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Joint Challenges for U.S.-South Korea Alliance

South Korean President Lee Myung-bak's state visit to the United States on October 13 comes on the heels of congressional approval (KoreaHerald) for a long-pending Free Trade Agreement (FTA) between the two countries. The pact is seen as another achievement in a strong alliance that experts say has "never been better" than under Lee and U.S. President Barack Obama.

South Korea is the seventh-largest trading partner of the United States; two-way goods trade amounted to roughly $88 billion in 2010. The Korea-U.S. FTA, the biggest since the 1994 North American Free Trade Agreement, would eliminate nearly 95 percent of all tariffs within five years and increase U.S. exports (PDF) by nearly $11 billion annually.

The deal is an essential step toward Obama's goal of doubling U.S. exports during the next five years. It will send an important signal to Asia-Pacific countries of the U.S. commitment to staying economically engaged with them, write Mauricio Cárdenas and Joshua Meltzer of the Brookings Institution. Additionally, it will provide strategic reassurance to South Korean allies in the face of its growing economic dependence on China and will lend credibility to U.S. efforts to negotiate a Trans-Pacific Partnership, a future free trading bloc in the Asia-Pacific that excludes China, write CFR's Edward Alden and Scott Snyder. It also reaffirms the U.S. commitment to remaining a preeminent power in the Asia-Pacific (ForeignPolicy), as Secretary of State Hillary Clinton recently outlined.

The FTA still needs ratification by the South Korean parliament, where it is expected to face some resistance. The leader of the opposition has called the deal an "unfair contract with too many benefits for the United States" (FT) and has asked to revise some of its clauses. But the hard slog, writes Christian Oliver in FT's blog beyondbrics, will be implementation, because of South Korea's protectionist instincts. The United States will also face competition from the European Union, which signed a bigger trade deal with South Korea in July.

The other issue expected to dominate Lee's visit is North Korea. Victor D. Cha of Georgetown University writes in Foreign Affairs that the Obama administration is edging closer to the possibility of engaging in bilateral talks with Pyongyang on denuclearization. The Six Party Talks on denuclearization have been stalled since late 2008, and North Korea has shown a preference for direct talks with Washington.

So far, the United States and South Korea have been aligned in making denuclearization the top priority with the North. Yet, it is inevitable that one or the other is likely to be more hard line vis-à-vis North Korea going forward, writes former South Korean foreign minister Han Sung-joo. Han says the dilemma of reacting strongly to North Korean intransigence while containing the possibility of conflict escalation is a big challenge for the U.S-South Korean alliance.

Both the United States and South Korea face presidential elections next year, and a change in leadership could also alter policies toward North Korea. Lee's hard-line approach has drawn criticism from some at home, including the leading presidential contender from his political party, Park Gyun-hye. Park has called for a new policy toward the North (Foreign Affairs)--an alignment policy that would take a tough line against Pyongyang when provoked and would be open to negotiations at other times.

Beyond North Korea, as this Backgrounder notes, the U.S.-South Korea alliance has grown to encompass cooperation on global issues from climate change to international development. But if this relationship has to act like the "security lynchpin" for the entire Pacific region as the two presidents desire, it will have to tackle difficult challenges like China's rise and maintaining military resources amid fiscal constraints, says Han. Snyder recommends that the two countries build a "whole of alliance" approach to develop a division of labor in promoting shared objectives based on comparative advantage.

Background Materials:

Crisis Guide: The Korean Peninsula, CFR Interactive

Free Trade is Good for America, Christian Science Monitor

U.S. Trade and Investment Policy, CFR Task Force Report

Managing Instability on China's Periphery, CFR Report

This article first appeared on CFR.org.

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