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Updated August 1, 2019
South Korea: Background and U.S. Relations
Overview
strike the continental United States with a nuclear-armed
South Korea (officially the Republic of Korea, or ROK) is
ballistic missile. The Obama and Trump Administrations
one of the United States’ most important strategic and
responded by expanding multilateral and unilateral
economic partners in Asia. The U.S.-ROK Mutual Defense
sanctions against North Korea.
Treaty, signed in 1953 at the end of the Korean War,
commits the United States to help South Korea defend
itself, particularly from North Korea (officially the
Democratic People’s Republic of Korea, or DPRK).
Approximately 28,500 U.S. troops are based in the ROK,
which is included under the U.S. “nuclear umbrella.” The
U.S.-ROK economic relationship is bolstered by the U.S.-
South Korea Free Trade Agreement (KORUS FTA). South
Korea is the United States’ seventh-largest trading partner,
and the United States is South Korea’s second-largest
trading partner, behind China.
After several years of close coordination, notably on North
Korea, collaboration between the United States and South
Korea has become more inconsistent and unpredictable
under the administrations of Donald Trump and Moon Jae-
in. Moon, a progressive, was elected in May 2017 after a
decade of conservative rule in South Korea. (See Figure 1
for more on ROK politics.) Moon and Trump have aligned
aspects of their approaches toward North Korea, with both
pursuing a rapprochement with Pyongyang. Moon brokered

a summit between North Korean leader Kim Jong-un and
Trump in June 2018. Kim and Trump met again in Hanoi in
Moon supported Trump’s “maximum pressure” campaign,
February 2019, though the negotiations collapsed, dealing a
but also retained his longstanding preference for engaging
major blow to Moon’s agenda of developing closer ties to
Pyongyang. During 2017, Trump Administration officials,
the North. Despite a third Trump-Kim meeting for one hour
including the President, repeatedly raised the possibility of
in June 2019 in Panmunjom, inside the demilitarized zone
launching a preventive military strike. This possibility,
(DMZ) between the two Koreas, U.S.-DPRK and ROK-
which would risk triggering a North Korean retaliation
DPRK diplomacy have stalled since the Hanoi summit.
against South Korea, appears to have convinced Moon that
the United States, rather than North Korea, represented the
Differences remain between Washington and Seoul on
greatest immediate threat to South Korean security. The
policy issues, such as whether and under what conditions to
combination of the fear of war, an ideological preference
offer concessions to North Korea and how to share costs
for engagement, and a belief that South Korea should shape
associated with the U.S.-ROK alliance. Seoul generally
the future of the Korean Peninsula drove Moon to improve
favors more and earlier economic concessions than does
inter-Korean relations and broker U.S.-DPRK talks.
Washington. The Trump Administration also reportedly has
asked South Korea to help contribute to a maritime security
Kim Jong-un enabled the breakthrough in early 2018 by
force to protect commercial shipping in the Persian Gulf, a
dropping his belligerent posture and pushing to end North
move Seoul appears reluctant to make. In the trade arena,
Korea’s diplomatic isolation. Since then, Kim has met with
although South Korea has been excluded for now from U.S.
U.S., ROK, Chinese, and Russian presidents. He has
Section 232 import restrictions on autos, U.S. import
pledged to “work toward complete denuclearization of the
restrictions remain in place on several other South Korean
Korean Peninsula,” not conduct nuclear or long-range
exports. The Trump Administration’s tendency to change
missile tests while dialogue continues, and allow the
policy positions unexpectedly adds another element of
“permanent dismantlement” of the Yongbyon Nuclear
uncertainty.
Scientific Research Center “as the United States takes
North Korea Policy Coordination
corresponding measures.” However, disagreements about
the definition of denuclearization, and the timing and
North Korea is the dominant strategic concern within the
sequencing of concessions, have prevented the United
U.S.-South Korea relationship. In 2016 and 2017, North
States and DPRK from agreeing on a way forward.
Korea conducted scores of missile tests and three nuclear
Meanwhile, despite its partial testing moratorium and
weapons tests, demonstrating major strides in its ability to
pledges to denuclearize, North Korea reportedly has
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South Korea: Background and U.S. Relations
advanced its military capabilities and resumed testing short-
U.S.-South Korea Economic Relations
range ballistic missiles in violation of United Nations
In 2018, U.S. goods and services exports to South Korea
sanctions.
totaled $82.0 billion, while imports totaled $87.3 billion.
Since the 2012 KORUS FTA’s entry into force, bilateral
U.S.-South Korea Security Issues
trade flows have increased, with U.S. services exports
In addition to the presence of U.S. troops, South Korea is
(+$7.9 billion to $24.6 billion in 2018) and auto imports
included under the U.S. “nuclear umbrella” (also known as
(+$6.9 billion to $22.4 billion in 2018) seeing the largest
“extended deterrence”), and traditionally has paid for about
gains. FDI between the two countries also has increased
50% (over $800 million annually) of the total non-
markedly since 2012, with the stock of South Korean FDI
personnel costs of the U.S. troop presence in South Korea.
in the United States more than doubling to $51.8 billion in
2017 and U.S. FDI to South Korea increasing one-third, to
In February 2019, U.S. and ROK negotiators announced a
$41.6 billion.
preliminary one-year “Special Measures Agreement”
(SMA) for dividing the cost of hosting U.S. troops in South
Though many U.S. businesses highlight improved market
Korea that increased South Korea’s contribution by
access since the KORUS FTA’s entry into force and its
approximately 8%, to $924 million. This stopgap agreement
improved mechanism for dispute resolution, they also have
is scheduled to expire in December 2019. The Trump
criticized Seoul’s implementation of certain provisions.
Administration reportedly had sought as much as double the
Growth of the bilateral trade deficit, particularly in the first
amount Seoul paid in the previous SMA, which covered
years the FTA was in effect, also led some policymakers to
five years. President Trump’s demands for greater
question the agreement’s benefits to the United States. Most
contributions, paired with his criticism of other allies’
economists, however, view macroeconomic factors, not
contributions also has raised concerns in Seoul about U.S.
trade agreements, to be the main drivers of trade balances.
security commitments. To facilitate talks with Pyongyang,
More recently, a significant increase in U.S. energy exports
Trump canceled major U.S.-ROK military exercises,
to South Korea contributed to a $13 billion decline in the
leading to questions about the alliance’s ability to maintain
deficit from its 2015 peak. At $5.3 billion in 2018, the
its state of readiness.
deficit was back to its pre-FTA 2011 value.
The U.S. military is relocating its forces farther south from
At the Trump Administration’s request, the two countries
bases near the border with North Korea, with South Korea
negotiated limited modifications to the KORUS FTA in
paying $9.7 billion—or about 94% of total costs—to
2018. South Korea agreed to a number of concessions, most
construct new military facilities. The recently opened Camp
prominently on bilateral trade in motor vehicles, including a
Humphreys is the largest overseas U.S. base in the world.
delayed reduction in U.S. light truck tariffs to 2041. The
conclusion of the FTA modification negotiations and the
South Korea’s Regional Relations
Trump Administration’s decision to target potential Section
China’s influence in the region figures prominently in
232 auto import restrictions on Japan and the European
South Korea’s foreign and economic policy. Because of
Union rather than South Korea have eased bilateral trade
North Korea’s growing economic dependence on China
tensions. A number of U.S. import restrictions, however,
since the early 2000s, South Korea calibrates its North
including a quota on South Korean steel exports and
Korea policy with an eye on Beijing’s relations with
increased tariffs on aluminum, washing machines, and solar
Pyongyang. China is South Korea’s largest trading partner
panels, continue to add tension to the trading relationship.
and destination for foreign direct investment (FDI), and
Beijing has in the past punished South Korean companies
Figure 1. South Korea’s National Assembly
when it disagrees with Seoul’s policy decisions. South
Korea generally tries to avoid antagonizing China.
Ties with Japan are perennially fraught because of sensitive
historical issues stemming from Japan’s colonization of the
Korean Peninsula from 1910 to 1945. Four events in 2018
and early 2019 have caused ROK-Japan relations to decline

precipitously: Moon’s steps to effectively terminate a 2015
Source: National Assembly of South Korea.
ROK-Japan agreement over “comfort women” who were
Notes: President Moon belongs to the Minjoo Party, which controls
forced to provide sexual services to Japanese soldiers
only a plurality of seats in South Korea’s National Assembly. National
during the 1930s and 1940s; multiple incidents involving
Assembly elections are held every four years and were last held in
Japanese reconnaissance planes and South Korean naval
April 2016. South Korea’s next presidential election is scheduled for
vessels; South Korean Supreme Court rulings that Japanese
May 2022. South Korean presidents are limited to one five-year term.
firms should compensate South Koreans for forced labor
during Japan’s occupation; and Japan’s June 2019 move to
place procedural hurdles on exports to South Korea of key
Mark E. Manyin,
materials used to manufacture tech products. Trilateral
Emma Chanlett-Avery,
security cooperation among the United States, Japan, and
Brock R. Williams,
South Korea has become more difficult during this time of
rising ROK-Japan tensions, which coincides with Seoul and
IF10165
Washington’s rapprochement with Pyongyang.
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South Korea: Background and U.S. Relations


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