EAI Asia Security Initiative Working Paper No. 3

Author

Dong Sun Lee

Dong Sun Lee is an assistant professor at the Department of Political Science and International Relations, Korea University. His research interests include East Asian security and international relations theory. Dr. Lee received his Ph.D. in political science from the University of Chicago and conducted research for the East-West Center, before assuming his current position. He is author of Power Shifts, Strategy, and War: Declining States and International Conflict (Routledge, 2008) and of articles in scholarly journals, including Asian Security, Australian Journal of International Affairs, Journal of East Asian Studies, and The Korean Journal of Defense Analysis. He also contributed to edited volumes such as The Long Shadow: Nuclear Weapons and Security in 21st Century Asia (Stanford University Press, 2008) and The International Encyclopedia of Peace (Oxford University Press, 2009). His current research focuses on North Korea and alliances of the Asia-Pacific region.

Sung Eun Kim

Sung Eun Kim is Research Fellow at the Asiatic Research Institute. Her research interests are in the impact of domestic politics and economic interdependence to alliance politics and international relations of East Asia. She received her M.A. degree in Political Science and B.A. degree in Political Science and Mass Communication from Korea University.

Abstract

This article investigates how commercial ties affect the cohesiveness of U.S. alliances with East Asian nations. While the conventional wisdom views their effects as positive, we argue that economic interdependence does not markedly reinforce East Asian alliances because all those alignments have an asymmetrical structure. To evaluate these competing arguments, we examine the impact of bilateral trade on the U.S. alliances with Japan, Taiwan, the Philippines, as well as South Korea, over the past quarter-century. Our empirical analysis provides little evidence for the conventional view while supporting our own argument. Based on this finding, the article offers some practical implications for the free trade agreement and the security alliance between South Korea and the United States.

Introduction

There exists a widely held view that closer commercial ties (or greater economic interdependence) among allies tend to reinforce alliances in the East Asian region. This belief (which has its root in liberalist international theory emphasizing the positive international consequences of trade) also wields considerable influence in both academic and policy communities.

In academia, a number of scholars have accepted a sweeping generalization that economic interdependence positively shapes alliance politics, and presume that it naturally holds true with respect to East Asian alliances as well. According to the advocates, to the extent that allies are economically dependent upon each other, interruptions in trade flows would be costly to them and jeopardize their economic welfare. Therefore, economically interdependent allies will be very reluctant to renege on security agreements, fearing that such an action would cause their lucrative commercial partnerships to break down.

Furthermore, as allies are major trading partners, the defeat of one at the hands of an adversary would impose substantial economic costs on the other. Allies-cum-trading-partners then have an added incentive to protect each other because losing an alliance partner could undermine their prosperity as well as security. With these extensive economic ties, there will also be influential political groups with vested interests in preserving those relations. Such political groups are likely to engage in domestic and transnational lobbying for closer security cooperation in order to avoid costly trade disruptions. The result is an enhanced commitment to the alliance.

This view pervades in the policy community as well. To take a notable example, it is a common expectation that the KORUS FTA (Korea-Unites States Free Trade Agreement) would revitalize their security alliance, which has been in decline throughout the turbulent post-Cold War period. Many experts and ordinary citizens, regardless of their political affiliation and attitude toward the alliance, believe that closer commercial ties produced by an FTA would broaden and deepen common interests and thereby enhance security cooperation between the signatories. Consequently, the impact of the agreement would turnaround the alliance’s steady decline. This expectation dominates the public discourse and partly motivates governments in Washington and Seoul to push for ratification of the KORUS FTA. For instance, the United States Department of State declares: “by boosting economic ties and broadening and modernizing our longstanding alliance, [the FTA] promises to become the pillar of our alliance for the next 50 years as the Mutual Defense Treaty has been for the last 50 years.” A South Korean government think tank similarly reports: “besides its economic benefits, the ROK-U.S. FTA will also be significant on the diplomatic and security fronts, namely in terms of strengthening the ROK-U.S. military alliance.”

Despite its wide acceptance, however, few scholars have systematically evaluated this conventional view that commerce and alliance cohesion are positively associated in East Asia. Few studies offer a thorough logical analysis, and even fewer draw upon credible evidence from a comprehensive examination of regional alliances. Such a dearth of rigorous evaluation, which contrasts sharply with frequent applications of the proposition, is highly problematic. This unproven assumption, if false, could lead scholars down unproductive paths of inquiry, thereby hindering scholarly progress. The policy impact of this assumption might include costly miscalculations and blunders. For example, overstressing the impact of trade on the alliance may lead to an overestimation of the KORUS FTA’s value in general, while exposing the agreement unnecessarily to attack from anti-alliance groups. Conversely, the security alliance could draw fire from opponents of free trade, if strengthening the alliance is used as a major rationale for the KORUS FTA. In the worst case scenario, a powerful political coalition could emerge in both countries aiming to destroy the alliance and the FTA, thereby critically damaging the bilateral relationship. In any case, misunderstanding the security implications of the FTA could lead to unwise security policies by generating overconfidence in the strength of the alliance...(Continued)