Korea: U.S.-Korean Relations — Issues for Congress
Order Code IB98045
CRS Issue Brief for Congress
Received through the CRS Web
Korea: U.S.-Korean Relations —
Issues for Congress
Updated July 11, 2006
Larry A. Niksch
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress
CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
U.S. Interests in South Korea
Recent Issues
Relations with North Korea
North Korea’s Objectives in July 2006 Missile Tests
Nuclear Weapons and the Six Party Talks
U.S. Moves Against North Korean Illegal Activities
North Korea’s Missile Program
Weapons of Mass Destruction
North Korea’s Inclusion on the U.S. Terrorism List
Food Aid
North Korean Refugees in China and Human Rights
South Korea’s Conciliation Policy Toward North Korea
U.S.-R.O.K. Negotiations over a Free Trade Agreement (FTA)
Anti-Americanism and Plans to Change the U.S. Military Presence
FOR ADDITIONAL READING
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Korea: U.S.-Korean Relations — Issues for Congress
SUMMARY
North Korea’s decision in December
tions that the United States plans an “Iraq-
2002 to restart nuclear installations at Yongb-
like” attack on North Korea, and denials that
yon that were shut down under the U.S.-North
it has an HEU program. North Korea’s posi-
Korean Agreed Framework of 1994 and its
tion, first taken in August 2005, that it will not
announced withdrawal from the Nuclear Non-
begin dismantlement until light water nuclear
Proliferation Treaty create an acute foreign
reactors are constructed inside North Korea
policy problem for the United States. North
(construction would take an estimated 10-15
Korea claims that it has nuclear weapons and
years) creates a significant gap between the
that it has completed reprocessing nuclear
Bush Administration’s timetable for disman-
weapons-grade plutonium that could produce
tlement and Pyongyang’s timetable.
six to eight atomic bombs. U.S. intelligence
estimates reportedly agree that North Korea
There are considerable differences be-
has this capability. North Korea also is oper-
tween the Bush Administration and China and
ating a secret nuclear program based on highly
South Korea over policies toward North
enriched uranium (HEU).
Korea. China has supported key North Ko-
rean negotiating positions and rejects pressure
The main elements of Bush Administrat-
on North Korea over the nuclear and missile
ion policy are (1) that North Korea must
issues. South Korea emphasizes bilateral
dismantle both its plutonium and HEU
reconciliation with North Korea and a policy
programs; (2) that dismantlement must be an
more equidistant between the United States
early stage in a settlement process; (3) assem-
and China. The South Korean public has
bling an international coalition to apply pres-
become critical of Bush Administration poli-
sure on North Korea in multilateral talks; and
cies and the U.S. military presence. Anti-U.S.
(4) asserting that a full normalization of U.S.-
demonstrations erupted in 2002, and Roh
North Korean relations is dependent on the
Moo-hyun was elected President after criticiz-
resolving of several issues, including nuclear
ing the United States. In 2003-2004, the
weapons, missiles, and human rights; and (5)
Pentagon announced plans to relocate U.S.
instituting financial sanctions at foreign banks
troops in South Korea away from the demilita-
and companies that cooperate with North
rized zone and Seoul. The United States will
Korea in international illegal activities.
withdraw 12,500 troops between the end of
2004 and September 2008, and U.S. military
China organized six party talks among
officials have hinted that further withdrawals
the United States, China, Japan, North Korea,
will come after 2008. U.S.-South Korean
South Korea, and Russia in mid-2003, but the
negotiations are underway to change the
talks have made little progress. U.S. attempts
military command structure and determine the
to isolate North Korea in the talks have been
degree to which the United States could de-
countered by North Korea’s strategy of threats
ploy U.S. troops in South Korea to other
to leave the talks, actual boycotts of the talks,
trouble spots in Northeast Asia.
the issuance of settlement proposals, accusa-
Congressional Research Service ˜ The Library of Congress
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MOST RECENT DEVELOPMENTS
The U.S. Senate passed an amendment to the FY2007 defense appropriations bill that
would require President Bush to appoint a senior presidential coordinator of policy toward
North Korea and submit to Congress an unclassified report on North Korea’s nuclear and
missile programs. North Korea fired seven missiles into the Sea of Japan on July 4, 2006,
including one long-range Taepodong II missile. However, the Taepodong II’s liftoff failed
after 40 seconds, and the missile fell into the sea. Experts concluded that the test was a
failure. The Bush Administration announced support for a Japanese resolution in the United
Nations Security Council that calls on countries to cease financial and technical support for
North Korea’s missile program. However, China, Russia, and South Korea opposed the
resolution. North Korea continued its second lengthy boycott of the six party talks,
demanding that the Bush Administration lift recent U.S. financial sanctions against Banco
Delta Asia in Macau. The U.S. Treasury Department accused Banco Delta of laundering
counterfeit U.S. 100 dollar bills produced by North Korea. Recent reports indicated that the
Treasury Department was considering applying similar financial sanctions against banks on
the Chinese mainland that were cooperating with North Korean illegal activities. In other
developments, North Korea ordered the U.N. World Food Program (WFP) to cease food-
donating operations at the end of 2005, but the WFP reached an agreement with Pyongyang
for a two-year, $102 million program to provide food to young children and women of child-
bearing age. Following criticism from Members of Congress, the Bush Administration
admitted the first group of six North Korean refugees into the United States. The United
States and South Korea began negotiations over a Free Trade Agreement.
BACKGROUND AND ANALYSIS
U.S. Interests in South Korea
U.S. interests in the Republic of Korea (R.O.K. — South Korea) involve security,
economic, and political concerns. The United States suffered over 33,000 killed and over
101,000 wounded in the Korean War (1950-53). The United States agreed to defend South
Korea from external aggression in the 1954 Mutual Defense Treaty. The United States
maintains about 34,000 troops there to supplement the 650,000-strong South Korean armed
forces. This force is intended to deter North Korea’s (the Democratic People’s Republic of
Korea — D.P.R.K.) 1.2 million-man army. Since 1991, attention has focused on North
Korea’s drive to develop nuclear weapons (see CRS Issue Brief IB91141, North Korea’s
Nuclear Weapons Program, by Larry A. Niksch) and long-range missiles.
U.S. economic aid to South Korea, from 1945 to 2002, totaled over $6 billion; most
economic aid ended in the mid-1970s as South Korea’s reached higher levels of economic
development. U.S. military aid, from 1945 to 2002, totaled over $8.8 billion. The United
States is South Korea’s second-largest trading partner (replaced as number one by China in
2002) and largest export market. South Korea is the seventh-largest U.S. trading partner.
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Recent Issues
Relations with North Korea
The Bush Administration’s policy toward North Korea has been based on three factors
within the Administration. First, President Bush has voiced distrust of North Korea and its
leader, Kim Jong-il. Second, there are divisions within the Administration over policy
toward North Korea. A coalition consists of Secretary of Defense Rumsfeld and his advisers,
Vice President Cheney and his advisers, and proliferation experts in the State Department
and White House. They reportedly oppose negotiations with North Korea, favor the issuance
of demands for unilateral North Korean concessions on military issues, and advocate a U.S.
strategy of isolating North Korea diplomatically and through economic sanctions. Officials
within this group express hope of a collapse of the North Korean regime. An alternative
approach, advanced mainly by officials in the State Department and White House with
experience on East Asian and Korean issues, favor negotiations before adopting more
coercive measures; they reportedly doubt the effectiveness of a strategy to bring about a
North Korean collapse.1 The third factor is heavy reliance on other governments, especially
China, to bring North Korea around to accept U.S. proposals on the nuclear issue.
North Korea’s Objectives in July 2006 Missile Tests. North Korea’s objectives
in launching seven missiles on July 4, 2006, including a long-range Taepodong II missile,
have been the subject of much analysis and, admittedly, speculation. Most of the analysis
focuses on likely multiple objectives and motives. One set of these may be related to internal
political factors in North Korea, particularly the assertion of the North Korean military
(KPA) within the North Korean leadership. Recent reports have indicated that the KPA has
been dissatisfied with the status of the six party nuclear talks, U.S. Treasury Department
financial sanctions against a bank in Macao that was a major conduit for North Korean illegal
activities, and the North Korea’s agreement to open rail links with South Korea. The KPA
reportedly intervened at the last moment to prevent the scheduled opening of the rail links
on May 25, 2006. The KPA thus may have pressed for stronger North Korean measures to
deal with a number of these issues.
On the diplomatic level, much of the analysis has focused on a likely North Korean
objective of escalating pressure on the United States for bilateral U.S.-North Korean talks.
Pyongyang has sought bilateral talks since the nuclear issue worsened in 2002, and the Bush
Administration has resisted such negotiations. It also is possible that North Korea seeks to
use provocative missile tests to place pressure on China for more aid, especially direct
financial subsidies to the regime. Throughout the six party talks since August 2003,
Pyongyang has used threats and boycotts of the talks to gain greater amounts of aid from
China. North Korea also may view the missile launches as a way to test the boundaries
China has placed on acceptable North Korean behavior since the six party talks began.
Chinese officials claim that China warned North Korea in the spring of 2003 against
conducting a nuclear weapons test. Pyongyang thus may view Chinese tolerance of the
missile launches as constituting an opening for a future nuclear test.
1 Kessler, Glenn. "U.S. has a shifting script on N. Korea." Washington Post, December 7, 2003. p.
A25. Beck, Peter. "The new Bush Korea team: a harder line?" Weekly Dong-a (Seoul), November
22, 2004.
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On the military level, the KPA may have argued that development of the Taepodong II
necessitated a test, since the last test of a Taepodong I was in August 1998. A more
disturbing motive would be that North Korea has developed nuclear warheads that could be
fitted on missiles and that the North Korean leadership decided that this achievement
necessitated the test of a long-range missile delivery system. Another possible motive would
be to advertise North Korean missiles to potential customers, including existing customers
like Iran and Syria and countries cited as potential customers like Burma and Venezuela.
North Korean missile sales have been lucrative sources of foreign exchange for North
Korean leader Kim Jong-il and the leadership.
Nuclear Weapons and the Six Party Talks.2 From 1994 to 2003, U.S. policy was
based largely on the U.S.-North Korean Agreed Framework of October 1994. It provided
for the suspension of operations and construction of North Korea’s active five megawatt
nuclear reactor and plutonium reprocessing plant and larger 50 megawatt and 200 megawatt
reactors under construction. It also specified the storage of 8,000 nuclear fuel rods that
North Korea had removed from the five megawatt reactor in May 1994. It provided that the
United States would facilitate the shipment of 500,000 tons of heavy oil annually to North
Korea until two light-water nuclear reactors (LWRs) were constructed in North Korea. The
Korean Peninsula Development Organization (KEDO), a multilateral body, was established
to implement the LWR project. The IAEA monitored the freeze of the designated facilities
and activities. North Korea would complete dismantlement of nuclear facilities when the
construction of LWRs was completed.
According to U.S. officials, North Korea admitted to having a secret uranium
enrichment program when U.S. officials visited Pyongyang in October 2002 (North Korea
since has denied making an admission). This confirmed U.S. intelligence information of
such a program that had built up since 1998. The Bush Administration reacted by pushing
a resolution through KEDO in November 2002 to suspend heavy oil shipments to North
Korea. The Administration also secured a suspension of construction of the light-water
reactors and a total termination in November 2005. North Korea then initiated a number of
moves to reactivate the plutonium-based nuclear program shut down in 1994 under the
Agreed Framework: re-starting the five-megawatt nuclear reactor, announcing that it would
re-start the plutonium reprocessing plant, and removing the 8,000 nuclear fuel rods from
storage facilities. North Korea expelled IAEA officials who had been monitoring the freeze
of the plutonium facilities under the Agreed Framework. In January 2003, North Korea
announced withdrawal from the Nuclear Non-Proliferation Treaty. North Korea later
asserted that it possessed nuclear weapons and that it had completed reprocessing of the
8,000 fuel rods into weapons-grade plutonium. According to nuclear experts and reportedly
by U.S. intelligence agencies, this reprocessing would produce enough plutonium for four
to six atomic bombs. A Central Intelligence Agency statement of August 18, 2003, estimated
“that North Korea has produced one or two simple fission-type nuclear weapons and has
validated the designs without conducting yield-producing nuclear tests.” Reuters News
Agency and the Washington Post reported on April 28, 2004, that U.S. intelligence agencies
were preparing a new National Intelligence Estimate that would conclude that North Korea
2 For assessments of diplomacy on the North Korean nuclear issues, see Pritchard, Charles L. "Six
Party Talks Update: False Start or a Case for Optimism?" Washington: The Brookings Institution,
December 1, 2005.
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had approximately eight atomic bombs based on plutonium and that the secret uranium
enrichment program would be operational by 2007 and would produce enough weapons-
grade uranium for up to six atomic bombs annually. “Senior officials across the government”
were quoted in March 2006 that North Korea had plutonium for 8 to 12 nuclear weapons.3
In early 2003, the Administration proposed multilateral talks, which became six party
talks hosted by China. South Korea, Japan, and Russia also participated along with North
Korea. Six party talks began in August 2003 and remained stalemated until September 2005,
when the six parties produced a statement of principles on September 19. However, the talks
quickly deadlocked as North Korea and the United States gave very different interpretations
of the Six Party Statement and North Korea announced its second major boycott of the talks
in November 2005, which has continued to the present.
There are at least four reasons for the deadlock. The first is a fundamental disagreement
between the United States and North Korea over the timing in a settlement process of North
Korean dismantlement of its nuclear programs. The Bush Administration has maintained a
core position that dismantlement must come in an early stage of a settlement, and it estimated
in 2005 that dismantlement would take about three years. Until August 2005, North Korea
took the position that it would dismantle only after receiving a number of concessions and
benefits from the United States, but it was ambiguous on the timing. In August 2005, North
Korea made a relatively secondary demand for light water nuclear reactors its core demand
for U.S. concessions, taking the position that it would dismantle only after LWRs were
constructed. Pyongyang maintained this position after the Six Party Statement, which called
for discussions of LWRs. This position set a time frame of at least ten years and more likely
15 years before North Korea would begin dismantlement (ten years is the amount of time
nuclear experts say is needed to construct LWRs in a “normal nation”4).
A second reason is the relative lack of support for U.S. positions in the talks from
China, South Korea, and Russia. In the early stages of the talks, Administration officials
emphasized that North Korea would become isolated diplomatically and that the other parties
in the talks would pressure North Korea to accede to U.S. proposals and demands.
Administration officials stressed that China should exert diplomatic pressure on North Korea
by exploiting North Korea’s dependence on China for an estimated 90% of its oil and 40%
of its food. However, North Korea exerted an effective counter-strategy in late 2003 into
2004 featuring proposals of a U.S. security guarantee, a long-term freeze of North Korea’s
plutonium program coinciding with U.S. concessions (“reward for freeze”), and retention by
North Korea of a “peaceful” nuclear program. North Korea instituted a concerted
propaganda campaign to promote these proposals, and it began a campaign of repeated
denials that it had a secret highly-enriched uranium (HEU) program. Throughout 2004,
China, Russia, and even South Korea expressed sympathy for Pyongyang’s proposals, and
Russia and China voiced doubts that North Korea has an HEU program. Pyongyang’s first
boycott of the talks (August 2004-July 2005) drew little criticism from these governments;
and while South Korea criticized the second boycott (November 2005 to the present), Beijing
3 Brinkley, Joel. "U.S. squeezes North Korea’s money flow." New York Times, March 10, 2006. p.
A11.
4 Herskovitz, Jon. "N. Korea says to build light-water nuclear reactors." Reuters News, December
19, 2005.
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and Moscow refrained from any public criticism. China appeared to demand from North
Korea at least a nominal commitment to the talks and avoidance of provocative acts like a
nuclear test; but China displayed a permissive attitude toward North Korean tactics in the
talks, rejected sanctions on North Korea, and heightened levels of economic and financial
aid to North Korea — the last being a reported commitment of $2 billion in October 2005.
A third factor may have been the slowness of the Bush Administration in moving from
a diplomatic strategy of demanding a unilateral North Korean nuclear dismantlement and
rejecting bilateral discussions with North Korea to a strategy of offering some reciprocal
concessions to North Korea in return for dismantlement and engaging in bilateral discussions
in six party meetings. This reportedly was due to the factional disputes within the Bush
Administration. China, South Korea, and Russia criticized the absence or limits of U.S.
offers of reciprocity and the U.S. refusal to negotiate bilaterally with North Korea. In
response to these criticisms, the Bush Administration offered a core proposal in June 2004
and modified it in July 2005 under Assistant Secretary of State Christopher Hill. The
Administration’s proposal calls for North Korean dismantlement over about a three-year
period in an initial stage of a settlement. During this period, South Korea and Japan would
supply North Korea with heavy oil, and South Korea would implement its offer of July 2005
to provide North Korea with 2,000 megawatts of electricity annually. After North Korea
completed dismantlement, it would receive a permanent security guarantee. However, the
Bush Administration did not offer North Korea full diplomatic relations in exchange for
dismantlement, despite calls from Beijing, Seoul, and Moscow for Washington to make such
an offer. These governments, too, gave little support to the Bush Administration’s initiatives
beginning with the June 2004 proposal. China and Russia, in particular, have not supported
the core U.S. position that dismantlement must be an early stage of a settlement process.
The fourth reason for the deadlock appears to be North Korea’s strategy of securing a
protracted diplomatic stalemate on the nuclear issue. After the U.S. proposal of June 2004,
Pyongyang’s main tactic has been to progressively enlarge the gap between North Korean
proposals and the Bush Administration’s core proposal, thus “killing” the Administration’s
proposal as a basis for negotiations. After July 2004, North Korea enlarged its demands for
U.S. concessions under the demand that the United States end its “hostile policy” and
“nuclear threat.” It proposed a “regional disarmament” agenda in March 2005, demanding
a range of U.S. military concessions in return for a nuclear settlement. As stated previously,
Pyongyang’s linkage of LWR construction and nuclear dismantlement creates a huge time
frame gap between its position and the Bush Administration’s position. Pyongyang’s
boycotts create stalemate, but North Korea also appears to use boycotts and threats of boycott
to condition South Korea, China, and Russia to treat North Korea’s proposals and positions
sympathetically when it does agree to a meeting, thus isolating the Bush Administration.
(Only Japan has supported consistently U.S. positions.)
U.S. Moves Against North Korean Illegal Activities. North Korea’s justification
for its second boycott of the six party talks is the U.S. financial sanctions against a bank in
Macau, Banco Delta, for involvement in North Korean money-laundering and counterfeiting
activities. U.S. administrations have cited North Korea since the mid-1990s for instigating
a number of activities abroad that are illegal under U.S. law. These include production and
trafficking in heroin, methamphetamines, counterfeit cigarettes, counterfeit pharmaceuticals,
and counterfeit U.S. currency. North Korea is estimated to earn between $500 million and
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$1 billion annually through these activities.5 (For a detailed discussion, see CRS Report
RL33324, North Korean Counterfeiting of U.S. Currency, by Raphael F. Perl and Dick K.
Nanto; and CRS Report RL32167, Drug Trafficking and North Korea: Issues for U.S. Policy,
by Raphael F. Perl.) These earnings reportedly go directly to North Korean leader, Kim
Jong-il, through Bureau 39 of the Communist Party. He reportedly uses the funds to reward
his political elite with imported consumer goods and to procure foreign components for
weapons of mass destruction.
In September 2005, the Bush Administration made the first overt U.S. move against
North Korean illegal activities; the Treasury Department named the Banco Delta in the
Chinese territory of Macau as a money laundering concern under the U.S. Patriot Act. The
Department accused Banco Delta of distributing North Korean counterfeit U.S. currency and
laundering money from the criminal enterprises of North Korean front companies. The
Macau government closed Banco Delta and froze more than 40 North Korean accounts with
the bank. Banks in a number of other countries also froze North Korean accounts and ended
financial transactions with North Korea. According to Treasury Department officials and
other sources, these freezes have restricted the flow of foreign exchange to Kim Jong-il and
have limited his ability to distribute consumer goods to members of his political elite.
The South Korea government reacted to the U.S. financial sanctions first with concern
over their impact on the six party talks and second by asserting that it had no information that
verified the U.S. claim of North Korean counterfeiting. By March 2006, the government had
shifted its position toward agreement with the U.S. claim, and government officials stated
that they had warned North Korea to deal with the U.S. allegations. China said nothing of
substance publicly about the issue, undoubtedly reflecting China’s sensitive position as the
location for much of North Korea’s illicit banking activities. The Chinese government
reportedly investigated Banco Delta and concluded that the Treasury Department’s
allegations were correct.6 However, there have been reports that North Korea reacted to the
shutdown of Banco Delta by shifting its financial operations to banks on the Chinese
mainland. In March 2006, the Bank of China warned Chinese banks that counterfeit U.S.
$100 bills “have flowed into our country from overseas” but did not name North Korea as
the source of the counterfeit currency.7
The Bush Administration officially held that the U.S. financial sanctions were a separate
issue from the six party talks. However, some U.S. officials stated that there was increased
sentiment within the Administration that the United States needed to apply pressure on North
Korea in order to break North Korea’s strategy of creating a diplomatic stalemate on the
nuclear issue. These officials also stated that the Treasury and Justice departments had
authority to take additional financial and legal steps against North Korea’s illegal activities.
5 Presentation of David Asher, Institute for Defense Analyses, at the American Enterprise Institute,
February 1, 2006.
6 Fackler, Martin. “North Korean Counterfeiting Complicates Nuclear Crisis.” New York Times,
January 29, 2003. p. 3. “China Finds N. Korea Guilty of Money Laundering.” Chosun Ilbo (Seoul,
internet version), January 11, 2006.
7 Fairclough, Gordon. “China Warns of Forgeries.” The Wall Street Journal Asia, March 24, 2006.
P. 7.
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North Korea’s Missile Program.8 North Korea maintained a moratorium on flight
testing of long-range missiles since September 1999 until the missile launches on July 4,
2006. The last such missile test, on August 31, 1998, flew over Japanese territory. Japan
also believes it is threatened by approximately 200 intermediate-range Nodong missiles,
which North Korea has deployed. Reports since 2000 cite U.S. intelligence findings that
North Korea is developing a Taepodong II intercontinental missile that would be capable of
striking Alaska, Hawaii, and the U.S. west coast with nuclear weapons. U.S. officials
reportedly claimed in September 2003 that North Korea had developed a more accurate,
longer-range intermediate ballistic missile that could reach Okinawa and Guam (sites of
major U.S. military bases) and that there was evidence that North Korea had produced the
Taepo Dong-2. U.S. officials reportedly told Japanese counterparts in July 2003 that North
Korea was close to developing nuclear warheads for its missiles.
In the 1990s, North Korea exported short-range Scud missiles and Scud missile
technology to countries in the Middle East. It exported Nodong missiles and Nodong
technology to Iran, Pakistan, and Libya. In 1998, Iran and Pakistan successfully tested
medium-range missiles modeled on the Nodong. Japan’s Sankei Shimbun newspaper
reported on August 6, 2003, that North Korea and Iran were negotiating a deal for the export
of the long-range Taepo Dong-2 missile to Iran and the joint development of nuclear
warheads. In February 2006, it was disclosed that Iran had purchased 18 BM-25 mobile
missiles from North Korea with a range of 2,500 kilometers. Pakistani and Iranian tests of
North Korean-designed missiles have provided “surrogate testing” that dilutes the limitations
of the September 1999 moratorium.
The test launch of the Taepo Dong-1 spurred the Clinton Administration to intensify
diplomacy on North Korea’s missile program. The Administration’s 1999 Perry initiative
set the goal of “verifiable cessation of testing, production and deployment of missiles ... and
the complete cessation of export sales of such missiles and the equipment and technology
associated with them.” The Perry initiative offered to normalize U.S.-North Korean
relations, end to U.S. economic sanctions, and provide other economic benefits in return for
North Korean concessions on the missile and nuclear issues.
In October 2000, the Clinton Administration reportedly proposed a comprehensive deal
covering all aspects of the issue. North Korea offered to prohibit exports of medium- and
long-range missiles and related technologies in exchange for “in-kind assistance.” (North
Korea previously had demanded $1 billion annually.) It also offered to ban permanently
missile tests and production above a certain range in exchange for “in-kind assistance” and
assistance in launching commercial satellites. Pyongyang offered to cease the deployment
of Nodong and Taepo Dong missiles. It proposed that President Clinton visit North Korea
to conclude an agreement. The negotiations reportedly stalled over four issues: North
Korea’s refusal to include short-range Scud missiles in a missile settlement; North Korea’s
non-response to the U.S. position that it would have to agree to dismantle the already
deployed Nodong missiles; the details of U.S. verification of a missile agreement; and the
nature and size of a U.S. financial compensation package. The Bush Administration has
offered no specific negotiating proposal on missiles. The Administration emphasized the
8 Kim Kyoung-soo (ed.). North Korea’s Weapons of Mass Destruction. Elizabeth, New Jersey, and
Seoul: Hollym Corporation, 2004: p.121-148.
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necessity of installing an anti-missile defense system and sought to dissuade a number of
North Korea’s customers from buying new missiles.
Weapons of Mass Destruction.9 A Pentagon report on the North Korean military,
released in September 2000, stated that North Korea had developed up to 5,000 metric tons
of chemical munitions and had the capability to produce biological weapons, including
anthrax, smallpox, the bubonic plague, and cholera. The Bush Administration has expressed
concern that North Korea might sell nuclear, chemical, or biological weapons to a terrorist
group such as Al Qaeda or that Al Qaeda might acquire these weapons from a Middle East
country that had purchased them from North Korea. The Bush Administration has not
accused North Korea directly of providing terrorist groups with WMDs. There are reports
from the early 1990s that North Korea assisted Syria and Iran in developing chemical and
biological weapons capabilities.
North Korea’s Inclusion on the U.S. Terrorism List. In February 2000, North
Korea began to demand that the United States remove it from the U.S. list of terrorist
countries. North Korea’s proposals at the six party nuclear talks also call for the United
States to remove Pyongyang from the terrorist list. North Korea’s chief motive appears to
be to open the way for the nation to receive financial aid from the World Bank and the
International Monetary Fund (IMF). P.L. 95-118, the International Financial Institutions Act,
requires the United States to oppose any proposals in the IMF and World Bank to extend
loans or other financial assistance to countries on the terrorism list. The South Korean also
has urged the United States to remove North Korean from the terrorism list so that North
Korea could receive international financial assistance.
Japan has urged the United States to keep North Korea on the terrorism list until North
Korea resolves Japan’s concerns over North Korea’s kidnapping of Japanese citizens. The
Clinton Administration gave Japan’s concerns increased priority in U.S. diplomacy in 2000
(See CRS Report RL30613, North Korea: Terrorism List Removal?, by Larry Niksch and
Raphael Perl). At the Beijing meetings, the Bush Administration called on North Korea to
resolve the issue with Japan. In 2004, the Administration made the kidnapping of Japanese
citizens an official reason for North Korea’s inclusion on the terrorist list. Kim Jong-il’s
admission, during the Kim-Koizumi summit of September 2002, that North Korea had
kidnapped Japanese citizens did not resolve the issue. His claim that eight of the 13 admitted
kidnapped victims are dead raised new issues for the Japanese government, including
information about the deaths of the kidnapped and the possibility that more Japanese were
kidnapped. The five living kidnapped Japanese returned to Japan in October 2002. In return,
Japan promised North Korea 250,000 tons of food and $10 million in medical supplies.
However, in late 2004, Japan announced that the remains of two alleged kidnapped Japanese
that North Korea had turned over to Japan were false remains. This prompted demands in
Japan for sanctions against North Korea. The Bush Administration reportedly advised Japan
to refrain from sanctions because of a potential negative impact on the six party talks.
Food Aid. North Korea’s order to the U.N. World Food Program (WFP) to suspend
food aid after December 2005 ended a ten-year program of WFP food aid to North Korea.
The two-year program negotiated in early 2006 to feed small children and young women is
9 Ibid., p.79-120.
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much more limited in scope. From 1995 through 2004, the United States supplied North
Korea with over 1.9 million metric tons of food aid through the United Nations World Food
Program (WFP). South Korea has extended increasing amounts of bilateral food aid to North
Korea, including one million tons of rice in 2004. Agriculture production in North Korea
began to decline in the mid-1980s. Severe food shortages appeared in 1990-1991. In
September 1995, North Korea appealed for international food assistance. The Bush
Administration reduced food aid, citing North Korean refusal to allow adequate access and
monitoring. It pledged 50,000 tons for 2005 but suspended the delivery of the remaining
25,000 tons when North Korea ordered the WFP to cease operations. The WFP
acknowledged that North Korea places restrictions on its monitors’ access to the food
distribution system, but it professed that most of its food aid reached needy people. Several
private aid groups, however, withdrew from North Korea because of such restrictions and
suspicions that the North Korean regime was diverting food aid to the military or the
communist elite living mainly in the capital of Pyongyang. The regime reportedly gives
priority to these two groups in its overall food distribution policy. Some experts also believe
that North Korean officials divert some food aid for sale on the extensive black market. The
regime has spent none of several billion dollars in foreign exchange earnings since 1998 to
import food or medicines. The regime refuses to adopt agricultural reforms similar to those
of fellow communist countries, China and Vietnam, including dismantling of Stalinist
collective farms. It is estimated that one to three million North Koreans died of malnutrition
between 1995 and 2003.10
North Korean Refugees in China and Human Rights. This issue confronted
governments after March 2002 when North Korean refugees, aided by South Korean and
European NGOs, sought asylum in foreign diplomatic missions in China and the Chinese
government sought to prevent access to the missions and forcibly removed refugees from the
Japanese and South Korean embassies. The refugee exodus from North Korea into China’s
Manchuria region began in the mid-1990s as the result of the dire food situation in North
Korea. Estimates of the number of refugees cover a huge range, from 10,000 to 300,000,
including a State Department estimate of 30,000-50,000 in June 2005.
Generally, China tacitly accepted the refugees so long as their presence was not highly
visible. China also allowed foreign private NGOs, including South Korean NGOs, to
provide aid to the refugees, again so long as their activities were not highly visible. China
barred any official international aid presence, including any role for the United Nations High
Commission for Refugees. It instituted periodic crackdowns that included police sweeps of
refugee populated areas, rounding up of refugees, and repatriation to North Korea. Since
early 2002, China allowed refugees who had gained asylum in foreign diplomatic missions
to emigrate to South Korea. However, China’s crackdown on the border reportedly included
the torture of captured refugees to gain information on the NGOs that assisted them.
China tries to prevent any scenario that would lead to a collapse of the Pyongyang
regime, its long-standing ally. Chinese officials fear that too much visibility of the refugees
and especially any U.N. presence could spark an escalation of the refugee outflow and lead
10 Natsios, Andrew S. The Great North Korean Famine. Washington, U.S. Institute of Peace Press,
2001. Flake, L. Gordon and Snyder, Scott. Paved with Good Intentions: The NGO Experience in
North Korea. Westport, Connecticut: Praeger, 2003.
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to a North Korean regime crisis and possible collapse. China’s crackdowns are sometimes
a reaction to increased visibility of the refugee issue. China’s interests in buttressing North
Korea also have made China susceptible to North Korean pressure to crack down on the
refugees and return them. Reports since 2002 described stepped-up security on both sides
of the China-North Korea border to stop the movement of refugees and Chinese roundups
of refugees and repatriation to North Korea. South Korea, which had turned refugees away
from its diplomatic missions, changed its policy in response to the new situation. It accepted
refugees seeking entrance into its missions and allowed them entrance into South Korea, and
it negotiated with China over how to deal with these refugees.11 However, South Korea, too,
opposes encouragement of a refugee exodus from North Korea.
The Bush Administration gave the refugee issue low priority. The Administration
requested that China allow U.N. assistance to the refugees but asserted that South Korea
should lead diplomatically with China. The issue has been aired in congressional hearings.
The North Korean Human Rights Act (P.L. 108-333), passed by Congress in October 2004,
provided for the admittance of North Korean refugees into the United States. In early 2006,
key Members of Congress criticized the Bush Administration for failing to implement this
provision, and the Administration admitted the first group of six refugees.
The refugee issue had led to increased outside attention to human rights conditions in
North Korea. Reports assert that refugees forcibly returned from China have been
imprisoned and tortured in an extensive apparatus of North Korean concentration camps
modeled after the “gulag” labor camp system in the Soviet Union under Stalin. Reports by
Amnesty International, the U.S. State Department, and, most recently, the U.S. Committee
for Human Rights in North Korea have described this system as holding up to 250,000
people. In 2003, 2004, and 2005, the United States secured resolutions from the U.N.
Human Rights Commission expressing concern over human rights violations in North Korea,
including concentration camps and forced labor. South Korea abstained from the
Commission’s votes in the interest of pursuing its “sunshine” policy with North Korea.12
South Korean officials also criticized passage by Congress of the North Korean Human
Rights Act of 2004. The act requires the U.S. executive branch adopt a number of measures
aimed at furthering human rights in North Korea, including financial support of
nongovernmental human rights groups, increased radio broadcasts into North Korea, sending
of radios into North Korea, and a demand for more effective monitoring of food aid.
South Korea’s Conciliation Policy Toward North Korea. South Korean
President Kim Dae-jung took office in 1998, proclaiming a “sunshine policy” of
reconciliation with North Korea. He achieved a breakthrough in meeting with North Korean
leader Kim Jong-il in Pyongyang, June 13-14, 2000. His successor, Roh Moo-hyun, has
continued these policies under the heading, “Peace and Prosperity Policy,” which his
government describes as seeking “reconciliation, cooperation, and the establishment of
peace” with North Korea. South Korean officials also hold that these policies will encourage
positive internal change within North Korea. Key principles of this conciliation policy are:
the extension of South Korean economic and humanitarian aid to North Korea, the promotion
11 Kirk, Jeremy. “N. Korean Defections Strain Ties,” Washington Times, February 11, 2005. p.A17.
12 Hawk, David. The Hidden Gulag: Exposing North Korea’s Prison Camps. Washington, U.S.
Committee for Human Rights in North Korea, 2004.
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of North-South economic relations, separating economic initiatives from political and
military issues, no expectation of strict North Korean reciprocity for South Korean
conciliation measures, avoidance of South Korean government public criticisms of North
Korea, and settlement of security issues with North Korea (including the nuclear issue)
through dialogue only without pressure and coercion. Since the June 2000 summit, South
Korea has achieved regular government-to-government meetings with North Korea. South
Korea has extended growing amounts of economic and humanitarian aid to North Korea —
$2.6 billion planned for 2006, double the amount in 2005. This included significant amounts
of food and fertilizer, including 400,000 tons of rice in 2004 and 2005. North-South trade
surpassed $1 billion in 2005, a ten-fold increase since the early 1990s. Seoul and Pyongyang
also instituted a series of reunion meetings of members of separated families. As of 2005,
nearly 10,000 South Korean had participated in reunions.13
The conciliation policy also has produced three major economic projects. A tourist
project at Mount Kumgang, in North Korea just north of the demilitarized zone (DMZ), has
hosted over one million visitors from South Korea. It began in 1998 under an agreement
between the North Korean government and Hyundai Asan, a major company within the
Hyundai business empire. Another agreement is for the connecting of roads and railways
across the DMZ. The roads opened in 2003; but the scheduled opening of the rail lines on
May 25, 2006, was canceled by North Korea at the last moment. The third project is the
establishment by Hyundai Asan of an “industrial complex” at Kaesong just north of the
DMZ. South Korean companies are to invest in manufacturing, using North Korean labor.
As of mid-2006, 15 companies had set up facilities, employing about 6,000 North Korean
workers. The plan envisages 2,000 companies investing by 2012, employing at least 500,000
North Koreans. North Korean workers are paid $50 monthly plus $7.50 for social insurance.
The wages are paid to a North Korean state agency.14
Critics have pointed to several negative effects of the conciliation policy. North Korean
leader Kim Jong-il appears to view South Korea as a source of financial subsidies for the
North Korean military and elite North Koreans. The Mount Kumgang tourist project resulted
in significant South Korean financial subsidies to Kim Jong-il through both official payments
and secret payments by Hyundai Asan, especially in the 1999-2001 period.15 As official and
secret payments were made during this period, the North Korean regime accelerated its
overseas purchases of components for its secret uranium enrichment nuclear weapons
program.16 The Kaesong industrial complex also will generate considerable foreign
exchange income to the regime in the near future — an estimated $500 million in annual
13 Republic of Korea. Ministry of Unification. Peace and Prosperity: White Paper on Korean
Unification 2005. 169 pages.
14 "Factbox — South Korea’s industrial park in the North." Reuters News, June 12, 2006. Faiola,
Anthony. "Two Koreas learn to work as one." Washington Post, February 28, 2006. p. A10.
15 Informed sources told CRS about the secret Hyundai payments in 2000, and CRS’s reporting of
this was the first public disclosure. The Kim Dae-jung administration denied for two years that
secret payments were made. In early 2003, it admitted that secret payments of $500 million were
made shortly before the June 2000 North-South summit.
16 Pincus, Walter. "North Korea’s nuclear plans were no secret." Washington Post, February 1,
2003. This report cited estimates and statement of the Central Intelligence Agency and former
Clinton Administration officials.
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wage income by 2012 and an additional $1.78 billion in estimated tax revenues by 2017.17
Another criticism is that South Korea does little monitoring of the food and fertilizer
shipments to North Korea. Critics assert that people-to-people exchange are primarily one
way with far more South Koreans visiting North Korea than North Koreans visiting South
Korea and that South Korean visitors face restrictions on their movements that prevent them
from day-to-day contacts with the North Korean people. Critics also have focused on the
North Korean workers in the Kaesong industrial complex. While working conditions in the
South Korean factories are better than working conditions throughout much of North Korea,
the North Korean workers appear to receive very little of their official wages, which are paid
to a North Korean state agency. The U.S. State Department’s coordinator of U.S. human
rights policy toward North Korea has criticized the Kaesong project on these grounds.18
U.S.-R.O.K. Negotiations over a Free Trade Agreement (FTA)
In May 2006, South Korea and the United States began negotiations over a Free Trade
Agreement. The negotiations are conducted under the trade promotion authority (TPA) that
Congress granted to the President under the Bipartisan Trade Promotion Act of 2002 (P.L.
107-210. The authority allows the President to negotiate trade agreements that would receive
expedited congressional consideration (no amendments and limited debate). However, the
TPA is due to expire July 1, 2007, placing a tight time restriction on the negotiations.
Congress would have to approve an FTA before it could enter into force. A U.S.-R.O.K.
FTA would be the second largest FTA in which the United States is a participant and the
largest in which South Korea is a participant.
The negotiations come as the U.S.-South Korean alliance has showed signs of fraying
due to differences over policies toward North Korea and anti-American sentiment in South
Korea. Some observers assert that a successful negotiation would help to shore up the
alliance. On the other hand, failure of the negotiations could the damage the relationship
fundamentally. Each country has key objectives in the negotiations. The United States will
seek reduction or elimination of South Korean restrictions on agriculture imports,
discriminatory tax and other regulations on foreign auto sales, and foreign investment. The
United States will encourage stronger South Korean government enforcement of intellectual
property rights and policies more favorable to foreign business activity in South Korea.
South Korea will seek FTA preferential treatment for goods produced in the Kaesong
industrial zone in North Korea, the inclusion of South Korean residents in the U.S. visa
waiver program, discussion of U.S. anti-dumping policies, and reduction of U.S. restrictions
on maritime services trade. A number of these issues could prove to be contentious,
including South Korea’s desire to include the Kaesong complex in an FTA. See CRS Report
RL33435, The Proposed South Korea-U.S. Free Trade Agreement (KORUSFTA).
17 Moon Ihlwan. "Bridging the Korean economic divide." Business Week Online, March 8, 2006.
18 Lefkowitz, Jay. "Freedom for all Koreans." The Wall Street Journal Asia, April 28, 2006. p. 13.
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Anti-Americanism and Plans to Change the U.S. Military Presence19
The U.S. alliance with South Korea is undergoing fundamental changes that are
affecting the alliance structure and the U.S. military presence in South Korea. Anti-
American sentiment has emerged as a major factor in South Korean politics. At the popular
level, South Korean fears of a North Korean attack are declining, prompting growing
questioning of the need for U.S. forces in South Korea. This declining fear is related to
minimal concern over potential North Korean nuclear threats to the United States and Japan
and North Korean proliferation of weapons of mass destruction. South Korean public
opinion became critical of the U.S. military because of incidents involving the U.S. military
and South Korean civilians. In 2002, massive South Korean protests erupted when a U.S.
military vehicle killed two Korean schoolgirls and the U.S. military personnel driving the
vehicle were acquitted in a U.S. court martial. Since then, polls have shown majorities or
substantial pluralities of South Koreans in favor of the withdrawal of U.S. forces from South
Korea. Popular support for the R.O.K. government’s conciliation policy toward North Korea
has brought forth substantial South Korean public sentiment against the Bush
Administration’s perceived policy toward North Korea. This sentiment has included fears
that the United States plans to launch a unilateral military attack on North Korea. South
Korean attitudes critical of the United States and sympathetic to North Korea are especially
pronounced among South Koreans below the age of 50, while older South Koreans remain
substantially pro-United States.20
At the level of the South Korean government the political elite, a generational change
of leadership has taken place. Members of a so-called 386 generation have gained dominant
positions in the Roh Moo-hyun administration and in the majority Uri party which controls
the National Assembly. Many of these people were student protestors against the South
Korean military government of the 1980s and criticize the United States for “supporting” that
government. They strongly believe in conciliation with North Korea and that the conciliation
policy will bring about moderation in Pyongyang’s policies. Members of the 386 generation
also have established new centers of media opinion in the internet, which have gained a wide
following among “computer savvy” younger South Koreans. Most spokesman for the 386
generation express support for the U.S.-R.O.K. alliance, but they also advocate that South
Korea establish policies that are independent of the United States. These views crystalized
in the 2002 South Korea presidential election when Roh Moo-hyun won on a platform of
criticisms of the United States and advocacy of South Korean “independence” from the
United States.21
19 Perry, Charles. Alliance Diversification and the Future of the U.S.-Korean Security Relationship.
Herndon, Virginia: Brassey’s, Inc., 2004. Mitchell, Derek (ed.). Strategy and Sentiment: South
Korean Views of the United States and the U.S.-ROK Alliance. Washington, Center for Strategic
and International Studies, 2004.
20 Lee Naw-young. "Changes in Korean public perception of the U.S. and Korea-U.S. relations."
East Asian Review, Summer 2005. p. 3-45.
21 Lee Jung-hoon. "The emergence of new elites in South Korea and its implications for popular
sentiment toward the United States." In Strategy and Sentiment: South Korean Views of the United
States and the U.S.-ROK Alliance, edited by Derek J. Mitchell. Washington, Center for Strategic
and International Studies, June 2004. p. 59-66.
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There are three areas of South Korean policy changes which reflect these changing
attitudes and generational shift. The Roh Moo-hyun administration is demanding changes
in the military alliance structure. It wants to change the command structure from the U.S.-
R.O.K. Combined Forces Command, which is commanded by a four-star U.S. general, by
2111 or 2012; South Korean forces would be removed from the authority of the U.S.
Commander. President Roh has said that South Korea would have the right to veto any U.S.
plan to utilize U.S. forces in South Korea in military crises outside the Korean peninsula in
Northeast Asia; his objective appears to be to keep South Korea out of military crises
involving China with either Taiwan or Japan. Second, as indicated previously, U.S. and
R.O.K. policies toward North Korea have diverged. This has become evident in the six party
nuclear talks, in South Korean financial subsidies to North Korea, in South Korean
opposition to a more assertive U.S. policy toward North Korean human rights abuses, and
most recently, in U.S.-R.O.K. differences in responding to North Korea’s July 2006 missile
firings. Third, South Korea has become increasingly critical of Japan over the issues of
Japan’s historical rule over Korea, territorial disputes with Japan, and Japan’s policies
toward North Korea. This criticism of Japan includes South Korean opposition to U.S.
encouragement of Japan taking on a greater military security role in the Western Pacific.
Correspondingly, South Korea has established friendlier relations with China with their
growing economic relationship as the base. South Korean diplomatic cooperation with
China in policies toward North Korea has become an important factors in the six party
negotiations.
The South Korean government expresses support for the alliance, and the South Korean
Defense Ministry has sought to minimize changes in the U.S. military presence.
Nevertheless, the Defense Ministry has had to accede to the changes sought by President Roh
and his administration. Officials of the Roh Administration and the Bush Administration
tout alliance unity in their public statements and minimize disputes and problems. President
Roh went against South Korean public opinion and sent 3,600 R.O.K. troops to Iraq. He
asserted that his ability to influence U.S. policy toward North Korea would be enhanced by
sending South Korean troops to Iraq.
Despite this public show of unity, the Bush Administration and the Pentagon appear
to seek changes in the alliance structure in ways that likely will loosen military coordination
and reduce the U.S. military presence in South Korea. Part of this relates to the restructuring
of the U.S. military, especially the U.S. Army, that is proceeding on a global basis, the aim
being to create smaller, more mobile army units that can be more easily moved to sites of
military crises. This concept has been termed “strategic flexibility.” However, statements
by officials like Secretary of Defense Rumsfeld indicate that it also is a response to South
Korean public complaints against U.S. troops, broader anti-American sentiment in South
Korea, and diverging South Korean policies.
In 2003, the Bush Administration made a series of decisions to alter the U.S. military
presence in South Korea and reduce the number of U.S. troops. The Second Infantry
Division of about 15,000 is being withdrawn from its position just below the DMZ to “hub
bases” about 75 miles south; and the U.S. military is relocating the U.S. Yongsan base,
which has housed about 8,000 U.S. military personnel in the center of Seoul, away from the
city to the “hub bases,” to be completed in 2008. In August 2004, the United States
withdrew a 3,600-man brigade of the Second Division and sent it to Iraq. In October 2004,
South Korea and the United States agreed to a U.S. plan to withdraw an additional 12,500
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U.S. troops but on a more deferred basis, in stages stretching to September 2008; the
Pentagon originally wanted to withdraw these troops by the end of 2005. The Pentagon has
put in place an $11 billion plan to modernize U.S. forces in South Korea, and it has deployed
F-117 stealth fighters to South Korea for extended training. South Korea has agreed to
assume the estimated $4.5 to $5 billion cost of the relocating the Yongsan garrison.
The Pentagon has agreed to negotiate with South Korea over changes in the military
command structure. The Bush Administration and Roh Moo-hyun Administration issued a
statement in January 2006 in which South Korea “fully understands” the U.S. strategic
flexibility doctrine and the United States “respects” South Korea’s wish that U.S. forces in
South Korea do not involve South Korea in unwanted conflicts in Northeast Asia. However,
the Pentagon appears to view South Korea’s position on these issues as providing
justification for further U.S. troop withdrawals after September 2008. The Pentagon appears
to seek avoidance of a situation of divided U.S. and R.O.K. commands involving large
numbers of U.S. forces. Moreover, a South Korean veto threat over the use of U.S. forces,
especially U.S. air power, in a conflict with China undoubtedly creates a rationale for
withdrawing U.S. forces from South Korea before any potential conflict with China could
materialize. In congressional testimony in the spring of 2006, Pentagon officials discussed
the command structure and strategic flexibility issues and indicated that the Pentagon
foresaw larger troop reductions after September 2008.22
The Pentagon reportedly also has a plan to reshape the military command structure in
South Korea to lower the U.S. role. The plan reportedly involves a downgrading of U.S.
Forces Korea (USFK) and placing USFK under a U.S. Army I Corps Command, which the
Pentagon plans to move from Washington State to Japan. This undoubtedly would involve
a reduction in the rank of the U.S. commander in Korea (he currently is a four-star general).
Such a plan, too, likely would involve a change in the United Nations Command, which has
been in place since the Korean War headed by the four-star U.S. commander.23
Several issues will have an important bearing on the alliance prior to the end of the
current U.S. force restructuring and withdrawal cycle in September 2008. One is the degree
of divergence between the United States and South Korea over policy toward North Korea,
especially if the nuclear negotiations fail. A second will be the outcome of U.S.-R.O.K.
negotiations over restructuring of the Combined Forces Command and further U.S. troop
withdrawals. South Korean officials complained that the changes in the U.S. force structure
beginning in 2003 were unilateral decisions by the Bush Administration with minimal prior
negotiations with South Korea. (However, the Pentagon did agree under urgings from the
South Korean Defense Ministry to move back the withdrawal of 12,500 U.S. troops from
December 2005 to September 2008.) A third will be the outcome of the negotiations over
a U.S.-South Korea Free Trade Agreement. If these negotiations fail to bring about an FTA,
many analysts believe that the alliance will suffer fundamental damage. A fourth will be the
extent to which relations with the United States will enter into South Korean presidential and
National Assembly elections in 2007. If candidates, especially presidential candidates, adopt
22 "U.S. officials raise possibility of further troop cut in S. Korea." Yonhap News Agency, March 10,
2006.
23 Halloran, Richard. "U.S. Pacific Command facing sweeping changes." Washington Times,
February 2, 2004. p. A11.
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anti-American themes and win elections, as Roh Moo-hyun did in 2002, this too could
produce fundamental damage to the alliance. If tensions between China and Taiwan or Japan
should mount, South Korean policy toward the U.S. strategic flexibility doctrine could pose
a bigger threat to the alliance. Finally, any new incidents between the U.S. military and
South Korean civilians similar to the killings of the Korean schoolgirls in 2002 could turn
South Korean public and political opinion more decidedly against the alliance and the U.S.
military presence.
The total cost of stationing U.S. troops in South Korea is nearly $3 billion annually.
The South Korean direct financial contribution for 2005 and 2006 is $681 million.
FOR ADDITIONAL READING
CRS Report RL31555. China and Proliferation of Weapons of Mass Destruction and
Missiles: Policy Issues, by Shirley A. Kan.
CRS Report RL32167. Drug Trafficking and North Korea: Issues for U.S. Policy, by
Raphael F. Perl.
CRS Report RL31785. Foreign Assistance to North Korea, by Mark E. Manyin.
CRS Report RL31696. North Korea: Economic Sanctions, by Dianne E. Rennack.
CRS Issue Brief IB91141. North Korea’s Nuclear Weapons Program, by Larry A. Niksch.
CRS Report RS21473. North Korean Ballistic Missile Threat to the United States, by
Andrew Feickert.
crsphpgw
CRS-16
CRS Issue Brief for Congress
Received through the CRS Web
Korea: U.S.-Korean Relations —
Issues for Congress
Updated July 11, 2006
Larry A. Niksch
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress
CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
U.S. Interests in South Korea
Recent Issues
Relations with North Korea
North Korea’s Objectives in July 2006 Missile Tests
Nuclear Weapons and the Six Party Talks
U.S. Moves Against North Korean Illegal Activities
North Korea’s Missile Program
Weapons of Mass Destruction
North Korea’s Inclusion on the U.S. Terrorism List
Food Aid
North Korean Refugees in China and Human Rights
South Korea’s Conciliation Policy Toward North Korea
U.S.-R.O.K. Negotiations over a Free Trade Agreement (FTA)
Anti-Americanism and Plans to Change the U.S. Military Presence
FOR ADDITIONAL READING
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Korea: U.S.-Korean Relations — Issues for Congress
SUMMARY
North Korea’s decision in December
tions that the United States plans an “Iraq-
2002 to restart nuclear installations at Yongb-
like” attack on North Korea, and denials that
yon that were shut down under the U.S.-North
it has an HEU program. North Korea’s posi-
Korean Agreed Framework of 1994 and its
tion, first taken in August 2005, that it will not
announced withdrawal from the Nuclear Non-
begin dismantlement until light water nuclear
Proliferation Treaty create an acute foreign
reactors are constructed inside North Korea
policy problem for the United States. North
(construction would take an estimated 10-15
Korea claims that it has nuclear weapons and
years) creates a significant gap between the
that it has completed reprocessing nuclear
Bush Administration’s timetable for disman-
weapons-grade plutonium that could produce
tlement and Pyongyang’s timetable.
six to eight atomic bombs. U.S. intelligence
estimates reportedly agree that North Korea
There are considerable differences be-
has this capability. North Korea also is oper-
tween the Bush Administration and China and
ating a secret nuclear program based on highly
South Korea over policies toward North
enriched uranium (HEU).
Korea. China has supported key North Ko-
rean negotiating positions and rejects pressure
The main elements of Bush Administrat-
on North Korea over the nuclear and missile
ion policy are (1) that North Korea must
issues. South Korea emphasizes bilateral
dismantle both its plutonium and HEU
reconciliation with North Korea and a policy
programs; (2) that dismantlement must be an
more equidistant between the United States
early stage in a settlement process; (3) assem-
and China. The South Korean public has
bling an international coalition to apply pres-
become critical of Bush Administration poli-
sure on North Korea in multilateral talks; and
cies and the U.S. military presence. Anti-U.S.
(4) asserting that a full normalization of U.S.-
demonstrations erupted in 2002, and Roh
North Korean relations is dependent on the
Moo-hyun was elected President after criticiz-
resolving of several issues, including nuclear
ing the United States. In 2003-2004, the
weapons, missiles, and human rights; and (5)
Pentagon announced plans to relocate U.S.
instituting financial sanctions at foreign banks
troops in South Korea away from the demilita-
and companies that cooperate with North
rized zone and Seoul. The United States will
Korea in international illegal activities.
withdraw 12,500 troops between the end of
2004 and September 2008, and U.S. military
China organized six party talks among
officials have hinted that further withdrawals
the United States, China, Japan, North Korea,
will come after 2008. U.S.-South Korean
South Korea, and Russia in mid-2003, but the
negotiations are underway to change the
talks have made little progress. U.S. attempts
military command structure and determine the
to isolate North Korea in the talks have been
degree to which the United States could de-
countered by North Korea’s strategy of threats
ploy U.S. troops in South Korea to other
to leave the talks, actual boycotts of the talks,
trouble spots in Northeast Asia.
the issuance of settlement proposals, accusa-
Congressional Research Service ˜ The Library of Congress
IB98045
07-11-06
MOST RECENT DEVELOPMENTS
The U.S. Senate passed an amendment to the FY2007 defense appropriations bill that
would require President Bush to appoint a senior presidential coordinator of policy toward
North Korea and submit to Congress an unclassified report on North Korea’s nuclear and
missile programs. North Korea fired seven missiles into the Sea of Japan on July 4, 2006,
including one long-range Taepodong II missile. However, the Taepodong II’s liftoff failed
after 40 seconds, and the missile fell into the sea. Experts concluded that the test was a
failure. The Bush Administration announced support for a Japanese resolution in the United
Nations Security Council that calls on countries to cease financial and technical support for
North Korea’s missile program. However, China, Russia, and South Korea opposed the
resolution. North Korea continued its second lengthy boycott of the six party talks,
demanding that the Bush Administration lift recent U.S. financial sanctions against Banco
Delta Asia in Macau. The U.S. Treasury Department accused Banco Delta of laundering
counterfeit U.S. 100 dollar bills produced by North Korea. Recent reports indicated that the
Treasury Department was considering applying similar financial sanctions against banks on
the Chinese mainland that were cooperating with North Korean illegal activities. In other
developments, North Korea ordered the U.N. World Food Program (WFP) to cease food-
donating operations at the end of 2005, but the WFP reached an agreement with Pyongyang
for a two-year, $102 million program to provide food to young children and women of child-
bearing age. Following criticism from Members of Congress, the Bush Administration
admitted the first group of six North Korean refugees into the United States. The United
States and South Korea began negotiations over a Free Trade Agreement.
BACKGROUND AND ANALYSIS
U.S. Interests in South Korea
U.S. interests in the Republic of Korea (R.O.K. — South Korea) involve security,
economic, and political concerns. The United States suffered over 33,000 killed and over
101,000 wounded in the Korean War (1950-53). The United States agreed to defend South
Korea from external aggression in the 1954 Mutual Defense Treaty. The United States
maintains about 34,000 troops there to supplement the 650,000-strong South Korean armed
forces. This force is intended to deter North Korea’s (the Democratic People’s Republic of
Korea — D.P.R.K.) 1.2 million-man army. Since 1991, attention has focused on North
Korea’s drive to develop nuclear weapons (see CRS Issue Brief IB91141, North Korea’s
Nuclear Weapons Program, by Larry A. Niksch) and long-range missiles.
U.S. economic aid to South Korea, from 1945 to 2002, totaled over $6 billion; most
economic aid ended in the mid-1970s as South Korea’s reached higher levels of economic
development. U.S. military aid, from 1945 to 2002, totaled over $8.8 billion. The United
States is South Korea’s second-largest trading partner (replaced as number one by China in
2002) and largest export market. South Korea is the seventh-largest U.S. trading partner.
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Recent Issues
Relations with North Korea
The Bush Administration’s policy toward North Korea has been based on three factors
within the Administration. First, President Bush has voiced distrust of North Korea and its
leader, Kim Jong-il. Second, there are divisions within the Administration over policy
toward North Korea. A coalition consists of Secretary of Defense Rumsfeld and his advisers,
Vice President Cheney and his advisers, and proliferation experts in the State Department
and White House. They reportedly oppose negotiations with North Korea, favor the issuance
of demands for unilateral North Korean concessions on military issues, and advocate a U.S.
strategy of isolating North Korea diplomatically and through economic sanctions. Officials
within this group express hope of a collapse of the North Korean regime. An alternative
approach, advanced mainly by officials in the State Department and White House with
experience on East Asian and Korean issues, favor negotiations before adopting more
coercive measures; they reportedly doubt the effectiveness of a strategy to bring about a
North Korean collapse.1 The third factor is heavy reliance on other governments, especially
China, to bring North Korea around to accept U.S. proposals on the nuclear issue.
North Korea’s Objectives in July 2006 Missile Tests. North Korea’s objectives
in launching seven missiles on July 4, 2006, including a long-range Taepodong II missile,
have been the subject of much analysis and, admittedly, speculation. Most of the analysis
focuses on likely multiple objectives and motives. One set of these may be related to internal
political factors in North Korea, particularly the assertion of the North Korean military
(KPA) within the North Korean leadership. Recent reports have indicated that the KPA has
been dissatisfied with the status of the six party nuclear talks, U.S. Treasury Department
financial sanctions against a bank in Macao that was a major conduit for North Korean illegal
activities, and the North Korea’s agreement to open rail links with South Korea. The KPA
reportedly intervened at the last moment to prevent the scheduled opening of the rail links
on May 25, 2006. The KPA thus may have pressed for stronger North Korean measures to
deal with a number of these issues.
On the diplomatic level, much of the analysis has focused on a likely North Korean
objective of escalating pressure on the United States for bilateral U.S.-North Korean talks.
Pyongyang has sought bilateral talks since the nuclear issue worsened in 2002, and the Bush
Administration has resisted such negotiations. It also is possible that North Korea seeks to
use provocative missile tests to place pressure on China for more aid, especially direct
financial subsidies to the regime. Throughout the six party talks since August 2003,
Pyongyang has used threats and boycotts of the talks to gain greater amounts of aid from
China. North Korea also may view the missile launches as a way to test the boundaries
China has placed on acceptable North Korean behavior since the six party talks began.
Chinese officials claim that China warned North Korea in the spring of 2003 against
conducting a nuclear weapons test. Pyongyang thus may view Chinese tolerance of the
missile launches as constituting an opening for a future nuclear test.
1 Kessler, Glenn. "U.S. has a shifting script on N. Korea." Washington Post, December 7, 2003. p.
A25. Beck, Peter. "The new Bush Korea team: a harder line?" Weekly Dong-a (Seoul), November
22, 2004.
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On the military level, the KPA may have argued that development of the Taepodong II
necessitated a test, since the last test of a Taepodong I was in August 1998. A more
disturbing motive would be that North Korea has developed nuclear warheads that could be
fitted on missiles and that the North Korean leadership decided that this achievement
necessitated the test of a long-range missile delivery system. Another possible motive would
be to advertise North Korean missiles to potential customers, including existing customers
like Iran and Syria and countries cited as potential customers like Burma and Venezuela.
North Korean missile sales have been lucrative sources of foreign exchange for North
Korean leader Kim Jong-il and the leadership.
Nuclear Weapons and the Six Party Talks.2 From 1994 to 2003, U.S. policy was
based largely on the U.S.-North Korean Agreed Framework of October 1994. It provided
for the suspension of operations and construction of North Korea’s active five megawatt
nuclear reactor and plutonium reprocessing plant and larger 50 megawatt and 200 megawatt
reactors under construction. It also specified the storage of 8,000 nuclear fuel rods that
North Korea had removed from the five megawatt reactor in May 1994. It provided that the
United States would facilitate the shipment of 500,000 tons of heavy oil annually to North
Korea until two light-water nuclear reactors (LWRs) were constructed in North Korea. The
Korean Peninsula Development Organization (KEDO), a multilateral body, was established
to implement the LWR project. The IAEA monitored the freeze of the designated facilities
and activities. North Korea would complete dismantlement of nuclear facilities when the
construction of LWRs was completed.
According to U.S. officials, North Korea admitted to having a secret uranium
enrichment program when U.S. officials visited Pyongyang in October 2002 (North Korea
since has denied making an admission). This confirmed U.S. intelligence information of
such a program that had built up since 1998. The Bush Administration reacted by pushing
a resolution through KEDO in November 2002 to suspend heavy oil shipments to North
Korea. The Administration also secured a suspension of construction of the light-water
reactors and a total termination in November 2005. North Korea then initiated a number of
moves to reactivate the plutonium-based nuclear program shut down in 1994 under the
Agreed Framework: re-starting the five-megawatt nuclear reactor, announcing that it would
re-start the plutonium reprocessing plant, and removing the 8,000 nuclear fuel rods from
storage facilities. North Korea expelled IAEA officials who had been monitoring the freeze
of the plutonium facilities under the Agreed Framework. In January 2003, North Korea
announced withdrawal from the Nuclear Non-Proliferation Treaty. North Korea later
asserted that it possessed nuclear weapons and that it had completed reprocessing of the
8,000 fuel rods into weapons-grade plutonium. According to nuclear experts and reportedly
by U.S. intelligence agencies, this reprocessing would produce enough plutonium for four
to six atomic bombs. A Central Intelligence Agency statement of August 18, 2003, estimated
“that North Korea has produced one or two simple fission-type nuclear weapons and has
validated the designs without conducting yield-producing nuclear tests.” Reuters News
Agency and the Washington Post reported on April 28, 2004, that U.S. intelligence agencies
were preparing a new National Intelligence Estimate that would conclude that North Korea
2 For assessments of diplomacy on the North Korean nuclear issues, see Pritchard, Charles L. "Six
Party Talks Update: False Start or a Case for Optimism?" Washington: The Brookings Institution,
December 1, 2005.
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had approximately eight atomic bombs based on plutonium and that the secret uranium
enrichment program would be operational by 2007 and would produce enough weapons-
grade uranium for up to six atomic bombs annually. “Senior officials across the government”
were quoted in March 2006 that North Korea had plutonium for 8 to 12 nuclear weapons.3
In early 2003, the Administration proposed multilateral talks, which became six party
talks hosted by China. South Korea, Japan, and Russia also participated along with North
Korea. Six party talks began in August 2003 and remained stalemated until September 2005,
when the six parties produced a statement of principles on September 19. However, the talks
quickly deadlocked as North Korea and the United States gave very different interpretations
of the Six Party Statement and North Korea announced its second major boycott of the talks
in November 2005, which has continued to the present.
There are at least four reasons for the deadlock. The first is a fundamental disagreement
between the United States and North Korea over the timing in a settlement process of North
Korean dismantlement of its nuclear programs. The Bush Administration has maintained a
core position that dismantlement must come in an early stage of a settlement, and it estimated
in 2005 that dismantlement would take about three years. Until August 2005, North Korea
took the position that it would dismantle only after receiving a number of concessions and
benefits from the United States, but it was ambiguous on the timing. In August 2005, North
Korea made a relatively secondary demand for light water nuclear reactors its core demand
for U.S. concessions, taking the position that it would dismantle only after LWRs were
constructed. Pyongyang maintained this position after the Six Party Statement, which called
for discussions of LWRs. This position set a time frame of at least ten years and more likely
15 years before North Korea would begin dismantlement (ten years is the amount of time
nuclear experts say is needed to construct LWRs in a “normal nation”4).
A second reason is the relative lack of support for U.S. positions in the talks from
China, South Korea, and Russia. In the early stages of the talks, Administration officials
emphasized that North Korea would become isolated diplomatically and that the other parties
in the talks would pressure North Korea to accede to U.S. proposals and demands.
Administration officials stressed that China should exert diplomatic pressure on North Korea
by exploiting North Korea’s dependence on China for an estimated 90% of its oil and 40%
of its food. However, North Korea exerted an effective counter-strategy in late 2003 into
2004 featuring proposals of a U.S. security guarantee, a long-term freeze of North Korea’s
plutonium program coinciding with U.S. concessions (“reward for freeze”), and retention by
North Korea of a “peaceful” nuclear program. North Korea instituted a concerted
propaganda campaign to promote these proposals, and it began a campaign of repeated
denials that it had a secret highly-enriched uranium (HEU) program. Throughout 2004,
China, Russia, and even South Korea expressed sympathy for Pyongyang’s proposals, and
Russia and China voiced doubts that North Korea has an HEU program. Pyongyang’s first
boycott of the talks (August 2004-July 2005) drew little criticism from these governments;
and while South Korea criticized the second boycott (November 2005 to the present), Beijing
3 Brinkley, Joel. "U.S. squeezes North Korea’s money flow." New York Times, March 10, 2006. p.
A11.
4 Herskovitz, Jon. "N. Korea says to build light-water nuclear reactors." Reuters News, December
19, 2005.
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and Moscow refrained from any public criticism. China appeared to demand from North
Korea at least a nominal commitment to the talks and avoidance of provocative acts like a
nuclear test; but China displayed a permissive attitude toward North Korean tactics in the
talks, rejected sanctions on North Korea, and heightened levels of economic and financial
aid to North Korea — the last being a reported commitment of $2 billion in October 2005.
A third factor may have been the slowness of the Bush Administration in moving from
a diplomatic strategy of demanding a unilateral North Korean nuclear dismantlement and
rejecting bilateral discussions with North Korea to a strategy of offering some reciprocal
concessions to North Korea in return for dismantlement and engaging in bilateral discussions
in six party meetings. This reportedly was due to the factional disputes within the Bush
Administration. China, South Korea, and Russia criticized the absence or limits of U.S.
offers of reciprocity and the U.S. refusal to negotiate bilaterally with North Korea. In
response to these criticisms, the Bush Administration offered a core proposal in June 2004
and modified it in July 2005 under Assistant Secretary of State Christopher Hill. The
Administration’s proposal calls for North Korean dismantlement over about a three-year
period in an initial stage of a settlement. During this period, South Korea and Japan would
supply North Korea with heavy oil, and South Korea would implement its offer of July 2005
to provide North Korea with 2,000 megawatts of electricity annually. After North Korea
completed dismantlement, it would receive a permanent security guarantee. However, the
Bush Administration did not offer North Korea full diplomatic relations in exchange for
dismantlement, despite calls from Beijing, Seoul, and Moscow for Washington to make such
an offer. These governments, too, gave little support to the Bush Administration’s initiatives
beginning with the June 2004 proposal. China and Russia, in particular, have not supported
the core U.S. position that dismantlement must be an early stage of a settlement process.
The fourth reason for the deadlock appears to be North Korea’s strategy of securing a
protracted diplomatic stalemate on the nuclear issue. After the U.S. proposal of June 2004,
Pyongyang’s main tactic has been to progressively enlarge the gap between North Korean
proposals and the Bush Administration’s core proposal, thus “killing” the Administration’s
proposal as a basis for negotiations. After July 2004, North Korea enlarged its demands for
U.S. concessions under the demand that the United States end its “hostile policy” and
“nuclear threat.” It proposed a “regional disarmament” agenda in March 2005, demanding
a range of U.S. military concessions in return for a nuclear settlement. As stated previously,
Pyongyang’s linkage of LWR construction and nuclear dismantlement creates a huge time
frame gap between its position and the Bush Administration’s position. Pyongyang’s
boycotts create stalemate, but North Korea also appears to use boycotts and threats of boycott
to condition South Korea, China, and Russia to treat North Korea’s proposals and positions
sympathetically when it does agree to a meeting, thus isolating the Bush Administration.
(Only Japan has supported consistently U.S. positions.)
U.S. Moves Against North Korean Illegal Activities. North Korea’s justification
for its second boycott of the six party talks is the U.S. financial sanctions against a bank in
Macau, Banco Delta, for involvement in North Korean money-laundering and counterfeiting
activities. U.S. administrations have cited North Korea since the mid-1990s for instigating
a number of activities abroad that are illegal under U.S. law. These include production and
trafficking in heroin, methamphetamines, counterfeit cigarettes, counterfeit pharmaceuticals,
and counterfeit U.S. currency. North Korea is estimated to earn between $500 million and
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$1 billion annually through these activities.5 (For a detailed discussion, see CRS Report
RL33324, North Korean Counterfeiting of U.S. Currency, by Raphael F. Perl and Dick K.
Nanto; and CRS Report RL32167, Drug Trafficking and North Korea: Issues for U.S. Policy,
by Raphael F. Perl.) These earnings reportedly go directly to North Korean leader, Kim
Jong-il, through Bureau 39 of the Communist Party. He reportedly uses the funds to reward
his political elite with imported consumer goods and to procure foreign components for
weapons of mass destruction.
In September 2005, the Bush Administration made the first overt U.S. move against
North Korean illegal activities; the Treasury Department named the Banco Delta in the
Chinese territory of Macau as a money laundering concern under the U.S. Patriot Act. The
Department accused Banco Delta of distributing North Korean counterfeit U.S. currency and
laundering money from the criminal enterprises of North Korean front companies. The
Macau government closed Banco Delta and froze more than 40 North Korean accounts with
the bank. Banks in a number of other countries also froze North Korean accounts and ended
financial transactions with North Korea. According to Treasury Department officials and
other sources, these freezes have restricted the flow of foreign exchange to Kim Jong-il and
have limited his ability to distribute consumer goods to members of his political elite.
The South Korea government reacted to the U.S. financial sanctions first with concern
over their impact on the six party talks and second by asserting that it had no information that
verified the U.S. claim of North Korean counterfeiting. By March 2006, the government had
shifted its position toward agreement with the U.S. claim, and government officials stated
that they had warned North Korea to deal with the U.S. allegations. China said nothing of
substance publicly about the issue, undoubtedly reflecting China’s sensitive position as the
location for much of North Korea’s illicit banking activities. The Chinese government
reportedly investigated Banco Delta and concluded that the Treasury Department’s
allegations were correct.6 However, there have been reports that North Korea reacted to the
shutdown of Banco Delta by shifting its financial operations to banks on the Chinese
mainland. In March 2006, the Bank of China warned Chinese banks that counterfeit U.S.
$100 bills “have flowed into our country from overseas” but did not name North Korea as
the source of the counterfeit currency.7
The Bush Administration officially held that the U.S. financial sanctions were a separate
issue from the six party talks. However, some U.S. officials stated that there was increased
sentiment within the Administration that the United States needed to apply pressure on North
Korea in order to break North Korea’s strategy of creating a diplomatic stalemate on the
nuclear issue. These officials also stated that the Treasury and Justice departments had
authority to take additional financial and legal steps against North Korea’s illegal activities.
5 Presentation of David Asher, Institute for Defense Analyses, at the American Enterprise Institute,
February 1, 2006.
6 Fackler, Martin. “North Korean Counterfeiting Complicates Nuclear Crisis.” New York Times,
January 29, 2003. p. 3. “China Finds N. Korea Guilty of Money Laundering.” Chosun Ilbo (Seoul,
internet version), January 11, 2006.
7 Fairclough, Gordon. “China Warns of Forgeries.” The Wall Street Journal Asia, March 24, 2006.
P. 7.
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North Korea’s Missile Program.8 North Korea maintained a moratorium on flight
testing of long-range missiles since September 1999 until the missile launches on July 4,
2006. The last such missile test, on August 31, 1998, flew over Japanese territory. Japan
also believes it is threatened by approximately 200 intermediate-range Nodong missiles,
which North Korea has deployed. Reports since 2000 cite U.S. intelligence findings that
North Korea is developing a Taepodong II intercontinental missile that would be capable of
striking Alaska, Hawaii, and the U.S. west coast with nuclear weapons. U.S. officials
reportedly claimed in September 2003 that North Korea had developed a more accurate,
longer-range intermediate ballistic missile that could reach Okinawa and Guam (sites of
major U.S. military bases) and that there was evidence that North Korea had produced the
Taepo Dong-2. U.S. officials reportedly told Japanese counterparts in July 2003 that North
Korea was close to developing nuclear warheads for its missiles.
In the 1990s, North Korea exported short-range Scud missiles and Scud missile
technology to countries in the Middle East. It exported Nodong missiles and Nodong
technology to Iran, Pakistan, and Libya. In 1998, Iran and Pakistan successfully tested
medium-range missiles modeled on the Nodong. Japan’s Sankei Shimbun newspaper
reported on August 6, 2003, that North Korea and Iran were negotiating a deal for the export
of the long-range Taepo Dong-2 missile to Iran and the joint development of nuclear
warheads. In February 2006, it was disclosed that Iran had purchased 18 BM-25 mobile
missiles from North Korea with a range of 2,500 kilometers. Pakistani and Iranian tests of
North Korean-designed missiles have provided “surrogate testing” that dilutes the limitations
of the September 1999 moratorium.
The test launch of the Taepo Dong-1 spurred the Clinton Administration to intensify
diplomacy on North Korea’s missile program. The Administration’s 1999 Perry initiative
set the goal of “verifiable cessation of testing, production and deployment of missiles ... and
the complete cessation of export sales of such missiles and the equipment and technology
associated with them.” The Perry initiative offered to normalize U.S.-North Korean
relations, end to U.S. economic sanctions, and provide other economic benefits in return for
North Korean concessions on the missile and nuclear issues.
In October 2000, the Clinton Administration reportedly proposed a comprehensive deal
covering all aspects of the issue. North Korea offered to prohibit exports of medium- and
long-range missiles and related technologies in exchange for “in-kind assistance.” (North
Korea previously had demanded $1 billion annually.) It also offered to ban permanently
missile tests and production above a certain range in exchange for “in-kind assistance” and
assistance in launching commercial satellites. Pyongyang offered to cease the deployment
of Nodong and Taepo Dong missiles. It proposed that President Clinton visit North Korea
to conclude an agreement. The negotiations reportedly stalled over four issues: North
Korea’s refusal to include short-range Scud missiles in a missile settlement; North Korea’s
non-response to the U.S. position that it would have to agree to dismantle the already
deployed Nodong missiles; the details of U.S. verification of a missile agreement; and the
nature and size of a U.S. financial compensation package. The Bush Administration has
offered no specific negotiating proposal on missiles. The Administration emphasized the
8 Kim Kyoung-soo (ed.). North Korea’s Weapons of Mass Destruction. Elizabeth, New Jersey, and
Seoul: Hollym Corporation, 2004: p.121-148.
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necessity of installing an anti-missile defense system and sought to dissuade a number of
North Korea’s customers from buying new missiles.
Weapons of Mass Destruction.9 A Pentagon report on the North Korean military,
released in September 2000, stated that North Korea had developed up to 5,000 metric tons
of chemical munitions and had the capability to produce biological weapons, including
anthrax, smallpox, the bubonic plague, and cholera. The Bush Administration has expressed
concern that North Korea might sell nuclear, chemical, or biological weapons to a terrorist
group such as Al Qaeda or that Al Qaeda might acquire these weapons from a Middle East
country that had purchased them from North Korea. The Bush Administration has not
accused North Korea directly of providing terrorist groups with WMDs. There are reports
from the early 1990s that North Korea assisted Syria and Iran in developing chemical and
biological weapons capabilities.
North Korea’s Inclusion on the U.S. Terrorism List. In February 2000, North
Korea began to demand that the United States remove it from the U.S. list of terrorist
countries. North Korea’s proposals at the six party nuclear talks also call for the United
States to remove Pyongyang from the terrorist list. North Korea’s chief motive appears to
be to open the way for the nation to receive financial aid from the World Bank and the
International Monetary Fund (IMF). P.L. 95-118, the International Financial Institutions Act,
requires the United States to oppose any proposals in the IMF and World Bank to extend
loans or other financial assistance to countries on the terrorism list. The South Korean also
has urged the United States to remove North Korean from the terrorism list so that North
Korea could receive international financial assistance.
Japan has urged the United States to keep North Korea on the terrorism list until North
Korea resolves Japan’s concerns over North Korea’s kidnapping of Japanese citizens. The
Clinton Administration gave Japan’s concerns increased priority in U.S. diplomacy in 2000
(See CRS Report RL30613, North Korea: Terrorism List Removal?, by Larry Niksch and
Raphael Perl). At the Beijing meetings, the Bush Administration called on North Korea to
resolve the issue with Japan. In 2004, the Administration made the kidnapping of Japanese
citizens an official reason for North Korea’s inclusion on the terrorist list. Kim Jong-il’s
admission, during the Kim-Koizumi summit of September 2002, that North Korea had
kidnapped Japanese citizens did not resolve the issue. His claim that eight of the 13 admitted
kidnapped victims are dead raised new issues for the Japanese government, including
information about the deaths of the kidnapped and the possibility that more Japanese were
kidnapped. The five living kidnapped Japanese returned to Japan in October 2002. In return,
Japan promised North Korea 250,000 tons of food and $10 million in medical supplies.
However, in late 2004, Japan announced that the remains of two alleged kidnapped Japanese
that North Korea had turned over to Japan were false remains. This prompted demands in
Japan for sanctions against North Korea. The Bush Administration reportedly advised Japan
to refrain from sanctions because of a potential negative impact on the six party talks.
Food Aid. North Korea’s order to the U.N. World Food Program (WFP) to suspend
food aid after December 2005 ended a ten-year program of WFP food aid to North Korea.
The two-year program negotiated in early 2006 to feed small children and young women is
9 Ibid., p.79-120.
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much more limited in scope. From 1995 through 2004, the United States supplied North
Korea with over 1.9 million metric tons of food aid through the United Nations World Food
Program (WFP). South Korea has extended increasing amounts of bilateral food aid to North
Korea, including one million tons of rice in 2004. Agriculture production in North Korea
began to decline in the mid-1980s. Severe food shortages appeared in 1990-1991. In
September 1995, North Korea appealed for international food assistance. The Bush
Administration reduced food aid, citing North Korean refusal to allow adequate access and
monitoring. It pledged 50,000 tons for 2005 but suspended the delivery of the remaining
25,000 tons when North Korea ordered the WFP to cease operations. The WFP
acknowledged that North Korea places restrictions on its monitors’ access to the food
distribution system, but it professed that most of its food aid reached needy people. Several
private aid groups, however, withdrew from North Korea because of such restrictions and
suspicions that the North Korean regime was diverting food aid to the military or the
communist elite living mainly in the capital of Pyongyang. The regime reportedly gives
priority to these two groups in its overall food distribution policy. Some experts also believe
that North Korean officials divert some food aid for sale on the extensive black market. The
regime has spent none of several billion dollars in foreign exchange earnings since 1998 to
import food or medicines. The regime refuses to adopt agricultural reforms similar to those
of fellow communist countries, China and Vietnam, including dismantling of Stalinist
collective farms. It is estimated that one to three million North Koreans died of malnutrition
between 1995 and 2003.10
North Korean Refugees in China and Human Rights. This issue confronted
governments after March 2002 when North Korean refugees, aided by South Korean and
European NGOs, sought asylum in foreign diplomatic missions in China and the Chinese
government sought to prevent access to the missions and forcibly removed refugees from the
Japanese and South Korean embassies. The refugee exodus from North Korea into China’s
Manchuria region began in the mid-1990s as the result of the dire food situation in North
Korea. Estimates of the number of refugees cover a huge range, from 10,000 to 300,000,
including a State Department estimate of 30,000-50,000 in June 2005.
Generally, China tacitly accepted the refugees so long as their presence was not highly
visible. China also allowed foreign private NGOs, including South Korean NGOs, to
provide aid to the refugees, again so long as their activities were not highly visible. China
barred any official international aid presence, including any role for the United Nations High
Commission for Refugees. It instituted periodic crackdowns that included police sweeps of
refugee populated areas, rounding up of refugees, and repatriation to North Korea. Since
early 2002, China allowed refugees who had gained asylum in foreign diplomatic missions
to emigrate to South Korea. However, China’s crackdown on the border reportedly included
the torture of captured refugees to gain information on the NGOs that assisted them.
China tries to prevent any scenario that would lead to a collapse of the Pyongyang
regime, its long-standing ally. Chinese officials fear that too much visibility of the refugees
and especially any U.N. presence could spark an escalation of the refugee outflow and lead
10 Natsios, Andrew S. The Great North Korean Famine. Washington, U.S. Institute of Peace Press,
2001. Flake, L. Gordon and Snyder, Scott. Paved with Good Intentions: The NGO Experience in
North Korea. Westport, Connecticut: Praeger, 2003.
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to a North Korean regime crisis and possible collapse. China’s crackdowns are sometimes
a reaction to increased visibility of the refugee issue. China’s interests in buttressing North
Korea also have made China susceptible to North Korean pressure to crack down on the
refugees and return them. Reports since 2002 described stepped-up security on both sides
of the China-North Korea border to stop the movement of refugees and Chinese roundups
of refugees and repatriation to North Korea. South Korea, which had turned refugees away
from its diplomatic missions, changed its policy in response to the new situation. It accepted
refugees seeking entrance into its missions and allowed them entrance into South Korea, and
it negotiated with China over how to deal with these refugees.11 However, South Korea, too,
opposes encouragement of a refugee exodus from North Korea.
The Bush Administration gave the refugee issue low priority. The Administration
requested that China allow U.N. assistance to the refugees but asserted that South Korea
should lead diplomatically with China. The issue has been aired in congressional hearings.
The North Korean Human Rights Act (P.L. 108-333), passed by Congress in October 2004,
provided for the admittance of North Korean refugees into the United States. In early 2006,
key Members of Congress criticized the Bush Administration for failing to implement this
provision, and the Administration admitted the first group of six refugees.
The refugee issue had led to increased outside attention to human rights conditions in
North Korea. Reports assert that refugees forcibly returned from China have been
imprisoned and tortured in an extensive apparatus of North Korean concentration camps
modeled after the “gulag” labor camp system in the Soviet Union under Stalin. Reports by
Amnesty International, the U.S. State Department, and, most recently, the U.S. Committee
for Human Rights in North Korea have described this system as holding up to 250,000
people. In 2003, 2004, and 2005, the United States secured resolutions from the U.N.
Human Rights Commission expressing concern over human rights violations in North Korea,
including concentration camps and forced labor. South Korea abstained from the
Commission’s votes in the interest of pursuing its “sunshine” policy with North Korea.12
South Korean officials also criticized passage by Congress of the North Korean Human
Rights Act of 2004. The act requires the U.S. executive branch adopt a number of measures
aimed at furthering human rights in North Korea, including financial support of
nongovernmental human rights groups, increased radio broadcasts into North Korea, sending
of radios into North Korea, and a demand for more effective monitoring of food aid.
South Korea’s Conciliation Policy Toward North Korea. South Korean
President Kim Dae-jung took office in 1998, proclaiming a “sunshine policy” of
reconciliation with North Korea. He achieved a breakthrough in meeting with North Korean
leader Kim Jong-il in Pyongyang, June 13-14, 2000. His successor, Roh Moo-hyun, has
continued these policies under the heading, “Peace and Prosperity Policy,” which his
government describes as seeking “reconciliation, cooperation, and the establishment of
peace” with North Korea. South Korean officials also hold that these policies will encourage
positive internal change within North Korea. Key principles of this conciliation policy are:
the extension of South Korean economic and humanitarian aid to North Korea, the promotion
11 Kirk, Jeremy. “N. Korean Defections Strain Ties,” Washington Times, February 11, 2005. p.A17.
12 Hawk, David. The Hidden Gulag: Exposing North Korea’s Prison Camps. Washington, U.S.
Committee for Human Rights in North Korea, 2004.
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of North-South economic relations, separating economic initiatives from political and
military issues, no expectation of strict North Korean reciprocity for South Korean
conciliation measures, avoidance of South Korean government public criticisms of North
Korea, and settlement of security issues with North Korea (including the nuclear issue)
through dialogue only without pressure and coercion. Since the June 2000 summit, South
Korea has achieved regular government-to-government meetings with North Korea. South
Korea has extended growing amounts of economic and humanitarian aid to North Korea —
$2.6 billion planned for 2006, double the amount in 2005. This included significant amounts
of food and fertilizer, including 400,000 tons of rice in 2004 and 2005. North-South trade
surpassed $1 billion in 2005, a ten-fold increase since the early 1990s. Seoul and Pyongyang
also instituted a series of reunion meetings of members of separated families. As of 2005,
nearly 10,000 South Korean had participated in reunions.13
The conciliation policy also has produced three major economic projects. A tourist
project at Mount Kumgang, in North Korea just north of the demilitarized zone (DMZ), has
hosted over one million visitors from South Korea. It began in 1998 under an agreement
between the North Korean government and Hyundai Asan, a major company within the
Hyundai business empire. Another agreement is for the connecting of roads and railways
across the DMZ. The roads opened in 2003; but the scheduled opening of the rail lines on
May 25, 2006, was canceled by North Korea at the last moment. The third project is the
establishment by Hyundai Asan of an “industrial complex” at Kaesong just north of the
DMZ. South Korean companies are to invest in manufacturing, using North Korean labor.
As of mid-2006, 15 companies had set up facilities, employing about 6,000 North Korean
workers. The plan envisages 2,000 companies investing by 2012, employing at least 500,000
North Koreans. North Korean workers are paid $50 monthly plus $7.50 for social insurance.
The wages are paid to a North Korean state agency.14
Critics have pointed to several negative effects of the conciliation policy. North Korean
leader Kim Jong-il appears to view South Korea as a source of financial subsidies for the
North Korean military and elite North Koreans. The Mount Kumgang tourist project resulted
in significant South Korean financial subsidies to Kim Jong-il through both official payments
and secret payments by Hyundai Asan, especially in the 1999-2001 period.15 As official and
secret payments were made during this period, the North Korean regime accelerated its
overseas purchases of components for its secret uranium enrichment nuclear weapons
program.16 The Kaesong industrial complex also will generate considerable foreign
exchange income to the regime in the near future — an estimated $500 million in annual
13 Republic of Korea. Ministry of Unification. Peace and Prosperity: White Paper on Korean
Unification 2005. 169 pages.
14 "Factbox — South Korea’s industrial park in the North." Reuters News, June 12, 2006. Faiola,
Anthony. "Two Koreas learn to work as one." Washington Post, February 28, 2006. p. A10.
15 Informed sources told CRS about the secret Hyundai payments in 2000, and CRS’s reporting of
this was the first public disclosure. The Kim Dae-jung administration denied for two years that
secret payments were made. In early 2003, it admitted that secret payments of $500 million were
made shortly before the June 2000 North-South summit.
16 Pincus, Walter. "North Korea’s nuclear plans were no secret." Washington Post, February 1,
2003. This report cited estimates and statement of the Central Intelligence Agency and former
Clinton Administration officials.
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wage income by 2012 and an additional $1.78 billion in estimated tax revenues by 2017.17
Another criticism is that South Korea does little monitoring of the food and fertilizer
shipments to North Korea. Critics assert that people-to-people exchange are primarily one
way with far more South Koreans visiting North Korea than North Koreans visiting South
Korea and that South Korean visitors face restrictions on their movements that prevent them
from day-to-day contacts with the North Korean people. Critics also have focused on the
North Korean workers in the Kaesong industrial complex. While working conditions in the
South Korean factories are better than working conditions throughout much of North Korea,
the North Korean workers appear to receive very little of their official wages, which are paid
to a North Korean state agency. The U.S. State Department’s coordinator of U.S. human
rights policy toward North Korea has criticized the Kaesong project on these grounds.18
U.S.-R.O.K. Negotiations over a Free Trade Agreement (FTA)
In May 2006, South Korea and the United States began negotiations over a Free Trade
Agreement. The negotiations are conducted under the trade promotion authority (TPA) that
Congress granted to the President under the Bipartisan Trade Promotion Act of 2002 (P.L.
107-210. The authority allows the President to negotiate trade agreements that would receive
expedited congressional consideration (no amendments and limited debate). However, the
TPA is due to expire July 1, 2007, placing a tight time restriction on the negotiations.
Congress would have to approve an FTA before it could enter into force. A U.S.-R.O.K.
FTA would be the second largest FTA in which the United States is a participant and the
largest in which South Korea is a participant.
The negotiations come as the U.S.-South Korean alliance has showed signs of fraying
due to differences over policies toward North Korea and anti-American sentiment in South
Korea. Some observers assert that a successful negotiation would help to shore up the
alliance. On the other hand, failure of the negotiations could the damage the relationship
fundamentally. Each country has key objectives in the negotiations. The United States will
seek reduction or elimination of South Korean restrictions on agriculture imports,
discriminatory tax and other regulations on foreign auto sales, and foreign investment. The
United States will encourage stronger South Korean government enforcement of intellectual
property rights and policies more favorable to foreign business activity in South Korea.
South Korea will seek FTA preferential treatment for goods produced in the Kaesong
industrial zone in North Korea, the inclusion of South Korean residents in the U.S. visa
waiver program, discussion of U.S. anti-dumping policies, and reduction of U.S. restrictions
on maritime services trade. A number of these issues could prove to be contentious,
including South Korea’s desire to include the Kaesong complex in an FTA. See CRS Report
RL33435, The Proposed South Korea-U.S. Free Trade Agreement (KORUSFTA).
17 Moon Ihlwan. "Bridging the Korean economic divide." Business Week Online, March 8, 2006.
18 Lefkowitz, Jay. "Freedom for all Koreans." The Wall Street Journal Asia, April 28, 2006. p. 13.
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Anti-Americanism and Plans to Change the U.S. Military Presence19
The U.S. alliance with South Korea is undergoing fundamental changes that are
affecting the alliance structure and the U.S. military presence in South Korea. Anti-
American sentiment has emerged as a major factor in South Korean politics. At the popular
level, South Korean fears of a North Korean attack are declining, prompting growing
questioning of the need for U.S. forces in South Korea. This declining fear is related to
minimal concern over potential North Korean nuclear threats to the United States and Japan
and North Korean proliferation of weapons of mass destruction. South Korean public
opinion became critical of the U.S. military because of incidents involving the U.S. military
and South Korean civilians. In 2002, massive South Korean protests erupted when a U.S.
military vehicle killed two Korean schoolgirls and the U.S. military personnel driving the
vehicle were acquitted in a U.S. court martial. Since then, polls have shown majorities or
substantial pluralities of South Koreans in favor of the withdrawal of U.S. forces from South
Korea. Popular support for the R.O.K. government’s conciliation policy toward North Korea
has brought forth substantial South Korean public sentiment against the Bush
Administration’s perceived policy toward North Korea. This sentiment has included fears
that the United States plans to launch a unilateral military attack on North Korea. South
Korean attitudes critical of the United States and sympathetic to North Korea are especially
pronounced among South Koreans below the age of 50, while older South Koreans remain
substantially pro-United States.20
At the level of the South Korean government the political elite, a generational change
of leadership has taken place. Members of a so-called 386 generation have gained dominant
positions in the Roh Moo-hyun administration and in the majority Uri party which controls
the National Assembly. Many of these people were student protestors against the South
Korean military government of the 1980s and criticize the United States for “supporting” that
government. They strongly believe in conciliation with North Korea and that the conciliation
policy will bring about moderation in Pyongyang’s policies. Members of the 386 generation
also have established new centers of media opinion in the internet, which have gained a wide
following among “computer savvy” younger South Koreans. Most spokesman for the 386
generation express support for the U.S.-R.O.K. alliance, but they also advocate that South
Korea establish policies that are independent of the United States. These views crystalized
in the 2002 South Korea presidential election when Roh Moo-hyun won on a platform of
criticisms of the United States and advocacy of South Korean “independence” from the
United States.21
19 Perry, Charles. Alliance Diversification and the Future of the U.S.-Korean Security Relationship.
Herndon, Virginia: Brassey’s, Inc., 2004. Mitchell, Derek (ed.). Strategy and Sentiment: South
Korean Views of the United States and the U.S.-ROK Alliance. Washington, Center for Strategic
and International Studies, 2004.
20 Lee Naw-young. "Changes in Korean public perception of the U.S. and Korea-U.S. relations."
East Asian Review, Summer 2005. p. 3-45.
21 Lee Jung-hoon. "The emergence of new elites in South Korea and its implications for popular
sentiment toward the United States." In Strategy and Sentiment: South Korean Views of the United
States and the U.S.-ROK Alliance, edited by Derek J. Mitchell. Washington, Center for Strategic
and International Studies, June 2004. p. 59-66.
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There are three areas of South Korean policy changes which reflect these changing
attitudes and generational shift. The Roh Moo-hyun administration is demanding changes
in the military alliance structure. It wants to change the command structure from the U.S.-
R.O.K. Combined Forces Command, which is commanded by a four-star U.S. general, by
2111 or 2012; South Korean forces would be removed from the authority of the U.S.
Commander. President Roh has said that South Korea would have the right to veto any U.S.
plan to utilize U.S. forces in South Korea in military crises outside the Korean peninsula in
Northeast Asia; his objective appears to be to keep South Korea out of military crises
involving China with either Taiwan or Japan. Second, as indicated previously, U.S. and
R.O.K. policies toward North Korea have diverged. This has become evident in the six party
nuclear talks, in South Korean financial subsidies to North Korea, in South Korean
opposition to a more assertive U.S. policy toward North Korean human rights abuses, and
most recently, in U.S.-R.O.K. differences in responding to North Korea’s July 2006 missile
firings. Third, South Korea has become increasingly critical of Japan over the issues of
Japan’s historical rule over Korea, territorial disputes with Japan, and Japan’s policies
toward North Korea. This criticism of Japan includes South Korean opposition to U.S.
encouragement of Japan taking on a greater military security role in the Western Pacific.
Correspondingly, South Korea has established friendlier relations with China with their
growing economic relationship as the base. South Korean diplomatic cooperation with
China in policies toward North Korea has become an important factors in the six party
negotiations.
The South Korean government expresses support for the alliance, and the South Korean
Defense Ministry has sought to minimize changes in the U.S. military presence.
Nevertheless, the Defense Ministry has had to accede to the changes sought by President Roh
and his administration. Officials of the Roh Administration and the Bush Administration
tout alliance unity in their public statements and minimize disputes and problems. President
Roh went against South Korean public opinion and sent 3,600 R.O.K. troops to Iraq. He
asserted that his ability to influence U.S. policy toward North Korea would be enhanced by
sending South Korean troops to Iraq.
Despite this public show of unity, the Bush Administration and the Pentagon appear
to seek changes in the alliance structure in ways that likely will loosen military coordination
and reduce the U.S. military presence in South Korea. Part of this relates to the restructuring
of the U.S. military, especially the U.S. Army, that is proceeding on a global basis, the aim
being to create smaller, more mobile army units that can be more easily moved to sites of
military crises. This concept has been termed “strategic flexibility.” However, statements
by officials like Secretary of Defense Rumsfeld indicate that it also is a response to South
Korean public complaints against U.S. troops, broader anti-American sentiment in South
Korea, and diverging South Korean policies.
In 2003, the Bush Administration made a series of decisions to alter the U.S. military
presence in South Korea and reduce the number of U.S. troops. The Second Infantry
Division of about 15,000 is being withdrawn from its position just below the DMZ to “hub
bases” about 75 miles south; and the U.S. military is relocating the U.S. Yongsan base,
which has housed about 8,000 U.S. military personnel in the center of Seoul, away from the
city to the “hub bases,” to be completed in 2008. In August 2004, the United States
withdrew a 3,600-man brigade of the Second Division and sent it to Iraq. In October 2004,
South Korea and the United States agreed to a U.S. plan to withdraw an additional 12,500
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U.S. troops but on a more deferred basis, in stages stretching to September 2008; the
Pentagon originally wanted to withdraw these troops by the end of 2005. The Pentagon has
put in place an $11 billion plan to modernize U.S. forces in South Korea, and it has deployed
F-117 stealth fighters to South Korea for extended training. South Korea has agreed to
assume the estimated $4.5 to $5 billion cost of the relocating the Yongsan garrison.
The Pentagon has agreed to negotiate with South Korea over changes in the military
command structure. The Bush Administration and Roh Moo-hyun Administration issued a
statement in January 2006 in which South Korea “fully understands” the U.S. strategic
flexibility doctrine and the United States “respects” South Korea’s wish that U.S. forces in
South Korea do not involve South Korea in unwanted conflicts in Northeast Asia. However,
the Pentagon appears to view South Korea’s position on these issues as providing
justification for further U.S. troop withdrawals after September 2008. The Pentagon appears
to seek avoidance of a situation of divided U.S. and R.O.K. commands involving large
numbers of U.S. forces. Moreover, a South Korean veto threat over the use of U.S. forces,
especially U.S. air power, in a conflict with China undoubtedly creates a rationale for
withdrawing U.S. forces from South Korea before any potential conflict with China could
materialize. In congressional testimony in the spring of 2006, Pentagon officials discussed
the command structure and strategic flexibility issues and indicated that the Pentagon
foresaw larger troop reductions after September 2008.22
The Pentagon reportedly also has a plan to reshape the military command structure in
South Korea to lower the U.S. role. The plan reportedly involves a downgrading of U.S.
Forces Korea (USFK) and placing USFK under a U.S. Army I Corps Command, which the
Pentagon plans to move from Washington State to Japan. This undoubtedly would involve
a reduction in the rank of the U.S. commander in Korea (he currently is a four-star general).
Such a plan, too, likely would involve a change in the United Nations Command, which has
been in place since the Korean War headed by the four-star U.S. commander.23
Several issues will have an important bearing on the alliance prior to the end of the
current U.S. force restructuring and withdrawal cycle in September 2008. One is the degree
of divergence between the United States and South Korea over policy toward North Korea,
especially if the nuclear negotiations fail. A second will be the outcome of U.S.-R.O.K.
negotiations over restructuring of the Combined Forces Command and further U.S. troop
withdrawals. South Korean officials complained that the changes in the U.S. force structure
beginning in 2003 were unilateral decisions by the Bush Administration with minimal prior
negotiations with South Korea. (However, the Pentagon did agree under urgings from the
South Korean Defense Ministry to move back the withdrawal of 12,500 U.S. troops from
December 2005 to September 2008.) A third will be the outcome of the negotiations over
a U.S.-South Korea Free Trade Agreement. If these negotiations fail to bring about an FTA,
many analysts believe that the alliance will suffer fundamental damage. A fourth will be the
extent to which relations with the United States will enter into South Korean presidential and
National Assembly elections in 2007. If candidates, especially presidential candidates, adopt
22 "U.S. officials raise possibility of further troop cut in S. Korea." Yonhap News Agency, March 10,
2006.
23 Halloran, Richard. "U.S. Pacific Command facing sweeping changes." Washington Times,
February 2, 2004. p. A11.
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anti-American themes and win elections, as Roh Moo-hyun did in 2002, this too could
produce fundamental damage to the alliance. If tensions between China and Taiwan or Japan
should mount, South Korean policy toward the U.S. strategic flexibility doctrine could pose
a bigger threat to the alliance. Finally, any new incidents between the U.S. military and
South Korean civilians similar to the killings of the Korean schoolgirls in 2002 could turn
South Korean public and political opinion more decidedly against the alliance and the U.S.
military presence.
The total cost of stationing U.S. troops in South Korea is nearly $3 billion annually.
The South Korean direct financial contribution for 2005 and 2006 is $681 million.
FOR ADDITIONAL READING
CRS Report RL31555. China and Proliferation of Weapons of Mass Destruction and
Missiles: Policy Issues, by Shirley A. Kan.
CRS Report RL32167. Drug Trafficking and North Korea: Issues for U.S. Policy, by
Raphael F. Perl.
CRS Report RL31785. Foreign Assistance to North Korea, by Mark E. Manyin.
CRS Report RL31696. North Korea: Economic Sanctions, by Dianne E. Rennack.
CRS Issue Brief IB91141. North Korea’s Nuclear Weapons Program, by Larry A. Niksch.
CRS Report RS21473. North Korean Ballistic Missile Threat to the United States, by
Andrew Feickert.
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