Tag Archive | "elections"

Why do Koreans Vote at a Higher Rate in Elections than Americans?

By Patrick Niceforo

According to the International Institute for Democracy and Electoral Assistance, South Korea’s 19th presidential election last May had a voter turnout of 77.9 percent, the highest it has been since 1997. This election was unique given that it took place following the impeachment of President Park Geun-hye. Accused of corruption, Park Geun-hye is the first South Korean president to be removed from office via impeachment and South Koreans’ frustration with their leadership was likely a major contributing factor to the increased voter turnout.

However, even prior to this presidential election, South Korea had a track record of high voter turnout relative to other countries. In fact, more than 60 percent of South Korea’s age-eligible citizens have voted in each of the last five presidential elections. On the other hand, voter turnout in the United States is consistently low across a similar period. It was lowest in 1996 at 49 percent and highest in 2000 at 58 percent. Only about 55 percent of the United States’ voting-age population participated in the 2016 presidential election.

2017 Voter Turnout Graph Shaded

Former Secretary General of South Korea’s National Election Commission, Joa Soon Im, cited youth outreach programs such as mock election days, celebrity endorsements, and ads in the media as strategies that have successfully increased voter participation. Another factor that could explain South Korea’s relatively high voter turnout is its voter registration process, or lack thereof. South Korean citizens, except those living abroad, who are 19 or older are eligible to vote without going through a formal registration process. In addition, election day is a holiday in Korea, meaning that most voters can go to the polls without worrying about taking the day off.

In contrast, the process for voter registration is complex in the United States, given that the rules vary by state. Same-day registration is only available in 10 states, and many other states lack an online registration mechanism. (A more comprehensive list of voter registration rules can be found here.) Others have cited reasons related to gerrymandering and apathy as negatively affecting voter turnout. Political apathy can come from several sources such as frustration with the status quo, complexity of issues, and the perceived irrelevance of some issues to individual voters.

Of course, there are other factors that may help explain low voter turnout. Particularly in the United States, demographic differences are prominent. Age and level of education seem to be reliable predictors of voting behavior, given that young people and those with limited education consistently have the smallest shares of the electorate. Given that South Koreans between the ages of 19 and 29 were also the smallest portion of the electorate, at first glance it may seem like South Korea similarly suffers from low voter turnout among its youth.

However, this may not necessarily be the case given South Korea’s top-heavy population. In other words, one reason that South Korean youth are the least represented may be because they are a relatively small portion of South Korea’s population. In the past two presidential elections, young South Koreans have outperformed young Americans at the voting booth. In the 2012 presidential election, over 65 percent of South Koreans between the ages of 19-29 voted, while in 2017 over 70 percent voted. Comparatively, less than 50 percent of Americans between the ages of 18-29 voted in presidential elections since 1984. Reasons such as unemployment, corruption, and outdated norms may have contributed to a greater share of South Korean youth participating in the 19th presidential election.

We cannot just measure voter turnout based on presidential elections, however. Similar to the United States, South Korea’s voter turnout is generally poorer when it comes to electing members to its national legislature. While there is room for improvement, South Korea’s consistently high voter turnout can provide lessons for the United States. Standardizing or eliminating voter registration as well as creating a holiday to allow people the flexibility to vote without hurting their paycheck could significantly boost turnout among American voters.

Patrick Niceforo is a graduate student at the Middlebury Institute of International Studies and an intern at KEI. The views expressed here are the authors’ alone.

Photo from Freshly Diced photostream on flickr Creative Commons.

 

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Moon Vows to Become a “President of All People,” but Faces a Nation Divided

By Gwanghyun Pyun

Moon Vows to Eradicate “Deep Rooted Evils” of Previous Administrations

An unexpected early presidential election was held on May 9 in South Korea. This election was the result of the impeachment of President Park Geun-hye. The election was won by Moon Jae-In, who strongly argued for eradicating ‘deep rooted evils”’ in Korean society, referring to the turmoil from the former President Park. Moon largely won the support of those who protested against the Park administration, and during his campaign he praised the “candle sentiment” of the people who took to the streets with candles to protest. But while he was supported by those who protested against the administration, how will his policies tackle the issues they stood up for?

In Moon and the Minjoo Party’s official pledge book, his first pledge out of twelve is for there to be a ‘Republic of Korea without corruption,’ including the ‘eradication of deep rooted evils’ as its primary agenda. It specifically promises that the next administration would eradicate the deep rooted evils that resulted from the nine years of the former two conservative administrations. This means that his strategy during the election focused on criticizing the previous two  presidents to gain the support of those who took part in the candlelight protests. According to a poll by Gallup Korea, the reasons people voted for Moon were the “eradication of deep rooted evils” (20 percent), “regime change” (17 percent) and Moon’s “good personality” (14 percent).

A Republic of Korea where people are sovereign by finishing the candlelight revolution

Moon and the Minjoo Party decided to begin his list of  four visions for Korea with a vision of “finishing the candlelight revolution, a Republic of Korea where people are sovereign.” It suggests that during the nine years of the two former administrations, Korean society has belonged to the 1 percent of people who have vested interests in the system such as bureaucrats, the chaebol and the rich. Moon insisted during the campaign that finishing the candle revolution would bring a society where all the people are sovereign.

As the first pledge, Moon made promises to take Korean society back from the 1 percent. To do this, his administration will set up a special committee for clearing out deep rooted corruption and confiscating any wealth accumulated by illicit means. While he spoke out against the meddling in state affairs by Choi Soon-sil, a friend of the former president Park closely tied with the scandal that led to hear impeachment, Moon also promised to reform corruption among high-ranking bureaucrats, to remove the blacklist of cultural figures who supported left-wing causes, and to negate the state authored history textbooks made under the Park’s administration.

At the same time, Moon pointed out what he thinks is the fundamental reason why a small number of people have too much power –  the Korean constitution made in 1987 is outdated. Because this constitution has given prior leaders imperial presidential power, he said, Korea needs constitutional revisions to ensure balance between the presidency and the National Assembly.

The 58.6 percent who did not vote for the President Moon

Since he has focused on giving power back to the people, Moon needs to be aware of the views of the 58.6 percent of people who did not vote for him. Considering the fact that Moon’s first vision and pledges are about fixing faults from the last nine years, it seems that his victory  is more about the perceived wrongs committed by the prior two administrations than his policies on security and the economy.

During the election, Moon had two main rivals – the conservative Hong Joon-pyo and the centrist Ahn Cheol-soo, who won 23.3 percent and 21.8 percent of the vote respectively.  He also faced two minor opponents in the center-right Yoo Seung-min and the left Shim Sang-jung, who won 6.8 percent and 6.4 percent respectively.

Excluding the topic of cleaning up corruption, Korean publics opinion on other policies are polarized. Especially in terms of security policy, the three other candidates who collectively won 52.9 percent  offered a different vision for dealing with North Korea than Moon’s pledge  to inherit the ‘Sunshine policy’ that pushed for a close relationship between South and North Korea during the liberal administrations of 1998 to 2008.

The two conservative candidates, Hong and Yoo, insisted that Seoul needs to maintain a hardline stance against the North, including deploying tactical nuclear weapons in South Korea. The main candidate, Ahn, said that without North’s denuclearization first, there cannot be any cooperation with North Korea. Furthermore, these three candidates support the deployment of THAAD, while Moon argued that the THAAD deployment decision should be left to the new administration.

When it comes to economic policy, Moon insisted that the government should lead the creation of job opportunities, and has set a target for creating 810,000 new jobs in the public sector. In contrast, his three main rivals argued that private sector should lead job creation and criticized Moon for having no proper plan to budget for the 810,000 jobs he wants to create.

But while Moon Jae-in may face these splits on economic and security policy, particularly among those who did not vote for him, he has acknowledged the need to bridge divides. In his inaugural address, Moon said “I will become a president of all people. Each person who did not support me will still be my people and I will serve them as such,” highlighting the nation’s integration. It will be an important task for him to address the faults of past, but he must also work to overcome the current divisions in society and bring the nation together.

Gwanghyun Pyun is currently an Intern at the Korea Economic Institute of America as part of the Asan Academy Fellowship Program. He is also a student of Sogang University in South Korea. The views expressed here are the author’s alone.

Photo from Republic of Korea’s photostream on flickr Creative Commons.

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Challenges in Relations with the U.S. under the Moon Administration

This is the seventh in a series of blogs looking at South Korea’s foreign relations for the new Korean administration. The series also includes blogs on relations with North KoreaChina, Japan, Russia, the European Union, ASEANAfrica, the Middle East, and Latin America

By Kyle Ferrier

The United States is a crucial security and economic partner for South Korea. Not only is the U.S. treaty obligated to defend South Korea, but 28,500 American troops are stationed below the DMZ. Should an armed conflict arise on the peninsula Washington would assume operational control (OPCON) of South Korean forces. Since its implementation in March 2012, the KORUS FTA has helped to secure the U.S. as South Korea’s second largest trading partner, making it the cornerstone of the bilateral economic relationship. While the strength of these ties is built on a foundation of shared values transcending leadership transitions over the years, U.S. President Donald Trump has openly disputed fundamental aspects of the relationship. For the newly elected South Korean President Moon Jae-in, just as central to resolving the issues raised by Trump will be understanding his approach to foreign affairs.

Trump won the U.S. presidential election last November on a platform of radical change. In contrast to the mood of Obama’s campaign in 2008 which employed slogans such as “Hope” and “Yes We Can,” Trump’s “Make America Great Again” complemented his bleak portrayal of a broken American system abused by elites and foreign countries alike. Trump often put South Korea in his crosshairs, claiming they did not pay enough for U.S. troops stationed there—going so far as to suggest withdrawing military personnel in exchange for allowing Seoul to have nuclear weapons as a cost saving measure—and criticizing the KORUS FTA for destroying U.S. jobs.

Once elected, Trump was quick to reverse course on the alliance, assuring President Park of U.S. commitment just one day later. Since then South Korea has hosted a steady stream of senior U.S. officials, including Defense Secretary Jim Matthis, Secretary of State Rex Tillerson, Vice President Mike Pence, and most recently CIA Director Mike Pompeo. Although these visits are an extension of initial efforts to reassure Seoul, they are contrasted by Trump’s “disruptive” approach to foreign policy, which draws on his campaign rhetoric, prioritizes his interpretation of American interests, and is underwritten by unpredictability. The disruptive approach is seemingly being applied to adversary and ally alike, which directly impacts South Korea through U.S. policy on North Korea as well as issues of alliance management and bilateral trade.

The Trump administration has repeatedly stated Obama’s second term policy of “strategic patience” towards North Korea is dead, yet it may just be going by a different name. At the onset of his presidency, Trump was relatively quiet on North Korea, with some hoping this might be interpreted as a willingness to talk with Kim Jong-un. However, since mid-March the administration has taken a more forceful stance. Secretary Matthis first announced the end of “strategic patience” on his trip to Seoul. Soon after, multiple senior officials and even Trump himself claimed military options were back on the table, particularly a pre-emptive strike against North Korea. Then, after a two-month policy review, the administration released its agenda of “maximum pressure and engagement,” which some have noted is remarkably similar to “strategic patience.” Both are centered on pressuring Beijing to influence Pyongyang and waiting for credible indications from the North that they are willing to reduce their illicit weapons programs. Despite posturing otherwise, security realities in Northeast Asia look to be constraining Trump to largely continuing Obama’s approach, at least for the time being, which is more than can be said for alliance management and trade relations.

Although Trump seemed to be shying away from campaign calls for Seoul to pay more for U.S. military presence on the peninsula, recent comments raise new questions, particularly for an upcoming milestone in the alliance. Trump’s call for South Korea to pay $1 billion for the THAAD missile defense system in an April 28 interview was refuted by National Security Advisor H.R. McMaster only a few days later. However, it was not enough to erase the negative impact on the public discourse in South Korea, unnecessarily complicating Moon’s promised domestic review of THAAD’s deployment. The president’s comments also raise questions over how he may attempt to shape the renewal of the Special Measures Agreement (SMA) that is set to expire at the end of this year, which governs the burden sharing arrangement. It is certainly conceivable that Trump may influence SMA negotiations by similarly calling for Seoul to contribute more to the alliance, including the potential to leverage OPCON.

The last major challenge for the Moon administration will be addressing Trump’s criticism of the KORUS FTA. Trump has repeatedly attacked the trade deal, citing the U.S. bilateral trade deficit with South Korea, though it is still unclear if he will pursue the actions he has espoused. KORUS was one of only two trade agreements singled out for not meeting expectations in The President’s Trade Policy Agenda released by USTR, the other being NAFTA. Trump recently suggested that he might terminate the agreement if South Korea was not open to renegotiations, similar to the approach he has taken with NAFTA.

Whereas the relevant senior U.S. officials have attempted to counter Trump’s disruptive approach to North Korea and the alliance, competing coalitions within the administration on trade further obscures how U.S. policy might be carried out. On the one hand, there are those who favor policies more traditionally associated with protectionism: Secretary of Commerce Wilbur Ross, Director of the new Office of Trade and Manufacturing Policy Peter Navarro, and USTR nominee Robert Lighthizer. And on the other are those who support greater global engagement: Director of the National Trade Council Gary Cohn and Senior Advisor to the President Jared Kushner. Although it is not yet clear how the U.S. will seek to pursue new concerns over KORUS—despite generally favorable reports by USTR and the US International Trade Commission released in the past year—the first major hurdle will come at the end of June when Commerce and USTR are expected to release their findings from a major review of all bilateral trading relationships.

How soon the Moon administration attempts to address these challenges with the United States will significantly dictate their potential impact on U.S.-South Korea relations. Whether it is growing pains or a more structural issue, the Trump administration’s implementation of foreign policy so far has negatively influenced South Korean public opinion. While the newly adopted policy of “maximum pressure and engagement” is remarkably similar to “strategic patience,” the process of getting there raised serious questions about U.S. credibility through concerns such as the location of the USS Carl Vinson and the perception that Washington would pre-emptively strike North Korea without consent from Seoul. Efforts by senior U.S. officials to smooth over some of Trump’s more controversial remarks have helped to stabilize relations, but the U.S. loses face each time. Even so, there are still contentious remarks that have not been sufficiently addressed.

Recent polling shows Trump’s popularity in Korea has sharply declined—falling below China’s Xi Jinping who is punishing South Koreans over THAAD. Koreans still view the U.S. favorably, yet it is unclear how long this duality can be sustained. A poor public opinion of the United States would severely constrain Moon’s ability to successfully coordinate the issues Trump has raised, which should make early and direct dialogue with his counterpart in Washington a high priority.

Kyle Ferrier is the Director of Academic Affairs and Research at the Korea Economic Institute of America. The views expressed here are the author’s alone.

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Seoul, Washington, and Pyongyang: Delicate Diplomatic Triangle for President Moon Jae-in

By Robert R. King

The campaign is over; ballots have been cast; the result is clear—Moon Jae-in will be in the Blue House within a few days.

The most critical foreign affairs issue on the agenda of the new President is the South’s relationship with North Korea, and entwined with that issue is its relationship with the United States.  Though the new American President passed his first 100 days in office just a few days ago, there is still considerable uncertainty about the direction of American foreign policy, and one of the most sensitive issues facing the United States is North Korea and its nuclear ambitions.  The relationship with North Korea is the most critical question for the South and its new president, and because of the military ties with Washington, how to deal with the North will also be the key issue in relations with Washington.

President Moon begins his contacts with the new American president at something of a disadvantage.  When President Trump moved into the White House, South Korea was in the midst of the impeachment of Moon’s elected predecessor Park Geun-hye.  As a result, Trump met with Japan’s Prime Minister during the transition (his first post-election meeting with a foreign leader) and again after his inauguration in Washington and at Mar-a-Lago.  The American President also met in early April with Chinese President Xi Jingping.  The American Secretary of Defense and Secretary of State have both met with counterparts in Seoul in recognition of the importance of Korea in American policy, but the chemistry and content of bond between the two presidents has yet to emerge.

It is also not clear where there may be differences on the North between the two leaders.  During the campaign, Moon has expressed the desire for engagement with the North and better relations.  Trump has expressed serious concern about North Korea’s nuclear and missile programs, but he has also expressed a willingness to meet directly with the North’s leader Kim Jong-un.  His first statement was made early in his tenure, but he repeated it again just last week.  Trump told Bloomberg News just a week ago that he would meet with Kim Jong-un under the right circumstances—“If it would be appropriate for me to meet with him, I would absolutely; I would be honored to do it.  If it’s under the, again, under the right circumstances. But I would do that.”

South Korea’s new president, who was still a candidate ten days ago, cited this statement by America’s President and concluded that Trump is “more reasonable than perceived” and suggested that he and Trump were taking a similar position in favor of bringing the North back to negotiations on the nuclear issue.  It remains to be seen, however, how close the two presidents are on the details of how best to bring the North into denuclearization negotiations.

Another potentially serious issue that could create problems between the two presidents and their countries with regard to policy toward the North is THAAD, the U.S. defensive missile system now deployed in the South as agreed to by Moon’s predecessor.  The U.S. rushed to get the system in place before the election, although Moon expressed concerns about the deployment and the belief that the next government should review the decision, his political and ideological allies were vocally opposed to the deployment throughout the election.  This will likely be a serious point of contention that could create difficulties for relations between the U.S. and South Korea.

It is made more complex by the fact that China has been particularly opposed to THAAD and has taken steps to make the deployment more costly for the South by significantly cutting back Chinese tourism to South Korea—a major source of income and consumer goods sales in the South—as well as boycotting retail outlets in China owned by the South Korean conglomerate which sold land to the South Korean government on which THAAD is based.  THAAD is an issue that has serious security and domestic political implications for President Moon, but one of the most difficult will be the effect the issue has on the American-South Korea relationship.

Making the issue even more awkward and controversial was President Trump’s pronouncement last week that he expected the South to pay the $1 billion cost for the missile defense system.  His comment came less than ten days before the South Korean election, and was certainly not welcomed by pro-U.S. presidential candidates in the South.  Trump’s statement calling for the South to pay for THAAD was linked to his call for a renegotiation of the U.S.-South Korea trade agreement (KORUS).  The U.S. National Security Advisor, General McMasters, however, reassured his counterpart in Seoul that the U.S. would keep its previous commitment on the missile system.

The bottom line is that uncertainty and shifting policy signals from the Oval Office will not make the task of the new South Korean president an easy one.  He will likely have his own learning-curve and unintended missteps, which will make his task harder.  The relationship between Seoul and Washington is critically important for both countries, however.  It will take a great deal of maturity and understanding on the part of both presidents to deal with North Korea.  There is a great deal at stake for all sides.

 

Robert R. King is a Non-Resident Fellow at the Korea Economic Institute of America.   He is former U.S. Special Envoy for North Korea Human Rights.  The views expressed here are his own.

Photo from Morning Calm Weekly Newspaper Installation Management Command, U.S. Army’s photostream on flickr Creative Commons.

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Deepening South Korea’s Relations with the Middle East

This is the sixth in a series of blogs looking at South Korea’s foreign relations in the run up to the next Korean administration taking office on May 10. The series also includes blogs on relations with North Korea, the United StatesChina, Japan, Russia, the European UnionASEANAfrica, and Latin America

By Juho Choi

The active relationship between South Korea and the Middle East Area is relatively young. Since South Korea established its government after the Korean War, most exchanges with Middle East nations had been based on oil and overseas construction. While there is significant geographic distance and cultural differences, the relationship has evolved significantly in recent years.

Korea’s active economic ties with the Middle East go back many years as Korean companies have often looked to the region for construction projects. However, ties have grown closer in the 21st century. As oil prices soared, many oil-supplying nations needed additional oil-related facilities and social infrastructure.

Middle East Blog Table

Out of the top 10 countries where Korea has construction work, 6 are in the Middle East including the top 4 countries. Under the two former presidents (Lee Myung Bak and Park Geun Hye), ties with Middle East nations were significantly expanded. Both presidents toured the Middle East and signed hundreds of memorandum of understanding (MOU) in various fields. In fact, some of them led to contracts such as plant building and operation contracts, including ones in the UAE for a $20 billion deal to build four nuclear power plants and $49.4 billion contract to operate the plants over 60 years.

Lifting sanctions on Iran also helped Korea’s economy advance and brought hundreds of millions of dollars in contracts. Daelim Industrial landed a $2 billion deal with the Esfahan Oil Refining Company and Hyundai Heavy Industries clinched a $700 million deal to build 10 ships for Iran’s state-owned shipping companies. Also, Turkey, which is called a brother nation in Korea, signed a $3 billion contract with SK E&C to construct the world’s longest suspension bridge.

In addition to economic ties, cultural exchanges have dramatically increased. According to Korea Customs statistics, Korean confectionery exports to UAE and Saudi Arabia have risen 60.8 percent and 141.8 percent, respectively, compared with 2011. The popularity of Hallyu (K-Wave) is also remarkable. Starting with the success of ‘Dae Jang Geum’ which recorded a 90 percent rating in Iran, many Korean TV shows have aired successfully in the Middle East. The growing popularity of K-pop is also considerable. The first music and culture convention ‘KCON Abu Dhabi 2016’ was a huge success with 8,000 fans and many idol groups have had concerts in the Middle East. State level effort also has continued to share cultural value in depth. Two Korean Cultural Center are running in the Egypt and Abu Dhabi and different events has been offered by Korean embassies around the Middle East.

This K-Wave trend has led to a boost in tourism. According to the Korea Tourism Organization (KTO), the number of tourists from the Middle East has soared over the past few years. In 2016, nearly 200,000 tourists from the Middle East visited South Korea, double the number of tourists in 2011.

Beyond cultural exchange, South Korea has also contributed to keeping peace in the Middle East. The Cheong-hae naval unit has been deployed for international maritime security and to counter the spread of terrorism. They also carried out an operation called ‘Dawn of Gulf of Aden’ which was successfully rescued 21 crew members of a Korean ship hijacked by Somali pirates. In addition to the Cheong-hae unit, the Dong-Myung unit has been engaged in rebuilding in Lebanon and the Ake unit has helped to train soldiers of the Persian Gulf state in UAE.

However, several obstacles such as fluctuating oil prices, unstable regional security, cultural, and religious difference still remain. In particular, armed conflict and unstable political situations in the Middle East need worldwide cooperation and focus to move forward. Considering Korea’s growing interest in the regions, it’s possible to play an important role by cooperating with Middle East nations in depth. According to Korea Institute for International Economic Policy (KIEP), many oil-supplying nations are promoting economic diversification for falling oil prices, it will lead to increased investment in non-oil based industries such as medical care, tourism, finance and others. South Korea has mainly enhanced its business tie with Middle East in construction and resource related industries. South Korea is also endeavoring to follow this diversification especially medical care. However, Korea should diversify investment in accordance with this phenomenon and prepare the post-oil era with the Middle East to greet the real ‘Second Middle East Boom’

Juho Choi is an intern at the Korea Economic Institute of America and a student of the Dong-A University in Busan. The views expressed here are the author’s alone.

Photo from Gordon’s photostream on flickr Creative Commons.

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Prospects for U.S.-Korea Economic Relations under New Administrations in Seoul and Washington

By Phil Eskeland

In 2017, both the Republic of Korea (ROK) and the United States face various challenges and opportunities in the growing economic relationship.  Korea is now America’s 6th largest trading partner, ahead of the United Kingdom and France.  As a nation that once was a major recipient of U.S. foreign aid, South Korea has rapidly advanced to become the world’s 13th largest economy, ahead of Canada and Spain.  However, these achievements are not locked in forever.  As the new ROK and U.S. administrations interact and deal with each other, both sides must avoid “unforced errors” and cooperate with each other as much as possible to confront domestic and international trends that place impediments on both economies, such as stagnant wage growth, aging population, mismatched workforce, and the siren song of trade protectionism.

The first major challenge is establishing an accurate analysis of the Korea-U.S. Free Trade Agreement (KORUS FTA).  The agreement’s success or failure should not be measured by just a single metric of the merchandise trade deficit, which parenthetically decreased in 2016, but on a comprehensive review of all of its effects.

  1. Total trade volume (imports and exports) between the two countries has increased since pre-KORUS levels (2011).  In fact, the most recent data from the Commerce Department shows that the U.S. exported a record level of manufactured goods and agricultural products to Korea for the month of March 2017 at $4.36 billion, the highest level since March 2014.
  2. The United States continues to break records in the export of services to Korea, producing the highest trade surplus ever for the U.S. in 2016.  This trade surplus reduced the overall goods and services trade deficit between the two countries to $17 billion.  As a result, Korea’s bilateral trade deficit with the U.S. is ranked well below other nations, including China, Germany, Mexico, Japan, and even Italy.
  3. According to the Commerce Department, U.S. exports to Korea have led to an increase of 87,000 jobs in the United States between 2009 and 2015, including 55,000 jobs in the goods sector, which pay 16 percent more on average than other employment.
  4. Korea now represents the 5th fastest-growing source of Foreign Direct Investment (FDI) into the United States, employing over 45,000 workers in the U.S. earning an average compensation package of $92,000 a year.
  5. Because U.S. exports of items covered by KORUS have increased by 18 percent since 2011, the agreement has helped to reduce the merchandise trade deficit by nearly $16 billion.

Thus, the KORUS FTA meets every metric of a successful trade agreement as outlined by the Trump Administration.  In fact, if reducing the trade deficit is the main concern, then the Trump Administration should focus their attention on other countries first before Korea.

Nonetheless, there is always room for improvement.  The KORUS FTA has a binational committee process to iron out differences in implementing the agreement.  This has greatly helped resolve numerous thorny issues without having to go through the difficult process of amending KORUS.  For example, clarifying the rules of origin on orange juice helped to dramatically increase sales to Korea, giving a boost to Florida citrus growers and producers at a critical moment when the U.S. market is declining.  In addition, Donald Trump won the Sunshine State – a key “swing” state with the most Electoral College votes – in the last presidential election.  However, both sides should avoid unforced errors by either scrapping the agreement or refusing to negotiate.  If KORUS is scrapped, hard-won gains for many U.S. exporters, including Florida orange juice producers, would vanish.  While KORUS is relatively new, it could be updated in a few areas, such as in intellectual property and e-commerce, though preferably through supplemental side agreements to avoid re-opening up the entire text.  The Trump Administration could lift the relevant IP and e-commerce sections from the now defunct Trans Pacific Partnership (TPP) agreement and offer to add these provisions to KORUS.

Second, international monetary policy could be another challenge to the U.S.-Korea relationship.  Every six months, the U.S. Treasury produces a report that identifies potential currency manipulators if three conditions are met:  (1) if there is a significant bilateral trade surplus with the United States; (2) if there is a material current account surplus; and (3) if the nation has engaged in persistent one-sided intervention in the foreign exchange market.  While Treasury did not identify any trading partner as a currency manipulator in its most recent report, the department included six countries, including Korea, on its monitoring list.  Some in the U.S. advocate adding provisions to prevent currency manipulation by other nations into trade agreements.  However, this challenge could represent an opportunity for Korea to be pro-active in responding to critics by being fully transparent in any governmental actions in foreign exchange operations.

Third, U.S. “fair trade” laws could also represent a challenge and opportunity in U.S.-Korea economic relations.  As with most U.S. administrations, the emphasis on trade during the first year in office usually focuses on enforcing existing agreements, not enacting new ones.  The Trump Administration is no different, but the prominence of trade enforcement has been amplified, particularly with the announcements of a series of reviews and investigations.  Both sides should take a step back to insure that enforcement actions do not lead misperceptions and unforced errors.  Korean companies should be extremely vigilant to make sure that they do not sell their product in the U.S. at a loss.  On the flip side, the Commerce Department should also be diligent to make sure it is not biased towards U.S. industry regarding allegations of unfair trade.  For example, the U.S. should implement the World Trade Organization (WTO) decision that disallows the use of “zeroing” (i.e., disregarding allegedly “non-dumped” sales in order to inflate dumping margins) to estimate higher tariff penalties.  Commerce should also consider the ramifications of a trade case for the entire U.S. economy because, ultimately, increased tariffs are another form of taxation that gets passed along to consumers in terms of higher prices.  As learned during the 2002/2003 steel tariff debate, many more American jobs at manufacturing facilities that used steel were at risk than in the steel industry as their final products were priced out of the marketplace.

Fourth, the two new administrations should give an opportunity for Korea to shine by highlighting and publicizing more of its FDI into the United States.  As stated above, Korea is now the 5th fastest growing source of FDI into the United States, which has accelerated since the implementation of the KORUS FTA.  If new investments are forthcoming, Korean companies would do well to let the American people and the Trump Administration know of this news to generate good will.

Finally, both countries would do well to continue its global partnership on numerous fronts:  cybersecurity, space, science, energy, environment, health security, Arctic cooperation, among others, that have enormous economic ramifications for both countries.  These important issues unfortunately do not receive the attention that they deserve because they are non-contentious, apolitical concerns.  Just because these initiatives were started by previous administrations should not mean that they are put to the wayside.  If anything, these issues, such as continuing the work of the U.S.-Korea Joint Committee on Science and Technology, should form the foundation for building further cooperation on economic and trade issues between the U.S. and the Republic of Korea.

 

Phil Eskeland is Executive Director for Operations and Policy at the Korea Economic Institute of America. The views expressed here are his own.

Photo from Saik Kim’s photostream on flickr Creative Commons.        

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Poll of Polls: Final South Korean Presidential Polls

By Juni Kim

May 2nd marked the last day for polls to be conducted before the South Korean presidential election on May 9th. With only four days remaining until the election and early voting already over, the odds are looking increasingly favorable for frontrunner Moon Jae-in despite a recent surge in the polls from conservative candidate Hong Joon-pyo. Moon maintains a 20 percent lead over his closest rival Ahn Cheol-soo of the People’s Party, who has fallen in the polls nearly congruently with Hong’s rise.

Although Ahn and Hong’s poll numbers have shifted dramatically in recent weeks, Moon has enjoyed relatively stable support. From our first poll of polls the week of April 11-17, Moon’s numbers have only decreased by 1.4 percent.

Poll Average Graph Final Day

A strong early voting turnout also works against Moon’s rivals. The National Election Commission reported that 26 percent of voters have already cast their ballots after early voting ended earlier today. In comparison, 12 percent of voters turned out for early voting in last year’s parliamentary elections. Of interesting note, the typically liberal Jeolla provinces had some of the highest early turnout, while the conservative Gyeongsang provinces experienced some of the lowest.

With little time remaining, it is difficult to see a scenario where any of the other remaining candidates could stage an upset again Moon. Either Hong or Ahn would have to decisively win over moderate and conservative voters over the weekend. Politics can be notoriously unpredictable, but that has not stopped some from calling the election early. The May 15th issue of the Asian edition of TIME magazine features Moon on the cover, and it is only a matter of days to see if he indeed does become South Korea’s next president.

The polls included in our aggregate poll are from listings on the South Korean National Election Commission’s website. The aggregate poll includes any polls conducted on May 2nd. For more information, you can visit this page and see the polling data (in Korean) from each research organization. Our aggregate poll includes polls conducted by Realmeter, Gallup Korea, ResearchView, Research & Research, Hankook Research, Jown C&I, MetriX, Kantar, Embrain, and Yeouido. Last week’s poll of polls was updated with polling information from the week of April 25-May 1 that has been released since the prior blog was published. The updated numbers for last week’s polling results are as follows: Moon Jae-in (41.4), Ahn Cheol-soo (22.4), Hong Joon-pyo (15.5), Sim Sang-jung (7.9), and Yoo Seung-min (4.7).

Juni Kim is the Program Manager and Executive Assistant at the Korea Economic Institute of America (KEI). The views expressed here are the author’s alone.

Photo from hjl’s photostream on flickr Creative Commons.

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Why This May Be South Korea’s Most Consequential Presidential Election

By Troy Stangarone

After months of protests across South Korea that culminated in the impeachment of President Park Geun-hye, South Koreans will go to the polls on May 9 to select her successor. Regardless of which candidate wins the election, the upcoming presidency may be the most significant for South Korea since the transition to the opposition with Kim Dae-jung cemented the democratic ideal of the transition of power and he was thrust into managing what is known in South Korea as the IMF crisis. The next administration will come into office at time when South Korea faces a wide array of economic, political, social, and security challenges.

The next president will need to begin by restoring confidence in government. The impeachment of President Park has divided society and exposed the continuing ties between government and business that have left a legacy of scandal trailing each administration. Prior scandals have not always directly involved the president, but the impeachment indicates a growing intolerance in South Korean society for ever too close of relations between the government and business. Addressing this issue will mean the next administration will need to consider reforms in both government and the chaebol.

If restoring confidence in government were not challenging enough, the next president will come into office at a time when South Korea faces critical domestic and international challenges that will need to be addressed. The South Korean economy in many ways is at a crossroads. After years of success as an exporting powerhouse, exports have been largely stagnant in recent years and South Korea faces increasing competition from lower wage countries such as China which have cut into key sectors for South Korea’s economy such as steel and shipbuilding, while becoming increasingly competitive in consumer electronics as well.

The challenges from international economic competition are coupled with domestic economic challenges. South Korea’s rate of economic growth has continued to decline and is expected to only by 2 percent in 2018. As the economy slows, income inequality has risen and will likely only continue to do so the economy becomes more oriented around services industries.

To begin addressing slowing economic growth and income inequality, the next administration will need to focus on structural reforms and labor market reform. South Korea needs structural reforms to address overcapacity in troubled areas such as steel, shipping, and ship building. At the same time, reforms are needed in the labor market as well. South Korea’s current two-tiered system made of a well-protected class of permanent workers and temporary workers who have few protections has created rigidities in the labor market that have limited job growth, especially for the young.

South Korea’s economic challenges have also created social challenges. As South Korean society rapidly ages, young South Koreans have seen their opportunities narrow even with one of the highest rates of college graduates in the world. While facing decade long highs in unemployment, young South Koreans face concerns about their future in a slowing economy and in a society that they see as constraining their opportunities.

If the young have seen increasing challenges, South Korea itself faces impending problems from its rapidly aging population. In the years ahead, over the next administration the working age population is expected to decline to just under 36 million and continue declining in the years after while the overall population will continue to grow until 2030. This means an increasing percentage of South Korea’s population will be in retirement with fewer workers to support them. This challenge is compounded by South Korea having the highest level of old age poverty in the OECD despite President Park having worked to improve the social safety net.

South Korea’s international relations may not be any less complex than its domestic challenges. On top of the agenda will be North Korea. While that will not have changed from prior administrations, Pyongyang has significantly advanced its nuclear weapon and missile programs under Kim Jong-un. As a result, the strategic situation could significantly change under the next administration should North Korea successfully deploy not only a nuclear deterrent but a viable second strike capability.

As a result, the administration may find its options for dealing with North Korea constrained, both by North Korea’s progress on its weapons programs and the policies of regional states. Relations with China have soured over the decision to deploy THAAD to defend against North Korean missiles, and China’s use of economic pressure may leave the next administration with a Scylla and Charybdis type dilemma of accepting significant economic harm or weakening South Korea’s defenses against North Korea.

Managing this situation will require close relations with the United States and Japan, both of which could be problematic if divisions over how to handle North Korea develop, or in the case of Japan historical issues complicate relations. While the Trump administration so far has been more conventional in its approach to North Korea than many foreign policy issues, Seoul and Washington will need to ensure that they do not diverge on how to handle North Korea. At the same time, there could be tension in the relationship, as the Trump administration is taking a harder position on trade and has indicated that it may review the KORUS FTA.

Whoever South Korea elects as president in May will face a more fluid domestic and international environment than prior South Korean presidents, one shaped by the impeachment and the need to enact reforms. While South Korea has gone through difficult economic times, such as the Asian Financial Crisis, or faced challenging relations with the United States or China, it is the degree and the number of challenges that South Korea may face over the next five years that make this election so consequential.

Troy Stangarone is the Senior Director for Congressional Affairs at the Korea Economic Institute of America. The views expressed here are the author’s alone.

Photo from sinano1000’s photostream on flickr Creative Commons.

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The European Union: A Key Partnership for the Next South Korean Administration

This is the fifth in a series of blogs looking at South Korea’s foreign relations in the run up to the next Korean administration taking office on May 10. The series also includes blogs on relations with North Korea, the United StatesChina, Japan, Russia, the Middle EastASEAN, Africa, and Latin America

By Gwanghyun Pyun

Since 1963, the Republic of Korea (ROK) and what has evolved into the European Union (EU) have been steadily developing economic and diplomatic relations. The EU, a large single market consisting of 28 European countries, is an important trading partner for the ROK and its soft power in the global community can assist with peace on the Korean peninsula.  Most importantly, the EU and South Korea share important values such as human rights, democracy and a market economy, making the EU an important partner for South Korea and the next presidential administration.   

The fundamental basis of the EU-Korea relationship, a Free Trade Agreement (FTA)

When the EU-ROK FTA talks began, the South Korean government sought to expand its export market, raise the amount of foreign investment in South Korea and increase job opportunities. The EU is the world’s largest trade block and an advanced economy that primarily trades in are automobiles, machinery and appliances, transport equipment and chemical products with South Korea. In fact, the amount of trade between the EU and the ROK has steadily increased to 90 billion euros since the agreement came into effect in 2011.

However, South Korea has not seen the results it expected. According to a report by the Korea Institute for International Economic Policy (KIEP), five years later, the EU-ROK FTA has resulted in just one-third of the benefits that the South Korean government expected initially. The report concluded that the result comes from the economic recession in the EU from lingering Eurozone related issues, but that South Korea has fared better than other countries such as China and Japan.

Although this unsatisfying result has been caused by the EU’s economic recession, there are rising voices saying that the FTA should be revised. Indeed, at a meeting of Asia-Europe Meeting (ASEM) last year, then President Park Geun-hye and EU leaders already shared the view that there was a need to revise the FTA.

Besides the economic relationship, the EU and South Korea have developed a strategic partnership.

The EU and ROK have entered into and developed three major agreements – the FTA (2011), an EU-Korea Framework Agreement (2010) and The Framework Participation Agreement (2014). With these agreements, the EU and South Korea can promote coordination and cooperation on international and regional concerns.

Based on these partnerships, the EU can support South Korean international policy. For example, when North Korea conducted their fifth nuclear test last year, South Korea and the EU agreed to utilize all means necessary for denuclearization. Also, the EU has currently imposed unilateral sanctions against North Korea. On the other hand, Last February, Chancellor Angela Merkel said during a meeting with the U.S. President Trump that ‘the EU-Korea FTA is win-win deal’ to champion free trade. In addition, the EU can expand its free trade market to other Asian countries based on the case of EU-Korea FTA that is the EU’s first trade deal with an Asian country.

Furthermore, South Korea and the EU have many areas of possible corporation because they share common values in various fields. First, both recognize the importance of higher education. They have kept up academic exchanges through Erasmus+ and the co-funded Industrialised Countries Instrument — Education Cooperation Programme (ICI-ECP). Also, South Korea and the EU cooperate in the cultural field through a protocol on cultural cooperation under the EU-ROK FTA. In science, they have arranged the Agreement on the Scientific and Technological Cooperation (2007) and decided to cooperate on research related to ICT, nanotechnology, health/bio, energy and satellite navigation. Both can work together to solve energy problems, as the EU is a leading energy consumer and South Korea is the 12th largest country of greenhouse gas emission.

An uncertain future for the EU

Now, the EU faces a number of uncertainties. The EU has an advantage as an economic and political union of 28 European countries. However, the opinion on the union is split among various countries in the EU. This is because of a strong unity that limits each country’s sovereignty, while  maintaining the union can place an economic burden to some of the EU countries.

Last year, a majority of British citizens voted for the United Kingdom (UK) to exit from the EU. The process of ‘Brexit’ is still in the process of being completed but should be concluded in two years. This year, in the first round of the French Presidential election, the right-wing politician Marine Le Pen got 21.3 percent of the vote, slightly less than the leading vote getter Emmanuel Macron at 24.01 percent. Le Pen has said that if she wins the election, she will seek to pull France out of the EU or redenominate France’s debt in franks, placing the euro at risk.

On the other hand, this wave to exit the EU cannot easily break the union because many of the EU leaders and European politicians are trying to maintain the union. Last January, German Chancellor Angela Merkel said Britain cannot do ‘cherry picking’ during Brexit and urged the unity of the other EU members. Two major French parties, the Socialist Party and the Republicans, along with outgoing President Francois Hollande, declared their support for Macron who is a pro-EU politician and received 64% support from the French people in an initial poll after the first round of the French presidential election.

Stability in the EU matters for South Korea as Germany, France, the UK and Italy are top four export markets for South Korea as they account for 43 percent of the Korea’s export to Europe.

The most urgent task for Korea is to continue relations with the EU as well as the UK.

Amid the crisis of the EU, South Korea should try to maintain a ‘win-win’ relationship with European countries. Fortunately, the EU President Jean-Claude Juncker said that Brexit would not have any impact on EU-ROK relations, and insisted that the EU would continue to keep bilateral cooperation with South Korea as a ‘trustworthy’ partner.

In addition, South Korea will need to build new economic ties with the UK as it exits from the EU. A report by the Korea Institute for International Economic Policy estimated that Brexit will cause a 0.5-0.8 percent decrease in Korea’s economic growth rate in the short-run if South Korea does not sign a UK-ROK FTA. However, in the long-run, if South Korea has a FTA with the UK as well as the EU, the Korean economy is expected to experience more trade benefits than before. South Korea and the UK sent positive signals to each other in a meeting between the Korean Foreign Minister and the British Ambassador to Korea, indicative that they would reinforce economic relations between the two countries.

The EU is an important partner for South Korea

When the new Korean administration takes office, the EU-ROK FTA revision and the UK-ROK FTA negotiation will be on the docket. They must not forget that the EU is an important global partner for South Korea and the EU-ROK FTA and other agreements are the basis of the relationship.

The new administration will also need to closely observe the situation in the European Union. First of all, when the UK exits from the EU, South Korea will need to reaffirm ties with the UK as an important partner on trade and security issues, while keeping in mind that a strong partnership with the EU and the UK would help South Korea economically, politically as well as socially.

Gwanghyun Pyun is currently an Intern at the Korea Economic Institute of America as part of the Asan Academy Fellowship Program. He is also a student of Sogang University in South Korea. The views expressed here are the author’s alone.

Photo from the European Parliament’s photostream on flickr Creative Commons.

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Poll of Polls: South Korean Presidential Polls April 25-May 1

By Juni Kim

With the South Korean presidential election a little over a week away, frontrunner Moon Jae-in has maintained his lead while his closest competitor Ahn Cheol-soo continues to fall in the polls. Ahn, who nearly matched Moon’s polling numbers in early April after a surge in support, has dropped off considerably in the past two weeks. Meanwhile, conservative candidate Hong Joon-pyo continues to rise in the polls with the largest increase in support (4.2% over last week’s poll of polls) among the presidential contenders.

The shift in support between Ahn and Hong is likely due to conservative voters turning towards Hong’s more traditionally right-wing appeal and Ahn’s underwhelming performance in televised debates. Although the conservative vote is still split, Hong is now the most preferred candidate among self-identified conservatives at 36% (compared to Ahn’s 29%) according to the latest Gallup Korea poll, and 42% of conservative voters indicated they had a more favorable view of Hong after watching the television debates.

 Poll Average Graph Week 2

Although the shift in the polls is promising for Hong’s camp, an upset election result by either Hong or Ahn is unlikely at this point. Both candidates had the lowest marks among general voters for their performances in the debates, and Moon has maintained his polling lead over the past few weeks. 221, 981 votes have already been cast in last week’s overseas voting, including over 48,000 ballots cast in the United States, and early voting starts in South Korea this Thursday. Politics, especially in recent years, is subject to stranger than fiction twists and turns, but barring a monumental “May Surprise,” South Korea is likely to have its first progressive president in nearly a decade.

The polls included in our aggregate poll are from listings on the South Korean National Election Commission’s website. For more information, you can visit this page and see the polling data (in Korean) from each research organization. Our aggregate poll includes polls conducted by Realmeter, Gallup Korea, ResearchView, Hankook Research, R&Search, KSOI, MetriX, and Ace Research. Last week’s poll of polls was updated with polling information from the week of April 18-24 that has been released since the prior blog was published. The updated numbers for last week’s polling results are as follows: Moon Jae-in (41.3), Ahn Cheol-soo (30.6), Hong Joon-pyo (10.1), Sim Sang-jung (4.2), and Yoo Seung-min (3.6).

Juni Kim is the Program Manager and Executive Assistant at the Korea Economic Institute of America (KEI). The views expressed here are the author’s alone.

Images created by Juni Kim. Photos from 박근혜 공식앨범‘s flickr page, Chihoon Byun’s flickr page, 철수 안’s flickr page, ddeohee’s Twitter page.

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About The Peninsula

The Peninsula blog is a project of the Korea Economic Institute. It is designed to provide a wide ranging forum for discussion of the foreign policy, economic, and social issues that impact the Korean peninsula. The views expressed on The Peninsula are those of the authors alone, and should not be taken to represent the views of either the editors or the Korea Economic Institute. For questions, comments, or to submit a post to The Peninsula, please contact us at ts@keia.org.