By Troy Stangarone

On May 2, Korea and China announced that they would begin talks on a bilateral free trade agreement. In many ways, this is a significant step in bilateral relations between Korea and China. The two countries only formally established relations in 1992, and in two short decades the relationship has blossomed on an economic level. In 1992, Korea and China did very little trade with each other, but today China is Korea’s largest trading partner surpassing the United States, Japan, and the European Union by wide margins.

A Korea-China FTA would link Korea with its largest trading partner, but would also make Korea the only nation with free trade pacts with the world’s three largest economies – the United States, the European Union, and China, potentially turning Korea into a regional FTA hub. With talks set to begin soon, what should we expect from a Korea-China FTA?

1.      What Will a Korea-China FTA Look Like?

While Korea has pursued high level, comprehensive agreements with the United States and the European Union, an FTA with China will likely fall short of that standard. China has largely pursued FTAs for strategic reasons tied to geopolitical or resource considerations rather than broad market openings. While China did conclude a high quality agreement with New Zealand, Korea is a much larger economy and China may be reluctant to make concessions on major trade irritants related to subsidies, state owned enterprises, or regulations outside of a multilateral agreement.

This means that we are likely to see a range of exceptions in this agreement, and along those same lines both sides have agreed to negotiate in two stages. If they are unable to agree on what exceptions should be contained in the agreement, it will not proceed forward. One interesting thing to look at here will be the services sector. China has excluded services in some of its agreements, but with Korea’s increasing emphasis on services the inclusion of a robust services chapter could be a sign of a higher level agreement on the Chinese part.

2.      What Are the Benefits for Korea of an FTA with China?

While countries such as the United States have seen their trade deficits with China widen since it joined the WTO, Korea has seen its trade surplus with China grow from $2.9 billion in 2001 to $39.3 billion in 2010. Korea’s exports to China have grown from $10.4 billion in 2001 to $111.3 billion in 2010, about $19.4 billion more than the United States.

Given Korea’s success in the Chinese market, and that China is still a significant platform for Korean exports to the United States and Europe, Korea would seem to have a good deal to gain from an FTA with China. One study has indicated that an agreement could increase Korea’s economic output up to 1.25 percent within five years and by 3 percent within 10 years of the FTA taking effect.

Korea has done well in exports of electronics and steel to China, despite China’s own success in these areas.  While China may be reluctant to address a wide range of subsidies or regulations, the FTA does represent an opportunity for Korea to seek reductions in states subsidies or improved regulations related to foreign direct investment that would benefit Korean producers in key areas.

 3.      What are Some Potentially Sensitive Issues for Korea?

With both the United States and the European Union, agriculture was a sensitive issue for Korea. However, in both of those agreements, along with expectations for potential agreements with Australia and New Zealand, Korea opened up significantly to foreign agricultural products.  On one level this is necessary as Korea only has the arable land to grow about half of its food, but its prior FTA partners are also developed nations with higher cost agricultural products. But opening up to China’s agricultural sector would be different. China is both geographically closer and more likely to directly compete in the products that Korean farmers grow.  There are also likely to be greater concerns regarding the sanitary aspects of Chinese produce. In terms of the economic impact of agriculture from China, the Korea Institute for International Economic Policy estimates an FTA with China would cause farm production to fall about 15% within a decade. Just as Korean farmers protested against the U.S.-Korea FTA, they have already begun protesting against an agreement with China.

4.      What About North Korea?

Korea and China have both indicated that they are open to discussing the inclusion of outward processing zones in the agreement. It seems likely that the two sides will strike a deal to allow goods from the Kaesong Industrial Complex and China’s own potential zones in Northern China to receive preferential treatment. While this would provide a boost to production in Kaesong in the short-term, it could in the long-run lead to conflicts with the United States. The sanctions on North Korea currently prohibit the importation on any non-Office of Foreign Assets Control approved goods or parts. If goods assembled in China were to include parts manufactured in Kaesong, they would run afoul of these sanctions.

5.      What are the Broader Implications?

While some have speculated that an FTA between Korea and China would bring tensions between the United States and Korea, this seems unlikely. As has been previously mentioned, the agreement between China and Korea will unlikely rise to the level of the KORUS FTA and the agreement is more directly a response by China to the KORUS FTA. In terms of the alliance, it is doubtful anyone in Washington or Seoul will confuse this for more than a commercial agreement between two key economic partners.

However, beyond the question of the alliance, the agreement could have implications for trade in East Asia. With the push for a broader Trans-Pacific Partnership (TPP) agreement, questions have become more focused on what Asian economic integration should look like. In the trade arena, there are competing visions of an East Asian FTA centered on ASEAN and the TPP. Because of Korea’s size as a trading nation, it could have significant influence on this process. However, there is also the possibility that once it has an agreement in place with China, the Korean preference could be to maintain its bilateral agreements and not become involved in what some view as a competition between China and the United States.

Troy Stangarone is the Senior Director for Congressional Affairs and Trade for the Korea Economic Institute. The views expressed here are his own.

Photo from Korea.net photo stream on flicker creative commons.

By Jack Pritchard

There was a plausible scenario ready to work itself out with a successful launch of a missile by North Korea.  The Security Council would meet and issue a stern presidential statement condemning Pyongyang.  North Korea would push back rhetorically, claiming its sovereign right to space exploration while Beijing would send a high level delegation to Pyongyang to privately caution the North not to conduct a third nuclear test.  Because the Security Council presidential statement carries no actual new punishments, Pyongyang would have absorbed the criticism and reveled in its achievement of placing a satellite in orbit and, most importantly, would not have seen the need to conduct a third nuclear test – at least not in the near term.  Beijing would have been given credit for preventing the situation from escalating out of hand.

But that is not what happened.  Pyongyang gambled that it could successfully launch a satellite and in a grand gesture to spotlight the launch as the centerpiece in the celebration of the country’s founder’s 100^th birthday, the North invited the international press to witness the event. The consequences of that decision were immediately evident when Pyongyang was forced to publicly admit that the missile had failed.  In contrast to past failures where North Korea has declared success to its citizens, there was no possibility that Pyongyang could cover up this failure.  Journalists were in real time communications with their networks and within minutes of the missile failure being reported outside of North Korea, the invited journalists were pressing their North Korean minders for comments about the failure. While there are controls on the 1 million cell phones in North Korea, news of the missile failure was certain to spread quickly.

The embarrassment to the new regime cannot be over stated.  The failure will cast a dark shadow over the most important celebratory day in North Korean history.  The credibility and perhaps the survivability of the regime are at stake.  Pyongyang will need a spectacular achievement to overcome the national embarrassment it finds itself in now.  Declaring yourself a “strong and prosperous nation” requires that you be able to point to some kind of tangible achievement. What that means is that it is now much more likely that North Korea will move forward with its third nuclear test.  Unlike a missile launch that is observable and is either a success or failure, a nuclear detonation, regardless of yield, can be touted as an absolute success.

If Pyongyang does proceed with a nuclear test, it will also mean that North Korea has made the political calculation that it can do anything without fear of serious negative consequences from Beijing. It will have concluded that China has put itself in a position where it will not allow North Korea to collapse – no matter what.  And it will be right.

The precedent for this type of calculation was set several years ago.  In spite of the tough non-proliferation rhetoric coming out of the George W. Bush administration, Pyongyang calculated that it could cooperate with Syria in building a nuclear reactor (proliferating nuclear technology) and get away with it.  Unfortunately, that calculation proved correct.  There were no consequences. 

Now China finds itself in a difficult situation. What, if any, leverage can it exert to prevent a third nuclear test and not risk contributing to the collapse of North Korea?  For Beijing, the answer is: very little.  The need for Pyongyang to overcome the immense embarrassment caused by the very public failure of its missile and to quell any latent rumblings about the leadership of Kim Jong Un is far stronger than any unrealistic threat by Beijing to seriously punish the North.

While a successful satellite launch would have it its negative consequences regarding North Korea’s missile delivery program, it just might have precluded the need for a third nuclear test.  However much relief there is because of the missile failure, it just may mean that Pyongyang disregards any warnings from China and goes ahead with a nuclear test. 

Jack Pritchard is the former ambassador and special envoy for negotiations with the Democratic People’s Republic of Korea and the President of the Korea Economic Institute. The views expressed here are his own.

Photo from Joseph Turk Jun’s photo stream on flickr Creative Commons.

By Ben Hancock

President Obama this week is gearing up for a trip to South Korea that will see him both participate in the international Nuclear Security Summit and make the short journey from Seoul to the border with North Korea. It’s also his first trip to Korea — indeed, anywhere in Asia — since last November, when his administration trumpeted the “Asia pivot,” a term that still has many in the foreign policy world scratching their heads. This makes now a good moment to reflect on what the “pivot” really means for South Korea, a long-time U.S. ally that already hosts a strong contingent of some 28,500 American soldiers.

It’s seems safe to say that, so far, the pivot has not yielded any concrete outcomes, perhaps other than stronger U.S. military ties with Australia. But even so, many observers have framed the policy as Washington taking an active role to counter-balance the widening influence of Beijing in the Asia-Pacific. Clearly, if true, this is an aspect that would have bearing on South Korea and its neighbor to the north. The questions are: How exactly would this affect the peninsula, and how likely is this effort to yield new results given the current geo-political dynamic?

In concept at least, it seems fairly straightforward that reducing military and economic tension in the Asia-Pacific by having the U.S. reaffirm its commitment to serving as an outside balancer in the region at a time when the rise of China has many worried would be beneficial for South Korea. Any subsequent increased U.S. leverage on China would also probably give Washington a better hand in negotiating with the North on its nuclear program — also a benefit for Seoul.

So that’s a partial answer to my first question. The fuller answer is: it’s complicated.  For example, it’s not really clear whether a new U.S. military focus on the Asia-Pacific would really counter-balance against China, or would simply raise the stakes as Beijing undergoes a leadership transition of its own and seeks to ensure stability and project strength. For that matter, it’s unclear if the pivot truly means an increased U.S. military focus on the region or more of a commitment not to reduce its presence. Similarly, on the economic front, it’s unanswered whether a new U.S.-led trade deal among nations along the Pacific Rim will really pressure China to adopt high standards, or will simply lead it to forge its own deals — with Korea and Japan, for instance.

We may not need to worry about any of that. In answer to the second question, I would bet that the likelihood of new developments under the “pivot” is very low. Though House Republicans are trying to reduce the budgetary impact on the Pentagon, defense cuts of some measure appear to be on the horizon. That seems to rule out a rise in U.S. military might in Asia being a cornerstone of the “pivot” policy. In Korea, it seems likely that the base consolidation now underway will continue along the same course, along with the transfer of wartime command to Seoul.

Next, economics and trade. Obama kicked off the year in his State of the Union with a clear salvo against China in this area, almost undoubtedly because it plays well in an election year. But this approach seems unlikely to further the long-term U.S. goal of convincing China to rebalance its export-dominated economy. This probably means the status quo for South Korea, too, which continues to be interested in making inroads into the Chinese market.  Of course, Korea could make advances on its own by increasing market share and investment in China if bilateral negotiations with Beijing take off. In the meantime, the conclusion of the U.S.-led Trans-Pacific Partnership (in which Korea has shown little interest) is still miles away.

This mix of factors seems to foreshadow a familiar formula for dealing with North Korea as well. Absent any new show of U.S. military might, increased leverage with China economically or otherwise, or real diplomatic maneuvering, what’s to keep the North from playing its old tricks? Not a whole lot, it seems, as evidenced by its return to testing missiles with the purported purpose of sending satellites into space. When Obama looks over the DMZ early next week for the first time since taking office, he may well find himself still puzzled at how to engage such a defiant nation.

This all paints a picture of the “pivot” not meaning very much for Korea in the near term. In fact, it may be more accurate to think of the phrase as the administration’s branding for what it has already accomplished in Asia — joining new dialogues, showing a lot of earnest diplomatic engagement in the region, and passing the KORUS FTA. That doesn’t mean there are no prospects for future developments under this umbrella; if Obama is granted more time to pursue the policy by voters this November, we may yet see it take on new aspects. A positive shift in the direction of the U.S. economy and fiscal situation could also alter the narrative, but neither of those appear to be in the offing any time soon.

Ben Hancock is a journalist based in Washington, D.C. He has studied Korean language and culture since 2004, and most recently lived in Korea from 2008 to 2010. The views represented here are his own.

Photo from Expert Infantry’s photo stream on flickr Creative Commons.

By Sarah K. Yun

At the recent talks between North Korea and the United States in Beijing, U.S. Special Representative for North Korea Policy, Glyn Davies, once again stressed the importance of restored inter-Korea relations in order to resume the Six-Party Talks to Kim Gye Gwan, North Korea’s First Vice Minister of Foreign Affairs.  Although the two Koreas are the parties most directly impacted by the security issues surrounding the Korean Peninsula, inter-Korea relations have been tense over the years, although some landmark accomplishments remain as symbols of inter-Korean cooperation.  On the other hand, the Cross-Strait relations have improved dramatically since 2008.  What caused such different outcomes?  What lessons from the Cross-Strait relations can be applied to inter-Korea relations?

Inter-Korea relations and Cross-Strait relations are inherently different in nature, history, and scope.  However, the two cases have interesting parallels from their Cold War split, largely driven by the ideological divide between capitalist democracy and communism.  They are also similar in that domestic politics plays an important role within the relations.  Additionally, the U.S. has played a key and complementary role in both relations through its support for Taipei’s engagement with Beijing and President Lee’s efforts to deter provocations by North Korea.

Despite these similarities, the two Koreas and the two China’s have taken divergent approaches to resolving their long standing separations. Experts have characterized Cross-Strait relations as “No Talks, Many Actions.”  There have been few official talks between the two sides but, a recent influx of trade, visits, investments, and exchanges.  However, these have been recent changes. Historically, communication between China and Taiwan ceased during the Cold War.  In 1979, after gaining confidence within the international community, China proposed the “Three Links” (trade, postal service, and transportation) and “Four Exchanges” (academic, culture, sports, and science and technology) to Taiwan.  Taiwan was not prepared to accept China’s offer at the time, therefore responded with the “Three Nos” policy of no contact, no negotiation, and no compromise.  In 1987 that changed. Taiwan began to allow visits to China and established two trade zones for Taiwanese companies in Fujian province in 1989.  During this period, Taiwan also renounced intentions to militarily recapture China.  In 1991, Taiwan officially declared end to hostilities and recognized the legitimacy of the Chinese Community Party.  Just when relations were on the road to improvement, then President Lee Teng-hui and his successor Chen Shui-bian argued for a Taiwan national identity separate from mainland China. 

All of this was reversed dramatically by the election of president Ma Ying-jeou who argued for the improvement of Cross-Strait relations in six stages: 1) charter and direct flights, 2) economic and financial cooperation, 3) investment and trade, 4) Taiwan’s participation in international organizations and non-governmental organizations, 5) promotion of a Cross-Strait common market and Taiwan’s participation in the East Asian economic integration, and 6) a peace accord and confidence-building measure.  He also implemented his own “Three Nos” policy to include no unification, no independence, and no use of force.  The current challenge, however, is that the Cross-Strait relations are successful at cooperation and exchange, but unsuccessful at creating a linkage between economic relations and political transformation.  In other words, this framework is effective in maintaining status quo, but ineffective in creating political spillovers.  The ultimate goal is not reunification, but a comparative advantage that China and Taiwan are able to gain economically and diplomatically from improved Cross-Strait relations.  The Economic Cooperation Framework Agreement (ECFA) was the epitome of improved Cross-Strait relations based on the economy-first paradigm. 

On the other hand, inter-Korea relations have been described as “No Actions, Talks Only.”  Although many official-level talks took place and declarations were announced between the two Koreas, it has had limited political spillover due to the fact that the Kim regime habitually exploited the cooperation projects.  Inter-Korea relations have for the most part been sustained by large-scale projects such as the Kaesong Industrial Complex, Mount Kumgang tourism, reunion of  separated families, and a few others.  A complete replication of the Cross-Strait framework would be difficult for the Korean Peninsula since North and South Korea have too much asymmetry of economic and political power as a result of North Korea’s military-first policy.  In essence, the current inter-Korea relations are focused on a framework of politics-first. 

What if the inter-Korean model also focused on economic integration first by stabilizing economic and trade relations?  This could create a platform for North Korea’s economy to be integrated into the region and provide an opportunity for North Korea to rethink its position in the world economic order.  In return, South Korea could play the role of Taiwan in supplying needed capital to a reforming command economy and would be able to benefit from  lower labor costs, access to raw materials, and decrease future reunification cost by reducing the economic gap between the two Koreas.  This would require a framework change in a way that the two Koreas view the inter-Korea relations from a perspective of ideology to one of practical economic interest.  Focusing on the economic aspects would bring political spillover effects, as in the case of Kaesong Industrial Complex where more than 50,000 North Koreans are employed by the South Korea-run companies.  These North Korean laborers are empowered financially and economically compared to others across the country.  Overall, a comprehensive strategy like the Ma Ying-jeou’s six-step plan may be needed in Korea, but it would require two willing partners. 

Whereas inter-Korea relations have undergone many challenges in the recent years, Cross-Strait relations have faced a dramatic détente.  The key point is that China reached out to Taiwan only after it gained status and confidence in the international community.  In other words, it did not feel threatened by Taiwan nor the international system, which was a product of China having a better economic foothold in the world.  From this, one can gather that unless North Korea’s economy is developing and industries being diversified, reconciliation and reunification may face more challenges.  Although  inter-Korean and Cross-Strait relations are not the same, a lesson learned from China and Taiwan’s experience is that economic cooperation is a key to closing the gap and improving inter-Korean relations. 

Sarah K. Yun is the Director of Public Affairs and Regional Issues for the Korea Economic Institute. The views expressed here are her own.

Photo from  Beautiful Taiwan’s photo stream on flickr Creative Commons.

By Nicholas Hamisevicz

2012 is a year of elections and leadership transitions in Asia. Taiwan was set to have the honor of kicking things off, but the death of Kim Jong-il in late December placed much of the early year’s attention on only the second transition in North Korea. In Taiwan, Democratic Progressive Party (DPP) candidate Tsai Ing-wen made it interesting, but Kuomintang presidential incumbent Ma Ying-jeou ultimately was re-elected and the party maintained its majority in Taiwan’s national legislature. For an Asia region uncertain where moving leadership pieces could potentially impact future policies, Taiwan’s election provides observers one of the first indications of where things might be going in 2012.

The outcome in Taiwan is important for a series of reasons. It gives some indication on the future of cross-Strait relations, and subsequently, how much effort and focus the United States and China will have to put toward these issues compared to other relations in the rest of Asia. For South Korea, understanding the priorities of China and the United States in 2012 is critical for developing its own policy toward North Korea under the leadership of Kim Jong-un.

In comparison to the previous presidential leadership in Taiwan under the DPP’s Chen Shui-bian, Ma Ying-jeou said his foreign policy toward the U.S. would contain “no surprises,” which became a mantra for his whole foreign policy. Countries in Asia had already received a surprise when they heard Kim Jong Il had died, and most governments were likely hoping for a Ma victory to continue a period of relative stability between China and Taiwan. If Tsai Ing-wen was able to pull off an upset victory, concerns were that China’s more contentious nature toward the DPP would extend into the larger Asia region. But even though President Ma will have four more years in office, it does not mean everything will be stable in cross-Strait relations. In October, China will have new leaders taking over. It is unclear how the new leadership in China will approach Taiwan or if the dynamics of a new transition of power in China force the new leaders to be tougher on Taiwan issues even with Ma Ying-jeou in office.

After the death of Kim Jong Il, South Korea is trying to develop an understanding with China on approaches to North Korea. South Korean President Lee Myung-bak and other South Korean delegations have already visited China this year. But often when a country tries to improve its relations with China, its own relations with Taiwan are tested. Last year, South Korea worked to enhance its military communication with China and set up a hotline between the two countries. This was perhaps part of its efforts to prepare for change in North Korea. South Korea and China agreed to set up a military hotline; however, South Korea’s military exchanges with Taiwanese military officers had to be suspended.

South Korea and Taiwan also compete economically in Asia. Both countries export similar products to similar markets. After Taiwan signed an Economic Cooperation Framework Agreement (ECFA) with China in 2010, South Korea worried that Taiwan had better positioned itself for the Chinese and Asian markets. Last year, South Korea completed free trade agreements with the European Union and the United States, both top five trading partners for Taiwan. Taiwan fears South Korea now has better economic access, and Taiwan’s trade share with its important trading partners will decrease. Taiwan is also concerned the impact of its ECFA with China will decrease if South Korea is able to sign a free trade agreement with China.

The elections in Taiwan and later this year in South Korea enhance the collective sense in both countries that their democracies are positive examples of government for their neighbors. Candidates sometimes have to govern differently in office then what they stated during their campaigns, but for an Asian region planning for new leadership, the campaign conversations in democracies like South Korea and Taiwan better prepare neighbors for new policies.

Many were watching the election in Taiwan to determine the effects on cross-Strait relations and its impact on regional security. Ma Ying-jeou’s reelection suggests there will be few changes in how China and the United States approach Taiwan issues. For South Korea, a stable cross-Strait situation helps them engage China and the U.S. more closely in preparation for changes in North Korea under Kim Jong-un. South Korea must be careful though as changes in Chinese leadership could change the dynamics with Taiwan; moreover, as South Korea looks to coordinate and understand Chinese intentions toward North Korea, China could ask South Korea to change its policies toward Taiwan. Despite occurring after the death of Kim Jong Il, Taiwan’s elections are the start of pieces settling into place in Asia, and South Korea must understand those connections to its interests.    

Nicholas Hamisevicz is the Director of Research and Academic Affairs for the Korea Economic Institute. The views represented here are his own.

Photo from Mooi’s photostream on flickr Creative Commons.

By Nicholas Hamisevicz, Sarah K. Yun, Chad O’Carroll, and Troy Stangarone

Last year saw significant changes on the Korean peninsula. While 2011 ended with the surprise death of Kim Jong-il and the beginning of succession to Kim Jong-un, last year also saw Korea become one of only nine nations to surpass $1 trillion in total trade, the passage of the KORUS FTA, and a surprise election for the mayor of Seoul. With even more change set for 2012 in both Northeast Asia and on the Korean peninsula, here are twelve economic and foreign policy issues that are worth following in the coming year:

1.      The Transition and Public Events in North Korea: Kim Jong-un has been declared the successor to his father. The North Korean government is working hard to illustrate the unity of the nation and the loyalty of the elites to Kim Jong-un. There will likely be a formal meeting of the Workers’ Party of Korea where titles and positions will be made and adjusted. Kim Jong Un possibly has an advantage with the early schedule of public events where his new leadership will continue to be highlighted, such as the one hundred year anniversary of Kim Il Sung’s birth in April and the start of North Korea’s development as a prosperous and powerful nation. However, after those events, there could be more room for maneuvering if other North Korean elites do not like the direction of the country.

2.      Political Change in South Korea: While North Korea may have got the jump on political change in 2012, South Korea will conduct elections for both the National Assembly and the presidency this year. With South Korean presidents limited to a maximum term of five years, Lee Myung-bak will be ending his term in December.  Lee’s Grand National Party (GNP) has Park Geun-hye at the forefront of potential presidential candidates. However, she will likely face a significant challenge from Ahn Cheol-soo, founder of anti-virus software company AhnLab.  Although yet to declare his candidacy, there are growing signs that he will run as the opposition candidate – and recent polls suggest that he has strong support polling at 49.7 percent, some 7 percent more than rival Park Geun-hye.

Additionally, in April, all 299 seats of the National Assembly will be up for vote, with 245 in single-member districts and 54 seats determined through proportional representation. The ruling GNP has fared poorly in local elections recently and developments indicate that progressives may be uniting under a unified banner for the April elections that could seriously compound difficulties for the GNP.

3.      Kim Jong-un and China: In the early days of the transition, China has thrown its support behind Kim Jong-un. Who from China visits North Korea, and especially if Kim visits the new leadership in China, will likely provide clues to the relationship between Pyongyang and Beijing, as well as how secure the new regime feels in its position. Given that China will undergo its own leadership transition this year, 2012 will likely set the tone for both sides going forward.

4.     The Role of Social Media in South Korean Politics: Social media, including Twitter, are playing an increasingly prominent role in Korean political discourse. A recent Hankyroreh and Korea Society Opinion Institute poll showed politics to be one of the most retweeted topics by users in South Korea this year. This suggests that the conversations that take place on Twitter in 2012 will play a significant variable in this year’s presidential election.  South Korea’s Twitter community has an active user rate that is some two times higher than the world average, with nearly 10% of the nation signed up.  The important role Twitter plays in politics can be seen in a campaign that was credited with a higher than expected voter turnout among young voters during the during the April 2011 by-elections.

The team behind the one of the world’s most listened to podcast, Naneun Ggomsuda, may have a key role in determining the outcome of elections in South Korea this year.  Specializing in political satire, their podcast has to date taken a vehemently anti- Lee Myung Bak and Grand National Party position.  They have also developed a number of investigative stories that have attempted to highlight mis-steps by the ruling government, often with significant media interest.  Their feature on Na Kyung-won’s alleged visits to a luxury skin care clinic is said to have contributed to her loss of support in recent Seoul mayoral elections.

5.   The Euro Crisis: Strictly speaking, this isn’t about Korea, but with Korea heavily dependent upon trade for growth and Europe a major trading partner, the euro zone matters for Korea. If Europe is unable to restore market confidence and avoid a deepening of its debt crisis, a steep economic decline in Europe or the unraveling of the euro could hit the global economy hard. While Europe has managed to consistently fail to address the debt crisis in a comprehensive manner, there may be some tell tale signs early in the year regarding whether Europe has turned the corner or not. If France is able to maintain its AAA credit rating and Italy and Spain are able to roll over nearly $200 billion in debt in the first quarter of the year, Europe will likely have passed the most immediate dangers. When it comes to Korea, the stats to think about are this, the EU accounted for 10.2 percent of Korea’s exports and 9.6 percent of its total trade through the first 11 months of 2011.

6.    U.S. Defense Budget Cuts: The U.S. Department of Defense budget is expected to cut $260 billion over the next five years and more than $450 billion over the next decade. In the new budget strategy announcement on January 5, President Obama and Secretary of Defense Panetta presented a revamped U.S. military strategy with an emphasis on Asia and space and cyber capabilities, and preservation of missions in the Middle East.

With a reduced defense budget, partner relationships will become more important. Although the 5% increase in the 2012 South Korean defense budget may offset the potential challenges in the U.S.-Korea military alliance, uncertainties continue as both countries enter an election year. Despite reassurances from Obama and Panetta, the future shape of United States presence in Korea and Asia is still to be determined. With both nations preparing for op-con transfer in 2015, how the budget and strategy changes in the U.S. play out could play a role in the future force structure of the alliance.

7.    North Korea’s Interaction with the United States and South Korea:  Despite its current turn inwards, North Korea will likely turn its attention outwards at some point in 2012. North Korea and the United States seemed to be on the verge of a deal over food aid and possibly moving forward on nuclear talks before Kim Jong-il’s death, and there are early indications these may start back up at some point. As for South Korea, Pyongyang has said that it will not deal with the current administration in Seoul, but 2012 will also bring fresh elections for the National Assembly in April and the presidency in December, key points to watch for in North-South relations.

8.    Seoul Nuclear Security Summit: Seoul will be hosting the second Nuclear Security Summit in March with participation from over 50 national leaders. The agenda will consist of mainly three issues: international cooperation against nuclear terrorism, prevention of illicit transaction of nuclear materials, and protection of nuclear materials, nuclear power plants and other nuclear related institutions.

The appointment of Korea as the chair of the second NSS is both practical and symbolic – practical in that Korea is a close ally of the U.S., enabling smooth coordination; and symbolic in that Korea has been an active member of the Nuclear Non-Proliferation Treaty with advanced nuclear energy capabilities, yet facing a serious nuclear threat from North Korea.

Whereas the hosting of the G-20 in 2011 elevated Korea’s status as a world economic power, the Seoul NSS will elevate Korea as a world security leader. The NSS will be even more significant in light of Kim Jong-il’s death. President Lee Myung-bak had previously extended an invitation to Kim Jong-il to attend. It will be interesting to see how the new regime responds to the summit.

9.    The Implementation of the KORUS FTA: Now that the United States and Korea have passed the KORUS FTA the two governments are looking to implement the agreement. The agreement should come into force early in the year, but might slip until after National Assembly elections in Korea for political reasons.

10.  The Politics Around the KORUS FTA and U.S.-Korea Relations: Speaking of the politics of the KORUS FTA, prior to the death of Kim Jong-il, the opposition in Korea was turning the FTA into a major campaign issue, calling on Korea to renegotiate certain provisions such as those relating to investor-state dispute settlement. Some had gone so far as to suggest Korea should withdraw from the agreement. Korea’s relationship with the United States is a complex one, and anti-Americanism has played a role in previous elections. While North Korea is now likely to become the major campaign issue, look for the FTA and Korea’s broader relationship with the United States to remain caught up in domestic politics for the time being.

11.  South Korea-China FTA: China has become South Korea’s largest trading partner by a significant margin, with the two countries doing more than $200 billion in trade in the first eleven months of 2011. With the EU and KORUS FTA now concluded, Korea will look to start negotiations with its biggest trading partner in the next few months.

12.  World Expo 2012 – Yeosu, Korea:From May to August, Korea will host the 2012 Expo in the port city of Yeosu. Under the theme of “The Living Ocean and Coast,” the Yeosu Expo will share knowledge in maritime cooperation, marine science, and the proper use of ocean and coast. Korea is anticipating an international recognition of Korea as a leading maritime nation.

Hosting the Expo can be seen as a completion of Korea’s campaign as a world leader – the 2011 G-20 on economic issues, the 2012 Seoul Nuclear Security Summit on security issues, and the 2012 Expo on cultural and soft power issues.

Nicholas Hamisevicz is the Director of Research and Academic Affairs, Sarah K. Yun is the Director of Public Affairs and Regional Issues, Chad O’Carroll is the Director of Communications, and Troy Stangarone the Senior Director for Congressional Affairs and Trade for the Korea Economic Institute. The views expressed here are the authors alone.

Photo from Rachael Towne’s photostream on flickr Creative Commons.

By Nicholas Hamisevicz

In Asia much of the pressure and focus from the transition in North Korea after Kim Jong Il’s death is now on China, its neighbor and chief benefactor. As a rising power that provides both economic and national security assistance North Korea needs to survive, China is in a difficult situation with new leadership emerging in North Korea and new leadership scheduled to take over China in October. For the other major emerging power, however, India possesses more ability to monitor the situation in North Korea and react in its best interests to any changes on the Korean peninsula.

Ties between India and North Korea are growing. The two sides had a few diplomatic connections in 2011 that suggested an improvement in bilateral relations. Pak Ui-chun, North Korea’s Foreign Minister, visited India’s embassy in Pyongyang on January 26 for India’s Republic Day event. India’s ambassador to North Korea was then invited to a dinner with North Korean officials. India also provided food aid to North Korea by donating $1 million to the World Food Programme. Moreover, prior to donating food aid, India’s ambassador to North Korea was permitted to visit some of the countryside between Pyongyang and Nampo to see areas in need of economic assistance. The Indian ambassador then toured Nampo. North Korea also sent a delegation to India in May 2011 to examine India’s history with special economic zones. Although engagement with North Korea is often along these smaller interactions, the momentum in India – North Korea relations seems to have a positive trajectory.

Yet India’s relations with North Korea are still hampered by India’s concerns over North Korea’s relations with Pakistan, and to a lesser extent, Burma. Both of India’s neighbors have a history of dangerous interaction with North Korea. Pakistan and North Korea previously traded missile and nuclear technology. Moreover, North Korea’s insistence on keeping its nuclear weapons reminds the international community of A.Q. Khan, one of the fathers of Pakistan’s nuclear program and his network of illegal transfers of nuclear material, especially the connections to North Korea. North Korea represents the negative example of a country outside the Nuclear Nonproliferation Treaty, in contrast to the positive image India is trying to project for itself to the international community. For India, the rumors over North Korean assistance for Burma’s own nuclear weapons program, along with previous military cooperation, feed a sense of insecurity in the region. During her recent visit to Burma, U.S. Secretary of State Hillary Clinton told Burmese leaders that they must end their illicit activities with North Korea as part of the reforms they are trying to undertake.

North Korea provides some more immediate security concerns for countries recently enhancing their relations with India. South Korea, Japan, and the United States are more immediately impacted by the leadership transition after the death of Kim Jong Il and whose own policies can also more directly influence the outcomes on the Korean peninsula.                                                                                                        

India has a strategic partnership and important economic relations with each of these countries. These new connections, along with India’s emergence as a rising power, will bring issues regarding transition in North Korea more deeply into India’s strategic portfolio. Prime Minister Yoshihiko Noda of Japan was in India the last week of December and called on India to support and understand Japan’s position on North Korea’s abductions of Japanese citizens. U.S. Assistant Secretary of State for East Asia and Pacific Affairs Kurt Campbell testified in March 2011 that the U.S. has discussed issues regarding North Korea with India. South Korea will also likely use its strategic partnership  with India to discuss approaches to North Korea in the near future.

The China factor is an important aspect in India’s foreign policy calculations. China’s reactions and responses to North Korea’s new leadership will demonstrate its confidence level toward Pyongyang. China would prefer a stable North Korea to prevent the burden of an uncertain government in Pyongyang and the possibility of major action toward North Korea during China’s own leadership transition in 2012. India probably would not mind if the uncertainties in North Korea kept China more preoccupied; some even suggest North Korea moving away from China would be beneficial to India as well.

India will have some benefit of not being directly impacted by the leadership transition in North Korea. However, the transition to Kim Jong-un will have an affect on India’s neighbors and its growing relationships with its strategic partners. India will be looking to see how the new North Korean leadership will approach their interactions with Pakistan, Burma, and China. South Korea, Japan, and the United States are likely to concentrate their efforts on the Korean peninsula, but will look to India for support as a regional and emerging world power. With the ascendance of Kim Jong-un, India’s development as a rising power will likely include more connections to issues regarding North Korea and the future of the Korean peninsula.

Nicholas Hamisevicz is the Director of Research and Academic Affairs for the Korea Economic Institute. The views represented here are his own.

Photo from Sonal And Abe’s photostream on flickr Creative Commons.

By Chad O’Carroll

Hundreds of thousands of mourning North Koreans lined the bitterly cold streets of Pyongyang today to say goodbye to their leader, Kim Jong-il.  How real the tears were is impossible to say, but the images were nonetheless extremely reminiscent of what was seen at Kim Il Sung’s funeral  – aside from the fact that today’s  winter setting contrasted greatly with 1994’s summer funeral.  But beyond the surface similarities, one key difference remains – Kim Jong-un has only had a fraction of the time his father had to prepare for his role as the new leader of North Korea.

The plan had been to mirror Kim Il Sung’s funeral exactly – both Kims underwent an initial mourning period of ten days and the start of today’s two day funeral was meant to kick off at 10am, just as it did sixteen years ago.  However, things kicked off four hours later than planned today with heavy snow meaning additional time was required to clear the roads, a task in which mourners in Pyongyang were only too happy to help with.  And just as it has been doing over the last few days with other natural phenomena, North Korean media pounced on the snow as further evidence that nature itself was mourning Kim Jong-il: “the feathery snowfall reminds the Korean people of the snowy day when the leader was born in the secret camp of Mt. Paektu and of the great revolutionary career that he followed through snowdrifts”.   The purpose – to remind North Koreans of the almost supernatural qualities of their leaders – Kim Jong-un included.

In contrast to the funeral of Kim Il Sung, when most of the mourners were dressed in Western style suits, the initial scene outside the Kumsusan Palace was extremely militaristic.  Pictures showed a large military procession walking behind the hearse, with thousands of soldiers lining the streets on either side of the road to downtown Pyongyang.   Prior to the live feed going out, KCNA also repeated footage of Kim Jong-ils achievements that included video clips of North Korea’s controversial long-range missile launches.  This was likely in one part due to Kim Jong-il’s former role as chairman of the National Defense Commission and supreme commander of the Korean People’s Army, and in another part to reaffirm the importance of his focus on “songun” (military-first) politics during his tenure.  This increased emphasis on the military will have also been to help cement support for Kim Jong-un’s credentials, having been named a four star general himself just fourteen months ago.

As the convoy left the Kumsusan memorial palace, the hearse was accompanied by a small delegation of walking mourners, led by Kim Jong-un.  Mirroring his father’s role in Kim Il Sung’s funeral sixteen years ago, Kim Jong-un could be seen walking at the front right of the hearse, dressed in a long black coat and dark Mao style outfit.  With Kim Jong-un already having been styled to look closely like his grandfather Kim Il-Sung, this will have been a calculated move to help underscore the significance of Kim Jong-un as the “great successor”.  Broadcast throughout North Korea, this powerful imagery will make it difficult for any potential rivals to try and take power any time soon, suggesting to internal audiences at least, that the succession appear to be proceeding smoothly.

Walking alongside Kim Jong-un was a delegation of North Korea’s political and military leaders which included two key allies of Kim Jong-un : Jang Song-Thaek, and Ri Yong-ho.   Jang Song-Thaek is a powerful figure within North Korea, being Kim Jong-ils brother in law, vice-chairman of the National Defense Commission and a member of the Political Bureau of the Central Committee.  Once seen as a potential rival for leadership, his stature and support for Kim Jong-un will be critical in the short-to-medium term.  For his part, Ri Yong Ho is vice chairman of the Central Military Commission (second only to Kim Jong-un) and was recently appointed to the Politburo presidium, of which there are only five members. This now puts him at a critical juncture between the political and military powers in Pyongyang, and in a pivotal position to help support Kim Jong-un’s succession in the coming months.  Their placement among the key mourners, and importantly behind Kim Jong-un, will be seen as evidence of their tacit support for Kim Jong-un’s legitimacy as successor.

Just as during Kim Il Sung’s funeral, a huge smiling portrait of Kim Jong-il was positioned on top of the front car in the procession for the 40km drive into Pyongyang – a far step from the solemn imagery previously standard for communist funerals that is also traditional in Korean funerals.  If history is providing a template for proceedings in 2011, it seems likely that we can now expect the smiling image of Kim Jong-Il most recently published by KCNA to start appearing atop buildings and on posters throughout the country.  Used to the much older image seen in recent news reports , this younger, smiling Kim Jong-il will subtly help remind North Koreans of the loving care of their Dear Leader, and in turn help foster support for Kim Jong-un (albeit marginally).

So far, video of Kim Jong-il’s two other sons has not yet emerged.  There had been much debate as to whether Kim Jong-nam would make the funeral, having been outcast to a life in Macau following his failed attempt to visit Tokyo Disneyworld in 2001.  An outspoken member of the Kim family, his impromptu and controversial interviews with international media led to him falling out of favor with the Pyongyang elite.  At one point he had been once expected to take power after Kim Jong-il, but his non-appearance at the funeral suggest how far out of favor he now is and perhaps that it might not have been safe for him to return.   As for the other son Kim Jong Chol, while he is still believed to be in North Korea, Kim Jong-il’s former sushi chef Kenji Fujimoto wrote in a memoir that the Dear Leader thought Jong-chul was “no good because he is like a little girl”.  His non-appearance in the main procession may have merely been to ensure that all attention was directed at Kim Jong-un.

Although KCNA issued multiple indicators in advance of Kim Jong-il’s funeral that suggested foreigners would not be allowed attend, initial reports from Chinese government sources indicate that Chinese Ambassador to the DPRK, Liu Hongcai, was in attendance at the funeral today.  This was in contrast to Kim Il Sung’s funeral in 1994, which was a uniquely North Korean affair.  At that time, China – DPRK relations were in a relatively bad place, with Beijing having recognized Seoul just two years before in 1992, much to the ire of the DPRK.  With North Korea’s relationship with China having improved significantly in recent years, the exclusive invitation for the Chinese ambassador can be seen as Pyongyang showing appreciation for China’s recent public support for Kim Jong-un.

After about two hours, the convoy reached Pyongyang’s infamous Kim Il-Sung square.  It is not known yet whether the body will be returned to the Kumsusan Memorial Palace and mummified like that of Kim Il Sung.  With Kim Jong-il having been at the helm throughout the catastrophic famine that resulted in nearly a million dead in the mid 1990s, his popularity was never like that of his father.  While there was a brief period when Kim Jong-il lapel badges circulated freely alongside those depicting his father, in the early 2000s they were banned – few people wore them, such were their preference for Kim Il Sung.  And while statues of Kim Il Sung adorn squares all over North Korea, none can be found of Kim Jong-il – the Mansudae Art Studio that produces them was instead ordered post-1994 to focus on commemorating Kim Il Sung only.  In this context, moving Kim Jong-il’s body for permanent display alongside that of his father at the Kumsusan Palace might be seen in some quarters as in appropriate.  But at the same time, there is a compelling argument that putting the two together will help bolster the legitimacy of Kim Jong-un, something that is desperately needed at the moment.

Today’s funeral is a critical part of the Pyongyang regime’s attempt to shore up both support and loyalty for Kim Jong-un.  Replicating so many aspects of Kim Il Sung’s funeral and putting Kim Jong-un center stage will undoubtedly boost the successors profile significantly for internal audiences.  Elevating the position of the army was crucial during the proceedings, having built up so much power under the leadership of Kim Jong-il’s songun first polities.   Similarly, the decision to invite Chinese representatives was shrewd, an easy way to show appreciation for early support for Kim Jong-un from Beijing.  So far, so good.  But just how long Kim Jong-un can continue on course is no doubt the question on everyone’s lips.

Chad O’Carroll is the Director of Communications for the Korea Economic Institute. The views represented here are his own.

Photo from David Stanley’s photostream on flickr Creative Commons.

By Sarah K. Yun 

In light of the uncertainties following the death of Kim Jong-il, China has stepped to the forefront as the first foreign player to express lavish condolences to the North Korean government.  Understanding China’s actions and words will be an important piece in the North Korea puzzle as events unfold on the peninsula.  Given that, it is particularly interesting to compare and contrast the different steps that China took after Kim Il-sung’s death in 1994 and Kim Jung-il’s death this week.

The context of 1994 and 2011 are quite different. At the time of Kim Il-sung’s death, China had a much less assertive and developed foreign policy. Moreover, it had been just a few years after the end of the Cold War, which meant that China was more cautious about maintaining a balanced relationship with its neighbors. Also, it was only two years after the normalization of relations with South Korea.

In their effort to integrate into the international system and markets, China attempted to uphold a balance between North and South Korea. North Korea, on the other hand, believed that China often compromised the socialist cause, evidenced by their economic reforms. As of June 1995, high level meetings took place between China and South Korea, while little activity occurred with the North, and Kim Jong-il had not been invited to China at this juncture. There were indications that China was tilting towards South Korea while trying to separate its economic and political policies.

Today, China is the second largest economy in the world and an active participant and leader of many key global issues such as the Six-Party Talks, climate change, nuclear nonproliferation, and more. China has gained much confidence from its growing influence and leverage in the world, including the Korean peninsula. Since the Cheonan and Yeongpyeong tragedies in 2010, China has revealed unprecedented efforts to prop up the Kim regime through aid, trade, and political support. 

Kim Jong-il’s death takes place in this context. Even though China operates in a different context and reputation in the world, signs imply that it will continue on its expected path in support of the North Korean regime in order to avoid instability. Moreover, China wants to be the best positioned and most informed about the changes in North Korea, which explains the quick acknowledgement of Kim Jong-un by the Chinese government. Interestingly, the official statements by the Chinese government after the death of Kim Il-sung and Kim Jong-il are quite similar:

“It is our strongest belief that the Korean people will surely carry out (Kim Il-sung’s) behest, unite closely around the Workers’ Party of Korea led by comrade Kim Jong-il, and continue their efforts in building their country well and achieving lasting peace for the Korean peninsula.” (Official Statement after Kim Il-sung’s Death, July 9, 1994)

“We are convinced that the Korean people will overcome sorrow and display strength, achieve steady and fresh successes in the overall work for socialist construction and make a fresh contribution to realizing lasting peace and stability on the Korean Peninsula, united single-mindedly under the leadership of Kim Jong-un and the Workers’ Party of Korea.” (Statement by Chinese Foreign Minister, Yang Jiechi, December 19, 2011)

“We believe the Korean people will surely overcome sorrow and display strength and courage and steadily advance the DPRK’s cause of socialism by dint of single-minded unity. Both China and the DPRK will as ever make joint efforts to make a positive contribution to steadily developing the traditional friendship between the two parties, two countries and two peoples and defending peace and stability in the Korean Peninsula and the region.” (Statement by the Spokesman for the Chinese Ministry of Foreign Affairs, December 19, 2011)

The content and wording are almost identical. The timing of the statements (one day after the death announcement) is similar as well. What is different, however, is the usage of the word “fresh” in the 2011 statement, underlining the new generation of North Korean leaders with whom China may not have close ties. Moreover, the phrase “DPRK’s cause of socialism” was used for the first time, indicating China’s recognition of North Korea’s uniqueness. The implication, however, is that socialism and history bind the two countries together but there now lies a difference between Chinese and North Korean ways of socialism.

Another interesting note is the slight differences in the order of condolence messages. On December 19, Chinese Foreign Minister Yang Jiechi conveyed a telegram of condolences on behalf of the Communist Party of China Central Committee, National People’s Congress Standing Committee, State Council, Central Military Commission, addressed to the Korean Workers Party Central Committee, Korean Workers Party Central Military Commission, National Defense Commission, Standing Committee of the Supreme People Assembly, and the Cabinet. In 1994, on the other hand, the CCP sent a person to the North Korean embassy, this time President Hu Jintao visited North Korea’s embassy in Beijing to express condolences. Moreover, additional condolence messages to Kim Il-sung came from Deng Xiaoping, President Jiang Zemin, Prime Minister Li Peng, and parliament chief Qiao Shi. It will be interesting to note if any previous and current Chinese leaders make separate statements of condolence in the near future. This also conveys the power shift within the Chinese government.

It is also important to note that Foreign Minister Yang exchanged phone calls on December 20 with Secretary Clinton and ROK Foreign Minister Kim Sung-hwan. This is positive news given that China often plays its cards close to the chest.

By looking at the similarities and differences between Chinese reactions to the death of two North Korean leaders, one can gain insight on China’s future posture towards North Korea. China will continue to ensure stability to North Korea as its foremost priority, while trying to create a larger imprint on the Korean peninsula. On the other hand, perhaps China is recognizing the potential for changes, opportunities, and openings from a North Korea under the leadership of Kim Jong-un and changing leadership of China.

Sarah K. Yun is the Director of Public Affairs and Regional Issues for the Korea Economic Institute. The views expressed here are her own.

Photo by Edourdoo

By Troy Stangarone

The sudden death of Kim Jong-Il has created the potential for significant uncertainty surrounding both the North Korean leadership and North Korean intentions. While all signs pointed to Kim Jong-un as the designated heir after the 2010 Party Conference, it is unclear if the succession process has fully taken hold and how much internal support Kim Jong-un has for his leadership going forward. As this process plays out with interaction both internally and externally over the coming weeks and months, here are ten issues that will likely provide insight into how the process is unfolding:

Internal Issues

1. The Stages of Succession – While Kim Jong-Il had seen to it that Kim Jong-un was promoted to four star general in 2010, along with other positions within the party, he has not had the time or ability to build the ties that his father acquired on his way to power by placing key individuals loyal to him in position of authority. What is unclear at this moment is what steps may still need to be put in place a completed succession of power from Kim Jong-Il to Kim Jong-un, but there are early indications that Kim Jong-un will rule as part of a collective leadership with the military rather than on his own.  If that is the case, he will likely serve more as a figurehead for a collective government, at least in the near term.

2. The Dynamics Between the Heir and the Regent – When Kim Jong-Il first became ill during 2008, Jang Song Taek and Kim Kyong Hui served as co-regents for Kim Jong-un. It is unclear if they will continue to serve in that capacity, but because of Jang’s support within the military and ties to China, he could see himself in a guiding role. Will he try to assert his authority and will Kim Jong-un resist?

3. What is the Potential for a Coup? – Because of his young age and unsecure hold on power, Kim Jong-un may be vulnerable to a coup either from within the military or from someone well connected such as Jang Song Taek. However, if indications of a collective leadership in Pyongyang are accurate, it would reduce the prospect of anyone trying to seize power.

4. Who Will Be the Key Players in Succession? – However the process unfolds, it will be driven by a small number of elites who will guide the process. Identifying those individuals and tracking their actions will be key for follow the transition.

5. Defections and Purges – Be they high level officials or an increase in ordinary individuals crossing the border into China, defections could be the proverbial canary in the coal mine that the succession is faltering or that the new regime is planning major changes. Purges could be a similar indicator for the future of the regime if they are for reasons of insufficient loyalty or policy preferences.

6. The Strong and Prosperous Nation – Next year will provide the regime with public opportunities to present a confident and stable front to the world. While this was always going to be an exercise in propaganda, festivities tied to North Korea being a strong and prosperous nation will provide the regime with opportunity to present a confident and stable image to the outside world. 

External Issues

1. How Seoul Reacts –As would be expected, South Korea placed its military on high alert after news of Kim Jong-Il’s death. If South Korea maintains a heightened posture or takes actions that seem to bolster its defenses against North Korean provocations, it would indicate that Seoul is not yet convinced that the transition will lead to stability in North Korean.

2. What Steps Does China Take? – China will be a key player in all of this and there are already indications that it’s inserting itself into the process by deepening contacts with North Korean officials, especially in the military. While China is unlikely to be able to control the transition, it may be able to provide key support should there be problems in the transition.

3. The Next Moves on the Six Party Talks – Just before Kim Jong-Il’s passing there were indications that talks over North Korea’s nuclear program could resume shortly. If Pyongyang were to engage on this issue and the United States take part, it would be a sign that the new regime is confident in its position and that the United States believes its dealing with a stable regime.

4. The Politics in South Korea – The death of Kim Jong-Il comes as South Korea prepares to gear up for a year of elections. North Korea is always a significant topic in Korean elections and depending on how the transition occurs it could play an outsized role in National Assembly elections in April and presidential elections in December.

Troy Stangarone is the Senior Director of Congressional Affairs and Trade for the Korea Economic Institute. The views expressed here are his own.

Photo by Zennie Abraham