Country Report: South Korea (July 2020)

Foremost on the minds of South Korean media writers was the intensifying competition between the United States and China and its impact on their country. Pressure has been mounting to join in exclusive economic arrangements, to make clear Seoul’s position on the PRC national security law for Hong Kong, to meet with the G7 to address concerns over China, and to coordinate as a US ally to counter the military build-up of China. Conservative media doubled down on the issue of bilateral alliance with the United States as the bedrock of foreign policy, while resisting US SMA demands or even warning against Trump’s transactional approach and differing on how much strategic ambiguity to retain with China. Progressive media warned against joining in containing China and insisted on balancing relations with the US and China. On leaflets for North Korea and the ruling party’s proposed revised Inter-Korean Exchange and Cooperation Act, the differences were stark. Conservatives worried about weakening the international sanctions regime. Progressives welcomed enhanced cooperation between the two Koreas. When the joint liaison office was blown up, conservatives lambasted Moon’s failure. The Yoon Mi-hyang scandal called into question the campaign to undermine the “comfort women” agreement with possible repercussions for Moon’s policy towards Japan as well as for South Korea-Japan relations. A mid-June court decision to seize company assets is a timebomb.

Sino-US relations and South Korea

Amid escalating tensions with China after the outbreak of a coronavirus, the United States has proposed to South Korea a plan to build an Economic Prosperity Network (EPN), a U.S.-led economic bloc. During a special telephone briefing at the Asia-Pacific Media Hub on May 20, Keith Krach, the undersecretary of state for Economic Growth, Energy, and the Environment, said, “We talked about the Economic Prosperity Network initiative to unite countries like the United States and the Republic of Korea,” referring to South Korea as a great ally for the United States. Exactly a year ago, the United States had also asked Seoul to take part in its anti-Huawei campaign.1 In response to Krach’s remarks, South Korea’s Foreign Ministry is taking a cautious approach, saying the government is closely watching the situation.2

The Hong Kong national security law has posed another difficult situation for South Korea. The State Department recently invited Washington-based diplomats from US allies, including South Korea, to explain their position on China’s new national security law for Hong Kong and demand that they participate in an anti-China coalition. Through diplomatic channels, Beijing has also reportedly asked Seoul for support for its Hong Kong national security law.3

Against this backdrop, on May 28, South Korea’s Foreign Ministry held the 7th Strategic Coordination Meeting, a forum which was launched last year to tackle policy challenges arising from heightened tensions between the United States and China. Presiding over the meeting, Foreign Minister Kang Kyung-wha said, “We are well aware of the concerns in relation to the heightening tensions in the international community and its repercussions." "Our government has been thoroughly assessing its meaning and impact as we closely watch the situation."4 However, Foreign Ministry officials emphasized repeatedly that the Hong Kong issue was not discussed at all during the meeting that lasted an hour and a half. The Foreign Ministry also did not express its position on the Hong Kong issue.5 "Hong Kong is an important region that has a close relationship with South Korea in terms of people-to-people and economic exchanges. We see it as important for prosperity and development in Hong Kong to be maintained under the ‘one nation, two systems’ framework," ministry spokesperson Kim In-chul said in a regular press briefing.6

Meanwhile, President Trump announced on May 30 that he is postponing the G7 summit to September and that he wants to invite four additional countries to the summit: South Korea, Australia, India, and Russia. Regarding his decision to call for these four countries to attend, White House Director of Strategic Communications Alyssa Farah said, “this is bringing together our traditional allies to talk about how to deal with the future of China.”7 President Moon accepted Trump’s invitation to expanded G7 summit, saying that the current G7 system is limited in tackling international problems.8 However, on June 2, Chinese Foreign Ministry spokesperson Zhao Lijian said, “Seeking a clique targeting China is not a popular move.”9

On the military front, Secretary of State Mike Pompeo, in an interview with Fox News on May 31, cited South Korea, together with India, Australia, and Japan, as an ally in efforts to counter China’s military buildup. “General Secretary Xi is intent on building out his military capabilities,” he said, continuing, “we can be good partners with our allies from India, from Australia, from South Korea, from Japan, from Brazil, from Europe, all around the world. We can be good partners alongside them and ensure that the next century remains a Western one modeled on the freedoms that we have here in the United States.”10

As tensions between the United States and China intensify, Seoul’s concerns are deepening. “I’m very much concerned about sharpening the U.S.-China conflict ahead of the U.S. presidential election,” Kim Hyun-chong, the country’s deputy national security advisor, said during a lecture for lawmakers-elect of the ruling Democratic Party. He said that the current US-China competition, which will not end easily, is an important and difficult challenge for South Korea in terms of national interests.11

Conservative editorials underlined the importance of its bilateral alliance with the United States as a foundation of South Korean foreign policy. While acknowledging the importance of cooperation with China, they argued that it should be pursued on the basis of a strong ROK-US alliance. Conservative Chosun argued that one cannot draw an equivalence between the United States that defended South Korea during the Korean War and China that joined the war on the opposite side in an attempt to assist the North’s effort to destroy the South. The editorial argued that although Seoul should speak out against Washington’s unreasonable demands on the issue of defense cost-sharing, there is no alternative but to choose the ROK-US alliance.12 In light of this, Chosun criticized the Moon administration for its ambiguous position on important issues such as the US plan to decouple China from the global supply chain. According to Chosun, while joining Trump’s idea may have negative effects on the South Korean economy from China, what is worse is being left out of the US-led new economic bloc.13 Chosun suggested that South Korea may play a buffer role within the G7+4 summit and the EPN by championing the liberal international order.14

Conservative Joongang also underscored the importance of the ROK-US alliance as the foundation of South Korean foreign policy.15 However, it differed from Chosun in terms of backing the government’s strategic ambiguity regarding the current US-China strategic competition. Beyond security issues, Joongang argued that it may be burdensome for South Korea to take part in the US strategy to contain China. The editorial called for a long-term structural effort, such as diversifying South Korea’s economic ties beyond the Chinese market, which accounted for 25 percent of the country’s total exports last year.16 In this regard, conservative Donga pointed out that joining the EPN could be an opportunity for South Korea to diversify its export market and production base beyond China.17 It also expressed concern that the current government only seems to care about inter-Korean cooperation and President Xi’s visit to South Korea without preparing a strategy for a new cold war between the United States and China.18

Progressive Hankyoreh, on the other hand, argued that Seoul needs to maintain a balance between the two countries rather than taking sides19 Sharing this view, Progressive Kyunghyang editorialized on the need to join the international community in urging both sides to show restraint.20 Kyunghyang also regarded the EPN initiative anachronistic in the era of international cooperation.21 Kyunghyang welcomed Trump’s G7 invitation, yet expressed a critical view regarding joining an effort to contain China as it may lead to the deterioration of the country’s bilateral relationship with China.22

ROK-US relations

Amid the stalled defense cost-sharing negotiations, it was reported on April 26 that Seoul notified Washington of its plan to fund the labor costs for those Korean National (KN) employees under the U.S. Forces Korea (USFK) who were placed on unpaid leave beginning on April 1.23 In a statement released on June 2, the US Department of Defense said that it has accepted the proposal. “Today’s decision will provide over $200M in ROK funding for USFK’s entire KN workforce through the end of 2020,” the statement said.24 In the meantime, Washington has reportedly asked Seoul to pay $1.3 billion a year for stationing US troops in South Korea, which is a 53.3 percent increase from last year. A senior Trump administration official told Chosun that the offer has been approved by Trump. However, Seoul is considering a multi-year contract where it would pay $1.3 billion in the fifth year, according to a senior official of South Korea. A US official also said that General Mark Milley, chairman of the Joint Chiefs of Staff, had told his South Korean counterpart General Park Han-ki that Washington may consider a reduction of USFK if Seoul declines to pay $1.3 billion a year. Park, however, told Chosun that he had not received such a notification from Milley.25

Hankook Ilbo editorialized about Washington’s possible reduction of USFK as a bargaining chip in the ongoing defense cost-sharing negotiations. The editorial questioned Washington’s intention to raise the issue of reducing troops amid the intensified US-China tensions as well as Pyongyang’s provocative behavior toward South Korea and the United States.26 It also emphasized that the negotiations are not merely an issue of money, but an issue of alliance, and called for Trump to be circumspect in his comments.27 Conservative Donga criticized the Trump administration for its transactional approach to the alliance. The editorial not only cited the administration’s neo-isolationist foreign policy, but also pointed out intervention fatigue in the United States in general. It argued that South Korea should therefore be prepared for an era of wavering, or even of an absence, of the ROK-US alliance.28

South Korea and the United States have reportedly not reached agreement on how to conduct joint military exercises scheduled for August. The U.S. Forces Korea (USFK) has insisted that the upcoming military exercises should be focused on examining the allies’ combined posture led by General Robert Abrams, commander of the Combined Forces Command (CFC), following the postponement of the joint exercises scheduled in the first half of this year due to COVID-19. In contrast, the South Korean military has argued that the upcoming drills should be focused on carrying out the Full Operational Capability (FOC) verification led by General Choi Byung-hyuk, deputy commander of the CFC, hoping to transfer wartime operational control (OPCON) from the United States by 2022 when Moon’s term expires. “The two sides are currently discussing the methods for the upcoming drills, yet the issue remains unsettled,” a South Korean government official said.29

Inter-Korean relations

After the breakdown of talks between the US and North Korea in Hanoi, North Korea has shown its discontent with the South Korean president for doing little to change the status quo. On April 14, a day before South Korea’s general election, North Korea fired several cruise missiles into the East Sea from Munchon in Gangwon province and held a large-scale military exercise. On May 3, it also fired four shots toward a South Korean guard post (GP) in the DMZ, and South Korea responded by firing back. It was the first artillery exchange between the two Koreas since the signing of the Military Agreement in 2018. South Korea and the US presumed that the North Korean firing was unintended, but the United Nations Command (UNC) concluded that while it could not determine whether the North Korean firing was deliberate or accidental, both Koreas have violated the armistice agreement.29

Despite heightening tensions, Moon continued his rapprochement towards North Korea, underlining potential areas of inter-Korean cooperation independent from international sanctions. Kim Yo-jong, Kim Jong-un’s sister and first vice director of the United Front Department of the Worker’s Party of Korea, blasted him, stating that she was “sickened by President Moon’s speech” and “It is high time to break with South Korean authorities.”

On May 31, Fighters for Free North Korea, an activist civil organization run by North Korean defectors, sent anti-regime leaflets and SD cards in balloons to North Korea.30 Another defector group Kunsem held regular events to float plastic bottles stuffed with rice into North Korea. Kim Yo-jong issued a statement pressing the South Korean president to crack down on anti-regime leaflets. She threatened to walk away from the Military Agreement, and warned that “If South Korean authorities do not take measures to crack down on hostile leaflets, then South Korea should be prepared for all sorts of retaliation including closing Mount Kumgang, demolition of the Industrial Complex, shutting down the joint liaison office, and termination of the Military Agreement.”31

In less than four hours, the Ministry of Unification announced that it is preparing to take legal action to ease tensions near the border region. “We should put an end to sending leaflets into North Korea because it poses a danger to the lives and property of the people living near the border region,” the Ministry of Defense stated. The Blue House also stated that the anti-regime leaflets are “harmful without any merit,” while the ruling Democratic Party of Korea proposed a revised Inter-Korean Exchange and Cooperation Act,”32 allowing North Korean companies to engage in for-profit business activities in South Korea and to form joint ventures with companies owned by a third country. This includes gains from land, buildings, intellectual property rights, mining and fishing rights, and energy development and use. North Korean companies could also hire South Korean workers in South Korea.

Conservative Donga published an article expressing concern that the revised Inter-Korean Exchange and Cooperation Act could weaken the international sanctions regime against Pyongyang.33 Another editorial from Donga pointed out that the revised Inter-Korean Exchange and Cooperation Act is in direct conflict with UN sanctions regime. The UN resolution 2375 prohibits member states from allowing North Korean companies to form or maintain new joint-ventures, while UN resolution 2397 calls for all North Korean workers working abroad in member states be repatriated to North Korea.

Progressive media outlets Hankyoreh and Kyunghyang described the revised bill as enhancing cooperation between the two Koreas and highlighted two aspects of the revised Inter-Korean Exchange and Cooperation Act—first, exemption from reporting contacts with separated families and accidental encounters with North Koreans to the Minister of Unification, and second, stipulation of local governments as a principal actor for inter-Korean cooperation projects.34 Meanwhile, North Korea criticized the revised bill for “lacking sincerity.”

Amidst intense controversy over the bill, the Ministry of Unification announced that it will charge Fighters for Free North Korea and Kunsem under the Inter-Korean Exchange and Cooperation Act, the Act on Collection and Use of Contributions, the Public Waters Reclamation Law, and the High Pressure Gas Safety Management Act, and vowed to revoke permission to operate for the two groups.35

On the government’s response to anti-regime leaflets, Joongang questioned whether South Koreans are obliged to comply with the Panmunjom Declaration, a political agreement (not a legal agreement) which is cited as grounds for the Inter-Korean Exchange and Cooperation Act.36 Its editorial denounced the move for limiting freedom of expression, citing a South Korean court in saying that the “Leaflets are a freedom of expression and cannot be restrained in principle.”37  

In contrast, progressive media outlets denounced anti-regime leaflets for needlessly provoking North Korea. Hankyoreh criticized the activist groups for sending anti-regime leaflets, stating that it does little in impacting North Korea while putting the lives of people living near the border region at risk. The same article also mentioned that the anti-regime leaflets only turn the North Korean leadership against North Korean defectors. Before the strain in inter-Korean relations, the article said, North Korea was tolerant towards North Korean defectors because the authorities could not figure out whether the defectors were headed to China or South Korea, and the remittances by North Korean defectors were considered economically beneficial. The fallout between the two Koreas from anti-regime leaflets, the article went on, makes it more difficult for other North Korean defectors to communicate with families in the North, and makes sending remittances to North Korea more costly.38 The article hinted that the Fighters for Free North Korea and Kunsem are largely funded by US conservative groups and protestants in South Korea, suggesting that the North Korean defector groups are trying to gain publicity in order to raise funds through anti-regime leaflets.

The Blue House and the Democratic Party of Korea also called for the resumption of tours to Mount Kumgang and urged the National Assembly to ratify the Panmunjom Declaration and declare the formal end of the Korean War, a move that was vehemently opposed by the United Future Party. Questions were also raised over what constitutes a declaration of the formal end of the Korean War touted by the Blue House and the ruling party.

On June 17, North Korea blew up the joint liaison office and threatened to send anti-government leaflets to South Korea and reinstall propaganda loudspeakers. The Blue House issued a strongly worded response, the toughest during Moon’s tenure, stating that it will no longer tolerate North Korea’s reckless behavior. Moon expressed “disappointment and anger,” and Minister of Unification Kim Yeon-chol handed in a letter of resignation.

The conservative media outlets lambasted Moon’s failure in North Korean policy, stating that his pursuit of peace without checks in place has led North Korea to believe that it has full leverage over Seoul, further emboldening Pyongyang. Joongang stated that it is high time that Moon rethink his rapprochement policy and replace his entire national security staff. Hankyoreh said that North Korea’s actions will only damage its own credibility and negatively affect South Korean public opinion towards North Korea. The article claimed that Pyongyang is seeking to break the impasse since the Hanoi summit by pressuring South Korea. On North Korea, China said “As a neighboring country, we hope to maintain consistent peace and stability on the Korean Peninsula.”39 Beijing did not however, comment on the joint liaison office. Japan said it will cooperate closely with the US and South Korea on the matter.40

South Korea-Japan relations

Yoon Mi-hyang, a member of the Democratic Party of Korea and an incumbent lawmaker, gained the national spotlight in May. She faced numerous allegations including misappropriation and corruption during her time as chairperson for the Korean Council for Justice and Remembrance for the Issues of Military Sexual Slavery by Japan during the Japanese invasion (The Korean Council). Among the speculation were claims that Yoon misappropriated funds raised for the purpose of helping the victims of Japan’s wartime sexual slavery, and that less than 10% of the donations went to the victims. Other allegations involve the “comfort women” shelter in Anseong. With donations received from Hyundai Heavy Industries, the Korean Council purchased a property in Anseong at a price much higher than the average market value in the area, and then later sold the building for a price way below market value fueling suspicion that she may have benefited an acquaintance who was the owner of the property. Questions have also been raised on how Yoon was able to pay for her daughter’s tuition fees and living expenses at UCLA.41 She initially explained that her daughter received a full scholarship from the university, but later changed her statement saying that the money came from her husband’s civil and criminal compensation for espionage cases. Her husband was sentenced to 4 years in prison for espionage violations of the National Security Law in 1994, but the Supreme Court found him not guilty on some of the charges in a retrial in 2017.

Another allegation is linked to the 2015 Japan-South Korea “comfort women” deal. South Korea’s news media outlets reported that the Ministry of Foreign Affairs informed Yoon about Japan’s one-billion yen compensation prior to the 2015 agreement, to which she expressed no objection. Following the agreement, she criticized the deal for not taking the “comfort women’s” interests into account. She claimed that she was opposed to accepting compensation because she considered the agreement invalid. However, former “comfort woman” Lee Young-soo claimed that some of these women were open to receiving compensation from the Japanese government as part of the 2015 deal, but Yoon pressured them to refuse. During a press conference, Lee blasted Yoon for deception and corruption. “I’ve been lied to for 30 years, and I’ve had enough,” she said, adding that Yoon should not be serving in the National Assembly.

On May 29, Yoon Mi-hyang held a press conference to explain the numerous allegations brought against her, making clear that she will not resign.42 She denied most of the accusations, but admitted that she should have been more meticulous in keeping business records, and apologized for hiring her father as a janitor for 6 years at the Anseong shelter. The Democratic Party of Korea said that Yoon’s press conference shed light on the allegations, while the opposition United Future Party claimed that Yoon’s press conference did not sufficiently explain many of them, warning that they will push for further investigations against Yoon.43 Meanwhile, sponsors of the Korean Council and House of Sharing filed two separate lawsuits against the organizations claiming civil damages for illegal activities and requested the return of their donations.44

South Korean media and experts pointed out that numerous allegations brought against Yoon could have repercussions for Moon’s policy towards Japan as well as for South Korea-Japan relations. When Moon pulled out from the 2015 Korea-Japan “comfort women” agreement negotiated by his ousted predecessor Park Geun-hye, he blasted the deal for not adequately reflecting the victims’ interests, highlighting the importance of his victim-centered approach.45 This was his core rationale behind the withdrawal from the 2015 agreement and the dissolution of the Reconciliation and Healing Foundation, which subsequently led to the beginning of a rapid deterioration in relations between South Korea and Japan.

Bilateral relations have been on a downward spiral since, leading to a tit-for-tat flare up from export controls to visa waiver suspensions and coming close to terminating GSOMIA. The bickering between South Korea and Japan came to a temporary standstill due to the coronavirus as both governments struggled to deal with a major global health crisis. Another potential source of conflict, Japan’s permission to use the “rising sun’ flag during the Tokyo Olympics, a flag that was used during the Japanese occupation, did not materialize, as the Tokyo Olympic games were postponed amid the global pandemic. Nonetheless, the relations between Seoul and Tokyo could potentially hit rock bottom in the coming months.

Last year, South Korea’s Supreme Court ruled that Nippon Steel & Sumitomo Metal Corporation and Mitsubishi Heavy Industries should compensate plaintiffs who were forced to work under Japan’s colonial rule, and granted a request to seize assets held by the two companies. On June 16, the Daegu District Court approved a request to seize 81,075 shares (worth 974 million won) held by Nippon Steel & Sumitomo Metal Corporation in PNR stocks, and the company’s stocks are expected to be sold and dispersed from August 4.46 Mitsubishi Heavy Industries’ assets related to patent and trademark rights will also face liquidation. Plaintiffs for other pending Supreme Court rulings concerning Nachi-Fujikoshi Corp and Daesung have already filed an application for provisional seizure of both companies’ assets. Liquidation of Japanese companies’ assets is inevitable since the Korean government, it claims, cannot intervene in the judicial proceedings, according to an article in Joongang, which pointed out that aside from three finalized court rulings related to forced labor compensation, 9 cases are pending, and 20 cases are being processed in Seoul and Gwangju district courts. The number of plaintiffs has snowballed during the process reaching tens of thousands. 218,639 people were officially acknowledged as victims of forced labor during the Roh administration, and only 72,631 of them received cash compensation. If Japan maintains that it cannot accept the South Korean court ruling, the article pointed out, South Korea-Japan relations will be caught up in a never-ending cycle of asset confiscation and forceful liquidation.