Announcements and Preparations for the Second Trump-Kim Summit
On Feb 5, 2019, United States President Donald Trump officially announced in his State of the Union address that he will meet North Korea’s leader Kim Jong-un for a second summit from Feb 27-28 in Vietnam. It is yet to be determined whether it will be held in the city of Hanoi or Da Nang. South Korea’s government welcomed the news with hopes that “the US and North Korea can make substantial and concrete steps forward”.
Earlier this week, Stephen Biegun, United States Special Representative for North Korea, met his South Korean counterpart, Lee Do-hoon after arriving in Seoul on Feb 3, 2019. They discussed Biegun’s planned meetings with his North Korean counterpart to prepare for the second summit.
Then on Monday, Feb 4, Biegun met with South Korea’s national security advisor, Chung Eui-yong, at the Blue House. According to the Blue House’s statement, Biegun explained Washington’s stance on North Korea and Chung Eui-yong expressed the South Korean government’s hope that the planning talks will succeed in preparing the summit. It is unclear if Biegun and his South Korean counterparts discussed the possibility of partially easing sanctions to facilitate both inter-Korean cooperation and nuclear diplomacy.
Kim Hyok-chol actually was newly designated as an envoy, when it was rumored to be North Korea’s vice foreign minister, Choe Son-hui who helped to prepare last year’s Singapore summit between President Trump and Kim Jong-un. Kim Hyok-chol was the former North Korean ambassador to Spain and joined Kim Jong-un’s close aide, Kim Yong-chol, who recently visited the White House. Afterwards, Biegun headed to Pyongyang to meet Kim Hyok-chol to make preparations for the second summit.
Biegun also needs to persuade him to attend a series of follow-up working-level meetings before the summit. Earlier, the U.S. State Department issued astatement that Biegun will visit Pyongyang on Wednesday, Feb 6 to prepare for the second summit and “advance further progress on the commitments the President and Chairman Kim made in Singapore: complete denuclearization, transforming U.S.-DPRK relations, and building a lasting peace on the Korean Peninsula.”
It remains to be seen if the planning talks between Biegun and Kim Hyok-chol will create an agreement to prepare the second summit. In his Jan 31, 2019 speech at Stanford University, Biegun said that Kim Jong-Un committed to “ the dismantlement and destruction of North Korea’s plutonium and uranium enrichment facilities” at the Singapore summit and during U.S. Secretary of State Mike Pompeo’s visit to Pyongyang in October.
Since Kim Jong-un wants the U.S. to take reciprocal steps, Biegun plans to clarify what those steps are with his counterpart. Biegun also emphasized that the United States will not lift sanctions until denuclearization is achieved and North Korea provides a full accounting of its nuclear missiles and WMD programs. However, he admitted that both North Korea and United States differ on the meaning of full, verified denuclearization. Experts suggested that in the second summit, North Korea will offer to dismantle its main Yongbyon facilities in exchange for the U.S. formally declaring the end of the Korean War and allowing inter-Korean economic projects to resume.
Prime Minister Abe's Policy Speech Reflects Tensions Between South Korea and Japan
Tensions rose again this past week between South Korea and Japan after a Japanese surveillance plane flew over a South Korean navy vessel on Wednesday, Jan 23, 2019. South Korean General Suh Wook “strongly condemned” the low-altitude flight off the Korean Peninsula’s southwest coast and called it a “clear provocation.” Two more flights by Japanese aircraft near South Korean navy vessels have followed since Wednesday’s incident.
This recent spate of low-altitude flights comes less than two months after Japan accused a South Korean ship of directing fire-control radar at a passing Japanese plane. The South Korean government has denied this claim, and the issue remains unresolved.
In the wake of these tensions, Japanese Prime Minister Shinzo Abe gave his annual policy speech on Monday, Jan 28, 2019. The speech, given on the first day of this year’s National Diet session, mentioned South Korea only once and only in reference to tackling the issue of a nuclear-armed North Korea. Manysee Abe’s omission of South Korea as an intentional snub and proof of Tokyo prioritizing its relationships with Washington and Beijing.
Following Abe’s speech, Japanese Foreign Minister Taro Kono gave a speech focused on foreign policy. In his speech, Kono urged South Korea to “firmly keep its promises made internationally,” referring to bilateral agreements on issues such as comfort women and wartime labor. Issues like these, along with recent military tensions, have put the South Korea-Japan relationship under incredible stress. Based on these speeches by Japanese political leaders, tensions are unlikely to cease in the near future.
US-ROK Disagreement Over Sharing Costs of US Troops in South Korea
Previously, the United States and South Korea were unable to reach an agreement on a deal to share the costs of maintaining the U.S. military presence, which led to the expiration of the Special Measures Agreement (SMA) on Dec 31st, 2018. The expiration comes on the heels of ten rounds of negotiations that began in March of 2018.
One of the major sources of disagreement was the amount of money that South Korea has to pay for American troops in the country. Although the deal was supposed to be concluded in 2018 with progress made in November, the Trump administration’s demand for South Korea to pay a much higher sumresulted in the talks falling apart. President Trump allegedly demanded that Seoul increase its spending, and the talks fell apart due to a request from the U.S. that South Korea pay $1.2 billion (1.4 trillion won).
The U.S. is also demanding that the deal be shortened to a year instead of the current five years. On the other hand, South Korea has insisted that the total sum should not exceed 1 trillion won, citing the figure as psychologically significant for its citizens, and is requesting a three-year deal instead of an annual one. Failure to reach an agreement will result in South Korean civilian employees being put on unpaid leave starting Apr 15th. North Korea criticizedthe increased demand by the U.S. on the grounds that it contradicts the agreements made at last year’s inter-Korean summits to reduce military tensions on the Korean peninsula.
Reportedly on Feb 4, 2019, the U.S. and South Korea are expected to reach an agreement on sharing costs this week, after taking into consideration the importance of the alliance and the need to focus more on dealing with North Korea ahead of the second Trump-Kim summit. Washington is set to accept South Korea’s request to contribute less than 1 trillion won while Seoul will accede to the American request for an annual deal.
South Korea Courts Foreign Companies for FDI but Faces Difficulties
On Jan 29, 2019, the South Korean Ministry of Trade, Industry, and Energy (MOTIE) announced that it had increased the budget for assisting foreign companies investing in South Korea from 6 billion KRW to 50 billion KRW in a move to attract more FDI into Korea.
MOTIE also noted that while the previous year’s strategy for attracting FDI into Korea was through the usage of investment tax credits, in 2019 cash payments would be the center of its strategy. In particular, electric and autonomous cars, health care, smart homes, energy efficiency, and hydrogen energy are new technologies that will be given priority to cash grants.
However, foreign firms continue to note that the business environment for foreign companies remains difficult to navigate. Unclear regulations, lack of Korean-to-English translations for regulations, difficulties finding raw materials, and Korea-only standards have continued to make doing business in Korea difficult.
This Week in History: Korean Lunar New Year
This year, from Feb 4-6, 2019, South Korea celebrates its Lunar New Year also known as Seollal. While the primary purpose of the holiday is to pay respects to their ancestors, it also became a day for families to come together and celebrate the five-day holiday. Traditions during the holiday consist of gift-giving among families, ancestral rites to pray for and honor their ancestors, several games, and wearing the traditional Korean clothing, hanbok.