Peace in Northeast Asia?
CAPP Hosts Roundtable Discussion On Issues Surrounding Recent Korean Summit

Since the historic June 15th summit, where the leaders of North and South Korea professed to open up a new era of reconciliation, previously cold relations between the two countries seem to be warming. Both countries have taken symbolic public actions to ease tensions, including the cancellation of parades and demonstrations commemorating the 50th anniversary of the Korean War, and implementation of a moratorium on vilification of each other in the national media. 

Despite the euphoria and hopeful rhetoric, the two Koreas are technically still at war, and many thorny issues remain unresolved. On August 2, 2000, RAND's Center for Asia Pacific Policy (CAPP) hosted a roundtable discussion on "The Korean Summit and Peace in Northeast Asia: Opportunities, Challenges, and Potential Issues" to examine the questions and issues surrounding the current political situation on the Korean peninsula. The discussion was open to the public and attended by scholars, business executives, and government officials from the Los Angeles area. 

South-North Relations After the Summit 
Presenter: Dr. Seungwhun Cheon 

The five-point declaration agreed to at the summit covered humanitarian issues, economic development, and promises of future dialogue between the two nations.  However, no mention was made of security issues in the declaration. South Korean President Kim Dae Jung told U.S. officials that he did discuss the North's nuclear and missile programs and the 37,000 American soldiers stationed in the Republic of Korea, among other sensitive security issues, with Kim Jong II during the summit. 

Cheon speculated that the absence of security issues in the declaration was due to North Korea's preference for direct talk with the United States on military issues. Though even President Kim Dae Jung is beginning to back away from his statement made soon after the summit that "the danger of war on the Korean peninsula has disappeared", both sides have taken concrete steps to reduce tension between the two countries. North Korea has agreed to allow reunions for South Korean families separated from their relatives in the North since the end of the Korean War. The South, meanwhile, has agreed to extend additional financial assistance to the struggling North. Conjecture is that both sides must take these confidence-building measures before serious talks can begin on security issues. 

Though the general post-summit mood in South Korea is euphoric, according to Cheon, South Korea remains divided on the following critical issues: 

• Amending the National Security Law, a measure passed fifty years ago to counter North Korean espionage. Worldwide humanitarian concerns led South Korea to amend this law once, but some say the law should be scrapped altogether.
• Agreement on a unification formula. There are two key  questions: Can President Kim's unification formula be South Korea's official policy? Can North Korea's unification policy be accepted? 
• Whether or not U.S. forces will be necessary after unification.

Economic Prospects and Costs of Unification 
Presenter: Dr. Charles Wolf 

RAND researchers recently completed a study on Asian economic trends and their security implications for five countries, including South Korea. They applied a macroeconomic model to predict independent (i.e., not taking into account interactions among the five countries) growth rates for each country.

Although the study did not take Korean unification into account, it gives an indication of the economic resources South Korea could have available to apply to unification efforts.

The study showed that, under certain conditions, Korea's GDP (Gross Domestic Product) could rise to half of Japan's GDP by 2015. Currently, Korea's GDP is approximately 25% of Japan's GDP.   Researchers estimated Korea's average annual growth rate over the period from 2000-2015 to be 5.6%, or more than four times that of Japan.

Given the strength of South Korea's growing economy, what are the possible costs of reunification? There are an enormous range of estimates, from $200 billion to $3.2 trillion. The wide range is due to the uncertainty of many of the variables on which the estimates are based, including military spending.

RAND's estimate of this cost is on the low end of this scale. The World Bank's estimate of the costs of unification is on the high end.

Wolf stressed that the costs of unification are dependent upon the following scenarios:

• whether the political process of unification will be peaceful or involve conflict,
• whether North Korea's economy will have a soft or hard landing,
• whether researchers are considering short-term costs or the long-term horizon, and 
• whether cultural affinities between the North and South are stronger than cultural differences. 

Deterrence and Defense: Implications of North-South Normalization 
Presenter: Dr. Yong-Sup Han 

Rising aspirations for unification on the peninsula are complicating the security situation. Han noted two growing post-summit trends in Seoul: a rising demand for unilateral disarmament and rising anti-American sentiment. Anti-American feelings have been exacerbated by accusations that U.S. troops have dumped illegal substances into the Han River. According to Han, the United States should be cautious and prudent in this environment.

Rapprochement between the two Koreas will not lead immediately to a request for U.S. troops to leave the peninsula.  It is reported that during the summit,  Kim Jong II indicated in response to a statement by Kim Dae Jung that the 37,000 U.S. troops in Korea may still be necessary during unification, that he was not totally opposed to American troops remaining as reunification progressed.

Nonetheless, North Korea has asked that the United States honor North Korea's sovereignty and improve bilateral relations so that North Korea could then "work to clear the United States of its worries."  Han noted that the North Koreans clearly wish to exact political and economic concessions from the South while exclusively talking with the United States about military issues.

According to Han, it is important for South Korea and the United States to avoid giving away all political and economic leverage to the North without obtaining increased security in return. To achieve this, the United States must insist that security concerns be addressed in a North-South summit.

Han added that if the South Korean government doesn't want a change in the U.S. force structure on the peninsula, it needs to make that position clear to the South Korean people to quell growing anti-American sentiment.

Arms Control: Towards a More Stable Structure 
Presenter: Dr. Paul Davis 

Davis compared arms control issues on the peninsula to those surrounding United States-Soviet tensions during the Cold War. The goals of arms control at that time were to deter war or limit the consequences of war, and to improve strategic ability.

But arms control issues on the Korean peninsula are different. The objectives there should be :

1) to build peace. North and South Korea are not an ocean away from each other. They are bound by land. Their closeness results in a high degree of paranoia.

2) to provide security while reducing tension. Arms control should make a surprise attack impossible. North Korea is probably as worried about invasion or strikes from the South.  Arms control efforts should mitigate this fear.

Davis called for a substantive discussion of security issues.  If the two countries do start down that path, he described the closeness of the North Korean Army as intolerable.

If the situation progresses to unification, Korea faces an interesting challenge: What does it want to be in the region? Will it be a regional partner with the United States? Should it have significant defense capabilities against China? Should the United States leave or change the character of its presence in South Korea?

Speculation about what role a unified Korea should play in the region may be premature, because it's too early to know if anything will come of the post-summit thaw.

South Korean Foreign Policy: Perspectives and Priorities 
Presenter: Dr. Jin Hyun Paik 

The summit has significantly affected foreign relations between Korea and other countries. The major powers have all welcomed the summit, but beneath the surface they are calculating how it will affect their relations with Korea and with each other.

Paik speculated about the effects of the summit on the following countries:

China: The conventional wisdom is that China is the real winner of the summit. China wants to avoid a conflict or collapse into which it could be drawn. The summit also gives China a chance to increase its influence in Korean affairs. Also, China objects to the U.S. military presence in the region and the proposed U.S. national missile defense program. The United States has used the threat from North Korea as a rationale for both. As North Korea extends an olive branch to the South, this rationale is gradually appearing weak to the rest of the region.

United States: The summit was a mixed blessing for the United States. While the United States supports peace and stability on the peninsula, the summit diverted attention away from the issue of Weapons of Mass Destruction in North Korea and put the U.S. in a "bad cop" role. It could also remove the leverage that the United States has had on economic assistance to North Korea.

Russia: Before the summit, Russia was inactive in Korean affairs. Since the summit, Putin demonstrated Russia's desire for greater involvement by paying the first visit to Pyongang ever by a Russian leader. Paik predicted that Russia's eagerness will further complicate Korea's foreign policy.

Japan: Japan welcomed the summit. Japan is primarily concerned about North Korean missiles. Over the long term, it is concerned about Chinese dominance over Korea. Japan's participation in North-South issues has been limited, but as discussions unfold, Japan may find a more expansive role to play.

One of the major post-summit challenges facing the Republic of Korea is managing relations with the United States while improving its relations with North Korea.

The Role of the United States 
Presenter: Dr. Norman Levin 

The United States is understandably cautious about the permanence of North Korean policy changes because:

1) Much about the peninsula has not changed. A technical state of war still exists along the militarized border. North Korea has expressed continuing apparent disinterest in discussing military issues.

2) The process of change seems likely to take a long time. No peace or reunification is likely in the immediate future.

3) Reports after the summit indicated that President Kim emphasized the importance of a continuing U.S. presence and role to Chairman Kim. If this is true, this probably reassured Washington.

Still, it would be a mistake for the United States to underestimate results of this historic event. The summit set in motion the following far-reaching ramifications:

1) A new dynamic on the peninsula. Leaders expressed their basic intent to approach unification on the basis of a common element in their unification strategy.

2) A new flux in bilateral relationships surrounding the peninsula. Speculation about who the winners are and increased competition for influence is circulating among the major global powers. This could increase the pressure on the United States to cut back its military presence or alter its security policies.

Levin said the process could be a harbinger of détente and described other potential future issues for the United States:

1) Missile defense. North Korean nuclear missile programs have been an important rationale for a national missile defense program in the United States. North Korea's announced moratorium on missile testing has weakened the U.S. position on a national missile defense in the eyes of others in the region. A challenge for the next presidential administration will be preventing missile defense from becoming a big problem with the United States' Asian allies, as well as with China.

2) U.S. forces in Korea: President Kim reaffirmed the need for U.S. forces. But if peace occurs, a growing number of Koreans are likely to question the U.S. presence.

3) Security role: If a broader reconciliation happens, the United States will need new justifications for its regional defense posture. China's conviction that it is the real target of the U.S. security role in the region could become a greater problem.