South Korea: Background and U.S. Relations




Updated February 2, 2021
South Korea: Background and U.S. Relations
Overview
being slow to procure COVID vaccines, which are expected
South Korea (officially the Republic of Korea, or ROK) is
to be available in February.
one of the United States’ most important strategic and
economic partners in Asia. The U.S.-ROK Mutual Defense
Treaty, signed in 1953 at the end of the Korean War,
commits the United States to help South Korea defend
itself, particularly from North Korea (officially the
Democratic People’s Republic of Korea, or DPRK). The
alliance also helps the United States promote its interests in
East Asia and around the globe, including by deploying
ROK troops to U.S.-led military conflicts in the Middle
East. Approximately 28,500 U.S. troops are based in the
ROK. The economic relationship is bolstered by the U.S.-
South Korea Free Trade Agreement (KORUS FTA). South
Korea is the United States’ seventh-largest trading partner,
and the United States is South Korea’s second-largest
trading partner, behind China.
Policy cooperation between the United States and South
Korea was inconsistent under the administrations of Donald
Trump and Moon Jae-in. President Moon, a progressive,
was elected in May 2017 after a decade of conservative

rule. President Biden has called for reinvigorating the
alliance, suggesting he would abandon President Trump’s
North Korea Policy Coordination
repeated use of punitive tariffs against allies like Seoul and
North Korea is the dominant strategic concern in the U.S.-
his demand for a five-fold increase in South Korea’s
South Korea relationship. Moon has championed U.S.-
payments for the costs of hosting U.S. troops. Unlike
North Korea talks, which he views as critical to preventing
Trump, Biden has not signaled an interest in demanding
military conflict and to realizing his goal of establishing a
new concessions in the KORUS FTA or withdrawing U.S.
durable peace on the Korean Peninsula. North Korea’s
troops from South Korea. Bilateral difficulties could
steady advances in its nuclear weapons and ballistic missile
surface, however, over North Korea policy. Moon’s
programs were not stopped by two years of personal
government favors easing sanctions against Pyongyang, a
diplomacy between President Trump and North Korean
stance that could create tensions with Washington.
leader Kim Jong-un. U.S.-DPRK talks halted in early 2019
due to differences over the scope and sequencing of
South Korea’s COVID-19 Response
concessions, specifically North Korean denuclearization
Despite being one of the countries first hit by COVID-19 in
measures in exchange for relief from international and U.S.
early 2020, South Korea has largely contained the virus
sanctions. Kim also has linked progress on denuclearization
without resorting to lockdowns. As of early February 2021,
talks to the cessation of U.S. joint military exercises with
the country reported around 79,000 cumulative cases and
and shipments of advanced military equipment to South
around 1,400 deaths. The government’s success stems in
Korea.
part from lessons learned after a 2015 deadly outbreak of
Middle East Respiratory Syndrome (MERS) exposed flaws
In the near term, analysts worry Kim will abandon his
in the country’s public health system. In response, South
three-year-old unilateral moratorium on nuclear tests and
Korea passed legislation granting the government greater
long-range ballistic missile tests. North Korea has
powers to monitor and track individual patients and to
continued to test short- and medium-range missiles and to
allow private companies to produce health tests rapidly.
conduct cyberattacks around the globe. U.N. and U.S.
These changes have helped South Korea manage the
sanctions remain in place, officially barring nearly all of
COVID-19 pandemic with aggressive testing, contact
North Korea’s typical exports and many of its imports. The
tracing, and public communication. The government has
sanctions severely limit cooperation activities that the
emphasized transparency, disseminating information about
Moon government favors to ease tension on the Peninsula.
the virus’ spread, including about possible infections at the
neighborhood level. At times, South Korea has prohibited
Inter-Korean relations under Moon have closely tracked
large gatherings, including anti-government rallies,
U.S.-North Korea relations, improving markedly in 2018—
prompting criticism. Moon also has been criticized for
when three Moon-Kim summits were held—before
collapsing in 2019. Since early 2019, Pyongyang largely
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South Korea: Background and U.S. Relations
has ignored Seoul’s outreach and has severed all overt
controversies have caused South Korea-Japan relations to
inter-Korean communication channels. Moon generally
plummet, eroding U.S.-ROK-Japan policy coordination.
favored offering more and earlier concessions to North
The Biden Administration has emphasized the importance
Korea than Trump, creating periodic tensions, a dynamic
of trilateral cooperation; several senior officials devoted
likely to continue with the Biden Administration. In
considerable efforts to improving ROK-Japan relations in
January 2021, Biden officials said they will conduct a
their previous roles during the Obama Administration.
review of policy toward North Korea, in cooperation with
South Korea and Japan.
U.S.-South Korea Economic Relations
The South Korean economy contracted by 1% in 2020,
U.S.-South Korea Security Issues
outperforming the United States and most industrialized
In addition to hosting U.S. troops, South Korea is included
countries during the pandemic. In addition to success in
under the U.S. “nuclear umbrella” (also known as extended
containing its outbreak, South Korea also benefitted from
deterrence), and traditionally has paid for about 50% (over
strong global demand for semiconductors, a top export. In
$800 million annually) of the total non-personnel costs of
2019, U.S. goods and services exports to the ROK totaled
the U.S. military presence, according to congressional
$81.4 billion, while imports totaled $88.9 billion. Since the
testimony by U.S. military officials. During Trump’s
2012 KORUS FTA’s entry into force, bilateral trade and
tenure, the U.S. and ROK struggled to renew the
investment have increased, with U.S. services exports
agreement—known as the Special Measures Agreement, or
(+$6.1 billion to $24.0 billion in 2019) and auto imports
SMA—that establishes South Korean contributions to host
(+$9.7 billion to $25.2 billion in 2019) seeing the largest
U.S. troops. Reportedly, Trump asked for a 400% increase
gains. From 2011-2019, the stock of South Korean FDI to
and South Korea countered with 13%, leading to an
the United States tripled to $61.8 billion, and U.S. FDI to
impasse; the previous SMA expired at the end of 2019.
South Korea grew 39% to $39.1 billion.
Incoming Defense Secretary Lloyd Austin has called for a
quick conclusion to the negotiations in order to shore up the
In 2018, the Trump Administration sought negotiations to
alliance, which he called “the linchpin of peace and security
modify the KORUS FTA, under threat of U.S. withdrawal
in the region” and “among the most combined,
from the pact. South Korea agreed to limited concessions,
interoperable, capable and dynamic” alliances in the world
most prominently a delay until 2041 in reductions to U.S.
during his confirmation hearing.
light truck tariffs. Conclusion of these negotiations and the
Trump Administration’s decision not to move forward with
The most immediate challenge for the alliance may be the
proposed Section 232 auto import restrictions have since
decision on whether to re-start major U.S.-ROK military
eased bilateral trade tensions. A number of Trump
exercises, which Trump unilaterally suspended after
Administration import restrictions on South Korean
meeting with Kim. Moon has suggested that the drills
products, including steel, aluminum, washing machines and
should be “negotiated” with Pyongyang, a stance that could
solar products, however, remain in place. President Biden
run counter to U.S. policy. Critics claim that further
intends to work with U.S. allies toward a global solution to
suspension of the exercises could harm alliance readiness.
the underlying overcapacity issues in certain sectors but has
not committed to removal of the U.S. import restrictions.
The U.S. military is in the process of relocating its forces in
South Korea farther south from the North Korean border,
South Korean Politics
with South Korea paying $9.7 billion—about 94% of total
Moon belongs to the Minjoo (Democratic) Party, which in
costs—to construct new military facilities. The U.S. exit
April 2020 won a landslide victory in legislative elections,
from these bases, particularly in Seoul, will allow for the
securing the country’s largest majority in the National
return of valuable real estate to South Korea. The recently
Assembly in nearly 30 years. The victory was propelled by
opened Camp Humphreys is the largest overseas U.S. base.
Moon’s success containing the initial COVID-19 outbreak.
His popularity has fallen since late 2019 due to complaints
South Korea’s Regional Relations
such as soaring housing prices and a slow vaccine rollout.
Because of North Korea’s economic dependence on China,
The next presidential election is scheduled for May 2022.
South Korea calibrates its North Korea policy with an eye
ROK presidents are limited to one five-year term.
on Beijing’s relations with Pyongyang. China also is South
Korea’s largest trading partner and destination for foreign
Figure 1. South Korea’s National Assembly
direct investment (FDI), and Beijing has punished South
Korean companies when it disagrees with Seoul’s policy
decisions. For these and other reasons, South Korea
generally tries to avoid antagonizing China. An exception
was Seoul’s 2016 decision to deploy a U.S. missile defense
system in the ROK. China responded by enacting economic
measures that have cost ROK companies billions of dollars.

Source: National Assembly website, accessed February 1, 2021.
ROK-Japan are perennially fraught because of sensitive
historical issues from Japan’s colonization of the Korean
Mark E. Manyin, Specialist in Asian Affairs
Peninsula from 1910 to 1945. Since 2018, a series of
actions and retaliatory countermeasures by both
Emma Chanlett-Avery, Specialist in Asian Affairs
governments involving trade, security, and history-related
Brock R. Williams, Specialist in International Trade and
Finance
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South Korea: Background and U.S. Relations

IF10165


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