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The first quarter of 2010 set the stage for what should be a busy year in US-Korea relations. The Six-Party Talks remain stalled, although dire conditions in the North may force Kim Jong-il back to negotiations soon. While North Korea continues to demand concessions before a return to talks, the US shows no sign of caving in. In South Korea, there was a flurry of mixed signals on whether the transfer of wartime operational control (OPCON) to Seoul scheduled to be completed in 2012 would go ahead as planned. Prospects for the US-ROK free trade agreement got a boost from President Obama and his administration, however, it remains uncertain when the deal will move to Congress for ratification. Finally, the issue of spent nuclear fuel reprocessing in South Korea has made its way to the forefront of US-Korea relations, where it will likely remain for some years. Six-Party Talks update Despite hopes that the Six-Party Talks would restart during the early part of 2010, there is still no agreement on when negotiations will resume. The US maintains that all the parties except North Korea are ready to return to the negotiating table. Meanwhile, Pyongyang has demanded discussions on a peace treaty with the US as a precondition to any nuclear talks and it is also calling on the UN to lift all international sanctions, although it is clear that North Korea has very little leverage for making demands. The Obama administration has held firm to its position that sanctions and a peace treaty will not be used as bargaining chips to entice the North into talks. Pyongyang’s habitual reneging has finally caught up with it. The North Korean regime is under unprecedented fire for bungling the economy, leading to reports that Kim Jong-il is gearing up for a trip to Beijing this spring to secure Chinese aid. Given the North’s heavily weakened position, some have argued that this visit could also serve as a segue into a new round of Six-Party Talks. The recent economic disasters in North Korea have shaken the core of the Kim Jong-il regime. Kim may have no choice but to return to negotiations in order to receive the aid necessary to stabilize his economy – and the government’s grip on power. The devastating currency revaluation of November, 2009 sent prices in North Korea skyrocketing. This combined with an exceptionally poor harvest has left the already impoverished North Korean citizens in a newfound state of destitution. Such gross mismanagement is not necessarily unprecedented in the North, however the mounting backlash from the citizens is something new. This time there seems to be a sense among the population that the ruling regime bears some responsibility in the debacle. The government acted swiftly to place blame on Pak Nam-gi, the ranking party official in charge of finance. Pak was first relieved of duty, and then reportedly executed by firing squad US-Korea Relations 37 April 2010 in early March. Subsequently, there were reports that one of Pak’s deputies was also executed. Nevertheless, reports of small, yet continuous, pockets of domestic unrest signal that the currency reform has caused lasting damage to the relationship between North Korean citizens and the regime. The debate over OPCON The US and South Korea spent the quarter sending mixed signals about the OPCON transfer, which is currently scheduled for April, 2012. The agreement, which was conceived in 2007 during the tenure of President Roh Moo-hyun, stipulates that the US will transfer wartime command of South Korean troops to the ROK military for the first time since the early days of the Korean War. Several South Korean lawmakers have urged a delay in the transfer, arguing that the ROK military may not be ready to respond to North Korea’s unconventional weapons threat. USFK Commander Gen. Walter Sharp went on the record in late March stressing that the transfer is going ahead on time. Assistant Secretary of State for East Asian and Pacific Affairs Kurt Campbell struck a more flexible tone, saying that he took South Korean concerns seriously and that the transfer issue is “a matter for further high-level dialogue between the two countries.” Those opposed to the OPCON transfer argue that it would significantly weaken the defense posture of the two allies against North Korea. Specifically, there are concerns over whether South Korea is ready to respond to a potential increased nuclear capability in the North. Further, opponents point to the proposed deactivation of the Combined Forces Command, which would establish two separate commands for the South Korean and US militaries. Some question whether this divided command structure would be wise given provocations from Pyongyang. Others argue that changing the transfer timetable at this time would send the wrong message to the North. These proponents contend that regardless of the OPCON transfer, the militaries of both South Korea and the US are capable of dealing with North Korea’s nuclear threat. Any talk of delaying the transfer, they argue, would convey weakness and a lack of confidence in the abilities of the ROK. South Korean crisis management went on worldwide display after the March 26 patrol boat tragedy that left 46 ROK sailors dead. The ship reportedly exploded and broke in half in the Yellow Sea, just south of the border with North Korea. South Korean officials are still investigating the cause of the incident, although several major newspaper have been quick to report the possibility that a North Korean torpedo or mine could have been responsible. The US Navy aided in the search and rescue mission, sending four US vessels to look for any survivors. The mission was eventually shifted from rescue to salvage. Seoul will take the operational lead, with Washington providing high-tech equipment and maritime salvage experts. Shot in the arm for KORUS The KORUS free trade agreement (FTA) got a boost from President Obama this quarter when he called for stronger trade relations with South Korea in his State of the Union Address in January. He touted free trade agreements as a key component of the National Export Initiative, which aims to double US exports over the next five years. The president estimates that this would help US-Korea Relations 38 April 2010 support 2 million jobs across the country. These statements are significant in that they framed free trade as a means for increasing jobs and stimulating the US economy. Other administration officials have also begun to echo that sentiment. This is a shift from much of the usually negative free trade rhetoric which focuses on potential losses. According to recent statistics from the East-West Center, the states of Washington, Oregon, Vermont, Idaho, and New Mexico all have over 1,000 jobs per 100,000 residents linked to Asia exports. The US public is starting to hear a new discourse about how free trade can be part of the answer to the recession. In March, a group of lawmakers from the US and Korea announced plans to form a task force to build bipartisan support for the FTA in both countries. Their goal is to expedite the ratification process, which has progressed at a frustratingly slow pace. Meanwhile, the Korea-European Union FTA is on schedule to be inked this spring. If that deal were to be ratified before KORUS, the US would be faced with the possibility of losing real market share in Korea. This message was not lost on President Obama, who in his State of the Union Address urged that, “We have to seek new markets aggressively, just as our competitors are. If America sits on the sidelines while other nations sign trade deals, we will lose the chance to create jobs on our shores.” While US Trade Representative Ron Kirk notes that there are still outstanding issues in the FTA regarding autos and beef, there is a growing sense that they can be taken care of through side agreements that would not require an amendment of the FTA. The administration has clearly come out positively on the FTA, although we have yet to see a decisive push for ratification. The likelihood of ratification continues to rise, but the timetable is still uncertain. Although the end of the health care debate could allow Congress to shift its focus, the political climate surrounding trade remains difficult, especially heading into the midterm elections in November. Both sides realize that it will still take some time for ratification to be considered, but there is a renewed hope that movement should be possible shortly after the elections. Nuclear, south of the border While a conclusion may soon be in sight for the FTA, another major issue in US-ROK relations is beginning to emerge. In early March, Seoul hosted an international conference on atomic energy where South Korean Prime Minister Chung Un-chan reaffirmed his country’s commitment to move forward with recycling its nuclear waste. This is a controversial move that encompasses a range of issues from energy security to nuclear nonproliferation. Lacking an indigenous abundance of the natural resources necessary for electricity production, South Korea has turned to nuclear power as an efficient and cost effective alternative. The ROK currently gets about 30 percent of its electricity from nuclear energy and the plan is to increase that share to 59 percent by 2030. While nuclear power is god for air quality, it also produces potentially dangerous nuclear waste. South Korea already houses over 10,000 tons of nuclear waste and the government is encountering difficulties in finding permanent storage facilities to house this radioactive material. This is where the idea for recycling originates. If there was an option to reuse parts of the waste as fuel, the waste problem could be significantly reduced. This is also an attractive option to Seoul from an energy security perspective because it would reduce South Korea’s reliance on imports. US-Korea Relations 39 April 2010 Recycling also presents a number of challenges. Recycling spent fuel can be undesirable from a nonproliferation standpoint as it brings the nuclear material one step closer to being usable for nuclear weapons. South Koreans counter that they are working on perfecting an advanced recycling technique known as pyroprocessing, which may be more proliferation resistant than the current industry standard used by Japan and France known as the Plutonium Uranium Extraction (PUREX) method. PUREX separates plutonium – which can be used to make nuclear weapons – from the nuclear waste slurry, creating a dual-use concern. Pyroprocessing uses a high- temperature method of recycling that does not extract pure plutonium. However, there is a dispute among scientists regarding how proliferation resistant pyroprocessing will be once it is ready for commercial use. Another challenge facing South Korea in its quest toward pyroprocessing is the fact that it is party to several agreements that ban spent nuclear fuel “reprocessing” in the country. Through the 1992 Joint Declaration on Denuclearization of the Korean Peninsula, both the North and the South pledged to refrain from any type of fuel enrichment or reprocessing. The 1974 nuclear accord between Washington and Seoul also forbids spent nuclear fuel reprocessing in South Korea. Seoul contends that because pyroprocessing is inherently more proliferation resistant than traditional reprocessing, it should be considered separately. Additionally, the South Korean government points to what it calls a double standard in the fact that the US does not seriously object to reprocessing in Japan, but prevents Seoul from dealing with its serious waste problem. The 1974 accord expires in 2014, and the US and South Korea are now working swiftly to develop a successor agreement. All eyes are on the US government’s decision on how to deal with Seoul’s plan to pyroprocess. If the US objects, it would likely strike a blow to bilateral relations. However, any move toward developing an operational pyroprocessing capability in the South could complicate denuclearization talks with the North. Outlook President Lee Myung-bak and the South Korean government have already signaled that they are ready to move ahead with the development and implementation of pyroprocessing. Over the next several quarters, look for the US to develop a firm stance on pyroprocessing in the South. On the Six-Party Talks, all parties are looking toward North Korea to join the group and agree to a new round of negotiations. If Kim Jong-il does indeed make his much speculated trip to China, there will be heightened anticipation of an imminent return to talks.