EAI Asia Security Initiative Working Paper No. 16

Author

Kim, Chi-Wook is a Research Fellow at the Sejong Institute, Seoul, Korea. Before joining the Institute, Dr. Kim worked for the Asia-Pacific Research Institute at the Catholic University of Korea and the Center for International Studies of Seoul National University. He received his B.A from the Department of International Relations of Seoul National University and his MA/Ph.D from the University of Texas at Austin. His research area includes American foreign economic policy, the politics of international finance, middle power diplomacy, and global governance. Now he is doing research on transgovernmental networks, investment peace, and international regime complexity. His publications include: “Veto Players, Policy Credibility and Stock Market Development in the World,” “Middle Power as a Unit of Analysis of International Relations: Its Conceptualization and Implications,” and “Middle Powers, G20, and Reform of the International Financial Architecture.”

I. Introduction

This article examines the influence and role of Korean businesses in shaping the ROKUS alliance, studying the case of KORUS free trade agreement (FTA). For more than a half century the ROKUS alliance has played a safety-pin role in preserving peace and stability on the Korean Peninsula and in the Northeast Asian region. Based on the common ideology and values, it also has functioned as an important institutional foundation for a strong bilateral economic and commercial relationship that underpinned common security and prosperity. Although the global security and economic conditions fluctuated, the bilateral partnership has been widened and deepened in all dimensions of inter-state relations through the security, economic, and cultural ties.

However, the last ten years has watched the ROKUS alliance seriously tested. The U.S began to reassess Korea’s strategic values for the 21st century and tried to make some structural adjustments to the alliance. Similarly, responding to both domestic and external changes, Korea sought a more equal relationship with the U.S. In particular, differences between the two countries over the policy toward North Korea highlighted the conflicting views of the two.

Now, a new version of the ROKUS alliance is in the making. The main catalyst of such realignment of the alliance to a higher level allegedly is the KORUS FTA. The proposed KORUS FTA would serve as an agent of momentum which transforms its nature of solely a military alliance into a comprehensive security-economic alliance. High expectation of this strengthened Korea-U.S cooperation is that it will be a much stronger basis for peace and prosperity in Northeast Asia in the future.

The Korea-U.S. military alliance has been one sturdy pillar that secured peace and security on the Korean peninsula for more than 50 years. Security cooperation will continue to be a key pillar of the U.S.-Korea alliance in the twenty-first century. However, it is no longer the only pillar. The United States and Korea enjoy deep and strong economic ties, evidenced by the dramatic expansion of economic relationship. The strong bilateral economic and commercial relationship is another pillar of the Korea-U.S. partnership.

So, the U.S and Korea are transforming both the military alliance and the economic ties. Then, what would be the domestic roots of the transformation of ROKUS alliance? More specifically what roles were played by Korean big businesses in the evolution of the alliance and the emergence of FTA? Of course the changing characteristics of the alliance should be traced to both international and domestic, on the one hand, and both political and economic forces, on the other. It suggests that it is very difficult and even foolhardy to try to single out a few key variables with which we explain the emerging Korea-US relations.

In fact, many studies on Korea’s foreign policy in general and the Korea-US relationship in particular, have gotten trapped in the so-called analytical double divide: between high and low politics, and between state and society as a key actor. The Korea-U.S relations have been considered, for the most part, as high politics in which security and strategic concerns dominate the discourse, and the decision-making powers resided in state actors, primarily top executives. Under the so-called imperial presidentialism, presidents have had overwhelming authority in making foreign policies. Thus, there was little room for an independent role of both low politics and societal actors like business interests in the formation of Korean foreign policy like the ROKUS alliance. To that extent, the need for studying the role of societal forces has been relatively minimal.

However, this neglect could not be valid any longer, since such a closed system of foreign policy making began to open under Kim Dae Jung administration. More fundamental changes were made under Roh Moo-hyun administration. Foreign policy had often been at the center of debate among Koreans, the examples of which were conflicts around troop dispatch to Iraq, rearrangement of the ROKUS alliance, and the KORUS FTA. As a consequence, a multi-stakeholder model becomes more relevant in explaining the Korean foreign policy behavior.

With a case study of the development of KORUS FTA, this paper thus explores the Korean business stakeholders’ influence on transforming the ROKUS alliance, which has been largely missed in the extant studies. Main finding is that, since the 1987 democratization, the Korean business community has increased its voice and influence on foreign policy toward the U.S, and contributed to strengthening the domestic support base for KORUS FTA negotiations, mainly through building internal and external advocacy networks.

The paper is organized as follows. The next section reviews the footprints of Korean business sector’s influence on the alliance. I underline that there was a historical affinity between the growth and interests of Korean businesses, on the one hand, and the ROKUS alliance as well as the government, on the other. Then, along with discussion of strengths and weaknesses, I sketch the background, process, and current status of KORUS FTA. Section III analyzes what roles the Korean business community has played in moving forward KORUS FTA, with focus on the Federation of Korean Industry (FKI), a representative organization of business interests in the country. Also, it is followed by inquiry into FKI’s priority concerns and strategies to expand Korea-U.S business interests and involvement in the alliance. In Section IV, I try to draw some implications of Korean businesses’ increasing influence for the deepening of Korea-U.S cooperation. I conclude it by discussing the potential benefits of KORUS FTA on the bilateral, regional, and global dimension...(Continued)