For the entire post WWII period the political security and economic development of South Korea has been guaranteed by the United States. In turn South Korea has served as a bulwark against communist expansion in Asia — as a security buffer for Japan, in particular. But today, this scenario is appearing more and more anachronistic, so rapidly is change coming to Northeast Asia. To be sure, the U.S. will maintain a strong presence in Northeast Asia for years to come, but it will be one among others vying for influence on the Korean peninsula, as Seoul and Pyongyang leverage their geopolitical and other economic assets to reap the benefits of what is shaping up to be a new regional economy encompassing China, Russia, Japan and both Koreas.
While the upcoming summit between Presidents Barack Obama and Lee Myung Bak is being staged to underscore efforts by both administrations to pass the controversial KORUS FTA, a lesser known trade agreement is very much in the works — a trilateral agreement among China, South Korea and Japan which is intended to assist Japan’s recovery from devastation caused by natural calamities and damaged nuclear reactors, and also to serve as a buffer against the economic downturns in Europe and the U.S. In exploration for several years, pursuit of this trade agreement took on a new sense of urgency last spring as it became clear that with its deficit spinning out of control, the U.S. economy was heading towards a second recession and threatening to pull the global economy along with it.
South Korea’s President Lee Myung Bak, Chinese Premier Wen Jiabao and Japan’s Foreign Minister Naoto Kan, met in Japan in May to show support for Japan’s recovery and to take steps to promote their common economic interests. They agreed to accelerate discussions on a trade framework between their countries, encompassing 1.5 billion people and accounting for more than 20% of the world’s GDP. In a joint statement they announced, “We decided to complete joint studies among industry representatives, officials and academics on a Japan-China-South Korea free-trade agreement this year, and to follow up by accelerating other joint studies after that.”
There are many outstanding issues between the three countries, not all of them are economic. To cite only a few, China and Japan have unresolved territorial disputes and President Lee brought up the artillery shelling of Yeonpyeong Island last year by China’s ally, North Korea. But it is expected that closer economic ties will help moderate other disagreements among the three. President Lee referred to tensions with North Korea with considerable constraint. “Inconvenient situations,” he said. “However overcoming these inconvenient situations we are showing an attitude of cooperation to move forward,” he stressed. And if there is any truth to the adage that a picture is worth a thousand words, the image of the three leaders munching on tomatoes during their summit deftly captures how quickly times are changing in that part of the world. Formal negotiations on a trilateral trade agreement are expected to start next year.
Russia is the other trading partner in the region. It has been cultivating ties with South Korea since the collapse of the Soviet Union two decades ago and has been gradually mending its relations with North Korea in the past decade. This year Russia came on strong, negotiating bilateral agreements with North and South Korea for an 1100 km gas pipeline running through North Korea to the South. If the three countries are able to achieve a tripartite agreement, as planned for November, the pipeline stands to provide over $100 million per year in transit fees to North Korea and will provide gas to South Korea at one third the cost of shipping liquid natural gas by sea. Equally important a tripartite agreement among Russia and North and South Korea, like a tripartite trade agreement among China, South Korea and Japan, would reinforce a new model for economic cooperation in the region; one in which mutual benefit trumps cold war enmity. So far the project has the support of both Koreas.
The gas pipeline took a big step from design to reality in a summit meeting between Russian President Dmitry Medvedev and North Korea’s General Secretary Kim Jong Il last August in Ulan-Ude, the capital city of Buryatia in Siberia. The two leaders apparently laid the groundwork for re-establishing the close relations enjoyed by their countries prior to the collapse of the Soviet Union. Not only did they move forward on the gas pipeline, Medvedev agreed to cancel 90 % of North Korea’s $11 billion debt to Soviet Russia while allocating the balance towards joint economic projects in North Korea. They also discussed a trans-Korean railway project and the export of surplus electricity to North Korea.
Russia, like China, desires economic ties with Japan and South Korea, but again like China it is heavily invested in maintaining stability in North Korea with which it shares a border, and regards as a security buffer against U.S. military forces. To this end both countries strongly support the six party talks for resolving tensions over the latter’s nuclear programs. The Ulan-Ude summit ended with an offer by Kim Jong Il to suspend work on nuclear weapons programs should the talks resume. Then, in its efforts to further bolster its ties with Pyongyang, Russia went one step further. Within a week of the Ulan-Ude summit Russia’s Eastern Military District commander, General Igor Muginov, visited Pyongyang and concluded an agreement to renew joint defense commitments. Naval exercises practicing the rescue of vessels in distress and the delivery of humanitarian assistance to populations experiencing natural disasters are planned for next year.
Unlike a century earlier when trading rights were imposed by gun boat diplomacy and colonization, and during the cold war when opposing ideological blocks, even within the communist camp, competed for hegemony in the third world, emergent regional “cooperation” in Asia is today becoming a much more “civil” affair, if no less calculating. Russia and China have resolved their border disputes, a key source of friction during the cold war, and are committed to “strategic cooperation” in all levels of economic, military and cultural exchanges. They have set a goal of increasing their trade from $57 billion to $100 billion by 2015 and $200 billion by 2020.
Although the volume of Russia’s trade in the region is dwarfed by China’s, Russia’s wealth from abundant supplies of energy is creating a growing market for manufactured and high technology products from Japan and South Korea. A year from now Russia will host the APEC summit in Vladivostok with the aim of more closely integrating its far eastern territory and Siberia into the Asia-Pacific Economic Cooperation region. Russia is clearly seeking to accelerate the growth of its trade, as well as its political influence, and so far it appears there is still room for all to partake in the growing Northeast Asian market.
In any case the growth of economic “cooperation” does not necessarily paint a rosy picture. Trade pacts are contentious. Moreover, dangers posed to the environment by the drive to modernize on the basis of fossil fuel energy, and the rapacious tendency of neo-liberal trade agreements to produce profits for a few at the expense of the many, may prove too powerful to overcome. More could die of famine than in all the wars of the 20th century if damage caused to the ecosphere is not repaired. Rather than lifting people out of poverty, a “successful” FTA might create massive wealth for corporations but drive millions into low wage jobs or unemployment. For the present, however, economic cooperation between former cold war adversaries in Northeast Asia, even if reluctant at times, serves to undermine the rationale for the division and militarization of Korea along ideological lines, and that is a welcome development.
North Korea and South Korea are both very much a strategic part of the new playing field and both stand more to gain if they are able to work together. The possibility of a tripartite agreement to construct a trans-peninsula gas pipeline is one short step from the kind of foreign relations that would be conducted by a confederated Korea as envisioned by the late President Kim Dae Jung and General Secretary Kim Jong Il in their historic summit of 2000 — one in which the two Koreas would come together to leverage the economic resources of the peninsula for the benefit of all Korea. To hold its own among powerful neighbors Korea stands a better chance united rather than divided.
The “rise of the rest,” as coined by journalist and author Fareed Zakaria to describe the ascent of a multi-polar world, is coming to pass in Northeast Asia. For the major actors in the region, the pursuit of economic cooperation as a hedge against economic decline emanating from the West is mitigating U.S. efforts to form a coalition of the willing to rid North Korea of its nuclear weapons programs. China and Russia are the big nuclear powers in Northeast Asia; they maintain diplomatic relations with each other, with Seoul, Pyongyang, and Tokyo, and thus have little need for leadership from the U.S. to keep the peace.
China and Russia appear steadfast in their support of North Korea’s proposal to restart the six party talks unconditionally and its proposal to place a moratorium on its nuclear programs within the framework of ongoing talks. Under this circumstance the Obama-Lee precondition that North Korea must first shut down its nuclear programs, before talks are possible, is shared only by Japan. But the world that gave rise to the U.S.-ROK-Japan alliance is itself transforming as South Korea and Japan are drawn more and more into the whirlwind of change sweeping not only the region, but the globe. The U.S. too must eventually find its place among the rest.
No proclamation by Presidents Obama and Lee this week can turn back the tide of change in Northeast Asia. But their actions can still greatly influence the manner and speed with which change in the cold war status quo takes place. South Korea continues to suffer all the ills associated with militarization as exemplified this past year by continuation of massive war games, revelations of agent orange buried and left behind by U.S forces, the perpetration of sex crimes by U.S. soldiers in two instances last month, and the heavy handed construction of a naval base off the shores of the Jeju island village of Gangjeong, in spite of protests by residents. It doesn’t have to be this way.
In the North, U.S. and South Korean sanctions intended to pressure Pyongyang into giving up its nuclear weapons have contributed to what the World Food Program and world leaders, including President Jimmy Carter, have described as a return to the famine years of the mid 1990s. Across the disputed territorial waters of the West Sea, North and South Korea continue to trade artillery shots, while China and the U.S. eye each other warily from a distance.
The status quo on the Korean peninsula is fraught with tension and danger. But this can change. The six party talks can be turned into a successful partnership and achieve the legitimate goal of implementing a verifiable nuclear nonproliferation regime across the peninsula in accordance with the September 2005 six party talks. The U.S., North Korea and South Korea can implement a peace process to replace the Korean War Armistice with a peace treaty, ending the cold war in Korea. In the next year, before the presidential elections in the U.S. and South Korea, there is still time for the two allies to partner with the other countries in the region and make these things happen. It is time for all to embrace change.
*Paul Liem is Board Chairperson of the Korea Policy Institute.
