean and American negotiators reached a historic agreement that will cement our already substantial commercial ties with the prosperity of free and open trade.  This is a multi-billion dollar deal that will provide more goods and services at lower prices to both countries’ consumers and create opportunities for both countries’ exporters and investors.  For our economies as a whole, it will boost GDP and employment, and sharpen our two nations’ competitiveness vis-à-vis other economies in the region.  The KORUS FTA will also strengthen and modernize the U.S.-Korea alliance as we deal with evolving challenges in Northeast Asia. 

However, just because our negotiators struck a really good deal, does not mean we can afford to become complacent.  We now face the challenge of securing ratification of the KORUS FTA in the National Assembly and the U.S. Congress.  In particular, we need to work together in the coming weeks so that the United States and Korea – both of us global leaders in terms of labor and environmental standards – can find a way to reflect a strong commitment to these standards in the FTA, in the spirit of the recent agreement reached between the Administration and the Congressional leadership on trade policy.  This would benefit both sides equally, and would not alter the balanced result of our FTA negotiations.

The road ahead may not be easy, but I remain confident the KORUS FTA will pass, because our legislators will come to understand that this agreement is a good investment in our countries’ future and the future of our alliance.  There are many indicators of strong majority support among the Korean public for the KORUS FTA.  Recent polls have shown support in the 60-percent range.  A mid-April Korea Trade Commission poll of over 600 businesses found that over 64 percent looked favorably upon the KORUS FTA.  Korean press reports and analyses are increasingly positive as well.

According to a forecast by 11 ROK think tanks, including the Korea Institute for International Economic Policy, the Korea Development Institute and the Korea Rural Economic Institute, the free trade agreement will boost South Korea’s annual economic growth by around 6 percentage points over ten years, create 340,000 new jobs over the coming decade, promote greater trade volume, and attract significantly more foreign investment to Korea.  This agreement has been extensively debated here in Korea and it seems that the general populace agrees with the experts that this agreement will be good for Korea.

During my latest trip to Washington, I recently had occasion to have some conversations with U.S. lawmakers about the KORUS FTA’s ratification prospects in the Congress.  I will say in that regard that those prospects are wrapped up in our efforts to re-open the Korean beef market.  American beef is as safe as it is delicious, and is consumed by millions of Korean visitors to the U.S. each year.  The ban on imports of U.S. beef has been a boon for Australian beef exporters, but it has driven up the cost of beef here in Korea to the point where Korean beef prices are now among the highest in the world. 

Again, U.S. beef is safe, and we anticipate that later this month, the World Animal Health Organization in Paris, or “OIE,” of which the U.S. and Korea are members, will announce that officially.  We are pleased by President Roh’s public commitment to resolve this issue on the basis of science, and believe that the OIE ruling should resolve any outstanding doubts about the safety of U.S. beef.  It will pave the way to a full market opening which in turn will help focus attention in the U.S. on the broader benefits of the FTA and help secure the biggest bilateral trade deal in the history of Asia.

Inter-Korean Exchanges and Denuclearization

Turning to North Korea, you may have noticed that there has been an enormous amount of inter-Korean activity lately.  The two Koreas have just concluded the 15th round of separated family reunions (May 9-14) that, for a brief time, allow families to get beyond the division on the Peninsula.  Earlier this month, a group of South Korean lawmakers and businessmen traveled to North Korea to discuss cross-border economic exchanges and the possibility of North Korean soccer players playing in the South Korean professional league.  This visit followed a five-day economic cooperation meeting in Pyongyang, where North and South Korea agreed to conduct test runs of the inter-Korean rail lines later this week, explore expansion of the Kaesong Industrial Complex, and establish working groups on various other economic projects. 

I wish I had as much progress  to report on the Six Party Talks.  The February 13 “Initial Actions” agreement set a firm 60-day timetable, but the deadline was not met.  A lot of this has to do with unexpected technical problems that interfered with the ability for North Korea to collect and transfer money out of its accounts in Banco Delta Asia in Macau.  And this means the Yongbyon nuclear facility is still operating, despite the agreement to shut it down within the 60-day window.  Still, North Korea continues to declare publicly that it remains committed to inviting back the IAEA inspectors, and to follow through on the shutdown of Yongbyon, as soon as it has the BDA funds in hand. 

I hope so, because we really want to restore momentum to the process.  After the shutdown and sealing of the Yongbyon facility, the February 13 agreement calls for the disabling of North Korea’s nuclear facilities – which we believe can be done within a few months – in phase 2.  We then want to move on to the third and final phase: the complete dismantlement of all of North Korea’s nuclear weapons and programs.  Yes, we have a long way to go.  Undoubtedly, everyone’s patience will be tested again and again.  The Six-Party agreements, including the overarching Joint Statement adopted in September 2005 and the “Initial Actions” agreement of February 13, represent convincing proof by the five parties that they are prepared to move forward in their relations with Pyongyang, provided North Korea delivers on its denuclearization commitments.

For our part, we remain steadfast on meeting our own commitments and obligations.  Still, as President Bush and Prime Minister Abe recently pointed out, our patience is not unlimited.  It’s time for North Korea to live up to its commitments.  The North has a lot to gain by ending its nuclear programs and getting rid of its nuclear weapons:  economic assistance, normalized relations with the United States, a permanent peace regime for the Korean peninsula – in short, a fundamental transformation of the DPRK’s relations with the rest of the world and an end to its pariah status. 

Multilateral Cooperation in Northeast Asia

Once we get beyond the current DPRK nuclear issue, not only can North Korea come into the light of a better future, but countries in Northeast Asia can return to concentrating on the business of building cooperation and integrating their economies to improve the lives of their citizens.  Indeed, I think there is enormous scope for more formal cooperation among the countries of Northeast Asia together with the United States.  This could, in time, lead to the creation of multilateral mechanisms and institutions in a region where there are presently almost none.  

The three countries of China, Japan, and South Korea alone comprise one-quarter (23 percent) of the world’s population; 18 percent of the globe’s total income and 14 percent of all international trade.  If one adds Russia’s Far East and its largely untapped resource potential into this equation, the possibilities are enormous.  Trade within Northeast Asia and across the Pacific continues to grow quickly, as highlighted by the KORUS FTA.    In short, Northeast Asia’s economies are reaching new levels of prosperity, and a high degree of economic interdependence is emerging.  This creates even greater opportunities to build closer economic relationships, and to move toward a deeper discussion of political and security issues, including those that have divided this region for years.

Closer regional planning and coordination could promote common approaches to education, energy, environmental challenges and more.  Such cooperation can also promote efforts to develop and defend universal human rights – in the region and in North Korea in particular.  Indeed, I think South Korea and the United States need to work more closely in using engagement with North Korea to create stronger incentives for the North to undertake economic and political reforms that would open up DPRK society and improve the lives of the long-suffering North Korean people.

The building blocks for greater regional cooperation on all these issues are embedded in the Six-Party process and supplement the existing architecture of APEC, the ASEAN Regional Forum, ASEAN Plus Three, and various “Track II” and NGO efforts.  Within the Six Party Talks, China is chairing the “Denuclearization of the Korean Peninsula” working group, the ROK is leading the “Economy and Energy Cooperation” working group, and Russia is organizing the “Northeast Asia Peace and Security Mechanism” working group.  The United States is prepared to normalize relations with the DPRK and work with the ROK, China and North Korea to replace the Armistice with a peace regime on the Korean peninsula – if the DPRK abandons its nuclear weapons and nuclear programs.  Japan also seeks to address its concerns, particularly the abduction issue, and work toward normalization with North Korea. 

All of these mechanisms, part of the Six-Party framework, give the five major powers in Northeast Asia the means to address the North Korean challenge in all its aspects, with the goal of creating a new regional dynamic that could make the last front of the Cold War look like ancient history.

What I am suggesting is that – especially if we are able to achieve the primary and immediate goal of denuclearizing North Korea – Northeast Asia has both the reasons for increased future-oriented cooperation and the means to do so.  The United States looks forward to working with our allies and friends in the region to find ways to contribute to this kind of positive future.

The Alliance

Back on the Peninsula, let me comment briefly on the U.S.-ROK military relationship.  The alliance is in a state of transformation that will take it from a Cold War stance to a politically sustainable, agile force equipped to face the challenges of the twenty-first century and beyond.  To this end, we have seen several important recent developments.  In February, Secretary of Defense Gates and ROK Defense Minister Kim Jang-soo resolved the contentious debate over the transition of wartime operational control, that is, OPCON.  Although our military has the highest confidence in the ability of ROK armed forces to assume this responsibility earlier rather than later, our governments agreed to delay the transition until April 17, 2012.  This will allow plenty of time for the training and exercises needed to ensure that deterrence and defense remain just as effective under the new system as under today’s Combined Forces Command.

We also look forward to continued cooperation with the Korean government as we reduce the footprint of U.S. Forces Korea on the peninsula.  We are on track to streamline our forces from 29,000 personnel to 25,000, return 23 camps to the ROK, and to move USFK headquarters from Yongsan Garrison in central Seoul to a new facility in Pyeongtaek.  I was just in Pyeongtaek yesterday with Vice Minister of Defense Kim Young-Ryong, and I was pleased to see that the work there is beginning in earnest to prepare for the relocation of USFK headquarters and the 2nd Infantry Division.  Not only will this open up a large parcel of valuable and useable land in the center of Seoul; it also allows U.S. and ROK forces to strengthen the alliance with new facilities and a more effective defense posture.  These are all positive changes which are being implemented in close coordination with the Korean armed forces, in conjunction with Korea’s sizeable investment in the latest military technology.   

Virginia Tech/Visa Waiver

In closing, I want to express how deeply touched I was by the outpouring of sympathy and condolences we received at the U.S. Embassy in the days following the tragedy at Virginia Tech.  Koreans, often acting anonymously, sent flowers to the Embassy and Korean leaders up to and including President Roh were quick to send condolences.  Like the outpouring of support we experienced in the aftermath of Katrina, many of our Korean friends reached deep into their pocketbooks to help.  A prominent South Korean pastor, for example, recently traveled to the United States to deliver around $500,000 that he had collected for the victims.  Another pastor visited me in my office last week to discuss how best to transfer the $250,000 he had collected.  It is in these moments of crisis that the people-to-people bonds of our alliance take on a truly special significance. 

As strong as these people-to-people ties are, something that would make them even stronger is Korean admission into the Visa Waiver Program.  To recap briefly, the program has been available for countries with very low refusal rates that can conform to a number of security standards, such as electronic passports and border safeguards.  The ROK rejection rate has been very low for several years running, albeit just above the current 3% threshold; Congress is now considering legislation that would allow more flexibility regarding the 3% rule.  On security issues, our governments are working closely to close any gaps and help the ROK pass Department of Homeland Security review.  I am optimistic that plenty of people in the Administration and Congress are working to help Korea join the Visa Waiver Program in the near future, and I very much hope it happens on my watch.

Conclusion

To sum up, there’s a lot going here in Korea and in the U.S.-Korean relationship. As the United States and Korea cooperate to achieve common goals – such as the denuclearization of North Korea, increased bilateral trade and investment, and safer and easier travel – I’m confident that our alliance will grow stronger, healthier and more resilient than ever before.  Thank you for this opportunity to share my thoughts with you today.  I look forward to your questions.