Updated May 26, 2021
South Korea: Background and U.S. Relations
Overview
explained how its approach might persuade the DPRK to
South Korea (officially the Republic of Korea, or ROK) is
come to the negotiating table or make concessions.
one of the United States’ most important strategic and
economic partners in Asia. The U.S.-ROK Mutual Defense
At their 2021 summit, Biden and Moon stated their belief
Treaty, signed in 1953 at the end of the Korean War,
that 2018 U.S.-North Korea and South Korea-North Korea
commits the United States to help South Korea defend
agreements negotiated by Moon and former President
itself, particularly from North Korea (officially the
Donald Trump could form the basis for denuclearization
Democratic People’s Republic of Korea, or DPRK). The
and achieving “permanent peace” on the Korean Peninsula.
alliance also helps the United States promote its interests in
Biden expressed support for inter-Korean dialogue and
East Asia and around the globe, including by deploying
appointed a part-time Special Representative for North
ROK troops to U.S.-led military conflicts in the Middle
Korea policy. Both presidents reiterated support for full
East. Approximately 28,500 U.S. troops are based in the
implementation of U.N. sanctions.
ROK. The economic relationship is bolstered by the U.S.-
South Korea Free Trade Agreement (KORUS FTA). In
2020, South Korea was the United States’ seventh-largest
trading partner, and the United States was South Korea’s
second-largest trading partner, behind China.
In May 2021, President Joseph Biden and ROK President
Moon Jae-in met in Washington, DC. During their summit,
Biden and Moon discussed North Korea policy, stated their
shared values on many issues pertaining to China, and
terminated an agreement that had restricted ROK ballistic
missile development. They also announced a Coronavirus
Disease 2019 (COVID-19) vaccine partnership; a U.S.
pledge to vaccinate 550,000 South Korean troops who work
closely with U.S. military forces; investments in the United
States by ROK technology companies in key sectors; and
expanded cooperation on critical technologies, climate
change, energy, cyber-security, global health, and space.
Moon also met with several Members of Congress.
North Korea Policy Coordination

In the near term, some analysts worry DPRK leader Kim
North Korea is the dominant strategic concern in the U.S.-
Jong-un will abandon his three-and-a-half-year-old
South Korea relationship. Moon has championed U.S.-
unilateral moratorium on nuclear tests and long-range
North Korea talks, which he views as critical to preventing
ballistic missile tests. North Korea has continued to test
military conflict and to realizing his goal of establishing a
short- and medium-range missiles and to conduct
durable peace on the Korean Peninsula. Since early 2019,
cyberattacks around the globe. U.N. and U.S. sanctions
Pyongyang largely has ignored U.S. and South Korean
remain in place, officially barring nearly all of North
outreach and has severed all overt inter-Korean
Korea’s typical exports and many of its imports. The
communication channels.
sanctions severely limit cooperation activities that the
Moon government favors.
In April 2021, the Biden Administration announced it had
completed a review of DPRK policy, and that it will pursue
U.S.-South Korea Security Issues
a “calibrated, practical approach that is open to and will
The U.S.-ROK alliance showed signs of strain in the past
explore diplomacy with North Korea” to achieve eventually
several years, as President Trump was openly skeptical of
the “complete denuclearization of the Korean Peninsula”
the value of the alliance and requested steep increases in
even as U.S. and international sanctions remain in place.
funds from South Korea to offset the cost of hosting U.S.
The approach appears to envision an incremental process of
troops on the Peninsula. In its first two months in office, the
offering partial sanctions relief in exchange for partial steps
Biden Administration concluded a cost-sharing negotiation
toward denuclearization. Moon has welcomed the policy
with South Korea that boosted South Korea’s contribution
review’s results. Administration officials say they have
by 13.9%. South Korea traditionally has paid for about 50%
reached out to North Korea, and that “the ball is in
(over $800 million annually) of the total non-personnel
[Pyongyang’s] court.” The Administration has not
costs of the U.S. military presence, according to
congressional testimony by U.S. military officials.
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South Korea: Background and U.S. Relations
Washington and Seoul have adapted their alliance to
South Korea’s COVID-19 Response
recognize South Korea’s increased capabilities and desire
South Korea has largely contained COVID-19, without
for greater autonomy. For over a decade, they have been
resorting to lockdowns. As of May 19, 2021, the country
preparing to transfer wartime operational control (OPCON)
reported around 130,000 cumulative cases and around
to a binational command led by an ROK general with a
1,900 deaths. Less than 3% of the population, however, was
U.S. deputy. Under the existing arrangement, South Korean
fully vaccinated by that date. Under the May 2021 U.S.-
soldiers would be under a binational command led by a
ROK vaccine partnership, South Korean biopharmaceutical
U.S. general in the event of war. In peacetime, the ROK
companies will mass produce and globally distribute U.S.-
military is responsible for national security. The two sides
developed vaccines. U.S. vaccine developers will invest in
have established conditions and benchmarks to demonstrate
ROK-based production facilities.
that the ROK can assume wartime OPCON, including
improved ROK capabilities to lead combined forces and
U.S.-South Korea Economic Relations
counter the DPRK nuclear and missile threat, and a security
The South Korean economy contracted by 1% in 2020,
environment on the Peninsula conducive to a transfer.
outperforming many countries during the pandemic. It
Additionally, U.S. forces in the ROK have consolidated
benefitted both from success in containing its outbreak and
their presence, in part to return land to South Korea. South
strong global demand for semiconductors, a top export.
Korea has paid $9.7 billion—about 94% of total costs—to
From 2019 to 2020, U.S. goods and services exports to the
construct new facilities such as the recently opened Camp
ROK decreased by $12.0 billion (-15%) to $69.5 billion, in
Humphreys, the largest overseas U.S. base. Another
large part due to pandemic-related challenges (South
example of alliance adaptation is the May 2021 decision to
Korean spending on U.S. travel services fell by $4.6
terminate the bilateral Missile Guidelines agreement,
billion). U.S. imports from South Korea appear to have
originally signed in 1979, which limited the range of South
been less affected by the pandemic, decreasing by $2.3
Korean ballistic missiles to 800 km (497 miles).
billion (-3%) to $86.6 billion. Autos and parts remain the
top U.S. import from South Korea ($24.4 billion in 2020).
South Korea’s Regional Relations
In 2019 (latest available), the stock of South Korean FDI in
Because of North Korea’s economic dependence on China,
the United States was $61.8 billion, and U.S. FDI to South
South Korea calibrates its DPRK policy with an eye on
Korea was $39.1 billion. At the recent summit, South
Beijing’s relations with Pyongyang. China is South Korea’s
Korean companies announced promises of $25 billion in
largest trading partner and destination for foreign direct
new U.S. investment in coming years with a focus on
investment (FDI), and Beijing has punished ROK
bilateral cooperation in key technologies including electric
companies when it disagrees with Seoul’s policy decisions.
vehicle batteries, semiconductors, and artificial intelligence.
For these and other reasons, South Korea generally tries to
avoid antagonizing China. An exception was Seoul’s 2016
In 2018, at the Trump Administration’s request, South
decision to deploy a U.S. missile defense system in the
Korea agreed to limited modifications to the KORUS FTA,
ROK. China responded by enacting measures that have cost
including a delay until 2041 in reductions to U.S. light truck
ROK companies billions of dollars. Moon’s government
tariffs. Trump Administration import restrictions on South
has taken an ambiguous stance on whether to cooperate
Korean products, including steel, aluminum, washing
with the Quadrilateral Security Dialogue (“the Quad”), a
machines, and solar products remain in effect, but President
cooperative forum that includes Australia, India, Japan, and
Biden has stated interest in working with allies to address
the United States. Seoul’s participation in Quad activities
the global overcapacity issues that led to the restrictions.
may be more likely after the Biden Administration dropped
the previous U.S. framing of the group as anti-China and
South Korean Politics
led the creation of new Quad initiatives on COVID-19
Moon, elected in 2017, belongs to the Minjoo (Democratic)
vaccine distribution, climate change, and critical
Party, which has a commanding majority in the National
technologies. The Biden-Moon May 2021 joint statement
Assembly. Moon’s popularity has fallen in 2021 due to
contained China-relevant phrases, including an agreement
complaints such as soaring housing prices. The next
to “oppose all activities that undermine, destabilize, or
presidential election is scheduled for March 2022. ROK
threaten the rules-based international order” and references
presidents are limited to one five-year term.
to “freedom of navigation and overflight in the South China
Sea and beyond” and “the importance of preserving peace
Figure 1. South Korea’s National Assembly
and stability in the Taiwan Strait.”
ROK-Japan relations are perennially fraught because of
sensitive historical issues from Japan’s colonization of the
Korean Peninsula from 1910 to 1945. Since 2018, a series
of actions and retaliatory countermeasures by both
governments involving trade, security, and history-related

controversies have caused South Korea-Japan relations to
Source: National Assembly website, accessed February 1, 2021.
plummet, eroding U.S.-ROK-Japan policy coordination. To
reverse this trend, the Biden Administration has emphasized
Mark E. Manyin, Specialist in Asian Affairs
the importance of trilateral cooperation and has convened
multiple high-level trilateral meetings.
Emma Chanlett-Avery, Specialist in Asian Affairs
Brock R. Williams, Specialist in International Trade and
Finance
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South Korea: Background and U.S. Relations

IF10165


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https://crsreports.congress.gov | IF10165 · VERSION 29 · UPDATED

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