Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM OMB No. 1124-0002; Expires April 30,2017 u.s. Department of Justice Supplemental Statement Washington, DC 20530 Pursuant to the Foreign Agents Registration Act of 1938, as amended

For Six Month Period Ending 08/31/2015 (Insert date)

I - REGISTRANT

1. (a) Name of Registrant (b) Registration No.

KOREA ECONOMIC INSTITUTE OF AMERICA, INC 3327

(c) Business Address(es) of Registrant 18D0 K ST. NW SUITE 1010 WASHINGTON, DC 20006

2. Has there been a change in the information previously furnished in connection with the following? (a) If an individual: (1) Residence address(es) Yes • No • (2) Citizenship Yes • No • (3) Occupation Yes • No • (b) If an organization: (1) Name Yes • No S (2) Ownership or control Yes • No _] (3) Branch offices Yes • No _] (c) Explain fully all changes, if any, indicated in Items (a) and (b) above.

IF THE REGISTRANT IS AN INDIVIDUAL, OMIT RESPONSE TO ITEMS 3,4, AND S(a). 3. If you have previously filed Exhibit C1, state whether any changes therein have occurred during this 6 month reporting period. Yes • No H If yes, have you filed an amendment to the Exhibit C? Yes • No CD If no, please attach the required amendment.

1 The Exhibit C, for which hp printed form is provided, consists of a true copy of the charter, articles of incorporation, association, and by laws of a registrant that is ail organizatioa (A waiver of the requirement to file an Exhibit C may be obtained for good cause upon written application to the Assistant Attorney General, National Security Division, U.S. Department of Justice, Washington, DC 20530.)

FORM NSD-2 Revised 03/14 Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM (PAGE 2) 4. (a) Have any persons ceased acting as partners, officers, directors or similar officials of the registrant during this 6 month reporting period? Yes _1 No • If yes, furnish the following information: Name Position Date Connection Ended SUKHANKIM BOARD MEMBER 05/18/2015

WON-HOKIM BOARD MEMBER 05/18/2015

(b) Have any persons become partners, officers, directors or similar officials during this 6 month reporting period? Yes B - No • If yes, furnish the following information : Name Residence Address Citizenship Position Date Assumed DANNY LEIPZIGER 2714 N FiLMORE ST U.S.A BOARD MEMBER 05/18/2015 ARLINGTON, VA 22207 TAESOOKANG # 105-903 EOWOLIM APT, SOUTH KOREA BOARD MEMBER 05/18/2015 OKSU-DONG SONGDONG-GU

5. (a) Has any person named in Item 4(b) rendered services directly in furtherance of the interests of any foreign principal? Yes |_ No • If yes, identify each such person and describe the service rendered, TAE SOO KANG IS A SENIOR RESEARCH FELLOW OF FOREIGN PRINCIPAL

(b) During this six month reporting period, has the registrant hired as employees or in any other capacity, any persons who rendered or will render services to the registrant directly in furtherance of the interests of any foreign principal(s) in other than a clerical or secretarial, or in a related or similar capacity? Yes H No • Name Residence Address Citizenship' Position Date Assumed JENNA GIBSON 1508 Q ST NW U.S.A ASSOCIATE 07/06/2015 WASHINGTON, DC 20009 DIRECTOR FOR COMMUNICATION TECHNOLOGY AND PROGRAMS (c) Have any employees or individuals, who have filed a short form registration statement, terminated their employment or connection with the registrant during this 6 month reporting period? Yes _0 No D If yes, furnish the following information; Name Position or Connection Date Terminated CLARE O'DONNELL HUBBARD ASSOSIATE DIRECTOR FOR PROGRAMS AND 07/29/2015 INTERNSHIP COORDINATOR NICHOLAS HAMISEVICZ DIRECTOR OF RESEARCH AND ACADEMIC AFFAIRS 08/20/2015

(d) Have any employees or individuals, who have filed a short form registration statement, terminated their connection with any foreign principal during this 6 month reporting period? Yes • No H If yes, furnish the following information: Name Position Or Connection Foreign Principal Date Terminated

6. Have short form registration statements been filedb y all of the persons named in Items 5(a) and 5(b) ofthe supplemental statement? Yes _1 No • If no, list names of persons who have not filed the required statement.

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II - FOREIGN PRINCIPAL

7, Has your connection with any foreign principal ended during this 6 month reporting period? Yes • No IS! If yes, furnish the following information:

Foreign Principal Date of Termination

8. Have you acquired any new foreign principal(s)2 during this 6 month reporting period? Yes • No If yes, furnish th following information:

Name and Address of Foreign Principal(s) Date Acquired

9. In addition to those named in Items 7 and 8, if any, list foreign principal(s)2 whom you continued to represent during the 6 month reporting period. KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)

10. (a) Have you filed exhibits for the newly acquired foreign principal(s), if any, listed in Item 8? Exhibit A3 Yes • No El Exhibit B4 Yes • No 0 If no, please attach the required exhibit.

(b) Have there been any changes in the Exhibits A and B previously filed for any foreign principal whom you represented during this six month period? Yes • No El If yes, have you filed an amendment to these exhibits? Yes • No _3 If no, please attach the required amendment.

2 The term "foreign principal" includes, in addition to those defined in Section 1(b) of the Act, an individual organization any of whose activities are directly or indirectly supervised, directed, controlled, financed, or subsidized in whole or in major part by a foreign government, foreign political party, foreign organization or foreign individual. (See Rule 100(a) (9)). A registrant who represents more than one foreign principal is required to list in the statements he files under the Act only those principals for whom he is not entitled to claim exemption under Section 3 ofthe Act. (See Rule 208.) 3 The Exhibit A, which is filed on Form NSD-3, sets forth the information required to be disclosed concerning each foreign principal. 4 The Exhibit B, which is filed on Form NSD-4, sets forth the information concerning the agreement or understanding between the registrant and the foreign principal. Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM (PAGE 4) III - ACTIVITIES

11. During this 6 month reporting period, have you engaged in any activities for or rendered any services to any foreign principal named in Items 7, 8, or 9 of this statement? Yes C_ No •

If yes, identify each foreign principal and describe in full detail your activities and services: THE KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP) WAS FOUNDED IN 1990 AS A GOVERNMENT- FUNDED ECONOMIC RESEARCH INSTITUTE IN THE REPUBLIC OF KOREA. IT IS A LEADING INSTITUTE CONCERNING THE INTERNATIONAL ECONOMY AND ITS RELATIONSHIP WITH KOREA. KIEP ADVISES THE KOREAN GOVERNMENT ON ALL MAJOR INTERNATIONAL ECONOMIC POLICY ISSUES AND SERVES AS A WAREHOUSE OF INFORMATION ON KOREA'S INTERNATIONAL ECONOMIC POLICIES, FURTHER, KIEP CARRIES OUT RESEARCH BY REQUEST FROM OUTSIDE INSTITUTIONS AND ORGANIZATIONS ON ALL AREAS OF KOREAN AND INTERNATIONAL ECONOMIES BY REQUEST. THE REGISTRANT'S OBJECTIVE IS TO PROMOTE DIALOGUE AND UNDERSTANDING BETWEEENTHE REPUBLIC OF KOREA AND THE UNITED STATES OF AMERICA, PARTICULARLY IN THE AREA OF ECONOMIC RELATIONS BUT ALSO ON SECURITY AND OTHER ISSUES SIGNIFICANTLY AFFECTING THE RELATIONSHIP BETWEEN THE TWO COUNTRIES.

12. During this 6 month reporting period, have you on behalf of any foreign principal engaged in political activity5 as defined below? Yes H No •

If yes, identify each such foreign principal and describe in full detail all such political activity, indicating, among other things, the relations, interests and policies sought to be influenced and the means employed to achieve this purpose. If the registrant arranged, sponsored or delivered speeches, lectures or radio and TV broadcasts, give details as to dates, places of delivery, names of speakers and subject matter. PLEASE SEE ATTACHED INFORMATION

13. In addition to the above described activities, if any, have you engaged in activity on your own behalf which benefits your foreign principal(s)? Yes • No 0

If yes, describe fully.

5 "Political activity," as defined in Section l(o) ofthe Act, means any activity thatthe person engaging in believes will, or that the person intends to, in any way influence any agency or official ofthe Government of the United States or any section of the public within the United States with reference to formulating, adopting or changing the domestic or foreign policies of the United States or with referencet o political or public interests, policies, or relations of a government of a foreign country or a foreign political party. Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM (PAGE 5)

IV - FINANCIAL INFORMATION

14. (a) RECEIPTS-MONIES During this 6 month reporting period, have you received from any foreign principal named in Items 7, 8, or 9 of this statement, or from any other source, for or in the interests of any such foreign principal, any contributions, income or money either as compensation or otherwise? Yes S No •

If no, explain why .

Ifyes, set forth below in the required detail and separately for each foreign principal ah account of such monies.6 Date From Whom Purpose . Amount 04/09/2015 KOREA INSTITUTE FOR PER CONTRACT $768,847 INTERNATIONAL ECONOMIC POLICY

06/26/2015 KOREA INSTITUTE FOR PER CONTRACT $623,128 INTERNATIONAL ECONOMIC POLICY

$1,391,975 Total

(b) RECEIPTS - FUNDRAISING CAMPAIGN During this 6 month reporting period, have you received, as part of a fundraising campaign7, any money on behalf of any foreign principal named in Items 7,8, or 9 of this statement? Yes • No H If yes, have you filed an Exhibit D to your registration? Yes • No •

If yes, indicate the date the Exhibit D was filed. Date

(c) RECEIPTS-THINGS OF VALUE During this 6 month reporting period, have you received any thing of value9 other than money from any foreign principal named in Items 7, 8, or 9 of this statement, or from any other source, for or in the interests of any such foreign principal? Yes • No 11

If yes, furnish the following information:

Foreign Principal Date Received Thing of Value Purpose

6,7 A registrant is required to file an Exhibit D if he collects or receives contributions, loans, moneys, or other things of value for a foreign principal, as part of a fundraising campaign. (See Rule 201(e)). 8 Ah Exhibit D, for which no printed form is provided, sets forth an account of money collected or received as a result of a fundraising campaign and transmitted for a foreign principal. 9 Things of value include but are not limited to gifts, interest free loans, expense freetravel , favored stock purchases, exclusive rights, favored treatment over competitors, "kickbacks," and the like! Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM

(PAGE 6)

15. (a) DISBURSEMENTS-MONIES During this 6 month reporting period, have you (1) disbursed or expended monies in connection with activity on behalf of any foreign principal named in Items 7, 8, or 9 of this statement? Yes IE! No • (2) transmitted monies to any such foreign principal? Yes • No S

If no, explain in full detail why there were no disbursements made on behalf of any foreign principal. REGISTRANT TRANSITS MONIES WHEN WE HAVE REIMBURSEMENTS TO BE MADE FOR THE FOREIGN PRINCIPAL

Ifyes, set forth below in the required detail and separately for each foreign principal an account of such monies, including monies transmitted, if any, to each foreign principal.

Date To Whom Purpose Amount

Total

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(PAGE 7) (b) DISBURSEMENTS-THINGS OF VALUE During this 6 month reporting period, have you disposed of anything of value10 other than money in furtherance of or in connection with activities on behalf of any foreign principal named in Items 7,8, or 9 of this statement? Yes • No S If yes, furnish the following information:

Date Recipient Foreign Principal Thing of Value Purpose

(c) DISBURSEMENTS-POLITICAL CONTRIBUTIONS During this 6 month reporting period, haVe you from your own funds and on your own behalf either directly or through any other person, made any contributions of money or other things of value11 in connection with ah election to any political office, or in connection with any primary election, convention, or caucus held to select candidates for political office? Yes • No 13 If yes, furnish the following information: Date Amount or Thing of Value Political Organization or Candidate Location of Event

10,11 Things of value include but are not limited to gifts, interest free loans, expense free travel, favored stock purchases, exclusive rights, favored treatment over competitors, "kickbacks," and the like.

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(PAGE 8) V - INFORMATIONAL MATERIALS

16. (a) During this 6 month reporting period, did you prepare, disseminate or cause to be disseminated any informational materials?12 Yes IEI No • If Yes, go to Item 17. (b) If you answered No to Item 16(a), do you disseminate any material in connection with your registration? Yes • No • If Yes, please forward the materials disseminated during the six month period to the Registration Unit for review. 17. Identify each such foreign principal. DURING THE 6 MONTH PERIOD, KEIA HAS PUBLISHED ACADEMIC PAPER SERIES PAPERS, A CONGRESSIONAL DISTRICT EXPORT TO KOREA FACT SHEET, AND BLOG ARTICLES. ALL THESE ITEMS ARE ALSO AVAILABLE ON KEIA'S WEBSITE.

18. During this 6 month reporting period, has any foreign principal established a budget of allocated a specified sum of money to finance your activities in preparing Or disseminating informational materials? Yes IEI No • If yes, identify each such foreign principal, specify amount, and indicate for what period of time. PLEASE SEE ATTACHED INFORMATION (BUDGET JUNE 2015)

19. During this 6 month reporting period, did your activities in preparing, disseminating or causing the dissemination of informational materials include the use of any ofthe following- El Radio or TV broadcasts 0 Magazine or newspaper • Motion picture films • Letters or telegrams • Advertising campaigns 0 Press releases 0 Pamphlets or other publications 0 Lectures or speeches

• Other (specify) : . Electronic Communications B Email S Website URL(s): WWW-KEIA.ORG 0 Social media websites URL(s): FACEBOOK.COM/KOREAECQNINSTITUTE,TWnTER.COM/KOREAECONINST • Other (specify) . .

20. During this 6 month reporting period, did you disseminate or cause to be disseminated informational materials among any of the following groups: El Public officials E Newspapers IEI Libraries 13 Legislators • Editors 0 Educational institutions 0 Government agencies 0 Civic groups or associations • Nationality groups • Other (specify)

21. What language was used in the informational materials: 0 English • Other (specify) _..

22. Did you file with the Registration Unit, U.S. Department of Justice a copy of each item of such informational materials disseminated or caused to be disseminated during this 6 month reporting period? Yes ^ No d

23. Did you label each item of such informational materials with the statement required by Section 4(b) of the Act? Yes M No •

12 The term informational materials includes any oral, visual, graphic, written, or pictorial information or matter of any kind, including that published by means of advertising, books, periodicals, newspapers, lectures, broadcasts, motion pictures, or any means or instrumentality of interstate or foreign commerce or otherwise. Informational materials disseminated by an agent of a foreign principal as part of an activity in itself exempt fromregistration , or an activity which by itself would not require registration, need not be filed pursuant to Section 4(b) of the Act

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(PAGE 9) J- VI- EXECUTION In accordance with 28 U.S.C. § 1746, the undersigned swear(s) or affirm(s) under penalty of perjury that he/she has (they have) read the information set forth in this registration statement and the attached exhibits and that he/she is (they are) familiar with the contents thereof and that such contents are in their entirety true and accurate to the best of his/her (their) knowledge and belief, except that the undersigned make(s) no representation as to truth or accuracy ofthe information contained in the attached Short Form Registration Statement(s), if any, insofar as such information is not within his/her (their) personal knowledge.

(Date of signature) (Print or type name under each signature or provide electronic signature13)

13 This statement shall be signed by the individual agent, if the registranti s an individual, or by a majority of those partners, officers, directors or persons performing similar functions, if the registrant is an organization, except that the organization can, by power of attorney, authorizeone or more individuals to execute this statement oh its behalf

Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM Korea Economic Institute of America, Inc (KEI) Budget Expenditures through June 30th, 2015

2015 Total Operating Budget (SSOItt) Planned Actual Contributions |KIEP Allotment (2.9 Billion Korean Won) 2,735,000 1,349,790 Contribiitiorrs Total 2,735,000 1,349,790

Unit: ($) Budget Category 2015 Planned 2015 Expended Variance 0iltf3W(qi) CHIt.H!r3<£> 2015

On Korea ggj «|:6*|r 28,000 26,814 1,186 96% Publications Korea's Economy (.S^ig^l) 25,000 10,300 S . 14,700 41% Special Studies Publication (Sgg? H8g)(2) 10,000 :3,000 7,000 30%!

Library AcquisitiomSmart Cards (-E.-*ia^lir-B 9[B. gjrU|) 10,000 142 9,858 1;% Publications Total 38.000 40.256 67.744 Compensation Including Employer's Taxes (E!ij"l/jl#^ 1,020,000 508,163 $• 511,837 50% Infrastucture Contingency (0||U|M|) 25;000 $ 25,000 0% Support Severance (£|*| 47;ooo 47,000 0% , 401 (k)/•Education (jfX|$^K|, S|g JEftSSn'B) 80,000 39,929 $ 40,071 50% Transportation, Parking & Insurances (JH-^m, MUS) 75,000 34,883 $ 40,117 47% Infra. Support Total 1,247.000 582,975 S 664 025 47°/. Total Amount 2 745 000 1,257,333 S 1.487.667 46%

Currency Avg. Rate Allotment Schedule Actual Fund Total Expended 1st Quarter W 1,033/$ 1 W 600 Million Budget Summary Received 2nd Quarter W 1,171/$1 W 900 Million 1,349,790 1,257333 3rd Quarter TBD W 700 Million Variance % 93.15%' 4th Quarter* TBD W 700 Million Total Surplus/(Deficit) 92,457 For the month ended 06/30/2015 AVG. W 1,1027$ 1 W 2.9 Billion

s Note: 1 The Korea Foundation no longer provides funding for both University Programs and Future of Korea Programs ($30,000) 2 Ad hoc Publication

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Department of Justice (DO J) Report

Phil Eskeland

Executive Director of Operations and Policy

Korea Economic Institute of America (KEI)

Contacts from March 1,2015 - August 31,2015

Manner of Contact : Meeting Forum/Program Dinner Lunch Breakfast Phone call Interview E-mail

• Coffee with someone may be categorized as Meeting

Date Activity/Subject Matter U.S. gov't office or U.S. public Manner of contacted contact March 3,2015 U.S.-Korea relations Bryan Davis, Director of Lunch Government Affairs and Contracts, Supply Core March 3, 2015 U.S.-Korea relations Ambassador Sung Kim, Special Meeting Representative for North Korea Policy and Deputy Assistant Secretary of State for Korea and Japan March 3,2015 South Dakota/Korea economic Paul Poteet, Senior Policy Meeting relations Advisor, Tax and Trade Counsel, Office of Senator John Thune (SD) March 6, 2015 Colorado/Korea relations Igor Khrestin, Legislative Meeting Assistant, and Senator Cory Gardner (CO) March 6, 2015 Michigan/Korea economic Jason LaGosh, Legislative Meeting relations Counsel, and Ani Toumajan, Legislative Aide, Office of Debbie Stabenow (MI) March 6,2015 Indiana/Korea economic Nick Catino, Legislative Meeting relations Assistant, Office of Senator Joe Donnelly (IN) March 6,2015 Kansas/Korea economic Theada Khrestin, Deputy Meeting relations Legislative Director and National Security Policy

Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM

Advisor, Office of Senator Pat Roberts (KS) March 6,2015 New Mexico/Korea economic Matt Padilla, Military and Meeting relations Foreign Relations Legisalstive Assistant, and Senator Tom Udall (NM) March 9, 2015 Korean-American community R.ep. Grace Meng (NY-6th) and Program engagement in Queens, NY and Rachana Shah, Legislative the importance of the U.S. - Assistant Korea relationship March 12, 2015 North Korea's Use of Re- Korea Economic Institute of Program defectors America (KEI) March 17, 2015 How Washington Works The Honorable Charles Bass, KEI Program Senior Director, Greenberg Traurig, and Chris Nelson, Senior Vice President, Samuel's International March 17, 2015 Congressional Perspectives on Michael Schiffer, Senior KEI Korean Unificiation Advisor and Counselor, U.S. lunch/program Senate Foreign Relations Committee March 17, 2015 Washington's View on the Scott Snyder, Senior Fellow for KEI program U.S.-Korea Alliance Korea Studies and Director of the Program on U.S.-Korea . Policy, Council on Foreign Relations, and Bruce Klingner, Senior Research Fellow,The Heritage Foundation March 17, 2015 Current State of U.S.-China Doug Paal, Vice President for KEI program Relations Studies, Carnegie Endowment for International Peace and Jonathan Pollack, Senior Fellow, Center for East Asia Policy Studies, Brookings Institution March 18, 2015 Views of the U.S. Business Paul Kong, Director of KEI Community on U.S.-Korea International Division, U.S. breakfast/program trade relations Chamber Of Commerce March 18, 2015 State ofthe U.S.-Korea Claude Barfield, Resident KEI program Economic Cooperation Scholar, American Enterprise Institute, and George Hutchinson, Senior Regional Planner, SecuriFense, Inc. March 18,2015 North Korea Human Rights Greg Scarlatoiu, Executive KEI Director, U.S. Committee on lunch/program Human Rights in North Korea

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(HRNK) March 18, 2015 U.S.-Korea relations The Honorable Ed Royce (CA- Meeting 39th), Chairman, Foreign Affairs Committee of the U.S. House of Representatives; and Representatives Randy Weber (TX-14th); ileaiia Ros-Lehtihen (FL-27th); Matt Salmon (AZ- 5th); Scott DesJarlais (TN-4th); Scott Perry (PA-4*) Grace Meng (NY-6111); Charles Rangel (NY-13th); and Gregory Meeks (NY-5th) March 18,2015 U.S.-Korea relations Senator Cory Gardner (CO), Meeting Chairman, Subcommittee on East Asia and the Pacific of the Senate Foreign Relations Committee March 19,2015 U.S.-Korea trade relations Wendy Cutler, Acting Deputy Meeting U.S. Trade Representative March 18, 2015 U.S.-Korea relations Ambassador Sung Kim, Deputy Meeting Assistant Secretary for Korea & Japan and Special Representative for North Korea Policy, and Ambassador Bob King, Special Envoy for North Korean Human Rights Issues, U.S. State Department March 18, 2015 U.S.-Korea security relations SaTah Mineiro, Korea Desk Meeting Director, U.S. Department of Defense March 18,2015 U.S. Perspectives of North Marcus Noland, Executive Vice Korea President^ Peterson Institute for International Economics; David Maxwell, Associate Director, Center for Security Studies, Georgetown University; and Ken Gause, Director, International Affairs Group, CNS Corporation March 20, 2015 North Korean defectors Council on Foreign Relations Lunch/program March 26,2015 Asian Perspectives on U.S. Chicago (IL) Council on Global Lunch/program Foreign Policy Affairs/KEI March 26, 2015 Dealing with North Korean KEI Academic Symposium Program Provocations March 27,2015 Korean and Japanese KEI Academic Symposium Program

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Development Assistance: Trade with Southeast Asia March 28,2015 Economic and Political Rockford (IL) Global Affairs Program/dinner Upheaval in Asia: Shifting Council/Rockford Alliances and Impact on University/KEI America March 29, 2015 Impact of National Identities on KEI Academic Symposium Program Korea Reunification May 14, 2015 U.S.-Korea relations Michael Mazzar, Professor of Meeting National Security Studies and Associate Dean for Academics, National Defense University; David Maxwell, Associate Director, Center for Security Studies, Georgetown University; Katy Oh, Nonresident Fellow, Center for East Asia Policy Studies, the Brookings Institution; Bruce Klingner, Senior Research Fellow, Northeast Asia, the Heritage Foundation; Nick Eberstadt, Henry Wendt Chair in Political Economy, the American Enterprise Institute; Duyeon Kim, Associate, Nuclear Policy and Asia Programs, Carnegie Endowment for International Peace; James Person, Deputy Director for the History and Pubic Policy Program, the Wilson Center; and Scott Synder, Senior Fellow for Korea Studies, Council on Foreign Relations. May 18, 2015 Future of Free Trade in East KEI Program Asia May 19, 2015 Possible areas of collaboration Christopher Griffin, Executive Meeting Director, and Elaine Wilson, Director of Government and External Relations, The Foreign Policy Intiatiye June 10,2015 Future Prospects for the U.S.- KEI Program ROK Alliance June 11,2015 Russia and the Two Koreas KEI Program

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June 16, 2015 U.S.-Korea security and Council on Foreign Relations Program alliance issues roundtable with General Curtis Scaparrotti, Commander United Nations Command, US/ROK Combined Forces Command, and U.S. Forces Korea June 18,2015 Korea's prospects for joining KEI and AMCHAM Korea Breakfast/program the Trans Pacific Partnership June 22, 2015 U.S.-Korea Relations Council oh Foreign Relations Lunch/program June 24,2015 U.S.-Korea-Japan relations Dan Bob, Director of Programs Lunch and Senior Fellow, Sasakawa Peace Foundation USA June 30,2015 Possible future collaboration Margo Grimm Eule, Director of Meeting Communications and Programs; Joshua Archer, Associate Director of Programs ; and Elly Cho, Program Manager of the Mike and Mureen Mansfield Foundation July 13 -15, 2015 U.S.-Korea relations KEI's Opinion Leaders Seminar Program July 15,2015 Future ofthe U.S.-ROK Carnegie Endowment for Program Alliance and Northeast Asia International Peace (CEIP)/KEI July 20, 2015 U.S.-Korea relations Meridian Center U.S. Congress- Program Korea National Assembly Exchange July 20, 2015 Legislative Oversight of the The Honorable Peter Hoekstra Meeting U.S. Intelligence Community and Korean National Assemblyman JOO Ho Young July 22, 2015 The Views of the Chinese KEI Lunch/program Peoples Liberation Army (PLA) of North Korea July 22, 2015 U.S.-Korea relations Meridian Center U.S.Congress- Reception Korea National Assembly Exchange July 30, 2015 Developing partnerships in Jim Thacker, Political Lunch Korea Consultant and Public Relations, and Patrick Murphy, Consultant August 5,2015 Future of Korea outreach in the Kongdan (Katy) Oh Hassig, Meeting U.S. "think-tank" community Ph.D., Research Staff Member, Institute for Defense Analyses August 5,2015 Future colloraboration on the Laura Baughman, President, The Lunch use of trade data Trade Partnership

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Department of Justice (DOJ) Report

Jenna Gibson

Associate Director for Communication Technology and Programs

Korea Economic Institute of America (KEI)

Contacts March 1,2015 - August 31,2015

Manner of Contact: Meeting Forum/Program Dinner Lunch Breakfast Phone call Interview E-mail • Coffee with someone may be categorized as Meeting

U.S. government official or U.S. Date Activity/Subject Matter Manner of public contacted contact July 13 - 15, U.S.-Korea relations Korea Economic Institute (KEI) Program 2015 Opinion^Leaders Seminar July 15,2015 Future of the U.S.-ROK Carnegie Endowment for Program Alliance and Northeast Asia International Peace (CEIPVKEI July 22, 2015 The Views of the Chinese KEI Lunch/program Peoples Liberation Army (PLA) of North Korea July 22, 2015 U. S.-Korea relations Meridian Center U.S.Congress- Reception Korea National Assembly Student Exchange program August 5, Future of Korea outreach in Kongdan (Katy) Oh Hassig, Meeting 2015 the U.S. "think-tank" Ph.D., Research Staff Member, community Institute for Defense Analyses

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Department of Justice (DOJ) Report

Nicholas Hamisevicz

Director of Research and Academic Affairs

Korea Economic Institute of America (KEI)

Contacts from March 1,2015 - August 31,2015

Manner of Contact:

Meeting Forum/Program Dinner Lunch

Breakfast Phone call Interview E-mail

Coffee with someone may be categorized as Meeting

Date Activity/Subject Matter U.S. government official or Manner of U.S. public contacted contact March 3, 2015 U.S.-Korea relations Ambassador Sung Kim^ Meeting Special Representative for North Korea Policy and Deputy Assistant Secretary of State forKore a and Japan March 4, 2015 U.S.-South Korea relations Bruce Klingner, Senior Lunch Research Fellow, Asian Studies Center, The Heritage Foundation March 5, 2015 U.S.-Asia Foreign Policy Council oh Asian Affairs Meeting March 12, North Korea' s Use of Re- Korea Economic Institute of Program 2015 defectors America (KEI) , March 13, U.S.-Asia Foreign Policy Council on Asian Affairs Meeting 2015 March 17, North Korean Human Rights Catholic University Asian Program 2015 Pacific American Law Students Association March 26, U.S.-Asia Foreign Policy KEI Academic Symposium Program 2015 - March 29,2015 April 1,2015 U.S.-Asia Relations vs. U.S. Morgan Vina, Oversight Lunch Middle East Relations Team, Senate Foreign Relations Committee

Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM

April 7, 2015 North Korean nuclear United States Military Program weapons Academy cadets April 9, 2015 Trans-Pacific Partnership Council on Asian Affairs Meeting April 9, 2015 China-North Korea relations Brookings Institution Meeting April 14, 2015 U.S.-East Asia Relations Carolyn Leddy, Senior Meeting Professional Staff Member, Senate Committee on Foreign Relations May 7,2015 North Korea human rights Alicia Cummings, Meeting Administrative Services Manager, American University May 18, 2015 South Korea - Japan Asan Institute for Policy Program Relations Studies May 28, 2015 South Korea domestic polities Stephen Costello, Producer, Meeting AsiaEast Roundtable June 3,2015 North Korean nuclear Stanford University Program weapons June 5, 2015 South Korea - Japan Council on Foreign Affairs Meeting Relations June 5,2015 U.S.-China relations Derek Scissors, Resident Lunch Scholar, American Enterprise Institute June 11,2015 Russia - Korea relations KEI Program June 16, 2015 Korean unification National Bureau of Asian Program Research June 19, 2015 Korean Language Critical Lanaguage Program Scholarship Prorgam June 19,2015 U.S.-Asia relations Walter Lohman, Director, Lunch Asian Studies Center, The Heritage Foundation June 19, 2015 India's Economic Policy American Enterprise Institute Program July 17, 2015 U.S. foreign policy strategy The Heritage Foundation Program July 21, 2015 Engagement with North Brookings Institution Meeting Korea July 22, 2015 North Korea - China relations KEI Program, July 30, 2015 U.S.-Asia relations Riley Walters, Research Lunch Assistant, Douglas and Sarah Allison Center for Foreign and National Security Policy, The Heritage Fondation July 30, 2015 U.S.-Asia relations Council oh Asian Affairs Program August 18, Japanese foreign policy The Heritage Foundation Program . 2015

Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM

Department of Justice (DOJ) Report

Clare Hubbard

Associate Director of Programs and Internship Coordinator

Korea Economic Institute of America (KEI)

Contacts from March 1,2015- August 31,2015

Manner of Contact:

Meeting Foruxn/Program Dinner Lunch Breakfast Remarks Interview • Coffee with someone may be categorized as Meeting

Date Activity/Subject Matter U.S. government official or Manner of contact U.S. public contacted March 3, 2015 U.S.-Korea relations Ambassador Sung Kim, Meeting Special Representative for North Korea Policy and Deputy Assistant Secretary of State for Korea and Japan March 12,2015 North Korea's Use of Re- Korea Economic Institute of Program defectors America (KEI) March 17,2015 How Washington Works The Honorable Charles Bass, KEI Program Senior Director, Greenberg Traurig, and Chris Nelson, Senior Vice President, Samuel's International March 17,2015 Congressional Perspectives Michael Schiffer, Senior KEI lunch/program on Korean Unificiation Advisor and Counselor, U.S. Senate Foreign Relations Committee March 17, 2015 Washington's View on the Scott Snyder, Senior Fellow KEI program U.S.-Korea Alliance for Korea Studies and Director of the Program on U.S.-Korea Policy, Council on Foreign Relations, and Bruce Klingner, Senior Research Fellow,The Heritage Foundation March 17,2015 Current State of U.S.-China Doug Paal, Vice President KEI program

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Relations for Studies, Carnegie Endowment for International Peace and Jonathan Pollack, Senior Fellow, Center for East Asia Policy Studies, Brookings Institution March 18,2015 State ofthe U.S.-Korea Claude Barfield, Resident KEI Program Economic Cooperation Scholar, American Enterprise Institute, and George Hutchinson, Senior Regional Planner, SecuriFense, Inc. March 18,2015 North Korea Human Rights Greg Scarlatoui, Executive KEI Lunch/program Director, U.S. Committee on Human Rights in North Korea (HRNK) March 29, 2015 Impact of National Identities KEI Academic Symposium Program on Korea Reunification Next Generation in Nuclear April 16, 2015 KEI Program Energy Options for Dealing with April 16, 2015 KEI Program North Korea April 29,2015 North Korea Human Rights Robert F. Kennedy Center Program for Justice & Human Rights May 13, 2015 Sancations on North Korea Robert F. Kennedy Center Program for Justice & Human Rights May 14,2015 Russia and the Korean Center for Strategic & Program Peninsula International Studies (CSIS) May 18,2015 Future of Free Trade in East KEI Program Asia May 29, 2015 Position of Web Coordinator Olivia Enos & Riley Walters, Meeting for the Council on Asian Heritage Foundation Affairs June 3,2015 Open Source Research on Sejong Society Program North Korea June 8,2015 Starvation in North Korea Korea Club KEI Program June 10,2015 Future Prospects for the U.S.- KEI Program ROK Alliance June 11,2015 Russia and the Two Koreas KEI Program June 14, 2015 Critical Language Scholarship Nicholas Hamisevicz, KEI; Program Panel June 24, 2015 Discussion on Public Affairs Olivia Enos & Riley Walters, Meeting for the Council oh Asian Heritage Foundation Affairs June 25-26,2015 Unification of the Korean International Council on Program Peninsula: Issues and Korean Studies conference at

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Opportunities Georgetown University July 13-14, 2015 Opinion Leaders Seminar KEI Program July 17, 2015 Emerging Leaders in Foreign Heritage Foundation Program Policy Workshop July 23, 2015 Intoduction to new Colleague Eileen Block, Asan Institute Meeting July 25, 2015 International Students KEI Program Conference Six Party Talks Simulation exercise July 28, 2015 International Students KEI Program Conference

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Department of Justice (DOJ) Report

MinK.Kang

Director of Finance & Human Resources

Korea Economic Institute of America (KEI)

Contacts from March 1,2015 - August 31,2015

Mariner of Contact- Meeting Forum/Program Dinner Lunch Breakfast Phone call Interview E-mail

o Coffee with someone may be categorized as Meeting

Date Activity/Subject Matter U.S. government official or Manner of U.S. public contacted contact 03/02/2015 U.S.-Korea relations Ambassador Sung Kim, Meeting Special Representative for North Korea Policy and Deputy Assistant Secretary of State for Korea and Japan 04/02/2015 Powering the Alliance: U.S.­ Kore Economic Institute of Program Korea Cooperation in Energy America (KEI)

04/16/2015 Options for Dealing with KEI Program North Korea

05/12/2015 Human Rights and North KEI/Database Center for Program Korea's Overseas Laborers: North Korean Human Rights Dilemmas and Policy Challenges

05/18/2015 Future of Free Trade in East KEI Program Asia

06/10/2015 Future Prospects for the U.S. KEI Program ROK Alliance

06/11/2015 Russia and the Two Koreas: KEI Program

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Old Friends, New Partners?

06/25/2015 Unification of the Korean International Council on Program Peninsula: Issues and Korean Studies/KEI Opportunities

07/15/2015 The Future of the U.S.-Korea Carnegie Endowment for Program Alliance and Northeast Asia International Peace/KEI

08/05/2015 Future of Korea outreach in Kongdan (Katy) Oh Hassig, Meeting the U.S. "think-tank" Ph.D., Research Staff community Member, Institute for Defense Analyses

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Department of Justice (DOJ) Report

Sang Kim

Executive Assistant & Office Manager

Korea Economic Institute of America (KEI)

Contacts March 1,2015 - August 31,2015

Manner of Contact: Meeting Forum/Program Dinner Lunch Breakfast Phone call Interview E-mail

c Coffee with someone may be categorized as Meeting

U.S. government official or U.S. public Date Activity/Subject Matter Manner of contact contacted March 3, 2015 U.S.-Korea relations Ambassador Sung Kim, Special Meeting Representative for North Korea Policy and Deputy Assistant Secretary of State for Korea and Japan March 12, 2015 North Korea's Use of Korea Economic Institute of America Program Re-defectors (KEI) March 17,2015 How Washington The Honorable Charles Bass, Senior KEI Program Works Director, Greenberg Traurig, and Chris Nelson, Senior Vice President, Samuel's International March 17,2015 Congressional Michael Schiffer, Senior Advisor and KEI Perspectives on Korean Counselor^ U.S> Senate Foreign Relations lunch/program Unificiation Committee March 17, 2015 Washington's View on Scott Snyder, Senior Fellow for Korea KEI program the U.S.-Korea Alliance Studies and Director of the Program on U.S.-Korea Policy, Council on Foreign Relations, and Bruce Klingner, Senior Research Fellow,The Heritage Foundation March 17,2015 Current State of U.S.­ Doug Paal, Vice President for Studies, KEI program China Relations Carnegie Endowment for International Peace and Jonathan Pollack, Senior Fellow, Center for East Asia Policy Studies, Brookings Institution

Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM

March 18,2015 State ofthe U.S.-Korea Claude Barfield, Resident Scholar, KEI program Economic Cooperation American Enterprise Institute, and George Hutchinson, Senior Regional Planner, SecuriFense, Inc. March 18, 2015 North Korea Human Greg Scarlatoiu, Executive Director, U.S. KEI Rights Committee on Human Rights in North lunch/program Korea (HRNK) South Korean Media April 9, 2015 George Washington University students Roundtable KEI Program Next Generation in KEI Program April 16,2015 Nuclear Energy Options for Dealing April 16,2015 KEI Program with North Korea North Korea Human Robert F. Kennedy Center for Justice & April 29, 2015 Program Rights Human Rights North Korea's Forced April 29, 2015 Tom Lantos Human Rights Commission Program Labor Enterprise North Korea's Overseas KEI/Database Center for North Korean May 12,2015 Program Laborers Human Rights Sancations on North Robert F. Kennedy Center for Justice & May 13,2015 Program Korea Human Rights Russia and the Korean Center for Strategic & International May 14, 2015 Program Peninsula Studies (CSIS) May 18, 2015 Future of Free Trade in KEI Program East Asia June 3,2015 Open Source Research Sejong Society Program on North Korea June 8, 2015 Starvation hi North KEI's Korea Club Program Korea June 10, 2015 Future Prospects for the KEI Program U.S.-ROK Alliance June 11,2015 Russia and the Two KEI Program Koreas June 18,2015 Korea's prospects for KEI and AMCHAM Korea Breakfast/program joining the Trans Pacific Partnership July 13 -15,2015 U.S.-Korea relations KEI's Opinion Leaders Seminar Program

Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM

July 22, 2015 The Views of the KEI Lunch/program Chinese Peoples Liberation Army (PLA) of North Korea Augusts, 2015 Future of Korea Kongdan (Katy) Oh Hassig, Ph.D., Meeting outreach in the U.S. Research Staff Member, Institute for 'think-tank" community Defense Analyses

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Department of Justice (DOJ) Report

Linda Butcher

Director of Media Relations & Public Affairs

Korea Economic Institute of America (KEI)

Contacts from March 1,2015 - August 31,2015

Manner of Contact : Meeting Forum/Program Dinner Lunch Breakfast Phone call Interview E-mail

Coffee with someone may be categorized as Meeting

Date Activity/Subject Matter U.S. government official or Manner of U.S. public contacted contact March 3, 2015 U.Sj-Korea relations Ambassador Sung Kim, Meeting Special Representative for North Korea Policy and Deputy Assistant Secretary of State for Korea and Japan March 5, 2015 Planning for an upcoming Jeanne Jones Manzer, Phone Call Future of Korea Program Executive Director, South Dakota World Affairs Council (SDWAC) March 10, U.S.-Korea Relations Jae Ku, Director, Meeting 2015 U.S.-Korea Institute (USKJ) March 12, North Korea's Use of Korea Economic Institute of KEI Program 2015 Re-Defectors America (KEI) March 16, Planning for an upcoming Miftjun Chen, Program Meeting 2015 Korea-America Student Manager, KASC, Conference (KASC) Program International Student Conferences (ISC) March 17, Unification of the Michael Schiffer, KEI Lunch / 2015 Korean Peninsula Senior Advisor and Program Counselor, U.S. Senate Foreign Relations Committee March 17, U.S. -Korea Relations KEI Panel with Scott Snyder, KEI Program 2015 Senior Fellow Korea Studies

Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM

and Director of the Program on U.S.-Korea Policy, Council on Foreign Relations, and Bruce Klingner, Senior Research Fellow,The Heritage Foundation March 18, U.S.-Korea Claude Barfield, Resident KEI Program 2015 Economic Relations Scholar, American Enterprise Institute (AEI) and George Hutchinson, Senior Regional Planner, SecuriFense, Inc. March 18, North Korea Human Rights Greg Scarlatoiu, Executive KEI 2015 Director, U.S. Committee on Lunch/Program Human Rights in North Korea (HRNK) March 26, Asian Perspectives on U.S. Chicago Council on Global Lunch/program 2015 Foreign Policy Affairs and KEI March 26, Dealing with North Korean KEI Academic Symposium Program 2015 Provocations at the 2015 Association for Asian Studies (AAS) Conference March 27, Korean and Japanese KEI Academic Symposium Program 2015 Development Assistance: at AAS Trade with Southeast Asia March 28, Hedging or Balancing KEI Academic Symposium Program 2015 between China and the United at AAS States March 29, Impact of National Identities KEI Academic Symposium Program 2015 on Korea Reunification at AAS April 1, 2015 Planning for an upcoming Jerome Sauvage, President, Phone Call University Program Sauvage Associates April 2, 2015 U.S.-Korea Energy KEI Program Cooperation April 8, 2015 Assessing National Committee on Dinner North Korea's Regime North Korea (NCNK) April 9, 2015 U.S.-Korea Relations The George Washington Program University (GWU) April 16,2015 Next Generation in KEI and the Global America Program Nuclear Energy Business Institute (GABI) April 16,2015 Dealing with North Korea KEI Program April 29,2015 North Korea's Forced Labor Tom Lantos Human Rights Program Enterprise Commission May 12,2015 Human Rights and KEI and the Database Center Program North Korea's for North Korean Human

Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM

Overseas Laborers Rights (NKDB) May 18, 2015 Future of Free Trade in KEI Program East Asia June 4,2015 U.S.-ROK Alliance Center for Strategic and Program International Studies (CSIS) June 9, 2015 North Korean Human Rights Rpbert F. Kennedy Center Program for Justice and Human Rights June 10,2015 Future Prospects for the KEI Program U.S.-ROK Alliance June 11,2015 Russia and the Two Koreas KEI Program June 15, 2015 U.S.-ROK Trade Andy Kim, President of the Lunch Korea Southeast Chamber of Commerce June 18,2015 Korea's Prospects for KEI Program Joining the Trans Pacific Partnership (TPP) June 24,2015 U.S.-Korea-India Relations Jennifer Chang, Researcher Meeting at the Embassy of India June 25-26, Unification of the Korean KEI, International Council Program 2015 Peninsula oh Korean Studies (ICKS), HRNK July 8,2015 U.S.-ROK-Japan Relations The Heritage Foundation Program July 9,2015 U.S.-ROK Relations John Gizzi, Chief Political Lunch Correspondent at Newsmax Media July 13-15, U.S. - Korea Relations Opinion Leaders Seminar Program 2015 KEI Event July 15,2015 Future of US-Korea Alliance KEI and Carnegie Program and Northeast Asia Endowment for International Peace July 17,2015 Emerging Leaders in The Heritage Foundation Program Foreign Policy July 22, 2015 Peoples Liberation Army KEI Program (PLA) Media Commentaries on North Korea July 28, 2015 Korea America Student Internationa Student Program Conference Conferences (ISC) July 30, 2015 Young Researchers Council on Asian Affairs Program Symposium (COAA) August 5, Future of Korea outreach in Kongdan (Katy) Oh Hassig, Meeting 2015 the U.S. "think-tank" Ph.D., Research Staff community Member, Institute for Defense Analyses August 6, Publications Mihae Kim, Principle / Art- Meeting 2015 Director: and Lauma

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Wingrove, Graphic Designer at Gimga Group August 13, U.S.-ROK Relations Seung-kyung Kim, Professor Lunch 2014 at the University of Maryland College Park August 13, Korea's Economy Hyoung Tae Kim, Visiting Meeting 2014 Scholar at The George Washington University August 20, Planning for Future of Korea Rachel Vogel, Director of Phone Call 2015 Program in Dallas, Texas Programs; and Alana Buenrostro, Program Manager, at the World Affairs Council Dallas Fort Worth (WACDFW) August 26, U.S.-ROK Relations Elaine Wilson, Director of Meeting 2015 Government Relations; and Samantha Schroeder, Director of Exeternal Affairs at the Foreign Policy Initiative (FPI) August 31, Planning for Future of Korea Seung Kim, Director at the Phone Call 2015 Program in St. Louis, Boeing Institute of Missouri International Business (BIU3)

Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM

Department of Justice (DO J) Report

Donald ManzuIIo

President & CEO

Korea Economic Institute of America (KEI)

Contacts from March 1,2015 - August 31, 2015

Manner of Contact: Meeting Forum/Program Dinner Lunch Breakfast Phone call Interview E-mail

Coffee with someone may be categorized as Meeting

U.S. government official or U.S. public Date Activity/Subject Matter Manner of contact contacted March 3, 2015 U.S.-Korea relations Bryan Davis, Director of Government Lunch Affairs and Contracts, Supply Core March 3,2015 U.S.-Korea relations Ambassador Sung Kim, Special Meeting Representative for North Korea Policy and Deputy Assistant Secretary of State for Korea and Japan March 3, 2015 South Dakota/Korea Paul Poteet, Senior Policy Advisor, Tax Meeting economic relations and Trade Counsel, Office of Senator John Thune (SD) March 6,2015 Colorado/Korea Igor Khrestin, Legislative Assistant, Meeting relations and Senator Cory Gardner (CO)

March 6,2015 Michigan/Korea Jason LaGpsh, Legislative Counsel, Meeting economic relations and Ani Toumajan, Legislative Aide, Office of Debbie Stabenow (MI) March 6,2015 Indiana/Korea economic Nick Catino, Legislative Assistant, Meeting relations Office of Senator Joe Donnelly (IN) March 6,2015 Kansas/Korea economic Theada Khrestin, Deputy Legislative Meeting relations Director and National Security Policy Advisor, Office of Senator Pat Roberts (KS)_ March 9,2015 Korean-American Rep. Grace Meng (NY-6th) and Program community engagement Rachana Shah, Legislative Assistant in Queens, NY and the

Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM

importance ofthe U.S. - Korea relationship March 12, 2015 North Korea's Use of Korea Economic Institute of America Program Re-defectors (KEI) March 17, 2015 How Washington The Honorable Charles Bass, Senior KEI Program Works Director, Greenberg Traurig, and Chris Nelson, Senior Vice President, Samuel's International March 17,2015 Congressional Michael Schiffer, Senior Advisor and KEI lunch/program Perspectives on Korean Counselor, U.S. Senate Foreign Unificiation Relations Committee March 17,2015 Washington's View on Scott Snyder, Senior Fellow for Korea KEI program the U.S.-Korea Alliance Studies and Director of the Program on U.S.-Korea Policy, Council on Foreign Relations, and Bruce Klingner, Senior Research Fellow,The Heritage Foundation March 17, 2015 Current State of U.S.­ Doug Paal, Vice President for Studies, KEI program China Relations Carnegie Endowment for International Peace and Jonathan Pollack, Senior Fellow, Center for East Asia Policy Studies, Brookings Institution March 18, 2015 Views ofthe U.S. Paul Kong, Director of International KEI Business Community on Division, U.S. Chamber of Commerce breakfast/program U.S.-Korea trade relations March 18,2015 State ofthe U.S.-Korea Claude Barfield, Resident Scholar, KEI program Economic Cooperation American Enterprise Institute, and George Hutchinson, Senior Regional Planner, SecuriFense, Inc, March 18,2015 North Korea Human Greg Scarlatoui, Executive Director, KEI lunch/program Rights U.S. Committee on Human Rights in North Korea (HRNK) March 18,2015 U.S.-Korea relations The Honorable Ed Royce (CA-39th), Meeting Chairman, Foreign Affairs Committee of the U. S. House of Representatives; and Representatives Randy Weber (TX-H*); Ileana Ros-Lehtinen (FL- 27th); Matt Salmon (AZ-5th); Scott DesJarlais (TN^*); Scott Perry (PA- 4th) Grace Meng (NY-6th); Charles Rangel (NY-13m); and Gregory Meeks (NY^) March 18, 2015 U.S.-Korea relations Senator Cory Gardner (CO), Chairman, Meeting Subcommittee on East Asia and the

Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM

Pacific ofthe Senate Foreign Relations Committee March 19,2015 U.S.-Korea trade Wendy Cutler, Acting Deputy U.S. Meeting relations Trade Representative March 18, 2015 U.S.-Korea relations Ambassador Sung Kim, Deputy Meeting Assistant Secretary for Korea & Japan and Special Representative for North Korea Policy, and Ambassador Bob King, Special Envoy for North Korean Human Rights Issues, U.S. State Department March 18,2015 U.S.-Korea security Sarah Mineiro, Korea Desk Director, Meeting relations U.S. Department of Defense March 18, 2015 U.S. Perspectives of Marcus Noland, Executive Vice North Korea President, Peterson Institute for International Economics; David Maxwell, Associate Director, Center for Security Studies, Georgetown University; and Ken Gause, Director, International Affairs Group, CNS Corporation March 26, 2015 Asian Perspectives on Chicago Council on Global Affairs Lunch/program U.S. Foreign Policy March 26,2015 Dealing with North KEI Academic Symposium Program Korean Provocations March 27, 2015 Korean and Japanese KEI Academic Symposium Program Development Assistance: trade with Southeast Asia March 28,2015 Economic and Political Rockford (IL) Global Affairs Council Program/dinner Upheaval in Asia: Shifting Alliances and Impact on America April 2, 2015 U.S- Korea Energy KEI Program Relations April 16,2015 Next Generation in KEI Program Nuclear Energy April 16, 2015 U.S.-Korea cooperation Tim Persons, Chief Scientist, U.S. Lunch in science Government Accountability Office (GAP) April 16,2015 U.S.-Korea cooperation Congressman Lamar Smith (TX-21st), Meeting in science Chairman, Science, Space and Technology Committee, U.S. House of

Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM

Representatives

April 16, 2015 U.S.-Korea cooperation Bart Gordon, Partner, K & L Gates, Meeting in science former Chairman House Science Committee April 23, 2015 U.S.-Korea relations KORUS Vision Group Program

April 29, 2015 U.S.-Korea relations Congressman Randy Forbes (VA-4th) Meeting

May 10, 2015 North Korea Overseas KEI Program Laborers May 18,2015 Future of Free Trade in KEI Program East Asia May 21, 2015 U.S.-Korea cooperation Tim Persons, Chief Scientist, GAO Meeting in science May 26, 2015 U.S.-Korea economic Lael Brainard, Federal Reserve Board Meeting relations of Governor June 10,2015 U.S.-Korea relations KEI Program

June 10,2015 Minority small business Latino Coalition Program issues June 11,2015 Russian Views of North KEI Program Korea June 18,2015 Korea's prospects for KEI and AMCHAM Korea Breakfast/program joining the Trans Pacific Partnership July 13 -15,2015 U.S.-Korea relations KEI's Opinion Leaders Seminar Program

July 15,2015 Future ofthe U.S.-ROK Carnegie Endowment for International Program Alliance and Northeast Peace (CEIP)/KEI Asia July 20, 2015 Legislative Oversight of The Honorable Peter Hoekstra (former Meeting the U.S. Intelligence Chairman of the Intelligence Community Committee of the U. S . House of Representatives) and Korean National Assemblyman JOO Ho Young . July 22,2015 The Views of the KEI Lunch/prOgram Chinese Peoples Liberation Army (PLA) of North Korea

Received by NSD/FARA Registration Unit 09/25/201• 5 6:08:54 PM Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM

Department of Justice (DOJ) Report

Mark Tokola

Vice President

Korea Economic Institute of America (KEI)

Contacts from March 1,2015 - August 31,2015

Manner of Contact: Meeting Forum/Program Dinner Lunch Breakfast Phone call Interview E-mail

Coffee with someone may be categorized as Meeting

Date Activity/Subject Matter United States government official Mariner of contact or United States public contacted 3/10/2015 U.S.-Korean Relations Mr. Jae Ku Meeting Director, Johns Hopkins University, SAIS/Korea Institute 3/17/2015 Unification of the Korean KEI Panel Discussion with Program peninsula Michael Schiffer, Senate Foreign ' Relations Staff 3/18/2015 U.S.-Korean commercial U.S. Chamber of Commerce, Program relations Washington 3/19/2015 U.S.-Korean diplomatic Ambassadors Club, DACOR Speech relations Bacon Foundation House 3/30/2015 U.S.-Korean energy Esther M. Bryan, Phone call cooperation Project Manager (on detail to Office of Electricity Delivery and Energy Reliability, Power Systems Engineering R&D) U.S. Department of Energy

4/6/2015 Wages and corporate Peterson Institute for International Program Behavior Economics (PILE) U.S.-Japan relations Sasakawa USA Foundation Program 4/7/2015 4/8/2015 Assessing North Korea's National Committee on North Program regime Korea (NCNK)

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4/15/2015 Lessons from the Euro crisis PILE Program

4/20/2015 North Korean overseas Roberta Cohen, Co-Chair, Board Email laborer rights of Directors, Committee for Human Rights in North Korea (HRNK) 4/24/2015 Development project Marina Coblentz, Deputy Head of Phone call management in Afghanistan Mission, International Rescue Committee (LRC), Kabul 5/7/2015 Political uses of World War II Johns Hopkins University, School Program History of Advanced International Studies (SAIS) Program 5/13/2015 Future of American Carnegie Endowment for Program predominance in the Pacific International Peace (CEIP) 5/15/2015 U.S. military sales to South Dana Marshall, President, Phone call Korea Transnational Strategies LLC 5/19/2015 Refugees from North Korea Paul Tyson, United States Foreign Email Service Officer (retired) 5/21/2015 Russian soft power and global U.S.-Asia Institute, George Program influence Washington University 5/22/2015 North Korean human rights Leslie Vinjamuri, Co-Director, Email Centre for the International Politics of Conflict, Rights and Justice Department of Politics and International Studies, School of Oriental and African Studies (SOAS), University of London 5/26/2015 Previewing the 2016 U.S. Bloomberg Webcast Webcast Presidential election 5/27/2015 Korea Economic Institute Maj. Gen. John Macdonald (ret.) Email (KEI) internship programs

6/16/2015 Russia and the Baltics Johns Hopkins SAIS Program

6/22/2015 U.S.-ROK Alliance Council of Foreign Relations Program (CFR) 7/1/2015 Changes in the Russian CEIP Program political system 7/7/2015 South Korea - Japan relations Center for Strategic and Program International Studies (CSIS) 7/17/2015 North Korean human rights Leslie Vinjamuri, Co-Director, Email Centre for the International

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Politics of Conflict, Rights and Justice Department of Politics and International Studies, School of Oriental and African Studies (SOAS), University of London 7/20/2015 North Korean human rights Leslie Vinjamuri, Co-Director, Breakfast Centre for the International Politics of Conflict, Rights and Justice Department of Politics and International Studies, School of Oriental and African Studies (SOAS), University of London 7/22/2015 Asian Infrastructure and Sasakawa Peace Foundation USA Program Investment Bank (AIIB) 7/27/2015 U.S.-Korean relations and Woodrow Wilson International Program Korean politics Center for Scholars 7/27/2015 Georgia State University Kim D. Reimann Email Korea Advisory Board Chair, Korea Task Force Associate Professor, Political Science Department Georgia State University

7/29/2015 Developments in North Korea Markus Garlauskas, National Lunch Intelligence Officer for North Korea, Office of the Director for National Intelligence 8/5/2015 Future of Korea outreach in Kongdan (Katy) Oh Hassig, Meeting the U.S. "think-tank" Ph.D., Research Staff Member, community Institute for Defense Analyses 8/12/2015 Thailand and changing CEIP Program politics of Southeast Asia 8/19/2015 Inter-American Development Ernesto Stein, Economist, Email Bank Inter-American Development Bank 8/26/2015 North Korea-South Korea Markus Garlauskas, National Email relations Intelligence Officer for North Korea, Office of the Director for National Intelligence 8/27/2015 Northeast Asia Peace and CSIS Program Cooperation Initiative

Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM

Department of Justice (DOJ) Report

Troy Stangarone

Senior Director of Congressional Affairs & Trade

Korea Economic Institute of America (KEI)

Contacts from March 1,2015 - August 31,2015

Manner of Contact: Meeting Forum/Program Dinner Lunch Breakfast Remarks Interview Reception E-mail Conference Call

• Coffee with someone may be categorized as Meeting

Date Activity/Subject U.S. government official or U.S. public Manner of contact Matter contacted March 2, 2015 U.S.-Korea trade Chris Nelson, Editor, The Nelson Interview relations Report March 3, 2015 U.S.-Korea relations Ambassador Sung Kim, Deputy Meeting Assistant Secretary for Korea & Japan and Special Representative for North Korea Policy, Department of State March 4,2015 Information on the Amy Chang, Professional Staff E-mail U.S.-Korea FTA and Member, House Foreign Affairs Congressional district Committee data March 9, 2015 U.S. - Korea economic Jordan Heiber, VP and Deputy Lunch . relations Representative, Bank of Tokyo- Mitsubishi UFJ March 10, 2015 U.S.-Korea Amy Chang, Professional Staff Meeting relations/introductory Member, House Foreign Affairs meeting Committee March 12,2015 Redefector press KEI program Program conferences in North Korea March 17, 2015 State ofthe South CCTV-America Interview Korean economy

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March 17,2015 How Washington The Honorable Charles Bass, Senior KEI Program Works Director, Greenberg Traurig, and Chris Nelson, Senior Vice President, Samuel's International March 17,2015 Congressional Michael Schiffer, Senior Advisor and KEI Perspectives on Counselor, U.S. Senate Foreign lunch/program Korean Unificiation Relations Committee March 17, 2015 Washington's View on Scott Snyder, Senior Fellow for Korea KEI program the U.S.-Korea Studies and Director of the Program on Alliance U.S.-Korea Policy, Council on Foreign Relations, and Bruce Klingner, Senior Research Fellow,The Heritage Foundation March 17, 2015 Current State of U.S. Doug Paal, Vice President for Studies, KEI program China Relations Carnegie Endowment for International Peace and Jonathan Pollack, Senior Fellow, Center for East Asia Policy _ Studies, Brookings Institution March 18, 2015 Views ofthe U.S. Paul Kong, Director of International KEI Business Community Division, U.S. Chamber of Commerce breakfast/program on U.S.-Korea trade relations March 18, 2015 State of the U.S.-Korea Claude Barfield, Resident Scholar, KEI program Economic Cooperation American Enterprise Institute, and George Hutchinson, Senior Regional Planner, SecuriFense, Inc. March 18,2015 North Korea Human Greg Scarlatoiu, Executive Director, KEI Rights U.S. Committee on Human Rights in lunch/program North Korea (HRNK) March 18,2015 U.S.-Korea relations The Honorable Ed Royce (CA-39ffi), Meeting Chairman, Foreign Affairs Committee ofthe U.S. House of Representatives; and Representatives Randy Weber (TXT 14th); Ileana Ros-Lehtinen (FL^*); Matt Salmon (AZS^); Scott DesJarlais (TN-4th); Scott Perry (PA-4th) Grace Meng (NY-6th); Charles Rangel (NY- 13th); and Gregory Meeks (NY-S^) March 18, 2015 U.S.-Korea relations Senator Cory Gardner (CO), Chairman, Meeting Subcommittee on East Asia and the Pacific of the Senate Foreign Relations Committee March 18,2015 U.S.-Korea trade Wendy Cutler, Acting Deputy U.S. Meeting relations Trade Representative

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March 18,2015 U.S.-Korea relations Ambassador Sung Kim, Deputy Meeting Assistant Secretary for Korea & Japan and Special Representative for North Korea Policy, and Ambassador Bob King, Special Envoy for North Korean Hiiman Rights Issues, U.S. State Department March 18, 2015 U.S.-Korea security Sarah Mineiro, Korea Desk Director, Meeting relations U.S. Department of Defense March 18, 2015 U.S. Perspectives of Marcus Noland, Executive Vice KEI Program North Korea President, Peterson Institute for International Economics; David Maxwell, Associate Director, Center for Security Studies, Georgetown . University; and Ken Gause, Director, International Affairs Group, CNS Corporation March 26, 2015 Asian Perspectives on Chicago Council on Global Affairs Lunch/program U.S. Foreign Policy March 26-29, 2015 U.S. relations with KEI Academic Symposium at 2015 Program Korea and Asia Association for Asian Studies in Chicago _ March 30, 2015 Data on the U.S.-Korea Amy Chang, Professional Staff E-mail FTA Member, House Foreign Affairs Committee April 2, 2015 U.S- Korea Energy KEI Program Relations April 6, 2015 U.S.-Korea relations Duyeon Kim, Associate, Carnegie Lunch Endowment for International Peace April 6,2015 Congressional Trip to Congressman Charles Rangel and Conference Call South Korea Hannah Kim, Communication Director, Office of Rep. Charles Rangel April 7-8,2015 U.S.-Korea relations KEI Future of Korea Program in Remarks and unification Milwaukee, Wl April 7, 2015 U.S.-Korea relations International Focus, Milwaukee Public Interview Television April 13-15,2015 U.S.-Korea relations KEI Future of Korea Programs in Remarks and unification Brookings and Aberdeen, South Dokota April 16, 2015 U.S. policy options for KEI Event with Stephen Bosworth, Remarks North Korea Senior Fellow, Belfor Center, Harvard University and Marcus Noland, Execuitive Vice President and Director of Studies, Peterson Institute for International Economics April 16,2015 U.S.-Korea autos Daniel Malone,Of Counsel, Butzel Long Meeting issues

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April 20, 2015 U.S.-Korea relations Duyeon Kim, Associate, Carnegie Lunch Endowment for International Peace April 20, 2015 U.S.-Kore energy Florence Lowe-Lee, President, Global Meeting relations America Business Institute April 22, 2015 U.S.-Korea Economic Julie Yang, Senior Manager, Policy and Conference Call relations for Programs, Japan and Korea Georgetown talk April 22, 2015 Korea's major trade Mireya Solis, Philip Knight Chair in E-mail agreements event Japan Studies, The Brookings Institution April 22, 2015 Chinese reports on Victor Beattie, Editor, Voice of America Interview North Korea's nuclear program April 23, 2015 U.S.-Korea relations U.S.-Korea Joint Vision Group Meeting April 24, 2015 U.S.-Korea economic Georgetown University Executive MBA Remarks relatons programs April 27-29, 2015 Global financial Asan Plenum Remarks reform April 28, 2015 Korea's major trade Derek Scissors, Resident Scholar, E-mail agreements event American Enterprise Institute April 29, 2015 Korea's major trade Edward Alden, Bernard L. Schwartz E-mail agreements event Senior Fellow, Council on Foreign Relations April 30, 2015 U.S.-Korea economic Amy Jackson, President, AMCHAM Meeting relations Korea May 1,2015 U.S.-Korea relations Brian Port, Director of Strategy, U.S. Meeting Forces Korea \ May 6, 2015 KEI Advisory Council Stephen Bosworth, Senior Fellow, Conference Call Belfor Center May 6, 2015 Upcoming North T. Kumar, International Advocacy E-mail Korea overseas Director, Amnesty International laborers event May 12,2015 North Korean overseas KEI event co-sponsored with the Remarks laborers Database Center for North Korean Human Rights May 14, 2015 Pre-U.S.-Korea Paul Kong, Director, Korea-japan, U.S. E-mail summit event Chamber of Commerce Korea's major trade KEI event - Future of Free Trade in Remarks May 18,2015 agreements Asia May 18,2015 U.S.-Korea relations Victor Beattie, Editor, Voice of America Interview May 21,2015 Humanitarian KEI University Program at the Remarks assistance in North University of California - San Diego Korea May 26, 2015 Upcoming pre-U. S.­ Evans Revere, Nonresident Fellow, E-mail Korea summit event Brookings Institution June 10,2015 U.S.-Korea relations KEI Event - Future Prospects for U.S. Remarks Korea relations

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June 18,2015 U.S.-Korea economic KEI Program relations June 24, 2015 Congress and U.S. Foreign Service Institute, U.S. Remarks Korea economic Department of State relations June 25,2015 Korean unification and Annual Conference ofthe International Remarks the issues of energy Council oh Korean Studies and the environment July 7,2015 Samsung quarterly Bloomberg News Interview earnings July 13-15 U.S.-Korea relations KEI Opinion Leaders Seminar Program and North Korea July 20, 2015 U.S.-Korea relations Meridian Center U.S.-Korea Remarks Congressional Exchange Program July 22, 2015 China-North Korea KEI Event - Deciphering PLA Media Program relations Commentaries on North Korea: AU Show or Real Talk? July 22, 2015 U. S. -Korea relations Meridian Center U.S.-Korea Reception Congressional Exchange Program July 23,2015 U.S.-Korea energy Ben Priddy, Advisor, International Meeting issues Government Affairs, Chevron

July 24, 2015 Korea-China economic Global Business Dialogue Event - Remarks relations FINANCE AND CHINA'S SOFT POWER: A Look at the Future of the RMB and Other Items in China's Toolbox August 5,2015 Korea-India-U.S. event Ashley Tellis, Senior Associate, E-mail Carnegie Endowment for International Peace August 5, 2015 U.S.-Korea economic Deborah Waggoner, Director, Public Meeting relations Policy, and Timothy Regan, Senior Vice President, Global Government Affairs, Corning Incorporated August 7, 2015 Upcoming U.S.-Korea- Scott Snyder, Senior Fellow for Korea Conference Call India event Studies and Director ofthe Program on U.S.-Korea Policy, Council on Foreign Relations August 12, 2015 Women's issues in Seung-Kyung Kim, Lunch Korea Professor and Chair Women's Studies Department & Director, Center for East Asian Studies University of Maryland

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August 13,2015 U.S.-Korea relations William Brown, Senior Advisor to the Meeting East Asia and North Korea Mission Managers, Office of Director of National Intelligence August 19,2015 Congress and U.S.­ Foreign Service Institute, Department of Remarks Korea Economic State Relations August 22, 2015 East Asian Financial Harvard Project for Asian and Remarks Issues International Relations annual conference August 27, 2015 Mid-career Amy Jackson, President, AMCHAM Meeting professionals program Korea August 31, 2015 Upcoming Future of Beoing Institute at St. Louis University Conference Call Korea KEI program in St. Louis, MO

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The Peninsula Blog March 1, 2015-August 31, 2015

Three Years of the Implementation of the KORUS FTA: A Korean View

Posted on 10 March 2015.

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This is the first part in a three part series on the U.S.-Korea Free Trade Agreement. The second part ofthe series can be found here and the third part here.

By Taeho Bark

The United States (U.S.) used to be always the largest export market for the Korean products during 1970s and 1980s. The proportion of Korea's exports to the U.S. once reached almost 50%. However, since the mid-1990s, it has continuously declined and recently went down to the 10% level. On the other hand, Korea's exports to China have rapidly increased and China has become Korea's number one trading partner since 2005. Moreover, the market share ofthe Korean products in the U.S. has decreased. This reflects that Korean products are losing their competitiveness against products from Japan, China, South East Asian countries and so on in the U.S. market, the most advanced and largest in the world. Some trade experts in Korea worry that losing competitiveness in the U.S. market could become a fundamental obstacle to Korea's future economic growth. The Korean government probably had thought that it would be important to reverse the deceasing trend of Korea's export to the U.S. market. This seems to be one ofthe main motivations for the Korean government to decide to pursue the KORUS FTA ten years ago.

March 15th marks the third anniversary ofthe implementation ofthe KORUS FTA. The bilateral trade between Korea and the U.S. has increased by 1.1% in 2012,1.7% in 2013, and 11.6% in 2014. The numbers do not seem to represent a large leap, but considering the recent world economic recession, it is worth mentioning that the KORUS FTA has been positively impacting Korea-U.S. trade relations. Korea's exports to the U.S. have been constantly increasing; especially in 2014, when they increased by 13.3%. Exports from the U.S., however, decreased both in 2012 and 2013 but increased by 9.1% in 2014. The positive trade performance of Korea seems to have created some concerns in the U.S. that the KORUS FTA is working only in favor of Korea.

However, if we take a closer look, any of these concerns can be dispelled. From the Korean side, exports of those products that have been benefited from tariff cuts or eliminations through the KORUS FTA have increased without

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exception. However, exports of products such as telephones for wireless networks and semiconductors, which were originally subjected to zero tariffs in the U.S., have not expanded much. In the case of the U.S., exports of agricultural and pharmaceutical products to Korea have increased by benefitting from the KORUS FTA. At the same time, the U.S. exports of products that were already subjected to zero tariffs in Korea, such as semiconductors, aircrafts and parts thereof, have actually declined. And so, it is those products that have been profited from the KORUS FTA that have shown better trade performances. This is convincing evidence that the KORUS FTA has been working properly for both countries.

Furthermore, trade between Korea and the U.S. is influenced by many other factors as well. Especially, the macroeconomic situation significantly influences each country's trade performance. The U.S. is concerned about its increasing trade deficit against Korea; but this can be a representation of strong recovery of the U.S. economy. On the other hand, a little expansion of Korea's imports from the U.S.. may reflect the mere fact that the Korean economy is recovering slowly. Meanwhile, in services trade, the U.S. is achieving large trade surpluses against Korea. If trade in goods and services is combined, the trade imbalance between the two countries is not serious at all.

There have been several issues raised in the process of implementing the KORUS FTA. The U.S. pointed out the Korean customs authorities are excessively strict, regarding their proof of origin system as applied to American automobiles and some processed foods like orange juice. Washington further complained that the Korean government's policy on gas emissions for the purpose of environmental protection is tod burdensome. Korea, for its part, drew the United States' attention to its insufficient progress on the issues of outward processing zones including the Kaesong Industrial Complex as well as the mutual recognition of professional services providers. Fortunately, such issues as mentioned above are being effectively discussed in the appropriate committees and working groups which were established when the two governments started the implementation of the KORUS FTA.

Lastly, but not least, both Seoul and Washington should pay attention to the Korea-China FTA which is nearing official conclusion. If Korea adds China to its FTA network, Korea will become one of the few countries which have FTAs simultaneously with the U.S., the European Union and China. If American firms set up manufacturing facilities or R&D centers in Korea, they can export their products to the mainland China using the Korea-China FTA. By doing so, they can substantially reduce transportation costs and customs duties. Now is the time for Korean and American entrepreneurs to work together to penetrate into the rapidly growing China market.

It is too early to make a comprehensive assessment of the performance of the KORUS FTA after only three years. Nevertheless, the trade relations between the two parties for last three years remain solid and are expected to expand in the future. We must understand that the overall performance of an FTA is critically dependent on how firms utilize the opportunities provided by the FTA. In this context, we would like to see more firms from both Korea and the U.S., particularly small and medium-sized enterprises, utilizing the KORUS FTA. We would also like to see closer collaborations among the business communities of the two countries.

Taeho Bark is a Professor in the Graduate School of International Studies at Seoul National University. He previously served as the Minister for Trade for the Republic of Korea from 2011-2013. The views expressed here are the authors alone.

Photo from Chris Humphrey's photostream on flickr Creative Commons.

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Third Anniversary ofthe KORUS FTA: What Does the KORUS FTA Mean for Services?

Posted on 11 March 2015. Tags: economics. Korus FTA. trade

This is the second part in a three part series on the U.S.-Korea Free Trade Agreement. The first part can be found hereand the third part here.

By Peter Allgeier

Free trade agreements such as the KORUS FTA certainly aim to expand bilateral trade flows, and that usually is where the public and politicians devote the most attention. But the greater contribution of such agreements is in improving the global competitiveness of each partner. That is especially true today, in the world ofthe Internet, global value chains, and the integration of services and manufacturing.

In this regard, the KORUS FTA is the world's most modern free trade agreement. It was negotiated in the context of two revolutions: the Services Revolution and the Digital Revolution. These are two symbiotic revolutions, and the KORUS FTA is helping both the United States and the Republic of Korea to position themselves to take maximum advantage of those two revolutions for the prosperity of our citizens.

The Services Revolution is having as dramatic an effect on our work lives and daily lives as the Industrial Revolution of 100-150 years ago. Services account for the largest share of GDP (70 percent of world GDP), the world's largest employer (3.2 billion jobs), and the source of most job growth. The numbers are impressive, but the revolution is more than just numbers of workers or share of GDP. The most important thing to recognize is that all businesses—small and large—and all segments ofthe economy, including agriculture, manufacturing, and energy, depend on services to be successful. Services are the enablers of all other economic activities.

The integration of services with manufacturing and agriculture is what produces global value chains, in which enterprises and countries specialize in tasks rather than goods. Manufacturing jobs depend on services. For example, GE, Hyundai, Samsung, and Boeing depend on services workers in their own companies or from outside service suppliers—in accounting, finance, product design, distribution and logistics, advertising, computer-related services, telecommunications, and express delivery, just to name a few.

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Recently the WTO and OECD, by looking more closely at the services value added in manufactured goods, determined that the share of services in international trade really is 45 percent, rather than 23 percent, as previously reported. Greater than either manufacturing or farming.

At the center of the services revolution is the Digital Revolution, of which the Internet is emblematic. The Internet is the Great Silk Road of the 21st century. Just as the Great Silk Road provided the transmission route for trade among Asia, Europe and North Africa during the 6th thru 14th centuries, the Internet today plays that role for the entire globe. In this digital age, companies in international markets constantly move data digitally across the globe for their own internal operations and in serving their customers. While this may be obvious in the case of insurance firms processing claims or accounting firms verifying and reviewing audits, it is actually essential for any international business. For example, think of express delivery companies tracking packages across the globe or an airline company remotely monitoring its engines' efficiency while the planes are in flight. Retailers have to manage their worldwide procurement and inventory. Health professionals seek second opinions from specialists across the globe.

This has enabled services to be delivered digitally across borders to a degree that was unimaginable twenty years ago. Keep in mind thatAmazon.com was only founded in 1994, and Facebook was founded ten years later. None of this was contemplated twenty years ago in the GATS (General Agreement on Trade in Services). The international rules and provisions governing trade in services have not kept up with these developments. They urgently needed to be Updated. The world has changed radically in the intervening years as a result of technological advances, global data flows, innovative business practices, and the widespread use of the Internet by everyone.

The KORUS FTA has taken a big step in that direction. Under the KORUS FTA barriers in services trade and foreign investment are being reduced or completely eliminated, especially in financial services, telecommunications, and professional services.As a result of these changes, U.S. services exports to Korea in 2014 exceeded $20 billion, an increase of nearly 25 percent since 2011 .In addition, the KORUS FTA requires both parties to:

Provide national treatment arid most favored nation (MFN) treatment to services imports from one another; Promote transparency in the development and implementation of regulations in services; Prohibit limits on market access, such as limits on the number of service providers in a given line of business or on the total value of services provided; and Prohibit restrictions on the type of business entity through which a foreign service firm provides its services (e.g., subsidiary, branch, or joint venture).

In addition to the advances in the KORUS FTA, Korea and the United States now are leading the way in the ongoing negotiations of the Trade in Services Agreement (TiSA) in Geneva in developing the rules for trade in services for the next decades.

Along with their commitments on market access for services in the KORUS FTA, they are setting the stage for their global competitiveness in the coming years. This is at least as important a benefit from the KORUS FTA as the changes in bilateral trade volumes.

Peter Allgeier is the President ofthe Coalition for Services Industries. The views expressed here are the author's alone. Photo from CLUC's photqstream on flickr Creative Commons.

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KORUS and EUKOR On Automotive: Progress, But Not There Yet

Posted on 12 March 2015. Tags: economics, FTA, Korus FTA, trade

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MB mm » /yt-vriiiimi T/7/s /s the third in a three part series on the U.S.-Korea Free Trade Agreement. The first part can be found here and the second part here.

By Daniel P. Malone

March 15, 2015 marks the third anniversary of the Korea - U.S. Free Trade Agreement (KORUS). July 1, 2015 will be the fourth anniversary of the Korea - European Union Free Trade Agreement (EUKOR). Some anniversaries are celebrated. Others merely provide the opportunity to assess - e.g. what has gone well, what remains unfinished. With only three - or even four - years behind them, these anniversaries fall into the latter category. But now seems a good time to take a snap shot of where things stand.

KORUS and EUKOR are comprehensive bilateral trade agreements. Both required considerable time and effort to negotiate. The trade negotiators of the participating nations were not writing on a blank slate. During 1998 - 2000, South Korea suffered through and recovered from ari economic collapse. During 2008 - 2009, the United States experienced a similar meltdown and recovered. More recently, the European Union has struggled to shake off economic malaise. The cornerstone of these agreements is the belief that facilitating international trade would better position these nations going forward.

In the automotive industry, prior to these agreements, South Korean exports of vehicles were substantial. In 2011, South Korea exported just under 600,000 passenger vehicles to the U.S. and more than 400,000 vehicles to the E.U., whereas the U.S. and E.U. exported only 8252 and 77,849 vehicles, respectively, to South Korea, a market with annual sales just over 1.5 million. While both agreements promote trade, no trade agreement resolves that magnitude of imbalance in only a few years! Not surprisingly, these have not. To expect as much is fanciful. The more accurate, realistic measure is to examine whether the agreerrients have improved trade and eliminated troublesome impediments. On this third anniversary of KORUS - and soon-to^arrive fourth anniversary of EUKOR - the impact of these agreements on the automotive industry remains modestly encouraging. Trade impediments are often characterized as tariffs or non-tariff barriers (NTBs).

In the hyper-competitive automotive industry, price matters. Tariffs affect the price of imported vehicles and components. Both agreements aggressively and successfully addressed tariff reduction or elimination. For example,

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the E.U.-Korea agreement immediately eliminated 82 percent of Korea's tariffs and 94 percent of the E.U.'s tariffs; arid by July 1, 2016, all tariff duties on vehicles will be eliminated. The KORUS FTA, on the other hand, eliminated some tariffs immediately and Will eliminate virtually all automotive tariffs by 2017. So, progress on tariff reduction and elimination has been both material and encouraging.

NTBs, however, are another matter. For example, differences in regulations and standards present far thornier impediments. Idiosyncratic or unwarranted differences in regulatory requirements can be used to delay imports at the border over trivial technicalities. They can also unfairly limit access to domestic markets and effectively undermine the spirit, if not the letter, of trade agreements. One such critical area concerns safety standards. The impact of regulatory performance standards on global competitiveness combined with the complexity of the global automotive industry creates an interdependency between national regulations and international trade. This interrelationship mandates careful attention to how national safety and environmental requirements are developed and enforced. EUKOR and KORUS have taken differing approaches to addressing such crucial issues.

EUKOR relies predominantly on harmonized regulations facilitated by WP.29, the UN World Forum for the Harmonization of Vehicle Regulations. WP.29 has evolved into the world's most important venue for the development of automotive regulatory requirements. Its harmonized UN regulations (f/k/a ECE regulations) were recognized as the equivalent to Korean safety standards. EUKOR further provides that, during a five year "phase in" period, South Korea will align its regulations with UN regulations. For regulations that fall outside of WP.29's scope, South Korea has committed to ensuring that those regulations would not be enforced in a manner that limits access to its domestic market. While encouraging, European automotive manufacturers have expressed concern that South Korean NTBs are frustrating the underlying purpose of EUKOR to facilitate trade.

KORUS, on the other hand, addresses the development and enforcement of safety standards by allowing export sales to South Korea of up to 2S.0O0 vehicles per manufacturer if the vehicles meet or exceed applicable U.S. safety standards. KORUS further requires that South Korea provide "early notice" for arty proposed new regulations. To date, several such proposals by South Korean agencies have been contested by importers including, but not limited to, proposals regarding: self-certification of auto parts and equivalence; end of vehicle life responsibilities; unlimited scope of warranty/recall responsibilities; parts rules (e.g. certification, registration, and marking); notice regarding foreign recalls; VIN stamping; fuel economy tailpipe emissions audits; and proposed elimination of Table 4, which recognizes certain E.U. and U.S. safety standards as equivalent to Korean standards. In July 2014, at a U.S. Senate hearing on KORUS, a U.S. manufacturer's representative testified that, "Although the U.S. government has engaged actively to address Korean NTBs in Korea, these NTBs have created a climate of regulatory uncertainty that has thwarted U.S. automakers' plans."[1] In a similar vein, a representative of a U.S. business association asked, ^Why are Korean safety tests to evaluate automotive components not used anywhere else in the world?"[2] Of note, however, is that several other Korean proposals-e.g. Bonus Malus program (e.g. tax on larger, "more polluting" cars), C02/Emissions targets - are opposed by foreign and domestic automakers.

For both the U.S. and the E.U., progress on NTBs has been less robust than on tariff reduction. Clearly, issues remain. As a result, proponents and opponents view these agreements through different lenses. For example, some question whether these agreements have resulted in job losses. Others challenge whether they have leveled previously existing imbalances on the field of competition. Still others wonder whether the agreements have been good for all of the respective nations and their manufacturers. In that regard, if is imperative to keep certain realities in focus. First, free trade agreements are not panaceas for challenges that the industry has always wrestled with. For example, free trade agreements do not cure lack of consumer demand, overcapacity, supply chain logistics, or lack of overall market strength, among many other issues facing the industry. In addition, free trade agreements, do not "raise all boats". Clearly, differentiating technologies, raised efficiencies, and overall marketing strategies largely separate winners from the rest. Not surprisingly, debate over the merit of these agreements continues and likely will for some time.

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The realistic expectation for these agreements was that foreign manufacturers would see large percentage increases ofthe traditionally small numbers of foreign-made vehicles sold in South Korea, the world's twelfth largest market. That is essentially what has happened. Vehicle imports made up 3 percent of automobiles sold in South Korea a decade ago. They now comprise 14 percent. German cars accounted for 71 percent of those sales.[3]

Country USA Europe Japan

2011 8,252 (7.9%) 77,849 (74.1%) 18,936(18%)

2012 9,724(7.4%) 97,210 (74.3%) 23,924 (18.3%)

2013 11,657(7.4%) 122,798(78.5%) 22,042(14.1%) 2014 14,465(7.4%} 157,801(80.4%) 24,093(12.3%) See, KAlDA (2015).

Initially, it appeared that Japan, while not a signatory to either agreement, might paradoxically reap the greatest benefits given Japanese manufacturers' considerable manufacturing presence in the U.S. and E.U. But that has not materialized for a variety of reasons (e.g. recalls, geo-political considerations).

U.S. manufacturers, while experiencing steady sales, have yet to make such robust inroads. These figures raise the question: why not? In addition to the aforementioned regulatory uncertainty, three reasons come to mind. First, Korean consumers, especially adult males, currently consider BMW, Mercedes, and Porsche to be best in class. Second, European automakers like Volkswagen have been quicker to bring smaller, fuel efficient cars to the Korean market. Finally, German automobile manufacturers have built a long-term preferential relationship with Korean consumers. Given the commitment that U.S. automakers are making to the South Korean market, the above market shares and total sales will likely change.

Overall, in roughly three years, these free trade agreements have contributed to increased acceptance among South Korean consumers of foreign vehicles, especially in the luxury vehicle segments. According to the Korean press, Korea's market for luxury vehicles is ranked among the world's top five markets. One industry representative observed that Korean "consumers are turning their eyes to foreign makes."[4] That is huge! At the moment, automakers from the E.U. - primarily Germany - have a corhfortable lead in sales. In luxury brand imports to South Korea, Germans automakers have far outpaced any other nation's.

Company 2011 2012 2013 2014

Audi Group 10,345 15,126 20,044 27,647

BMW 23293 28152 33066 40174

Mercedes Bern 19,543 20,389 24,780 35,213

Porsche 1301 1516 2041 2568 See, KAIDA (2015).

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With regard to South Korean manufacturers, their vehicles have continued to sell well in both the E.U. and U.S. markets. They have also wisely localized production in both markets. As they continue to do so, Korean automotive manufacturers' "dependence" upon these trade agreements will likely diminish. Parenthetically, it is difficult to understand claims by KORUS opponents that the agreement has adversely affected, let alone "devastated", the U.S. automotive economy as the vast majority of Korean automobiles currently sold in the U.S. are made in the U.S. (i.e. not linked to KORUS at all). Korean automakers and component suppliers are major employers in both markets. What lies ahead? The global automotive industry and nations' efforts to regulate it continue to evolve. Many other trade agreements in that region are well along in either the negotiation process or ratification. These include: the Trans-Pacific Partnership (TPP), which does not include South Korea and began negotiations before KORUS and EUKOR took effect; the Korea - China Free Trade Agreement, which has been agreed to but not yet ratified; the Canada - Korea Free Trade Agreement, which is now in effect; and the proposed Korea - Japan - China Free Trade Agreement, which is currently mired in negotiations. Each may impact EUKOR and KORUS. When these trade efforts are viewed collectively, it is clear that indisputable progress in market access and regulatory fairness will be crucial. Moreover, notwithstanding what the U.S. does or does not do, others are taking action. At the end ofthe day, though, the products themselves - and the efficient delivery and servicing of them - that automotive manufacturers offer consumers will likely differentiate winners from the rest of the industry.

Are we "there" yet? In a word, ho. Substantial work remains, especially in regard to NTBs. South Korea's automotive manufacturers will continue to do well in the E.U. and U.S. markets. Likewise, measurable progress has been made by European and, to a lesser extent, U.S. automotive manufactures in penetrating the South Korean market. Processes have been established to address and mitigate future NTB disputes by providing, among other things, "early notice" of proposed regulatory rulemaking. Significantly, both KORUS and EUKOR contain transparency provisions throughout. Transparency promotes constructive interaction. As Korean regulators propose new safety and environmental standards, all will benefit from proceeding in as transparent and inclusive a manner possible. This is why the automotive industry should be modestly encouraged by the brief history of these two bilateral trade agreements.

Daniel P. Malone, an attorney with the Detroit-based firm Butzel Long, is the firm's Director of Korean Client Relations. He has travelled to South Korea extensively and has considerable experience representing the interests of both Korean and domestic automotive suppliers. Among other things, he also serves as a consultant to the Michigan Economic Development Corporation (MEDC) on South Korea's automotive industry.

Photo from wwian's photostream on flickr Creative Commons.

[1]See, Testimony of Stephen E. Biegun, U.S. Senate Committee On Finance, Trade Subcommittee, July 29, 2014. [2] See, Kirk, No Chorus for KORUS, Forbes.com (July 25, 2014). [3] Hyunjoo Jin, Foreign Imports Erode Sales of South Korean Automakers, New York Times, Nov. 17, 2014. [4] Hyunjoo Jin, South Korea turns up the heat as foreign automakers make inroads, Reuters.com, June 13, 2013.

Three Questions Behind Korea's Decision to Join the Asia Infrastructure Investment Bank

Posted on 30 March 2015. Tags: china, economics

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By Mark Tokola

One March 26th newspaper headline read: "South Korea Seeks Membership in Asian Infrastructure Investment Bank." Another newspaper's headline read: "Decision to Join China-Led Bank Tests South Korea's Ties to U.S." The latter probably drew more readers because, face it, stories about multilateral lending institutions rarely stir excitement. Stories about potential rifts between the U.S. and its allies, on the other hand, feed ah ongoing demand to keep a scorecard of countries' standings in the international leagues. There is a significant story behind the headlines about Korea applying to be one ofthe founding members ofthe Asian Infrastructure Investment Bank (AIIB), but it is to be found in the answers to three questions, none of which is whether South Korea likes the United States or China best.

Will the AIIB fill a real need? The Asian Development Bank (ADB) estimated in 2009 (long before the AIIB was proposed) that during the decade beginning in 2010, between $8 and $13 trillion would need to be invested in infrastructure to keep Asia oh its development track. The ADB itself has $160 billion in its capital base. The World Bank has $223 billion. And, the ADB and World Bank lending programs support objectives such as environmental protection and gender equality, not just infrastructure development. The AIIB's additional $50 billion in capital, focused on infrastructure, will not close the gap between available capital and needed infrastructure investment spending, but it will help narrow it. That, by the way, is what U.S. Treasury Secretary Lew has been saying all along: more capital, under the right conditions, is a good thing. U.S. Treasury Under Secretary Nathan Sheets has said: "The U.S. would welcome new multilateral institutions that strengthen the international financial architecture." The World Bank, IMF, and ADB have all welcomed the AMB.

Why have there been concerns about the AIIB? Following Xi Jinping's speech in October 2013 proposing the AIIB, there was concern that a China-dominated lending bank might fail to meet the international standards set by the World Bank and regional development banks in transparency, responsible lending, and sustainability. These concerns were not irrational given China's record of opaque lending to developing countries, and in light of the economically unnecessary and unviable infrastructure projects that China has undertaken at home and abroad. China has heard this potential criticism ofthe AIIB arid has insisted that it will meet international standards. Given the AIIB membership - now to include the UK, France, Germany, New Zealand, Singapore, and other countries with international lending experience there will be plenty of internal scrutiny to hold the AIIB to its commitment to high standards.

Why has the Republic of Korea joined the AIIB? Korea was not among the initial founding countries, perhaps waiting to see what other countries decided to do. Given that it will now be part of a group of liberal, market economies in the AIIB, that clearly is more comfortable than being in the AIIB with few fellow OECD members. Korea also looks to expand its already considerable overseas construction activities. Being part of the AIIB is one way of making sure that Korean firms have support in their bids on Asian infrastructure projects. Does this means a rift between Seoul and Washington? U.S. officials have asked that countries signing up to be part of the AIIB make efforts to, ensure that the bank operates according to high international standards. The Korean government, in making its announcement to join,

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said that it will help the bank set "high level standards that are in line with those of existing multilateral development banks in responsibility, transparency, governance, and debt sustainability." Far from being at odds, that sounds like two governments that are in agreement about what they expect of the AIIB.

Moises Nairn in his astute book "The End of Power" offers the very wise advice that commentators on international affairs "should get off the elevator." The obsession with who is up and who is down is so woven into our intellectual fabric that it can get in the way of more productive thinking. Relations between China and the United States are not a zero sum game. If China succeeds in doing something that serves the world well, such as putting its massive capital holdings to productive use, that would be a good thing. By starting the AIIB, China is on the hook to make it a success. If South Korea can help them do that, it will be good for all of us.

Mark Jokola is the Vice President ofthe Korea Economic Institute of America. The views expressed here are his own. Photo from SoundTransit's photOstream on flickr Creative Commons.

A Balanced Approach to North Korea

Posted on 01 April 2015. Tags: diplomacy, military affairs, nuclear weapons m x i :ll

By Matthew Nrtkoski

According to former National Assembly Speaker Park Kwan-yong, the United States will soon turn away from its North Korea denuclearization strategy and focus on nuclear non-proliferation issues. His comments come at a time when North Korean advancements in warheads and delivery mechanisms are forcing regional states to reassess their capabilities and reconsider their long-standing defensive arrangements. According to Park, a former Saenuri Party official and presidential chief of staff, it will soon be impossible for the U.S. to launch a military attack on a nuclear- armed North Korea without facing a retaliatory strike. Although Washington has not signaled any intended shift in foreign policy, the rapidly changing East Asian security environment and the failure of current strategies necessitate a recalibration of the current U.S. position on North Korea.

Since 2009, the United States has utilized economic sanctions, international isolation, and jointmilitary exercises in an attempt to force Pyongyang to forego nuclear weapons development. While this stance has strained North Korea's economy and severely limited its choices of trading partners, it has done little to halt the regime's inexorable march towards obtaining advanced nuclear warheads and delivery mechanisms. North Korea currently possesses short and intermediate range ballistic missiles that can strike most major cities in Northeast Asia and experts estimate that it has somewhere between four and eight nuclear weapons in its stockpile. In addition, U.S. military planners have warned of

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an advanced long-range missile program that, once completed, will allow the regime to target cities on the West Coast of the United States.

The U.S. has responded to these developments by urging South Korea to join its ballistic missile defense system. The Terminal High Altitude Area Defense system, better known as THAAD, would act as a deterrent against any nuclear attacks aimed at South Korea, but would do little to discourage Pyongyang from continuing its military modernization. The proposed U.S. led missile defense system, coupled with current isolation tactics and sanctions, provide little incentive for North Korea to abandon its weapons programs and reengage in six-party talks. With Pyongyang steadily moving ahead with its weapons programs and nuclear advancements, the U.S. must couple diplomatic overtures with its hard line stance in order to coax North Korea into approaching the negotiating table.

While the missile defense system is ostensibly aimed at deterring North Korea, the proposed THAAD system is also unsettling South Korea's neighbors. Seoul and Beijing have enjoyed improved relations since President Park Geun- hye's election in 2013, but the missile defense system presents a potential stumbling block for their relationship. China is concerned that a missile defense system placed in South Korea would limit the PLA's ability to project power and influence into the East China Sea. Additionally, many within China view THAAD as yet another U.S. attempt to exert regional hegemony and contain Chinese military power. The Blue House insists that Washington is not pressuring it to deploy the advanced missile defense system, but there is clearly a growing divide within Korea over how to deal with increasing North Korean capabilities. Beijing is not content to stand by idly, and reports indicate that China may be offering South Korea improved trade and business deals in exchange for Seoul's rejection of THAAD deployment. Clearly, security issues are a top priority for South Korea and the United States, yet the tough, hardline approach towards the North Korean nuclear program has not increased regional security or reined in Pyongyang's ambitions. Unless the U.S. can force Kim Jong-un into making credible concessions and commitments to safeguarding nuclear material and limiting nuclear developments, regional governments will be forced into making tough security decisions to guarantee their own safety. While South Korea and Japan have foresworn developing nuclear weapons, China's growing power and North Korea's nuclear program could provide ample impetus for starting domestic nuclear programs. This situation currently seems far fetched and unlikely, but regional governments must take into consideration what could happen to Pyongyang's arsenal if the government collapsed or lost control.

The above evidence suggests that Washington needs to rebalance its approach to North Korea, however, President Obama's recent comments concerning totalitarian regime collapse indicate that the White House still favors a hardline towards the rogue state. Indeed, the president's statement did more to reveal the White House's uncertainty about North Korea than to allay key allies' security concerns. With the president acknowledging that the U.S. has nearly exhausted its repertoire of economic sanctions, Washington needs to consider alternative measures.

The U.S. must utilize a new set of diplomatic and economic tools along with strict security measures in order to encourage North Korea to accept some limits on its nuclear program. Park Kwan-yong's recent statement is a realistic appraisal of North Korea's nuclear and technological developments. North Korea seeks begrudging acceptance as a nuclear power much like Pakistan did in the 1970s and 80s, and, with Pyongyang pushing ahead with development and production, the U.S. must alter its tactics and accept that coercion will not deter Kim Jong-un from nuclear developments.

THAAD and annual military drills are important for regional security, but Congress should take note of the important progress made in nuclear discussions with Iran arid improving relations with Cuba. The current policy of "strategic patience" has not halted North Korean nuclear development, and the U.S. should offer some concessions to coax Pyongyang back to the negotiating table. An isolated, nuclear armed Kim regime is a grave threat to security, and bringing rogue states back into the international order should be the top priority for the U.S. and its allies.

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Matthew Nitkoskl is a MA candidate in International Affairs at the Elliot School for International Affairs at George Washington University and an intern af the Korea Economic Institute of America. The views expressed here are the author's alone.

Photo from Marcelb Druck's photostream on flickr Creative Commons, March 2015: Backwards Steps in Inter- Korean Relations

Posted on 09 April 2015. Tags: diplomacy, economics. Kaesong Industrial Complex, military affairs

By Nicholas Hamisevicz

March was expected to be a difficult month for inter-Korean relations with the joint U.S.-ROK military exercises taking place and the lack of progress between the two Koreas inJanUary and February. Unfortunately, events in March suggest even more difficult times ahead for relations between North and South Korea even without military exercises occurring. Across the econorrty, human rights, and security fronts, North Korea pushed and prodded South Korea to try to gain an advantage and prevent perceived attempts by South Korea for unification by absorption. The scheduled ending of the U.S.-ROK military exercises on Aprir 24 may help bring about a better environment to work on these issues, but it won't be enough. The two Koreas will need to interact at a more sustained level in order to solve the disputes that arose in March.

North Korea has once again unilaterally taken action in the Kaesong Industrial Complex (KIC) that could hurt the facility's ability to function and damage the main avenue for inter-Korean economic exchange. The North Korean government declared that South Korean companies must increase the wages they pay North Korean workers more than the contractually agreed amount. The South Korean government hasrejected th e statement by North Korea about the wage hike believing that the issue should be discussed in the joint corrimittee set up after the temporary shutdown of the KIC. Reports point to April 10 as the date when South Korean companies would have to pay the increased wage. The South Korean government doesn't want the companies to pay and is sending a letter to the companies telling them riot to comply with the wage hike. The mishandling of this issue could cause fissures between the Park administration and the businesses she is trying to woo back into Kaesong and internationalize it. In addition to the difficulties, previous agreements over Kaesong require the two Koreas to negotiate over the rent South Korean companies must pay North Korea for using the land in Kaesong.

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Also concerning for inter-Korean relations is the potential difficulties ahead,with human rights. In March, the DPRK revealed that it had arrested two South Korean citizens for spying. The South Korean government denies that these two people are spies and has demanded its citizens be returned. Relatively little info has come out on this situation. North Korea says these two people were arrested late last year, and the South Korean government is not saying why these two men were out of the country and on the Chinese border with North Korea.

North Korea has fried to Use the detention of U.S. citizens in the past to try to gain concessions and advantages in relations; however, the detentions actually held back relations and nothing really moved forward until after the detainees were released.. For inter-Korean relations, the danger of no progress because of these detainees is potentially there as well.

With the annual U.S.-ROK military exercises during this time, North Korea often tries to demonstrate some of its abilities, argue that the exercises are preparation for war, and readies its forces for that perceived potential war. This year is no different. North Korea fired seven ground-to-air missiles into the East Sea.

Also worrisome in the security realm is the announcement from South Korea that it was North Korea who hacked nuclear power plants and officials in the South Korean nuclear company that runs those plants, this cyber attack occurred in December, but with the findings indicating North Korea as behind the hack, it demonstrates North Korea's cyber capabilities to penetrate multiple areas of South Korean society. Its worrisome and dangerous that North Korea is targeting important power sources in South Korea and that the potential damage from these attacks can be immediately devastating.

These strong moves taken by North Korea require significant diplomacy and deterrence by South Korea in order to work through these economic, human rights, and security issues between the two Koreas. The difficulty will be in the fact that South Korea will want to use diplomacy over Kaesong and the detainees, yet North Korea has tried to push its demands in both of these areas. While diplomacy is also important in the security realm, deterrence will still be vital for South Korea. North Korea continues to improve its missile and cyber warfare capabilities; moreover, the recent cyber attacks on the nuclear power plants illustrate how North Korea is willing to go after sensitive targets in South Korea in an attempt to create panic, confusion, and even destruction. The anticipation was for a difficult month of inter-Korean relations; unfortunately, the difficulties that did occur in March will make inter-Korean relations even more complicated in the months ahead.

Nicholas Hamisevicz is the Director of Research and Academic Affairs for the Korea Economic Institute. The views represented here are his own.

Photo from Matt Paish's photostream on fljckr Creative Commons. British Election Outcome Good News for Korea

Posted on 08 May 2015. Tags: diplomacy, economics, politics, trade

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By Mark Tokola

The notion that Korea might be affected by the outcome of the May 7 UK General Election might seem far-fetched. In truth, it would be an exaggeration to say that the outcome is of major significance to South Korea, However, because it is Of some importance, that makes it worthy of some attention. Thinking through the international effects of the British election is also a reminder that Korea has global interests, and therefore events anywhere in the world can make a difference to Korea's peace and prosperity.

The British election outcome was hugely surprising arid may mark a turning point in British politics. Contrary to every opinion poll and virtually every expert commentator's prediction, Prime Minister David Cameron's Conservative Party won an outright majority ofthe Parliamentary seats. The Conservatives' coalition partner party, the Liberal Democrats, were almost wiped out and now are down to a single digit share of the 650 seats. Many of the major figures of British politics from the Labour and Liberal Democratic Party lost their seats in Parliament, including the individuals who most likely would have been the Chancellor (equivalent to Treasury Secretary but also the second most important figure in government) and Foreign Ministers if Ed Miliband's Labour Party had won. In the aftermath ofthe election, three ofthe party leaders have resigned their positions, Ed Miliband (Labour), Nick Glegg (Liberal Democrat), and Nigel Farage (U.K. Independence Party).

The most startling result ofthe British elections was that the Scottish National Party (SNP), which is dedicated to making Scotland an independent country, captured 56 of the 59 Parliamentary seats that represent Scottish constituencies in the Westminster Parliament, Before the election, the SNP had held 6 ofthe 59 seats. This shift is unprecedented in the long history of British politics. As an example of the SNP's triumph, one ofthe leaders ofthe Labour Party, Shadow Foreign Secretary Douglas Alexander, lost his seat in Glasgow to 20-year-old University of Glasgow student, Mhairi Black of the SNP, who will become the youngest Member of Parliament since 1667. The leader of the SNP, Nicola Sturgeon, has become one of the most important figures in British politics.

Why does this matter to Korea? For two-and-a-half reasons. It rheans that: (1) the UK is more likely to remain in the European Union; (2) the UK probably will take a more active role in security and defense policy than if the election had been won by a Labour-led coalition government; and (3) advanced, democratic countries are driven by similar political and social forces. The issues that influenced British Voters in this election Could influence Korean voters in future elections.

The European Union is one of Korea's most important trading partners and the EU's influence on global politics is in Korea's interest. The UK is an important voice within the EU that pushes the EU in the direction of liberal trading policies, defense of human rights, promotion of overseas development policies, and an outward-looking foreign policy that ensures that the EU has an active policy in all parts of the world. None of these EU policies would change in a radical way if the UK were to leave the EU, but without the UK, Europeans agree that the EU would be more focused on its immediate neighborhood and would be more prone to protectionist economic interests. The U.S. government

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has been explicit that it supports the UK remaining within the EU for these reasons. The U.S. supports "a strong UK in a strong EU." A stronger EU similarly is in Korea's interest.

Superficially, the Conservative victory in the May 7 elections might seem more likely to lead to a British exit from the EU because Conservatives generally are more hostile to continued British membership in the EU than are Labour members. However, David Cameron has made clear that he supports continued UK membership in the EU if it undertakes necessary reforms. Labour will remain pro-EU in opposition, but the Conservatives might have turned to an anti-EU leader to replace David Cameron had they lost. So, now both major parties will try to keep the UK in the EU, rather than a Labour government having to fight, and perhaps lose, to a Euro-skeptic led Conservative Party. Finally, David Cameron emerges from the election a stronger party leader, and therefore less likely to have to make concessions to the Euro-skeptics within his own party who would prefer that the UK leave the EU.

On defense and security, the UK is a member ofthe United Nations Military Command (UNMC) in Korea, obligated by treaty to preserving the armistice. The UK is not a major contributor of military forces, of course, but as a member of the UNMC is one of the most important of the allies within the UNMC, along with Australia. The UK provided one of the experts who investigated the sinking ofthe South Korean naval corvette, the Cheonan. The UK has a resident ambassador in Pyongyang. In terms of global politics, it is important that North Korea and China are dealing not only with a U.S.-ROK alliance but with a multinational organization officially supported by the United Nations.

When the Labour Party was in power in the UK under Prime Ministers Tony Blair and Gordon Brown, the UK remained as committed to global security and defense as it was under Conservative Prime Ministers Margaret Thatcher and John Major. A Labour victory in the May 7th election would not have led to any seismic changes in the UK's security and defense posture. However, there are voices within the Labour Party and the Liberal-Democrat Party who have argued for deeper spending cuts, and if Ed Miliband had been pushed into a governing coalition with the SNP, the tetter's policy is strongly in favor of cutting the UK's nuclear deterrent and defense spending. The UK is now more likely to proceed with launching its two new aircraft carriers and maintaining its Trident nuclear deterrence. The British military is currently shrinking, but its residual ability to free U.S. forces for other priorities, such as the Pacific, is helpful to Korea. If an aggressive Russia forces the Europeans to spend more money on defense in coming years, the ability ofthe liberal democracies to defend their interests everywhere in the world will improve, which is also good for Korea. There are two footnotes from the British election that will interest Koreans. First, the ability of professional polling agencies to read and interpret public sentiment has become an important feature of all advanced democratic political systems. The fact that British polling experts were caught so flat-footed by the May 7 election outcome will give all polling experts, including in Korea, reason to examine their methodologies to see if they might be similarly mistaken in their analyses. Second, the predominance of the Scottish National Party in Scotland will inevitably lead to a new examination ofthe UK system of governance. Is it possible that the accommodation of Scottish interests within the UK might provide lessons for the future accommodation of reformed North Korean interests with a Unified Korea?

Mark Tokola is the Vice President ofthe Korea Economic Institute of America. The views expressed here are his own. Photo from Number 10's photostream qh flickr Creative Commons. April 2015: Survive and Advance for Inter- Korean Relations

Posted on 11 May 2015.

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By Nicholas Hamisevicz

"Survive and advance" is a phrase often associated with the month of March with the NCAA basketball tournament in the United States, but the phrase could be applied to the month of April for events on the Korean peninsula. The two Koreas, as well as the other countries involved in Northeast Asia, seemed resigned to the fact that no major breakthrough would happen until the joint U.S.-ROK military exercises were completed. April has traditionally been a contentious month with missile tests and the suspension of activities at Kaesong previously occurring during this time, and the heightened possibility of a provocation centered around the military exercises, North Korea's Supreme People's Assembly meeting, or Kim ll-sung's birthday. While there were sortie incidents that could create difficulties, at least none of them appear to be issues that would automatically hold back inter-Korean progress. Having survived April, we Will have to see if there will be any advancement between the two Koreas in May.

North Korea linked progress in both the Six Party Talks framework and in inter-Korea relations to the suspension or ending of the military exercises. With the exercises lasting until late April, South Korea had little opportunity to engage North Korea. During the month, the Park Geun-hye administration tried to take steps to prepare for possible increased interaction in May and in the future. The administration announced that it was going to permit more journalists to attend events in North Korea that feature inter-Korean affairs. The Park government also hopes to entice more interaction with North Korea through more sporting events between the two Koreas; Kim Jong-un continues to emphasize sports, and sports was the backdrop for possibly the best chance for inter-Korean dialogue after the Incheon Games.

It wasn't just a quiet month while waiting for the military exercises to end as there were incidents that could affect success of inter-Korean relations in May. North Korea continued to demand higher wages for the workers in Kaesong. and the dispute still seems unsettled. Moreover, North Korea seems to have hindered an attempt by South Korea to have more business and diplomatic interaction via railroads. South Korea has been trying to become a full merhber of the Organization for Cooperation between Railways, an international organization created by former socialist countries. North Korea is a full member of this body, and supposedly stated that it will not attend the next meeting in May in South Korea, eliminating the chance for unanimous consent on South Korea's full membership bid at that meeting. Moreover, a South Korean national who is a student at New York University was caught crossing into North Korea has been detained, bringing the total number of South Koreans officially held in North Korea up to four.

April has been a difficult month for positive interaction between the two Koreas throughout the year. The military exercises are over for now, and despite some frustrations, the two sides have an opportunity to move forward in May. The two Koreas have been able to survive, It is the advancement of inter-Korean ties that have been difficult.

Nicholas Hamisevicz is the Director of Research and Academic Affairs for the Korea Economic Institute. The views represented here are his own.

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Photo from Morning Calm Weekly Newspaper Installation Management Command, U.S. Army's photostream oh flickr Creative Commons.

Roller Coaster Ride of Trade Politics

Posted on 18 May 2015.

This is the first in a three part series looking at the ongoing trade debate in the United States arid its impact on Korea. Part two can be found here and part three here.

By Phil Eskeland

Last week saw one of the most interesting weeks in the politics of trade policy on Capitol Hill in many years. On Tuesday, May 12th, Senate Majority Leader Mitch McConnell brought up legislation on the Senate floor that would provide Trade Promotion Authority (TPA), previously known as "fast-track," for the President to finally complete negotiations on the Trans Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP). This bill had just a few weeks earlier passed the Senate Finance Committee by a wide bipartisan margin of 20 to 6. Yet, the motion to proceed with debate on the Senate floor failed by a vote of 52 to 45 after all but one Democrat Senator opposed the parliamentary maneuver. According to Senate rules, 60 Senators out ofthe 100-Member body must vote in the affirmative in order to proceed with debate on a particular bill (known as invoking "cloture"); otherwise, the legislation is stalled and cannot be considered any further (known as a "filibuster") unless the concerns of the objecting Senators are addressed.

What changed between committee and Senate floor? There is debate as to the reasons why but suffice it to say that Within 24 hours, a compromise was reached to allow two other trade related bills dealing with trade enforcement and Africa to advance first, followed by a list of amendments that will be allowed to be debated and considered to the TPA bill later this week by the full Senate. As a result, two days later, on Thursday, May 14th, the TPA legislation was brought up again on the Senate floor for the cloture vote and it passed by a wider margin of 65 to 33, thus clearing the 60-vote threshold. Thirteen Democrat Senators switched their vote to yes once a compromise was reached. This does not mean that every Senator who voted yes on the cloture motion will vote yes on final passage. In fact, some Senators who voted yes on the motion to proceed plan to vote no on TPA. But the wide margin on cloture shows that Majority Leader McConnell has a sufficient cushion of Votes to pass TPA. Last week's action overcame the basic procedural hurdle in the Senate that has stymied many pieces of legislation in the past.

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While the drama in the Senate will soon be over, the attention on TPA will quickly move to the House of Representatives. Many expect that only a handful of House Democrats will vote yes on TPA because, in part, of strong opposition from the core constituency of the Democrat Party. Thus, the burden of passing TPA will largely depend on House Republicans. While House Speaker John Boehner has the largest number of Republicans in over 80 years, that does not guarantee every House Republican will vote for TPA. Many Republicans are still very upset over President Obama's executive actions, believing that he overstepped his constitutional authority on a variety of issues. These Members are loathe to give President Obama any new additional authority. But to address this concern, key Republican leaders have astutely counter-argued that TPA reins in and gives strict parameters to the President with respect to specific instructions from Congress as to what he must accomplish in the trade talks with our Asian and European partners.

But the wild card in this debate may come down to Trade Adjustment Assistance (TAA). TAA has existed in some form since 1962 as tool to help Congress pass trade liberalization measures, recognizing the reality that some workers are negatively affected by trade; Because trade policy is a constitutionally enumerated function ofthe federal government, TAA supporters argue it is a proper role for the U.S. government to offer training programs and other assistance to help these workers become gainfully employed in non-import sensitive industries. However, in recent years, TAA has been opposed by certain fiscal conservative groups because they believe it duplicates other federal job training programs and is counterintuitive - if free trade agreements results in opening more overseas markets to U.S. goods and services, thus creating more jobs, why is TAA even needed?

During the 2011 debate on the Korea-U.S. (KORUS) Free Trade Agreement (FTA), along with the Colombia and Panama FTA, there was a concern that because the reauthorization of TAA was not included in the implementing legislation for these agreements, these FTAs would not pass Congress. Many Democrats and some Republicans who were inclined to vote for these agreements withheld their support until they received assurances that the TAA programs would be renewed. The House had just recently passed another trade related bill by unanimous voice vote that renewed the Generalized System of Preferences (GSP), which allows many goods coming from certain less developed countries around the world to enter the U.S. duty-free. In a counter-move, the Democrat-controlled Senate amended the GSP bill to add a two-year extension of TAA programs. On September 22, 2011, this newly combined GSP/TAA bill passed the Senate by a wide bipartisan margin of 70 to 27, and then sent the bill back to the House.

However, when this newly amended GSP/TAA bill came back to the House from the Senate, the legislation became controversial. While the GSP/TAA combined bill passed the House on October 12, 2011, by a wide bipartisan margin of 307 to 122, it is important to note is that over half of House Republicans voted no solely because of addition of the TAA reauthorization. This occurred on the same day as passage of the three FTAs. Two conservative free market organizations — Club for Growth and Heritage Action - urged Members to oppose the combined GSP/TAA bill and included this vote in their annual legislative scorecard, which is used by many conservative activists and Tea Party adherents to judge which candidate has the most fidelity to the cause of a smaller, limited government.

Will history repeat itself? Will inclusion of TAA in this year's TPA hinder passage in the House? Thus far, signs are pointing no. While Club for Growth and Heritage Action are opposed to TAA, it appears that they will not make TPA a key "no" vote. While the Club for Growth will negatively score any amendment vote to "plus up" TAA,[1] so far they are not scoring the underlying bill. Michael Needham, CEO of Heritage Action, said recently, "...free-market conservatives are understandably split on this president's request for fast-track authority. Including an egregiously ineffective welfare program in a bill intended to promote trade will only exacerbate the problem."I2] Nonetheless, prospects for final passage of TPA will brighteri if these two groups remain neutral and do not "key vote" a negative position on this bill. While there are still some conservative groups opposed to TPA on other grounds, it may not be enough to sway a sufficient number of Members to vote no to doom TPA in the House.

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Once TPA passes Congress (most likely by the slimmest margin), it will be up to the Obama Administration to swiftly conclude the TPP and possibly the TTIP talks. The President only has about 18 months left in office and once presidential primary election season kicks off in early 2016, it will be even more difficult to pass any trade agreement in Congress. Thus, the TPP talks must reach a successful conclusion within a very short time of TPA passage to give Congress the ability to consider the implementing legislation before the end of the year and the start of the presidential campaign season. Otherwise, the timeline envisioned by the TPA legislation could push this debate well into the next U.S. administration. While this could work to Korea's advantage to give more time to closely study and review the TPP text and possibly join as a founding member (assuming the other nations as part of the TPP would agree as well), it is now too late for Korea to join as part of the original negotiating partners.

Phil Eskeland is Executive Director for Operations and Policy at the Korea Economic Institute of America. The views expressed here are his own.

Photo from Willem van Bergen's photostream oh flickr Creative Commons,

HI htto://www.clubfomrowth.orQ/free-trade/club-for-qrowth-opposes-trade-killer-amendments/ [2] "Fight Over China Currency Policies Threatens Vote on Trade Bill," New York Times. May 11, 2015 Modi to Korea: Enhanced Partnership but Adjustments Needed in Korea - India Ties

Posted on 29 May 2015.

By Nicholas Hamisevicz

Indian Prime Minister Narendra Modi's trip to Korea last week marks the fourth time in the last six years where either thePrime Minister of India has visited Korea or the President of Korea has traveled to India. These recent visits have helped create a solid structure and format for steadily increasing Korea - India ties. However, some ofthe big projects anReceived opportunitied bys tha NSD/FARt were publicizeA dRegistratio to propel Korena -Uni Indiat relation09/25/201s forward5 to anothe6:08:5r leve4 l PhavMe not materialized. Prime Minister Modi is trying to use the momentum and mandate from his election to change the dynamics in India in stemminpossibilitieorder to gmak sfro fomer iKorethit mors visitae - appealin,Indi maay relations providg fore foreig. the spacn investmente and opportunitie. Modi's sefforts to mov, alone ogn frowitmh thpase tmeeting deficiencies ans dan arrangementd create news Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM

Business and economic relations were always going to be the major focus on this visit. In the lead Up to the visit, the Indian Foreign Minister and Defense Minister both traveled to Korea and promoted Modi's "Make in India" initiative. Prime Minister Modi did the same, talking about the initiative at every opportunity and explaining how his government. was trying to make it easier to do business in India.

While some Korean businesses have had decent success in India, the trouble is that South Korea has tried to make things in India, but it hasn't had much luck with projects that were publicized as important milestones for the bilateral relationship. The most recognizable example, and the one most absent from the meetings last week, isPQSCQ's steel plant and investment in Odisha. The project, which began in 2005, was the biggest foreign investment in India at the time; however, delays in securing federal and local approvals, court rulings, local protests, and environmental concerns have prevented the project from getting started in a meaningful way. South Korea also thought it won a deal to make eight minesweepers for India, but that was rejected when it was ruled that middle men were used to help secure the deal, a practice that is technically illegal for Indian defense procurement. South Korea also fell short trying to sell fighter trainers to India.

In addition to the lack of success with these big projects, therelatively small amount of bilateral trade is also a concern. The two countries were originally hoping to be at the $40 billion mark for total trade by this year, but they are way short, and the goal hasn't been mentioned in recent meetings. Both sides have issues with the Comprehensive Economic Partnership Agreement (CEPA) that entered into force in 2010. Economics should be the main connector between India and Korea from which other projects could emerge, but it just hasn't been that impactful.

Fortunately, both sides realize that adjustments need to be made. Prime Minister Modi has been vocal and active in trying to make it easier for countries to do business with India. In his speech at the India-Korea CEO forum in Seoul, Prime Minister Modi said that his government is "working day and night to create conditions for faster and inclusive growth." In the press briefing with Park Geun-hye, Modi mentioned there will be a new "Korea Plus" channel to help Korean companies that want to work with India. Also during the visit, Korea and India created a Joint Group for Shipbuilding to try to bring about more collaboration in a sector that would be mutually beneficial but hasn't occurred. Lastly, the two sides promised to begin working toward negotiations for upgrading the CEPA.

Encapsulating the effort by Korea and India during Modi's visit to enhance their relations, the two sides agreed to upgrade their "Strategic Partnership" to a "Special Strategic Partnership." Korea and India set up a Foreign and Defense 2+2 format for the Vice Minister level and will have more "consultations between the National-Security Council structures of the two countries on security, defense, and cvber related issues" The emphasis by the two leaders on their particular regional plans, "Act East' for Modi and the "Northeast Asia Peace and Cooperation Initiative for Park Geun-hye, will help lead to a broader understanding between Korea and India on regional interests and strategic calculations.

Over the past decade, Korea and India have done more to enhance their economic, political, and strategic interactions. The structures in place allow for a steady improvement of bilateral relations; however, certain economic and strategic setbacks, along with living in the dynamic Asia-Pacific region, make it important for Korea and India to readjust their relations to get the maximum benefit of their partnership in order to be successful in the Asia-Pacific century. Modi's visit to Korea, his attempted adjustments in India, and the agreements and arrangements made last week, are a good way for Korea and India to reestablish ties and move forward as special strategic partners However, even if there are suggestions that the minesweeper deal or the fighter trainer deal could be back in play, the two countries should really look for other opportunities from this point forward for a big win to showcase their partnership and desire to be strong players in Asia and in the world,

Nicholas Hamisevicz is the Director of Research and Academic Affairs for the Korea Economic Institute. The views represented here are his own.

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Photo from Narendra Modi's photostream on flickr Creative Commons. May 2015: Kaesong, Slander, and Little Slices of Inter-Korean Relations

Posted on 05 June 2015:

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By Nicholas Hamisevicz

Once again, a month of positive movements but also negative setbacks that keep near term inter-Korean relations uncertain. Many of the inter-Korean related activities that took place in May involved Kaesong in some way. Even with a few interactions, discouraging rhetoric still hurts the possibilities for future possibilities. Inter-Korean connections have been difficult, but the Park Geun-hye administration announced a few low-key policy changes it hoped would be beneficial for exchanges with North Korea when they do take place. The use of Kaesong, loud rhetoric, and small events have become the mediums for inter-Korean relations in recent years. This will continue to be unless connections can be built upon or a major breakthrough takes place, neither of which seems promising after the month of May.

The Kaesong Industrial Complex (KIC) remains the largest and most regular contact point for inter-Korean relations. The two sides were able to come to an agreement over the months long wage dispute. In February, North Korea unilaterally announced that it wanted the South Korean companies in the KIC to pay their North Korean workers a 5.18% increase in salary to $74 a month, which was stated without South Korean government approval and a .18% above the previously agreed upon ceiling for wage increases. However, the two Koreas recently agreed to not increase the ratefor.the moment and to allow companies to provide back pav for any increase negotiated in the future. However, the South Korean government wants the negotiations to take place within the joint committee set up after the resumption of KIC operations following the suspension of activities in April 2013. The North Korean government has been very reluctant to work through this committee, so it is likely there is still some future fallout from this wage dispute.

Two additional inter-Korean events in May prominently involved Kaesong. Ban Ki-Moon, former South Korean Minister of Foreign Affairs and current United Nations Secretary General announced on May 20th that North Korea had given him permission to visit Kaesong. Unfortunately, one day later, Ban's office was informed that North Korea had withdrawn their permission and the trip was off.

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An event that did occur that drew a lot of attention was the Women Cross DMZ march led by Gloria Steneim and other women peace activists. The group originally wanted to march from North Korea to the DMZ and through Panmunjom to South Korea. In a smart move, the South Korean government allowed the women to pass through the DMZ; however, the group was transported to Kaesong. and then bused through the same corridor that South Korean companies working in the KIC must travel. This required at least a little coordination with North Korea. The attention from the march and the absence of any legal ramifications will likely lead other groups to think about similar attempts, requiring the two Koreas to at least coordinate again on the procedures for dealing with the possibility of iriter-Korean transit.

Despite that small coordination over the march, there was some louder rhetoric that could be damaging toward inter- Korean relations. North Korean state media again made Vicious, sexist remarks against Park Geun-hve. In addition, North Korea's state propaganda website, Urimzokkori, made a video bashing Park Geun-hve. In the video, criticism was launched against her upcoming June visit to the United States, stating She is purposely ignoring the 15th anniversary of the June 15, 2000 inter-Korean declaration and the summit between the former South Korean President Kim Dae-Jung and the former leader of North Korea Kim Jong-il.

Despite the slandering and the lack of a big success with North Korea, the Park Geun-hye government announced in May a few policy changes that it hoped would help when inter-Korean interactions do occur. The Park government stated it would allow more journalists to travel to North Korea to cover inter-Korean events. They also said more civilians would be.permitted.to-undertake.exchanges with North Korea. Lastly, the Park administration suggested if is exploring ways to have inter-Korean celebrations and events in recognition of the 70th anniversary of Korean independence and the end of World War II.

In a way, the activities in May represent the only three areas of current inter-Korean interactions. The two sides only have the Kaesong Industrial Complex, rhetoric back and forth about each other, and little slices of potential or actual exchanges. These three things could lead to better inter-Korea relations if there was positive arid consistent forward progress in each areas. However, the month of May was another example of the positive interaction not being connected with any follow-up opportunities and the negative outcomes creating a heavy burden that makes it even more difficult for the two Koreas in the future.

Nicholas Hamisevicz is the Director of Research and Academic Affairs for the Korea Economic Institute. The views represented here are his own,

Photo by Troy Stangarone, Korea Economic Institute of America. Don't Wish North Korea on China

Posted on 08 June 2015. Tags: chjna, diplomacy, nuclear weapons. Six Party Talks

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When discussing what to do about North Korea, it is often suggested that China should do more to pressure North Korea to suspend its nuclear weapons program, stop military provocations, create a more constructive relationship with South Korea, and improve the lives of North Koreans. Chinese representatives usually say this is exactly what China is doing: China's critics say that judging by the recent history of North Korean behavior, if that is what China is doing, it obviously is not doing it enough.

It is worth unpacking some of the assumptions behind the belief that China should do more to push North Korea in the right direction. One is that China has leverage over North Korea. Observers believe that China provides most of North Korea's energy supply and consumer products, and around half of its food. But does that translate into leverage? It would only be leverage if, on one side ofthe equation, China was able to find consensus among its competing, internal views on the utility of pressuring North Korea, and on the other, if North Korea actually would change its behavior in the face of such external pressure. Judging by how the Pyongyang regime survived mass starvation during the 1990s famine, it has shown a ruthless capacity to survive hardship. The United States, which has shown more eagerness than China to put an end to North Korea's nuclear program and its military provocations, has always targeted its sanctions toward members of the North Korean regime, not towards the North Korean people, who have suffered enough. It is hard to imagine that the U.S. would want China to do what it would not, to squeeze North Korea by inflicting misery on the North Korean people by reducing their available amount of food and energy.

Taking the blunt tool of a general economic quarantine off the table, there obviously are other measures China could take to increase pressure North Korea:reducing investments in specific projects, showing official displeasure with North Korean behavior through government and official media statements, withholding official visits, and allowing UN resolutions aimed at condemning North Korea's human rights record to pass without a Chinese veto. There are signs that some of this is happening. China's support for North Korea has been increasingly muted and the tempo of visits has fallen. It is also possible to believe without evidence that China has sent blunt messages to Pyongyang about which neither side has spoken about publicly.

From the Chinese perspective, calibrating pressure on North Korea is a delicate business. There are reasons for China to do more. It is desirable for China that North Korea end its nuclear weapons program. As long as it continues, there is increased likelihood that South Korea, or even Japan, might feel the need to follow suit with nuclear deterrence of their own, a nightmare for China. Being one of a few nuclear weapons states is better for China than being one of many, in Asia and beyond. North Korea has shown interest in proliferating nuclear weapons beyond its border, to Syria for example, mostly for profit. Beyond even that and despite the durability of its regime, no one would describe North Korea as a safe bet for long-term internal stability. Turmoil inside North Korea could lead to a loss of control over its nuclear weapons storage. For non-state actors to acquire nuclear weaponry on China's borders would be an alarming development for China. There is also a large intangible element in the embarrassment for China of being unable to prevent its one formal military ally, the DPRK, from becoming an international pariah through its crude and cruel

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behavior. Contrasting the United States' alliance with a prosperous and internationally respected Republic of Korea with China's alliance with the Democratic People's Republic of Korea, China clearly has gotten the short end ofthe stick. North Korea is China's biggest foreign policy failure.

But, China also feels deeply restrained in how much it is prepared to pressure North Korea. By far, the highest priority for China on the Korean peninsula is to maintain stability. In case of a collapse of the North Korean government, the flow of refugees into China (into a region already heavily populated by ethnic Koreans); the risk of a possible, unwanted confrontation with the United States and its allies; the upheaval in China's relations with South Korea (of increasing economic interest to China), and the financial and diplomatic distraction of having to be involved in negotiations regarding the future of a unified Korean peninsula, would be a series of headaches that China would wish to avoid. The current situation in Korea is uncomfortable for China; but the collapse of the North Korean regime could be disastrous. China is mindful, therefore, that whatever pressure it might apply on North Korea, it cannot be so much as to push the North Korean regime off the edge ofthe table. Even though tough, North Korea could be brittle. Too much Chinese pressure could break it.

Beyond tactical calculations of what China might do to nudge North Korea in the right direction, there is another, deeper assumption in the China-should-do-more thesis. Assuming that China is responsible for North Korea's behavior might be one side of a coin that on its other side posits that North Korea is within China's legitimate sphere of influence. Is that something to which we should agree? If we want to assert that North Korea is "China's problem," is that very different from acknowledging that Ukraine is "Russia's problem"? One of the great foreign policy challenges of the 21st century is to decide whether China and Russia have a legitimate, recognizable national interest in being able to veto decisions made in smaller, neighboring countries. It is an unsettled question. It is an assertion they seem prepared to make, but there is a countervailing principle that all nations have the sovereign right to ally and trade with whom they choose; That principle, enshrined in the UN charter, is probably too pure to survive untarnished in real-life geopolitics, but it is a good basis from which to begin diplomacy rather than to end it. China has a responsibility to apply agreed- upon UN sanctions pn North Korea and historic reasons to engage the regime in Pyongyang more than would be expected of other countries, but we should not wish North Korea on China. The historic exercise of drawing lines on maps to determine who is responsible for whom usually has ended badly. We all have a responsibility to have a policy towards North Korea.

Mark Tokola is the Vice President ofthe Korea Economic Institute of America. The views expressed here are his own. Photo from Prachatai's photbstream On flickr Creative Commons. Korea and Trade Promotion Authority

Posted on 11 June 2015. Tags: economics. FTA. Korus FTA. trade, US - ROK Relations

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By Phil Eskeland

What does the looming vote in the U.S. House of Representatives on Trade Promotion Authority (TPA) for the President have to do with Korea? While Korea is currently not party to the Trans Pacific Partnership (TPP) talks, on the surface, the TPA debate appears not to affect Korea all that much. However, there is much at stake not only for Korea but for U.S. leadership in the Asia-Pacific region. Without TPA, the TPP talks will not conclude and slip into the next U.S. presidential administration, further delaying the opportunity for Korea to join the TPP. If TPA is defeated in Congress, it will send yet another message to the world that Washington is completely dysfunctional - even when a Democrat President and a Republican Congress agree on something, they still can't get anything done.

Nonetheless, the U.S. experience with the Korea-U.S. Free Trade Agreement (KORUS FTA) is currently being cited in the TPA debate. First, opponents of TPA and TPP have selectively used recent Korea-U.S. bilateral trade data as one of many talking points to deny TPA for President Obama arid discredit the post-WWII consensus for advancing free trade and economic opportunity around the world. However, U.S. exports to South Korea saw an uptick in 2014 to hit record levels, even as the U.S. dollar increased in value. As a result, opponents of TPA/TPP shifted the attack to the growing bilateral trade deficit in merchandise goods between the U.S. and Korea. Thereality i s that both countries saw an increase in trade with each other, which demonstrates the KORUS FTA is far from a failure but a win-win for both sides.

When the U.S. Senate debated TPA last month, anyone could look at trade data from the U.S. Department of Commerce to determine the value and composition of exports from an individual state to Korea or to the Asia-Pacific region as a whole. Unfortunately, there is no comparable data for House districts. There is no definitive source of information related to exports to South Korea from individual Congressional districts.

Until now. The Korea Economic Institute of American (KEI), utilizing U.S. government^collected data provided by The Trade Partnership (Washington, D.C), fills this gap by demonstrating the Vital role Korea plays in the economic livelihood of each individual Congressional district, including the number of jobs directly or indirectly created or sustained by exports to Korea. While one might correctly assume that districts in large states such as California and Texas would dominate U.S. exports to Korea, data analyzed by KEI shows a few surprises. For example, while not in the top 10 list of exporting districts, the Seventh District of Indiana (Indianapolis) sold $446 million worth of goods and services to Korea, mostly in pharrriaceuticals and other medicine products. The Sixth District of Massachusetts (Burlington) also sold $438.5 million worth of goods and services to Korea, mostly in aerospace products and parts.

Because international economicrelationships are more than just imports and exports, KEI also complied data gathered by the U.S. Department of State to determine the extent and level of foreign direct investment (FDI) from South Korea into specific Congressional Districts. Between 2010 and 2014, Korean companies invested over $14.4 billion in 67 Congressional districts, resulting in the expansion or creation of over 20,000 jobs in the United States. According to

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Select USA, U.S. subsidiaries of South Korean firms provide an average yearly salary of $83,000 for their workers and contribute to nearly $10 billion in exports of goods from the United States.

Finally, KEI also included the results from the American Community Survey ofthe U.S. Census Bureau estimating the number of residents in a particular Congressional district of Korean descent. Again, while one might correctly assume that Korean Americans reside primarily in the Los Angeles or New York metropolitan area, there are Korean Americans living in every Congressional district. For example, over 21,000 Americans of Korean descent reside in the Seventh District of Georgia (northeast of Atlanta).

If you want to find the most up-to-date informationregarding th e amount and composition of goods and services exports to Korea, along with the associated jobs, from a specific Congressional District; if you want to see how much FDI came into a particular Congressional District from Korea, along with the number of jobs, over the past five years; or if you want to find out how many Americans of Korean descent reside in a Congressional District, then please" visit the website of KEI - www.keia.org and click on "Congressional Trade Statistics" underneath the "Research" icon on the top of home page. Then select the specific Congressional District you would like to examine. You can also click here. I encourage those interested in the U.S.-Korea relationship to peruse this exciting new statistical tool.

Phil Eskeland is Executive Director for Operations and Policy at the Korea Economic Institute of America. The views expressed here are his own.

Photo from Kim Daram's photostream on flickr Creative Commons. Roller Coaster Ride of Trade Politics - Part II

Posted on 12 June 2015. Tags: economics. FTA trade

This is the second in a three part series looking at the ongoing trade debate in the United States and its impact on Korea. Part one can be found here and part three here.

By Phil Eskeland

Last month, the U.S. Senate experienced the ups and downs of passing Trade Promotion Authority (TPA) for the President. Initially, the first procedural vote to that allowed TPA to be debated on the Senate floor failed but then 48

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hours later, 13 votes switched and the Senate was able to proceed. Eventually, after debating and voting on several amendments, the Senate passed the trade Act of 2015 on May 22, 2015, by a bipartisan vote of 62 to 37. Now, the House of Representatives is experiencing the topsy-turvy ride otherwise known as trade politics. While the Senate Republican leadership combined TPA with the reauthorization of the Trade Adjustment Assistance (TAA) program in the Trade Act of 2015 to help smooth passage in the more collegial Senate, this action made passage of this legislation more difficult in the House. As mentioned in a previous blog post, a majority of House Republicans previously voted against renewing TAA in 2011 as part of a bill to extend certain U.S. trade preference laws. However, every House Democrat voted for TAA, which enabled the passage of the trade preference bill in 2011, and, indirectly, the three other free trade agreements (FTAs), including the Korea-U.S, (KORUS) FTA, that were under Consideration at the time.

To deal with this problem during the current debate, the House Republican leadership split the Trade Act of 2015in half to give Members the opportunity to independently vote on TAA and TPA separately (otherwise known in parliamentary- speak as "dividing the question"). It was expected that the TAA portion ofthe bill would pass the House with the support primarily from Democrats and the TPA section of the Trade Act of 2015 would pass with the support primarily from Republicans. Then, after both sections passed independently, the resolution governing the parameters of the House floor debate on the Trade Act of 2015 (otherwise known as the "rule") would automatically recombine the sections together and then send the bill to the President for his expected signature without needing to involve the Senate any longer.

However, even before these Votes took place, the House needed to pass the rule on the Trade Act of 2015 that allowed this parliamentary procedure to play out. Normally, passage of the rule in the House governing any floor debate is a perfunctory matter because the resolution passes on a party-line vote. Every Member serving in the majority is told at the beginning of each Congress that he or she must vote for every rule even if the Member disagrees with the substance of the bill under consideration; otherwise, the House Speaker and the Majority Leader lose control of the House floor and the debate and amendment process is turned over to the minority. Every Member serving in the minority is given the opposite advice - he or she must vote against every rule even if the Member agrees with the underlying bill; otherwise, attempts to further amend a bill or expand debate would be for naught. Thus, it was surprising that the vote on the rule yesterday was so close. In fact, the vote was held open for 35 minutes (about twice as long as normal) and the vote was tied at 206 to 206 for several minutes because 34 House Republicans, who are in the majority, defied their political party to oppose the rule. It took the vote of eight pro-trade House Democrats serving in the minority to also defy their party to pass the rule for this parliamentary strategy tp pass TPA and TAA. Thus, the rule barely passed the House by a vote of 217 to 212. '

Nevertheless, the surprising twist in this debate was the decision by most House Democrats to oppose TAA. Most House Democrats voted against TAA not on substance but as a tactic to defeat TPA because they calculated a majority of House Republicans would also vote against renewing TAA for other reasons. If TAA was defeated, then TPA could be dead for the rest of the Obama Administration. Initially, sorne House Democrats opposed the TAA provision in the Trade Act of 2015 because ofthe budgetary offset used to "pay for" the additional government spending associated with the extension of this program. But to respond to this concern, the House Republican leadership devised yet another parliamentary tactic to swap out the objectionable offset for TAA with another more acceptable budgetary saying and then included the new offset in yet another bill that extended certain U.S. trade preference laws. Nonetheless, despite a rare appearance of President Barack Obama on Capitol Hill earlier this morning to personally appeal to his fellow Democrats to support this legislative strategy, most Democrats still voted against TAA as a tactic to stall TPA. So, the TAA portion of the Trade Act of 2015 went down to stinging defeat by a bipartisan margin of 126 to 302 because an overwhelming majority of both House Democrats and Republicans voted against TAA for widely different reasons.

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Nonetheless, the House still proceeded with the vote on the TPA portion of the Trade Act of 2015. Subsequently, TPA passed the House by a narrow margin of 219 to 211, garnering the support of 191 Republicans and 28 Democrats. This is a remarkable accomplishment, considering a previous attempt to pass TPA for a Derndcrat President by a Republican Congress failed in 1998, the massive distrust many Congressional Republicans have for President Obama, and the pressure by some conservative groups to oppose TPA.

Then, Speaker John Boehner made a rare appearance on the House floor to make a motion to have a re-vote on the TAA portion ofthe Trade Act of 2015 at some point in the future. Unless the House Republican leadership is able to persuade either most of their rank and file rhembers to switch their vote on TAA (near two-thirds of House Republicans voted against TAA) or convince the Senate Republican leadership to hold a stand-alone vote just on TPA (not coupled with TAA), President Barack Obama's request for TPA may be dead for the rest of his time in office. As mentioned yesterday's blog post, if TPA legislation cannot make it to the President's desk for his signature, it will send yet another unfortunate signal to the rest of the world that Washington is completely dysfunctional - even when a Democrat President and a Republican Congress agree on something, they still can't get anything major done.

What does this mean for Korea? Because nations engaged in trade talks with the U.S. will not reveal their politically sensitive "bottom line" in negotiations until they receive assurances that the trade agreement will not be picked apart by 535 Members of the U.S. Congress, the Trans-Pacific Partnership (TPP) talks may lag into the next presidential administration unless Speaker Boehner is able to pull off a miracle in the next few weeks. This can be either a stumbling block or an opportunity for Korea to join the TPP. If Korea delays its decision until the text of the TPP agreement is finalized, then Korea will have to wait much longer to join the TPP. If Korea decides to try to join as an original founding member, the delay in granting TPA to the President may give Korea an unexpected opportunity to make this request. The ball is in Korea's court.

Phil Eskeland is Executive Director for Operations and Policy at the Korea Economic Institute of America. The views expressed here are his own-

Photo from Speaker John Boehner's photostream on flickr Creative Commons. What North Korea Can Learn from the Magna Carta

Posted on 15 June 2015.

Received by NSD/FARA Registration Unit 09/25/2015 6;08:54 PM Received by NSD/FARA Registration Unit 09/25/2015 6:08:54 PM

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By Mark Tokola

Ceremonies are being held in the UK to mark the 800manniversary of the Magna Carta. On June 15, 1215, in Runnymede, England, King John and a group of rebel barons agreed to a contract, drafted by the Archbishop of Canterbury, that placed limits on the King's power. Historians will point out that this "great charter" (Magna Carta) was not the first time that monarchs had been forced to agree to restrictions on their abilities to exercise arbitrary power, but the Magna Carta has assumed a special place among the world's political documents because among its clauses it created protections from illegal imprisonment, guaranteed swift access to justice, and imposed limitations on the monarch's ability to tax at will. In a fundamental way, the Magna Carta established the principle that rulers as well as the ruled were subject to law.

The Magna Carta went on to have global influence. The American Declaration of Independence and Constitution consciously drew on the Magna Carta, and the American Constitution went on to have its own great influence over the drafters of constitutions around the world during the subsequent two hundred years.

The Magna Carta continues to have relevance after 800 years, as an embodiment of the principle of rule of law, and as an inspiration to supporters of constitutionalism and defenders of human rights. Among the charges leveled against the North Korean regime are some ofthe same charges that the English barons leveled against King John: that he had imprisoned people arbitrarily and held them without trial. We know that the DPRK is wrong to do so in part because of the global inheritance ofthe 1215 Magna Carta and the 1948 UN Declaration of Human Rights. Happy Birthday, Magna Carta!

Mark Tokola is the Vice President ofthe Korea Economic Institute of America. The views expressed here are his own. Photo from the Surrey County Council News's photostream on flickr Creative Commons.

The 2015 Global Peace Index: More Proof that North Korea is Bad and Getting Worse

Posted on 19 June 2015. Taos: military affairs, social issues

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On June 17th, the Institute for Economics and Peace released its 2015 edition ofthe "Global Peace Index." This annual publication began in 2008, which makes it useful for tracking both global trends and individual country's performances. The headlines of the 2015 report are: (1) the averaged level of violence across the globe has been holding steady over the past few years but has differentiated. That is to say, peaceful areas (e.g. Europe and North America) are increasingly peaceful but violence in conflict areas (e.g. the Middle East) has become worse, and (2) the number of refugees and internally-displaced persons is the highest it has been since 1945. The report also highlights a drop in Violent conflicts between countries, but an increasing number of deaths from terrorism: 20,000 in 2014, over 80 percent of which occurred in five countries: Afghanistan, Iraq, Pakistan, Nigeria, and Syria. The full report can be viewed and downloaded at www.economicsandpeace.org.

For Korea watchers, the Global Peace Index provides specific statistical information for each of the 162 countries it surveys, including North Korea and South Korea. The institute for Economics and Peace believes that "peace" is measurable and traceable. It gathers data from internationally recognized sources to populate its 23 indicators, based on three broad themes: the level of safety and security in society, the extent of domestic and international conflict, and the degree of militarization. Taking all of that into account, South Korea is the 42nd most peaceful country in the world (out of 162), while North Korea, despite a lack of involvement in either international conflict or civil war, is in the bottom ten at 153rt [In 2014, Syria was the most violent country in the world. Iceland was the world's most peaceful, and has been every year the Index has been published.]

The details below the top numbers are instructive. The Index ranks North Korea as the second most militarized country in the world, behind only Israel, but Israel has become 4 percent less militarized since 2008, while North Korea has become 5 percent more militarized. The Institute's measurement of militarization takes into account expenditure, number of armed personnel, and weapons capabilities. For a country that objective observers would assess as possessing few genuine external threats, and no external security commitments, the degree of militarization seems pathological. South Korea ranks 33rd on the militarization index, behind countries such as Norway and Morocco.

Another measurement within the Global Index is the cost of violence containment as a percentage of GDP. Violence containment includes not only military expenditure, but the money governments must spend dealing With internal conflict, crime, violent demonstrations, internally displaced populations, and other threats to peace and order. Unsurprisingly, the three countries with the highest cost of violence containment in 2014 were war-torn Syria, Afghanistan, and Iraq. North Korea bizarrely ranks fourth, ahead of countries experiencing civil conflict such as Somalia, the Central African Republic, and Zimbabwe. This can only be explained by the expense to the North Korean regime of its policy of complete suppression of its own population along with its desire to intimidate its neighbors.

So far, we have been looking at North Korea's current ranking, but what does the Global Peace Index tell us about trends? Are Kim Jong-un's purported reforms improving North Korea? According to the Global Peace Index's data,

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tracked from 2008 to 2015, North Korea has a rising homicide rate, a higher incarceration rate, more political instability, more political terror, higher military expenditure, and worse relations with its neighboring countries than it did seven years ago. Quantifiably, the behavior of the North Korean government is bad and getting worse. With South Korea's indicators heading in the opposite direction, the two countries are becoming increasingly different, making a "soft landing" unification more difficult to envision unless North Korea reduces it militarization and ends the repression of its own people.

Mark tokola is the Vice President Ofthe Korea Economic Institute of America, the views expressed here are his own.

Photo from Expert Infantry's photostream on flickr Creative Commons. North Korea and the Millstones of Justice

Posted on 23 June 2015. Tags: diplomacy. Human Rights .

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By Mark Tokola

People who have worked on policy towards North Korea for some time often remark that nothing really changes: the DPR'fCs weapons programs progress, gross humanrights violation s continue, bad crop years are met with international appeals for food assistance, acts of aggression against South Korea occur periodically, and North Korean propaganda threatens death and destruction to anyone who impugns the dignity of its cult of leadership. The demise of Kim Jong- il in 2011 and the arrival of Kim Jong-un seemed to make little difference. There is a sameness to news about North Korea that can push it off the front pages (or the internet equivalent). Compounding the problem, ISIS' current depredations in the Middle East are so horrific, they can make even North Korea's systematic and ongoing human rights abuses seem like "old news" and worthy of less attention. However, the apparent stasis of North Korea can also disguise real change when it occurs.

Two separate but related events this week highlight that there is something new going on regarding North Korea, specifically regarding the North Korean human rights situation. First, the Office of the United Nations High Commissioner for Human Rights (OHCHR) is opening a field office in Seoul on June 23, for the express purpose of collecting evidence regarding North Korean human rights violations. It is unclear whether the collected evidence will be used for potential prosecutions of North Korean officials in the International Criminal Court, a special international tribunal, or perhaps in Korean courts following unification, but the fact that a UN office is collecting and archiving evidence should give North Korean officials pause when they order or carry out human rights violations. The activities of the OHCHR office in Seoul may not lead to a wholesale change of North Korean human rights policy, but it might

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nudge North Korean prison officials towards making less barbaric choices when they have the latitude to do so. The seed has been planted in their minds that their actions may have consequences.

The origins ofthe OHCHR Seoul field office go back to the remarkable December 18,2014 UN General Assembly vote condemning the "ongoing, systematic, widespread and gross violations of human rights" in the Democratic People's Republic of Korea (DPRK), The General Assembly was moved to action by the. 400-page UN Commission of Inquiry (COI) report on human rights in the DPRK that was issued in February 2014. The COI report was based on first-hand testimony of 80 witness and 240 confidential interviews. Its conclusions were tough but unassailable. One of the COI's specific recommendations was that the OHCHR should create a field office to ensure accountability for human rights violations in the DPRK. The establishment of the Seoul field office this week shows that the existence of the Chinese and Russian vetoes in the Security Council cannot, in themselves, altogether prevent the UN from acting.

Does this make a difference in North Korea itself? In the past, North Korea ignored charges of humanrights violations , or brushed therri aside as part of a U.S. arid South Korean plot to undermine the DPRK, The 116 to 20 vote in the General Assembly (with 53 abstentions) stung the DPRK into reacting, and undermined their narrative that raising human rights issues was a narrowly-based ploy by their enemies. The COI report and the General Assembly vote led the DPRK to undertake an Unprecedented diplomatic initiative, with senior DPRK officials engaging EU and other countries to try to blunt the effect ofthe UN report and vote. In the same Vein, Pyongyang has reacted strongly against the establishment of the OHCHR Seoul field office, calling it an "unpardonable provocation" and an "open declaration of war," and threatening South Korea with "merciless punishment" for allowing it to open in Seoul.

Because international opinion regarding its human rights abuses seems to matter much more to North Korea than it has in the recent past, it is also noteworthy that this week also saw the release, on June 22, of the "Salzburg Statement on the Human Rights Situation in the Democratic People's Republic of Korea (North Korea)." From June 2 to 6, the three authors of the UN COI report - Michael Ki.rby of Australia, Marzuki Darusman of Indonesia, and Sonja Biserko of Serbia - met at a Salzburg Global Seminar symposium with a group of government officials, legal experts, and representatives of human rights and humanitarian assistance NGOs from around the world — including from South America and Africa as well as from Europe, North America and Asia — for an in-depth discussion of what practical steps might be taken to advance the COI report recommendations. The resulting Salzburg Statement on North Korean human rights is something new in that it addresses recommendations not only to governments, but also provides advice to private organizations and individuals on what they might do to help to push North Korea in theright direction.

It is not clear why the DPRK apparently is taking international opinion more seriously than it did in the past, but it is possible that Kim Jong-un and his regime do not feel secure in their legitimacy, and therefore feel threatened by a growing international consensus that the DPRK is guilty of international crimes against humanity. Although still the most closed-off country in the world, the technology of modern media is making it possible for outside news to make its way to the people of North Korea, and specifically to mid and low-level North Korean officials.. They may question Whether their leadership is indeed universally admired (as DPRK propaganda would have it) if there are calls for them to be sent to the International Criminal Court. If 116 UN member states, broad-based international gatherings such as the Salzburg Global Seminar, and the UN system itself as embodied in the OHCHR field office have publicly concluded that there are "reasonable grounds to establish that crimes against humanity have been committed" by the DPRK, then something has changed. China, in spite of or perhaps because of its own human rights problems, may be increasingly loath to be associated with aregime that is so broadly condemned by the international community.

The stories that have been told by North Korean refugees over the years have set big wheels in motion. It may turn out to be true even in regard to North Korea that the "millstones of justice turn exceedingly slow, but they grind exceedingly fine."

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Mark Tokola is the Vice President ofthe Korea Economic Institute of America. The views expressed here are his own.

Photo provided courtesy of the Salzburg Global Seminar. Roller Coaster Ride of Trade Politics - Part III Posted on 25 June 2015. Tags: economics, FTA, TPP. trade

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This is the third in a three part series looking at the ongoing trade debate in the United States and its impact on Korea. Part one can be found here and part two here.

By Phil Eskeland

This post was updated on July 24, 2015.

This has been an incredibly fascinating past several weeks to anyone who has followed the politics of trade policy in the U.S. Congress. This was not your average roller coaster ride - it was multi-dimensional experience where Congress went forwards and backwards, even a couple of 360 degree reversals, only to come out at the end in passing the original goal of Trade Promotion Authority (TPA) for the President. But how Congress reached this goal was like seeing sausages being made (apologies to Otto von Bismarck).

Last May, the Senate initially could not overcome a procedural hurdle to bring up the Trade Act of 2015. But within 24 hours, an agreement was reached on how to proceed and the Senate passed TPA by a comfortable majority of 62 to 37, with the support from 14 pro-trade Democrat Senators. The Trade Act of 2015 also included a provision to reauthorize the Trade Adjustment Assistance (TAA) program, which provides federal job retraining assistance to workers negatively affected by imports.

However, when the combined TPA/TAA bill went to the House of Representatives for consideration, a different fate awaited the Trade Act of 2015. The Republican leadership decided to split the bill in half and vote on each section separately because TAA is a more contentious issue within the GOP than TPA. Then if both sections passed, the bill would automatically be recombined and sent to the President for his signature. But before the Republican leadership could proceed with this plan, the House needed to pass a resolution or a Rule to permit this legislative strategy to take place. Usually, a Rule passes on a straight party-line vote. With Republicans controlling 236 seats (vs. 188 for Democrats), the Rule to consider the Trade Act of 2015 should have easily passed. However, as portend of the next

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series of votes, the Rule barely passed the House and necessitated 8 pro-trade Democrats to cross party lines to support the Rule. At the end of the day, most House Democrats decided to join most House Republicans in opposing TAA but for completely different reasons. Most House Democrats opposed TAA as a tactical tool to halt TPA. But despite this defeat, the HoUse Republican leadership wisely decided to proceed with the next vote on TPA itself, which passed by a narrow margin of 216 to 211 with the support of 28 House Democrats. However, without these courageous Democrat Members - Representatives Earl Blumenauer (OR-S"1); Gerald Connolly (VA-H"1); Jim Cooper (TN-5'1); Henry Cuellar fTX^*1); John Delaney (MD^); Eddie Bernioe Johnson (TX-30,h); Ron Kind (Wl-3ni); and Rick Larsen (WA-2nd) - supporting the initial Rule to allow the entire House to debate TPA, the final vote on TPA itself would not have happened.

After the temporary set-back, the Republican leaders in the House and Senate got together to devise a strategy on how to advance TPA. U.S. leadership around the world was taking a shellacking after this defeat. While no path was easy, the most effective route was to convince the U.S. Senate to hold a re-vote on TPA. However, because TAA was now no longer an integral part of Trade Act of 2015, it was not a guarantee that the 14 Democrat Senators who supported TPA in the past would do so again. Thus, the operable word over the past two weeks was trust. Both House Speaker John Boehner and Senate Majority Leader Mitch McConnell made a rarejoint statement pledging that TPA and TAA Would get votes in both the House and Senate so that these bills could both sent to the President's desk for his signature. So, based on this promise, pro-trade Democrats in the Senate once again voted for "doture" (60 votes are needed in the Senate in order to bring up any legislation for debate and amendments). Then, shortly thereafter, the newly renamed TPA bill - the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 - passed the Senate by a vote of 60 to 38. As an additional sweetener, U.S. trade enforcement laws were amended in a separate bill that extended certain U.S. trade preference measures, to combat alleged unfair trade practices, such as provisions to counteract foreign government subsidies of exports.

However, the last twist in this legislative roller coaster ride in the Senate was the decision of presidential candidate Senator Ted Cruz of Texas to switch his vote to oppose both the TPA cloture motion and TPA itself, which gave Senate Majority Leader McConnell no margin for error. He could not afford to lose any additional votes on either side of the aisle. In addition, one of the fiscal conservative, small government groups - Heritage Action - also decided to oppose TPA even though other like-minded groups, such as Club for Growth, urged Senators to support the legislation. Despite the switch by Senator Cruz, the cloture motion passed — but barely - by a vote of 60 to 37.

Once again, the trade politics drama moved to the House. Now that the Senate passed the House version ofthe stand­ alone TPA bill, sending it on its way to the President's deskfor hi s signature, would House Democrats still oppose TAA on tactical grounds? President Obama made it clear that he wanted to sign both provisions into law, but some Democrats were toying with the idea of still opposing TAA to force the President into a decision to sign or veto TPA if that was the only bill that reached his desk. Further complicating matters for House Democrats, the TAA reauthorization was now attached to legislation to renew various U.S. trade preference laws, including those that benefit Africa. This bill - the Trade Preferences Extension Act of 2015 - eventually passed the Senate by a wide bipartisan margin of 76 to 22, with the support of many Senate Democrats who strongly opposed TPA, including Senators Elizabeth Warren of Massachusetts and Sherrbd Brown of Ohio.

So, for the final "drop" on this interesting roller coaster ride, most House Democrats decided not to oppose the Trade Preferences Extension Act of 2015 as a tactical tool to stop TPA, Their temporary pyrrhic victory in halting TPA was overcome less than two weeks later. On June 25, 2015, the House passed the Trade Preferences Extension Act of 2015 by another wide bipartisan margin of 286 to 138. Almost every House Democrat voted for this bill while the House GOP was almost evenly split because of the TAA provision. Regardless, President Obama can now sign both bills granting him both TPA and renewing the TAA program.

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The fascinating TPA legislative roller coaster ride has now come to an end. House Speaker Boehner and Senate Majority Leader McConnell both deserve a great deal of credit for pulling off a legislative resurrection. But this happened only because Members of Congress of opposite political parties and in opposite legislative bodies trusted each other to keep their side of the bargain. On this issue, Washington overcame numerous obstacles to show the world that the U.S. was not completely dysfunctional and that different political parties can work together on issues of mutual agreement.

Now, it is expected that the negotiations on the Trans-Pacific Partnership (TPP) will quickly wrap up. This is critically important in order to give the U.S. Congress sufficient time to debate the TPP before the beginning of the next U.S. presidential election season, which is expected to commence in earnest in January. The TPP implementation legislation will be the next big trade policy debate in Congress. Regardless, Korea will now have to wait until the agreement is finalized in order to join in the second round of nations expected to accede to the TPP. Because TPP is modelled, in part, on the high-quality Korea-U.S. Free Trade Agreement, it should not be difficult for Korea to meet the terms and conditions ofthe TPP.

Phil Eskeland is Executive Director for Operations and Policy at the Korea Economic Institute of America. The views expressed here are his own.

Photo from Jennifer Stahri's photostrean on flickr Creative Commons. Could a Grexit Impact Korea's Economy? Posted on 29 June 2015.

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By Troy Stangarone

For Greeks and European officials alike, the last five years must have seemed like the Greek myth of Sisyphus who was condemned to roll an immense bolder up a hill only to have it roll down and have to start over again for all eternity. In 2010 as the euro crisis began to heat up in the aftermath ofthe U.S. financial crisis and the earlier acknowledgement by Greece that.it had been understating the actual level of its government debt, Greek and European officials faced the prospect of Greece being pushed out of the Eurozone in what has commonly become known as Grexit. With the call for a referendum this past weekend by Greek Prime Min ister Alexis Tsipras and the breakdown of talks between Greece and its Creditors once again leaves Greece and its European partners facing the possibility of Greece leaving the euro.

How did we get to this point?

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In some ways, Greece faced a task of Sisyphean order. It would need to engage in strict austerity and an internal devaluation to reduce debt and make the Greek economy competitive since as a member of a currency union it did not have the option of engaging in a devaluation to increase the economy's competitiveness. However, the task has been more trying than many would have hoped. Since the crisis broke out in 2010, the results of efforts to reduce Greece's debt and revive its economy have been meager. Despite a 240 billion euro aid package designed to help Greece meet its debts, Greece's debt to GDP ratio has grown since 2010 to 177 percent as opposed to 148 percent when the crisis began. The debt to GDP ratio has grown despite significant European and IMF aid packages because over the same period the economy has contracted by 25 percent and unemployment has risen to 25 percent as the government has laid off workers to move its annual budget into a surplus. All of this has combined with other factors to make it difficult for Greece to grow its way out of its debt.

As a result of five grueling years of economic struggle there was a significant political shift earlier this year as Greek Prime Minister Alexis Tsipras and his Sryiza won elections on promises of ending the austerity that has been the condition of Greece's aid. However, tsipras and his government have managed to alienate other Eurozone members in France and Italy among others who might have been sympathetic to their efforts for a more pro-growth policy and also found themselves in the politically untenable spot of having to undertake policies they were elected to reverse due to their inability to convince their other European partners to take a more lenient approach.

Where are things now?

Unlike Sisyphus, Greece and its creditors are not condemned by the gods to their fate. The call for a referendum on the Eurogroup's latest proposal by Greek Prime Minister Alexis Tsipras has raised the stakes in Greece's ongoing struggle with its creditors and precipitated a series of responses. In response to Tsipras' call for a referendum on the terms of the hew deal, in which he and his government have said they would fight for a no vote, the Eurogroup has removed its offer and the European Central Bank, while not ending its Emergency Liquidity Assistance, has decided to cap it at the previous level of 89 billion euros. As a result, capital controls have been put in place and Greece's stock market and banks will be closed until after the proposed referendum on July 5. All of this potentially moves Greece closer to a Grexit.

However, much has changed since the last time that Europe faced the possibility of Greece leaving the euro. At the time, Italy, Spain, Portugal, and France to a lesser extent were all facing pressure in bond markets raising concerns that if Greece was forced out of the euro the others might also be forced out perhaps leading to a breakup of the common currency or a much smaller northern core of countries that would remain. Europe has also taken steps such as the development of a banking union to help insulate itself against shocks from a potential Grexit and the economies on the continent are stronger than they were in 2010. There are also good economic reasons why Greece may enter into a short term default on its IMF loans on June 30, but still not leave the Eurozone.

However, this crisis is as much a political crisis as it is an economic crisis, perhaps making the situation more unpredictable. The euro itself was as much a political venture as an economic one with its roots in an effort to build a symbol for a united Europe and to tie Gerinany more deeply to Europe after its reunification in 1990. So, that political considerations could trump economic considerations in the Eurozone should not be surprising.

Therefore, the unanswered question is not how well Europe has built up its institutions to prevent contagion from Greece to the rest of Europe but what is the damage that would be done to Europe's institutions? Post-war Europe has been built on a consensus of cooperation and shared opportunities, but how will those institutions be affected at a time when their legitimacy is seen as low across Europe and Greece could be seen in time as a symbol for an over-dominating and 'unfair" Europe?

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What is the impact on Korea and what are the lessons for East Asia?

For Korea, the potential impact of a Greek default or'Grexit would not be so much from Greece itself, which only accounts for 0.2 percent of Korea's exports, but if the crisis were to spread beyond Greece to Europe more broadly. If Europe is able to contain any damage in the coming days from either a Greek default or Grexit, the impact on Korea is likely to be minimal. If the damage does spread early estimates are that economic output could drop by 0.3 percent in Asia as a whole next year. The potential impact more broadly can be seen from the last crisis in 2010 when there were significant drops in exports to some European countries as the crisis developed.

If there is a potential for a small economic slowdown stemming from a slowdown in Europe, there is also a lesson for future political architects in East Asia thinking about their own monetary union. We don't yet know how Europe's current crisis will turn out, but the lesson from the 2010 crisis is that monetary unions require a high degree of fiscal and banking unions to provide them with the tools needed to deal with shocks. If the supranational entity overseeing a monetary union is unable to adequately monitor and to some extent limit government spending on the national level without the ability to utilize bonds that all ofthe member states are accountable for, any Asian Monetary Union would likely run into a problem similar to Greece. At the sarrie time, in the absence of a supranational banking authority there would be no means through which to ensure the stability of the financial system as a whole, while also providing common safety nets and a unified resolution authority for weak and failing banks.

Whatever happens in Europe, Asian policy makers should learn from its mistake as they seek to develop more common economic institutions in East Asia.

Troy Stangarone is the Senior Director for Congressional Affairs and Trade at the Korea Economic Institute of America. The views expressed here are the authors alone.

Photo from Kristoffer Trolle's photostream on flickr Creative Commons. Three Dilemmas of Dealing with North Korea Posted on 08 July 2015. Tags: aid, diplomacy. Human Rights ii^Hr-. ml' m* [inn • linn-"*- jMMiit (ft mM Hit jjiha

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By Mark Tokola

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Short conversations about North Korea generally end with similar conclusions: it is too soon to tell whether Kim Jong- un has successfully entrenched himself; the North Korean economy whether by design or necessity has introduced some market elements; China is growing impatient with North Korea's unpredictability and belligerency; and Kim Jung- un's regime is even more brutal and repressive than his father's. The level of purges and numbers of executions is unprecedented, even for North Korea. The regime's fixation with building amusement parks While much of its population goes malnourished is the epitome of how far a dictator can place whims above necessities. That much, at least, attracts a consensus of opinion.

It takes a longer conversation to reveal the fault-lines arid seams in opinion among experts regarding what should be done in regard to North Korea. There is a weight of opinion, but without unanimity, that urgency is beginning to ratchet up. The DPRK's nuclear and missile programs are closer to producing weapons which can threaten other countries. In truth, Seoul has been within the range of North Korean artillery for decades, but longer-range North Korean weaponry carrying nuclear warheads would alter broader, strategic equations regardless whether they could reach the United States. The United Nations Commission of Inquiry (COI) report on human rights violations in North Korea is making it increasingly difficult for the international community to avert its eyes from the regime's widespread and systematic abuses of its own people, which are likely to be counted as crimes against humanity. The prospect of unification ofthe Korean peninsula is being discussed more seriously than it has been for years. The most surprising outcome of the change that seems to be in the air would be if the situation on the Korean peninsula remained as it is for another generation. Hence, the need to talk about North Korea with increasing seriousness.

Two such longer conversations about North Korea were held first, at the June 2-6 Salzburg Global Seminar on "International Responses to Crimes Against Humanity: The Challenge of North Korea," and second, at the Annual Conference ofthe International Council on Korean Studies (ICKS) held at Georgetown University from June 25-26 on "Unification of the Korean Peninsula: Issues and Opportunities." The Salzburg Seminar was held under the Chatham House rule and therefore remarks by the participants are not to be publicly attributed to them without their permission, but what they discussed can be shared. Confidentiality was necessary in order to have a free-flowing arid frank conversation among the government and private sector experts Who attended the seminar. The Seminar ended with an agreed public statement outlining specific steps that should be taken by governments, private organizations, and concerned individuals to improve the human rights situation in North Korea. The ICKS conference by contrast was a public meeting and will be made available on the KEI website.

During long conversations amorig experts on North Korea, three questions often surface, the answers to which have practical consequences: Is it better to engage North Korea or to isolate it? Is there a choice to be made regarding whether to prioritize North Korea's strategic threat or its humari rights record? And, which is the higher goal, peace or justice? The answer to each of the questions may be "It depends," "That is a false choice," or "This isn't black and white, the pest policy lies along a spectrum." In any case, the questions are not ones that can be ignored.

Engagement or Isolation?

If the goal |s to change North Korea's behavior, is that more likely to come about through interacting with the North Korean government, or through refusing to have anything to do with it until its behavior changes? The answers depends upon a series of further, refining questions: are we talking about government-to-government, diplomatic engagement? humanitarian assistance and other NGO engagement? or people-to-people engagement (and is that even possible with a country as totalitarian as North Korea)?

The question of diplomatic engagement already seems to have an answer. Both the South Korean and U.S. governments have said that they are willing to engage in talks with North Korea. President Park says she is prepared to hold talks without preconditions, but rejects North Korea's requirement that U.S.-ROK military exercises be cancelled

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before it is willing to meet. North Korea has called for "unconditional" talks with the U.S. but then conditioned the unconditional talks by saying that they would have to be held without reference to North Korea's nuclear weapons program. In essence, the path is open for diplomatic engagement should North Korea choose to take it. Demanding that South Korea end its military exercise while continuing to conduct its own, and insisting that the U.S. abandon its primary objective, getting North Korea to abide by the international obligations it undertook regarding its nuclear program, seem to show a lack of enthusiasm for diplomacy on North Korea's part.

An alternative might be to make Unilateral gestures towards North Korea in hope that North Korea might respond positively. It seems likely, however, that the Kim Jung-un government is not firmly enough on its feet to be able to respond to concessions, whether a reduction in sanctions or a pause in U.S.-ROK military exercises. Absent a signal from Pyongyang that it was truly interested in a negotiation, a unilateral concession from Seoul or Washington would only reduce the number of bargaining chips available for future talks, making them more difficult.

For organizations that provide or might provide assistance to North Koreans, there are serious practical and ethical questions regarding their unavoidable interaction with the North Korean government. On one hand, the humanitarian need for nutritional supplements and medicine is great. The cost of saving a life in North Korea is less than in other struggling countries because the base line is so low. On the other, does providing assistance merely serve to extend the life of an abhorrent regime? Do outside resources allow it to channel its resources to prison camps and nuclear weapons programs?

One NGO has given up and pulled out of North Korea. The problem was not that its resources were being diverted to the government, but that the government was controlling the population that the NGO in question was serving. The government in effect chose the people whom the NGO would help. The people being served were needy, but not the neediest or most vulnerable population in North Korea. Because the baseline principle of the organization was that it would serve those most in need of assistance, it deemed that if could not continue. Other organizations have decided otherwise, that providing assistance to anyone in need was worth doing if possible.

There are other considerations in deciding whether to engage with humanitarian assistance or not. One is the theory of "feeding the executioner." The idea is that if the international community did not provide assistance to the needy in North Korea, neither would the North Korean government. Belief that Pyongyang would fill the gap left by decisions of NGOs not to operate in North Korea is naive. In fact, the DPRK government would be more likely to extract what it could from its most vulnerable populations to support its programs rather than to assist them. If everyone has enough food, the government will not have to take any from the people to give to the ruling class and army. If everyone has too little, the government will take what it can from the population. Providing humanitarian assistance, therefore, prevents the DPRK from further preying on its own people.

Finally there is the notion of investing in the future through humanitarian assistance. Providing help to the people of North Korea now will make unification ofthe peninsula easier when it occurs. A healthier, better-educated North Korean population will be easier to accommodate into a unified Korea than one that is stunted and unable to work. In the end, everyone has to decide for themselves whether their engagement with North Korea is a good idea and what compromises they are prepared to make to achieve their goals. The term "principled engagement" is often used.

Even people-to-people engagement is a tougher calculation than we would all wish. It would be nice to think that all contacts that can be arranged with North Koreans—whether government officials, sports figures, or artists - are bound at least to give them a better impression of us, and at most to raise questions in their minds about the state of their own country and whether it might be different. That may even be true. However, there is another side to the argument. The costs of people-to-people engagements may be that they give the North Korean government propaganda points to argue to their own people that the Kim Jong-un regime is indeed internationally accepted and admired. Second, the

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DPRK has complete control over who gets to participate in people-to-people programs. If they are being used to reward the party faithful, does that make them little more than treats which can be dispensed to maintain loyalty to the regime? There is no easy answer.

The Strategic Threat versus Human Rights

So long at the DPRK argues that it will never abandon its nuclear weapons program and that its population enjoys the world's highest level of human rights, there is no reason not to press the DPRK on both issues. It should abide by its commitments to not pursue nuclear weaponry and should accept the UN COI recommendations on how to put an end to its abuses of the rights of its citizens. It could, and should, do both.

However, it is possible to imagine a different situation. What if the DPRK expressed a willingness to engage in negotiations on its nuclear program, but only if the international community would stop trying to undermine the government by charging it with human rights violations? Why would members of a government who were being threatened with being sent to the International Criminal Court for crimes against humanity agree to negotiate with their prosecutors? Being afraid to travel for fear of being arrested would make protracted negotiations impossible. this is a dilemma that posits a situation different from the one we are in with North Korea, but among the DPRK's few international defenders, there are voices who argue that the choice is already upon us. We should accept right now the DPRK as a sovereign, "normal," state rather than treating it as an outlaw. Sanctions should be ended and serious negotiations should begin to reduce regional tensions. After all, they argue, the greatest violation of humanrights woul d be general warfare on the Korean peninsula rather than the selective if unfortunate actions by the DPRK against disruptive individuals in its quest to maintain domestic order.

One argument that may tip the balance towards those who argue that accountability for crimes against humanity cannot be negotiated away is the weight of international opinion. The Six Party Talks have six parties because they (South Korea, North Korea, the U.S., Russia, and China) have the dominant stake in the strategic stability ofthe peninsula. The circle of countries who have an interest in human rights is far broader. It should be possible to enlist democracies such as India, South Africa, Brazil, and others in an international effort to pressure North Korea to improve its human rights situation. Not only North Korea, but its chief patron, China, have shown sensitivity to wider international opinion beyond what the U.S. and its close allies have to say. the human rights situation in North Korea is, or should be, a global concern, that is reason enough to keep it on the agenda with North Korea.

Peace or Justice?

The call usually goes up for peace and justice, but what if they are not compatible in regard to North Korea? This dilemma is similar to that of strategic threat versus human rights, but different. It most likely would surface in regard to unification. Under any unification scenario (usually boiled down to peaceful and negotiated, or following a collapse of the DPRK) it will be necessary to deal with the crimes against humanity that have been committed by North Korean authorities. Will the priority be to quickly reach a peaceful situation by giving amnesty to those who might otherwise resist unification, or to give justice its chance to do its slower work to determine crime and punishment? In the longer term, will the many North Korean mid and low-level authorities be given the right to resume positions of authority in a unified Korea, or will they be forever excluded? Peace may argue one answer, justice another. The UN's COI report is legally correct in its carefully worded finding of "reasonable grounds to establish that crimes against humanity have been committed." The rule of law requires that the facts and judgment be weighed through a trial process, not though a presumption of guilt. The "reasonable grounds" are strong enough that the COI recommends a Security Council referral to the International Criminal Court, but the report is light on naming names or identifying

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institutions of those who should be tried. It is for this reason that a UNHCHR Field Office began operating in Seoul this June. Its purpose is to collect evidence for use in future prosecutions, whether international, Korea, or hybrid,

There is much to be decided in regards to eventually holding North Korean authorities accountable for crimes committed by the regime. Which authorities, at what level, and with what degree of culpability should be tried and for what crimes? This is an issue that will need to be decided primarily by the unified Korea, but the international community also has a stake in the prosecution of crimes against humanity. The Nuremburg trials, and the International Criminal Tribunal for the Former Yugoslavia (ICTY) are examples, if imperfect models, of how justice might be done. Other countries that have emerged from conflict have opted for 'peace and reconciliation commissions,' to make sense of what they have been through. Maybe in the case of Korea both will be needed: criminal trials to establish guilt among those most responsible for the human rights abuses, and peace and reconciliation organizations to help all Koreans come to terms with living in a shared Korea.

One future benefit of the justice system is that it will establish a comrriori, evidence-based history of Korea from 1954 to the date of unification. In the case of Yugoslavia, the ICTY has created an invaluable collection of first-person, sworn testimony offered by all sides that will help settle future disagreements about the true story of their tragic recent history. One ofthe problems in dealing with the ongoing tensions in Northern Ireland is that there is no comrnon historic database of fact shared by the unionists and the nationalists, leaving each with its own version of history. The court records of the Korean human rights trials, when they come, will help people come to terms with their past better than any government-organized, official history.

Well-informed, well-intentioned people can disagree over how to deal With North Korea. Discussing the common dilemmas can help them make their individual decisions. The stakes are high. Today's decisions on engagement immediately affect the lives of people living in North Korea. Coming to terms in advance with the issues that will follow unification will increase the odds that the process of unification will be less costly and painful than might otherwise be the case. Unification of the peninsula will improve the lives of millions. The process of getting there will require the best that South Korea and her allies can do.

Mark Tokola is the Vice President ofthe Korea Economic Institute of America. The views expressed here are his own. Photo from Niels Sienaert's photostream on flickr Creative Commons. Are There Implications from the Nuclear Deal with Iran for North Korea?

Posted on 20 July 2015. Tags: military affairs, nuclear weapons. WMD

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By Phil Eskeland

Commentators on both sides ofthe political spectrum have used North Korea and Iran interchangeably to buttress their position on the negotiations to corral Iran's nuclear weapons ambition. Some argue that the Iran deal will not work just like the 1994 nuclear deal with North Korea. Others argue that the Iranian deal could serve as a lesson to bring North Korea back to the negotiating table. .

Regardless of the alleged merits or failures of the agreement with Iran, there are too many differences between the nuclear weapons threat confronting the United States from Iran and North Korea, respectively, to draw relevant analogies. Plus, after the conclusion ofthe Iran deal, a North Korean Foreign Ministry spokesman said that his country "is not interested at all in the dialogue to discuss the issue of making it freeze or dismantle its nukes unilaterally first." In other words, it is doubtful that the Obama Administration can replicate its success in concluding a nuclear agreement with North Korea based on its effort with Iran. In fact, the lessons learned from the experience with North Korea helped to shape the talks with Iran. What are these differences?

Nature of the regime: while both Iran and North Korea have repressive governments, Iran is a theocratic regime based on a major world religion while North Korea is a totalitarian regime based on one person or family, similar to a crime syndicate, Iran is also relatively speaking more open to outside influences than North Korea, According to Freedom House, Iran is placed in the "Not Free" ranking (#6) among the nations ofthe world; however, North Korea is listed among the "Worst of the Worst" nations (#7). Many Iranians have access to information about the outside world and a majority have a positive view ofthe American people. In contrast, there is absolutely no room for dissent in North Korea and the Vast majority of North Koreans are completely isolated from the rest of the world. Hundreds of thousands of North Koreans languish in prison labor camps for vague offenses against the state. Status of nuclear weapon development: most analysts conclude that Iran has not yet perfected the technology to make a nuclear weapon. However, back in 1994, North Korea had already developed a nuclear weapons program and was suspected of having one to two weapons, then withdrew from the Nuclear Non-Proliferatibn Treaty in 2003, and conducted its first nuclear weapon test in 2006 while in the midst of the international negotiations designed to eliminate this development. Thus, U.S. diplomats were dealing with a fundamentally different negotiation scenario with North Korea than Iran. Stance on nuclear weapons: Iran's Supreme Leader, Ayatollah AN Khamenei, said in 2012 that Iran will"never go after" stockpiling nuclear weapons and believes "using such weapons are a great sin. While this may be a misleading statement by the Iranian leader, it is abundantly clear that North Korea is misleading no one - it has no intention of giving up its nuclear stockpile, even to the point of enshrining its declaration as a nuclear weapori state in its constitution. North Korea has even threatened to use nuclear weapons in a first strike capability.

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> Connectivity to the global economy: Iran was connected to the global economy and suffered immensely from the increased outside pressure from heightened sanctions. These sanctions sent the Iranian economy into a tailspin and compelled the Iranian regime to enter into negotiations to put limits on its nuclear ambitions in order to receive relief from sanctions. In contrast, North Korea is almost completely isolated from the global economy and sanctions have little impact on their economy. In fact, China accounts for 90 percent of its global trade; without this trade, North Korea would be a classic example of autarky. Unless China reduces its economic interactions with North Korea and fully cooperates with the imposition of multilateral sanctions, any additional unilateral sanctions will serve little purpose. ~> > Military option: the military option was never completely taken off the table with respect to Iran. Even if the United States did not launch any strikes to take out Iranian nuclear facilities, other actors in the region may have taken it upon themselves to end the Iranian nuclear threat. However, because the capital city and largest population center of South Korea - Seoul - is in such close proximity to the Demilitarized Zone with North Korea, any pre-emptive strike to try to eliminate North Korea's nuclear facilities would most likely result in some conventional retaliation by the North against the South. There is no doubt that if North Korea initiated any large-scale offensive military action, particularly using any weapons of mass destruction (WMDs), U.S. and Republic of Korea (ROK) forces would quickly and decisively end the brutal North Korean regime. But no serious policymaker advocates military strikes (outside of preventing an imminent launch of a nuclear missile from North Korean territory) to pro-actively deal with the North Korean nuclear threat. Existing deal: There is already a nuclear disarmament deal with North Korea. In 2005, six nations — the U.S., South Korea, North Korea, Japan, Russia, and China - successfully negotiated a Joint Statement where North Korea agreed to abandon its nuclear weapons and programs while the U.S. provided a security guarantee that it would not attack or invade North Korea. In addition, the U.S. agreed to negotiate a separate peace treaty to formally conclude the Korean War. North Korea got everything it wanted in the talks. There is no need to renegotiate these matters. Basically, all North Korea has to do is to abide by its existing commitments that it made to the international community 10 years ago. There Was no similar multilateral agreement with Iran prior to the completion ofthe Joint Comprehensive Plan of Action (JCPOA) reached on July 14, 2015.

While there may be some lessons that can be learned from the Iranian experience to apply in the North Korean context, almost all the lessons have flowed the other direction. From the JCPOA, it appears that U.S. negotiators learned from the experience with North Korea to limit the opportunity for mischief on the part of the Iranians. Iran could still violate the terms and the international community may not have the will to strictly enforce the agreement. However, the monitoring and verification provisions of the JCPOA demonstrate that if North Korea does express a willingness to return to the table, these sections are what they should expect to make sure that they do not go back on their word again.

Phil Eskeland is Executive Director for Operations and Policy at the Korea Economic Institute Of America. The views expressed here are his own.

Photo from U.S. Erhbassy Vienna's photostream on flickr Creative Commons.

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Korean Boom: As Foreign Language Enrollments Drop in the U.S., Korean is on the Rise

Posted on 21 July 2015. Tags: social issues, soft power

By Jenna Gibson

In a June article, Foreign Affairs magazine decried the "decline of international studies," citing a broad trend of "the scaling back of a long-term national commitment to education and research focused on international affairs." This trend can clearly be seen when it corries to foreign language education in the United States. According to a new report from the Modern Language Association, enrollment in language courses dropped 6.7 percent from 2009 to 2013. Across the board, American students are choosing not to study foreign languages. U.S. Language Enrollments, 2009-13 Language Percent Total Enrollment, Change 2013 Spanish -8.2 790756"" French -8.1 197.757 German -9.3 86 700 Japanese -7 8 66.740 Chinese -2.0 61,055 Arabic -7.5 32.286 Korean +44.7 12.229 Source: Modem Language Association

But even as top languages like Spanish, French and Gentian slip, Korean is experiencing a major boom.. In contrast to the overall decline, enrollment in Korean classes rose by 44.7 percent across the United States, and was the only language to grow at the two-year, four-year and graduate level.

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Source: Modern Language Association

Officials at the University of California Los Angeles (UCLA) fold the LA Times that there are often waiting listsfor their Korean courses, which have skyrocketed in popularity over the past few years. Even more striking - this increase can be seen both in their heritage classes (aimed at Korean Americans with some knowledge of the language) and in beginner classes for non-Koreans.

This increase comes despite the fact that Korean is one of the hardest languages for English speakers to master. The Foreign Service Institute (FSI) includes Korean at the top of its language difficulty scale, along with Arabic, Japanese and Chinese. Because Korean sentence structure and verb conjugations are completely different from English, plus the fact that a significant portion of vocabulary is based on Chinese characters (hanja), English learners can have a hard time picking up Korean. According to FSI, Korean language learners need to spend at least 2,200 classroom hours to achieve proficiency.

Americans are not alone in jumping on the Korean bandwagon. In 2012 the Korean government established the King Seiong Institute Foundation to help provide Korean language education abroad. As ofthe end of 2014, the foundation had established 130 institutes in 55 countries. Meanwhile, more than 1 million people have registered to take the Test of Proficiency in Korean (TOPIK) since the exam was first offered in 1997.

Why Korean?

South Korea's Ministry of Culture and Tourism believes the expansion of Korean businesses globally, along with a rise in foreigners living and working in Korea, have contributed to this trend. However, one of the biggest driving factors may be the spread of Hallyu, or the Korean Wave.

Hallyu, a phenomenon that seems to have originated with the popularity of Korean dramas in Japan in the early 2000s, has now attracted millions of fans from around the world. The rising interest in Korean pop music and television has corresponded with this trend of increased demand for Korean language education. In fact, according to a 2013 survev of Sejong Institute students, 34.3 percent cited interest in pop Culture as their main impetus for studying Korean. The second most common response was a general curiosity about Korea and Korean language at 28.1 percent. In fact, the King Sejong Institute Foundation cites "Rapid increase in the Korean language education thanks to the spread of Hariryu [Hallyu]'' as one of the main factors that sparked their establishment

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the government has continued to seize oh this fact, using interest in pop culture to draw more students. The Sejong Institute in Washington, DC, for example, offers a five-day Hallyu Camp each summer focused on teaching the basics of Korean language along with cultural programming.

In addition, Study in Korea, the official government site providing information on studying abroad in Korea, also emphasizes Hallyu as a reason to study Korean, noting that "while Hallyu fans first fall in love with the concepts and creativity of Hallyu, immersion in language, the true essence of the country's culture is also a critical step."

More Resources

Along with the spread of Hallyu, an increase in online resources may be fueling, or at least facilitating, this trend. The popular website Talk to Me in Korean (TTMJK) provides free podcast and video lessons ranging from how to read and write Korean characters all the way up to reading the daily news. Since its inception in 2009, the site has drawn more than 8.7 million users and surpassed 50 million total downloads.

And students from all over the globe have better access to Korean educational materials thanks to the world wide web. In fact, G Market, an online shopping service, said sales of books and videos teaching Korean rose around 37 percent from 2013 to 2014. This included shoppers from 76 different countries, up from 57 the previous year.

Through the Korean Wave and a push to increase access to Korean education both on and offline, Korean is bucking the trend in language study the United States and around the world. Whether this increase in interest is sustainable, however, remains to be seen.

Jenna Gibson is the Associate Director for Communication Technology and Programs at the Korea Economic Institute of America. The views expressed here are the author's alone.

Photo from Shaylor's photostream on flickr Creative Commons.

Korean Study Abroad Numbers Drop as Return on Investment Falters

Posted on 03 August 2015. Tags: economics, education

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By Jenna Gibson

For South Korean children, studying abroad and mastering English used to be the key to success, prompting waves of students to head overseas for their diplomas. Now, South Korea is the third largest source of international students studying in the United States, behind only China and India,

But this trend may be nearing its end. In 2014, 220,000 Koreans in their 20s studied abroad, down from 260,000 in 2011, according to Statistics Korea. The number of Koreansstudying in the United States has fallen for the last three years in a row, dipping below 70,000 for the first time since 2007.

It all comes down to economics. With rising costs overseas and a stagnant economy at home, more Korean students are choosing to stay put. But while money is clearly a key factor in deciding where to go to school, there is more to studying abroad than increased salaries. The intangible and societal benefits of cross-cultural experiences can easily tip the scale in favor of leaving the peninsula.

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Why are Korean students staying home?

In a word, money. Tuition and living costs are increasingly expensive, particularly in the United States, where one third of South Korean students who study abroad choose to go. Part Ofthe draw has always been so-called "English Fever," a trend that started in the 1990s as a government push to increase Korean businesses' global competitiveness by emphasizing English language education, according to a report in International Educator magazine.

Still today, English is part of required curricula fro'/•m third grade to graduate school. In ah effort to boost their child's proficiency, many families began sending their children to study abroad in English speaking countries starting as soon as elementary school. Sending children abroad to study English became so common that a new term emerged to

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describe these split families - a "Goose Father" stays home in Korea to provide for his family abroad, only able to "migrate" and see his family once or twice a year.

But as more students began flocking abroad, the market for bilingual workers became saturated, and English started to lose its competitive edge. At the same time, more international universities are opening campuses in Korea, Thanks to the openirig of the Songdo Global University campus, Stony Brook University, George Mason Uriiversity, the University of Utah and more have set up shop in Incheon. The best part - these campuses offer international education at prices comparable to domestic universities.

In addition, the job market makes it hard to justify spending more to send students overseas. According to the Korea Herald, youth unemployment is at its highest since 2000. And for those aged 15-29 that have a job, 34.8 percent of them are in contract positions with limited job security.

With all these changes, studying abroad is no longer the silver bullet it used to be. Now, one student said, "Korean employers perceive returnees from abroad as being more expensive hires because of the costly tuition they shelled , out for their U.S. education."

Further, "in Korea, kinship is important. It's a Very relational society...YbU have to have a good network in your school to get a job. Those students who study in the States don't," according to Jaeha Choi, director of student recruitment and admissions at SUNY-Korea

No wonder parents and students are no longer seeing enough return on their investment from studying overseas.

Looking beyond costs

While it's understandable to look at costs and benefits when considering study abroad, parents and students must also remember that not all benefits come with a dollar (or won) sign.

In fact, according to a long-term survey of Americans who studied abroad between 1960 and 2007, the non-economic benefits of living outside of their home country were clear. These students were more plugged in to world issues and cultural differences, and were more likely to express a desire to make a difference and work toward the common good. These students were also more likely to pursue graduate work than the national average. Participants overwhelmingly cited their study abroad experience as one ofthe most influential experience in their lives. Bottom line, the researchers found, "investing in study abroad has both major social and individual benefits, and, thus contributes to the development of not only human capital but social capital, and, thus contributes to the common good, above and beyond the personal private benefits."

In the short-ferm, Korea and its citizens may save money by cutting back on English education. But in the long run, Korea risks losing its global competitiveness if it drops its English focus. The government in the 1990s wasn't wrong to emphasize English as a gateway to the world economy - English is by far the world's most usedlanguage in newspaper publishing, book publishing, international telecommunications, scientific publishing, international trade, mass entertainment, and diplomacy. And, let's face it, there is no substitute for learning a language than living in a place ' where it is spoken. This is not to say that English Fever doesn't have its faults, but cutting back on the chance for students to live and study abroad should not.be seen as a blanket solution.

Obviously, costs come into play when students and families make the decision to study abroad. Keeping this in mind, American universities need to reduce tuition for international students (and for domestic students while they're at it) to

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help boost return on investment for Korean families. But at the same time, families need to keep in mind that the benefits of study abroad are numerous and lasting, and can reach far beyond each individual student.

Jenna Gibson is the Associate Director for Communication Technology and Programs at the Korea Economic Institute of America. The views expressed here are the author's alone.

Photo from Michael Cote's photostream on flickr Creative Commons.

/ July 2015: Summer Heat Only Leaves the Small Stuff in Inter-Korean Relations

Posted on 04 August 2016. Tags: diplomacy, environment. Kaesong industrial Complex

By Nicholas Hamisevicz

When it's a hot summer day in July, one often has to make the strategic calculation of what particular circumstances would require one to leave the friendly confines of a place with working air conditioning. Similarly, it seemed the two Koreas were only going to deal with each other during July under specific conditions. Consistent with many of the interactions in inter-Korean relations recently, the two sides had some significant disagreements that overshadowed the few positive interactions. There's hope that the 70th anniversary of the end of Japanese occupation of the Korean peninsula in August will provide another context for exchanges; however, the political environment suggests that inter- Korean relations will be more on a shorter term, project-to-project basis rather than on a consistently sustainable basis.

For the two Koreas, there were plenty of reasons not to step outside their current comfort zones and engage in a more meaningful way. The month started off with North Korea boycotting the Universiade Games that took place in Gwangju, South Korea; the reason was believed to be in protest of the United Nations human rights office being set up in Seoul to collect evidence of North Korean human rights violations. Despite Kim Jong-un emphasizing the importance of sports for North Korea, the possibility for another inter-Korean meeting similar to the one at the end of the Incheon Asian Games last year vanished. In addition, despite production at the Kaesong Industrial Complex increasing, the two sides still had trouble with the negotiations over wage disputes. Lastly, North and South Korea bickered over the repatriation of North Korean fishermen whose boat drifted into South Korean waters. South Korea repatriated two ofthe fishermen but said the other three truly wanted to defect to South Korea.

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However, the two Koreas were able to have some smaller slices of interaction. A main effort in July was the two countries working together to study the "abnormal symptoms" that were being displayed by the pine trees in the Mount Kumgang area of North Korea. This forestry effort, along with reports that universities in South Korea, China, and North Korea will share reforestation data and information, provided that small opportunity for positive inter-Korean relations. There is also hope that there will be more interaction soon. The widow of former South Korean President Kim Dae- jung, Lee Hee-hd, is scheduled to travel to North Korea in early August. There is also hope for a possible joint celebration ofthe 70th anniversary ofthe end of World War II and the Japan's occupation of Korea,

July was another month of relatively limited interaction between North and South Korea and no clear possibility for large scale engagement. The disagreements still seem rather contentious and the positive exchanges weren't significant enough to change the larger calculations between the two sides. Individual joint Korean projects like the forestry cooperation might have to be the way forward for now until a better overall framework and sentiment allows for a more fully, consistent, and sustainable platform for inter-Korean relations.

Nicholas Hamisevicz is the Director of Research and Academic Affairs for the Korea Economic Institute. The views represented here are his own.

Photo from Mike Rowe's photostream on flickr Creative Commons,

Three Questions About North Korea's Latest Execution

Posted on 12 August 2015. Tags: Kim Jong-un, leadership transition, propaganda

By Troy Stangarone

In the pantheon of executions, one would not expect to see a niche devoted to disagreements over forestry policy, which makes the news that Vice Premier Choe Yong-gon was executed by Kim Jong-un for a disagreement over reforesting North Korea and poor job performance such a perplexing development,

Executions of high level officials are seemingly becoming a common occurrence in North Korea. In 2013, Kim Jong-un executed his uncle, Jang Song-thaek, who was widely believed to be the second highest ranking official in North Korea, for treason. Earlier this year it was reported that Defense Minister Hyon Yong-chul was executed for failing to follow

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orders and nodding off in meetings, while other defense officials are widely believed to have recently been executed or demoted for failing to improve food rations for soldiers. All told, Kim Jong-un is believed to haveexecuted some 70 officials since coming to power in 2011 with challenges to his authority or perceived acts of disrespect being among the primary causes among the higher profile cases.

The recent execution of Vice Premier Choe Yong-gon raises interesting questions about these power struggles in North Korea. Vice Premier Choe is reported to have been executed for disagreeing with Kim Jong-un's forestry policies and a poor job performance. While seemingly a minor area of policy, North Korea's forestry policy is important to its long- term potential economic development. After years of deforestation and over-fertilization of lands felled for farming, North Korea has largely exhausted its soil and has become more prone to flooding and other environmental damage. Kim Jong-un has noted this himself:

...as people have felled trees at random since the days of the Arduous March on the plea of obtaining cereals and firewood and, worse still, as no proper measures have been taken to prevent forest fire, the precious forest resources of the country have decreased to a great extent. As the mountains are sparsely wooded, even a slightly heavy rain in the rainy season causes flooding and landslides and rivers dry up in the dry season; this greatly hinders conducting economic construction and improving people's standard of living ...

At present, the forests of the country can be said to have reached a crossroads-whether to perish forever or to be restored. We can no longer back off from the issue related with the forests.

If Vice Premier Choe was executed for disagreeing with Kim Jong-un's forestry policy, it raises three questions:

1. Was he executed for opposing Kim Jong-un's plan to reforest North Korea?

2. If so, was it because he opposed part of the policy such as Kim Jong-un's suggestion of utilizing the military as well as other resources to reforest North Korea? 3. Or, was Vice Premier Choe in favor of reforestation but felt that Kim Jong-un's actions were insufficient despite his rhetoric?

As with any authoritarian regime Vice Premier Choe's execution could have taken place for unrelated reasons and the notion of disagreements over forestry policy merely serving as a pretext for the act. However, if a disagreement over policy was the proximate cause, a more detailed understanding of the nature of the dispute could help to provide insight into the regime's objectives and divisions.

Troy StangarOrie is the Senior Director fOr Congressional Affairs and Trade at the Korea Economic Institute of America. The views expressed here are the authors alone.

Photo from CIFOR's photostream on flickr Creative Commons. How North and South Korea Have Changed Since the Korean War

Posted on 17 August 2015. Tags: development, economics, social issues, technology

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With the 70th anniversary of the end of World War II over the weekend, KEI takes a look back at what has changed on the Korean Peninsula from the 1945 to today. The three boxes compare a unified peninsula before the Korean War to North and South Korea in the 2010s. By looking at GDP, economic production, the number of radio stations, literacy and urban population, it becomes clear how far the peninsula has come in the past seven decades and how far apart its two halves remain today.

THE KOREAN PENINSULA FROM THE 1950s TO TODAY

North Korea South Korea GOP per capita: Si,122* GDP per capita: S21.7011 Main Sector: Textile Main Sector: Services manufacturing Industry Radio Stations: i>5 Radio Stations: 420 Literacy: 100% Literacy: 94.6% Urban Population: 60% Urban Population: 83% Pre-Korean War GDP: SSSt" Main Sector: Indu'SttuI/ Agriculture Radio Stations: 15 Literacy: 78'!v. Urban Population: 16%

-GOPW W90 ln,..„.«tan..l O-arv »umh da...,. Graphic created by Jenna Gibson, Associate Director for Communication Technology and Programs at the Korea Economic Institute of America, with assistance from Bradley Sancken, Jina Shin, Christopher Kang, and Lilka Marino at the Korea Economic Institute Of America. Photo a composite of photos by bradhamonds of Seoul and lawrenceyeah Of Pyongyang on flickr Creative Commons. Sources:

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CIA World Factbook 38 North "Japanese Colonialism and Korean Economic Development, 1910-1945" Maddison Project "The Population of Korea" Fact Check: Burdensharing by Korea Posted on 18 August 2015.

By Phil Eskeland

Recently, there has been some discussion among certain opinion makers in the United States claiming that the U.S. bears all the burden in defending allies against potential North Korean aggression. Currently, the U.S. has approximately 28,500 troops stationed on the Korean peninsula. Many other U.S. forces in the Asia-Pacific region participate in regular military exercises with the Republic of Korea (ROK) and provide extended deterrence from bases in Japan, Guam, and elsewhere. Some incorrectly believe that the ROK contributes relatively little to its own defense, relying on the U.S. "tripwire" for its national security, or does not offer funding to offset the cost of stationing U.S. troops in South Korea.

First, the ROK, with a population of just under 50 million, has approximately 630,000 enlisted in their armed forces and has nearly 3 million South Korean citizens serving in the reserves. This compares to the U.S. with 1.4 million enlisted in the armed forces with 850,000 in the reserves out of a population in excess of 320 million. Also, unlike the United States, the ROK has compulsory military service for South Korean young males, lasting between 21 to 24 months. Just in recent days, the world was reminded once again of the immense sacrifice South Korea makes to deter aggression with the maiming of two of its soldiers patrolling the heavily-fortified Demilitarized Zone (DMZ) with North Korea.

Second, according to the Stockholm International Peace Research Institute (SIPRI). South Korea expends a relatively large percentage of its Gross Domestic Product (GDP) on defense - 2.6 percent - representing one of the highest in all of Asia and bigger than any European ally of the United States. Japan spends 1 percent of its GDP on defense; the Philippines spends 1.1 percent; Germany spends 1.2 percent; Australia spends 1.8 percent; and the United Kingdom spends 2.2 percent. According to the SIPRI, the U.S. spends approximately 3.5 percent of its GDP on defense.

Third, according to the independent, non-partisan Congressional Research Service, the ROK has provided financial support to offset the cost of stationing U.S. forces in Korea since 1991. In January 2014, the U.S. and the ROK renewed the Special Measures Agreement (SMA) that increased South Korea's contribution to maintain the U.S. military

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presence on the Korean peninsula. Last year, Korea raised its support to the U.S. military by 6 percent to approximately $870 million per year, which will further increase with the rate of inflation each year through 2018 when the SMA will be up for renegotiation. CRS estimated that in combination with other compensation outside the SMA (such as the South Korean contribution to the relocation of a major U.S. military base in Seoul to other parts in Korea further from the DMZ), the ROK provided for about 40 to 45 percent of the total non-personnel costs ofthe U.S. troop presence in 2012.

Finally, the U.S. troop presence in the ROK is there to preserve peace and stability not just on the Korean peninsula but all throughout northeast Asia. This mission serves U.S. interests, particularly as South Korea has emerged to become America's 6*1 largest trading partner supporting over 330,000 U.S. jobs. Any premature withdrawal of U.S. troops would send the wrong signal to our adversaries that the U.S. commitment to defend our allies against unprovoked aggression has weakened. So, next time when you hear the siren song that South Korea isn't doing enough remember: v

1) Korea has a draft and 630,000 of its 50 million citizens under arms;

2) Korea spends a higher percentage of its GDP on its own defense than other U.S. allies;

3) Korea contributes almost half of the non-personnel costs associated with the U.S. troop presence in the ROK; and

4) The U.S. military is in the ROK and other parts ofthe Pacific Rim to protect its larger national interests in northeast Asia, which includes - but is not limited to - deterring North Korean aggression,

Phil Eskeland is Executive Director for Operations and Policy at the Korea Economic Institute of America. The views expressed here are his own.

Photo from Morning Calm Weekly Newspaper Installation Management Command, U.S. Army's photostream on flickr Creative Commons. Trans-Pacific Love Affair: South Korean Perceptions of the United States on the Rise

Posted on 19 August 2015. Tags: diplomacy, polling data, soft power. US - ROK Relations

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By Jehna Gibson

According to at least one poll, South Korea has a higher opinion of the United States than the United States has of itself. In its 2015 Global Indicators survey, Pew Research Center found that 84 percent of South Koreans view the U.S. favorably, while only 83 percent of Americans said the same.[1] This is the highest approval rating for the U.S. within South Korea since Pew started collecting this data in 2002, when approval was only at 52 percent[2]. South Korea doesn't only approve of the United States as a whole - they also have a positive view of its leader. When asked if they are confident in President Barack Obama to "do the right thing regarding world affairs," 88 percent of Koreans answered affirmatively. The only country surveyed that has more confidence in Obama is the Philippines, with 94 percent.

This approval far outweighs even Korean views on their own government - a recent Organization for Economic Cooperation and Development (OECD) report found that only 34 percent of Koreans said they have confidence in their national government. And their perception of Obama certainly dwarfs his current 46 percent domestic approval rating. fliitti Korean Pereepfjohs ofIhe United States

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South Koreans haven't always been this keen on the United States. As recently as 2007, only 58 percent of those surveyed by Pew had favorable opinions about their ally. And going back to.2003, less than half responded positively (46 percent favorable).

What caused this significant shift in just over a decade? It's important to keep context in mind. In 2002, tensions flared after an infamous incident where two Korean teenagers were killed after being struck by a U.S. military vehicle. The drop in favorable views of the United States in 2003 makes perfect sense in this context.

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Further, lukewarm responses through the following decade can possibly be attributed to the Sunshine Policy, an attempt to influence North Korea using carrots rather than sticks. According to a Washi ngton Post column , "The policy attempted to soften the tension between the two Korean nations, something that often required breaking, rhetorically or even politically, with the United States. President Roh Moo-hyun did this in part by criticizing the U.S. containment policy - and thus, implicitly, the enormous American military force stationed in his country - in an effort to demonstrate goodwill toward North Korea and, he hoped, to lay the groundwork for real cooperation."

Since 2009, administrations in both the United States and South Korea have worked ensure that their policies towards North Korea are aligned and public perceptions have moved in a similar direction. In fact, a recent Washington Post article points out that younger South Koreans are among the most pro-American. One possible explanation - "they appear to be more suspicious about China's rise and are Way more suspicious of North Korea's intentions. For both of these reasons, it's understandable that they value the alliance with the United States."

Interestingly, a 2015 poll by the Asan Institute found that South Koreans associated the United States most With capitalism (28.6 percent), military strength (26.7 percent), and democracy (20.6 percent). It follows, then, that when the two countries' economic, military and diplomatic priorities align, as they generally do at the moment, public opinion will follow.

Korean perception ofthe United States can of course be lost in an instant, but it's important to note that even during one ofthe lowest points in recent memory, more than half of the Korean people still viewed the U.S. favorably. These polls show the strength ofthe U.S.-Korea Alliance, even if the two countries don't always see eye to eye. By keeping this in mind and building on this solid base of support, policymakers on both sides of the Pacific can continue to work together to address issues in Northeast Asia and beyond.

Jenna Gibson is the Associate Director for Communication technology and Programs at the Korea Economic Institute of America, the views expressed here are the author's alone.

Photo from Sue Lahgford's phOtqstream on flickr Creative Commons.

[1] Margin of error for South Korea: +/- 3.2 percent, for United States +/- 3.6 percent. [2] In contrast, the United States' other ally in the region, Japan, is less enthusiastic. Favorable views ofthe U.S. have slid over the past few years from an all-time high of 85 in 2011 to 68 percent in 2015. How the Korean Language Has Diverged Over 70 Years of Separation

Posted on 20 August 2015. Tags: north korea. social issues. South Korea

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By Lilka Marino

the first official meeting between delegations of North and South Korea since division occurred in 1972, where delegations from both sides of the Demilitarized Zone met at Panmunjom to discuss reunification, it was the first time that the North and South met each other face to face in decades. However, the North Korean delegation already noted achange in the Korean language that both sides spoke, changes that have made a marked difference in each dialect that goes beyond regional differences. The Korean that is spoken in Pyongyang has evolved away from the Seoul dialect, which has been traditionally considered the standard register of Korean since the Joseon era, and legally established as such in 1935.

The divergence between the two dialects is not entirely due to geography, nor was it merely a result of the political isolation of Pyongyang. While certain terms such as kangnaengi and oksusu (the different words for corn in the north and south, respectively) have always differed depending on the preferred dialect of the speaker, political reforms in Pyongyang have cemented a place for these disparate words in the official lexicon of North Korea. In the Pyongyang dialect, the alterations in official vocabulary are the biggest indicator of a move to create an artificial and deliberate variance from the Seoul dialect;

These changes began not long after the division in 1945. In a move to eradicate illiteracy and promote "democratization" of written Korean, newspapers in North Korea such as the Nodong Simum were instructed by leader Kim ll-sung to circulate articles published entirely in the native Korean Hangul letters, and doing away with the practice of using Hanja, the Chinese syllabary used to write Sino-Korean loanwOrds.[1] Notably, while Korean is considered by most experts a language isolate, up to sixty percent of the vocabulary of written Korean is composed of these loanwords. While South Korea would have its own variable history with using Hanja, North Korea never uses Hanja in political or academic settings, save to teach students a few "necessary" characters that Kim ll-sung designated essential for relations with North Korea's neighbors.[2]

The next step of Kim ll-sung's policy with Sino-Korean vocabulary reflects the most dramatic change to the Pyongyang dialect. In 1964, he publically noted the necessity for these changes, citing that the Korean language had become a "hodgepodge language" too dependent on foreign loanwords, and if was in the best interests of North Koreans to substitute native Korean words and phrases for the English and Sino-Korean vocabulary. Kim llrsung described the new Pyongyang dialect that would arise from these changes as a munhwae, or the "Cultured Language", in comparison to the pydjuneo, "Standard Language", used in Seoul.

New dictionaries published after this speech retain traditional spelling rules that were native to dialects surrounding Pyongyang, as well as traditional regional vocabulary such as kangnaengi rather than oksusu. The most notable difference was the appearance of new words to replace a multitude of Sino-Korean words that are still in use in Seoul. Examples of these newer phrases include tayyang, "ocean", a Sino-Korean word that issubstituted with the native Korean term hanpata ("big sea"), arid taiethu, from the English word "diet", that isreplaced with salkkakkki (which

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translates literally to "the cutting off of flesh"). Many of these words are mundane, sUch as the word for shampoo, which instead of using the English cognate, North Koreans say meorimulbinu, or "hair water soap". Other words that lack even a South Korean equivalent include babgongjang, which refers to a place where women can redeem ration coupons for rice. A few foreign influences do remain, such as the tendency to transliterate native words for foreign countries like Ppolsukka rather than Pollandeu, which deviatesfrom the practice of using the English word, as the Seoul dialect usually does, Most other North Korean loanwords come from Russian such as kkumuna ("commune") or tturakttoru ("tractor").

The effect of Russian on the Pyongyang dialect has been evident not only in these lexicon differences, but in the stilted language that issues forth from the state propaganda organ. One expert, Andrei Lankov, has noted that the changes in the North Korean dialect have provided issues for English translators but do not affect him in the same way, as a lot of the state's use of idioms and phrases are borrowed from what he described as a "Soviet dialect" of official phrases. Russian speakers who lived through the years of Soviet propaganda would see an echo ofthe same language used in the Soviet Union mirrored in the often unwieldy phrases Pyongyang uses. One example of these borrowings is dang jungangui durie gutge mungchyeo, or "to be firmly united around the party Central Committee", a phrase used liberally in the indictment against Jang Song-taek in late 2013, which is derived from the Russian phrase splotjyshsis vokgrug tsentralnogo komiteta partii. Lankov lists other phrases and even songs borrowed from the Soviet originals and presented as uniquely North Korean.

One final notable difference is the use of speech levels to indicate the relationship between the speakers, ranging from the archaic mode when addressing royalty to one only used among close friends. This goes along with the highly detailed social hierarchy that exists in Korean society, derived from the Confucian mode. Traditionally, the Seoul dialect maintains six distinct registers that combine verb conjugation and honorifics to signify respect among speakers. In North Korea, it is said that these have been reduced to three, mainly the high, equal, and low styles.

It is important to note that a few words and phrases have changed their meanings on both sides ofthe DMZ due to political connotations. One example of this is the word tongmu) it was traditionally used all over the Korean peninsula to mean friend, but after the division, it fell out of use in South Korea as North Korean speakers used it to mean 'comrade', akin to the Russian tovorashch and the Chinese tongzhi. It has since been replaced by the term chingu. Another word that has changed meaning is the term agassi, a word for a young girl in Seoul, but a slave to feudalism in Pyongyang.

The Pyongyang dialect has not been alone in changing since the division; the Korean spoken by those south of the DMZ has gone through an evolution of its own. Unlike in Pyongyang, Hanja are still used in newspapers, maps, public signs, political texts and academic texts in Seoul.[3] However there is a decreasing[4] public knowledge Of Hanja characters, which are no longer taught in primary school and have been under scrutiny byproponents of Hangul-on\y publication as "old-fashioned and Unnecessary". Meanwhile, as the last North Korean orthographical reforms date to 1954, the latest South Korean reforms occurred in 1988, which reveal minor differences in spelling and grammar between the Pyongyang and Seoul dialects.

The most notable of the literary changes around Seoul is the introduction of more English loan words, often called Konglish, that are described as pseudo-anglicisms that English speakers may have trouble understanding themselves due to the inevitable changes from language borrowing. Up to ninety percent of foreign loanwords in South Korea originate from English[5). Commonly used examples include the popularly used hwaiting (from "fighting", a term used to empower coworkers rather than indicating violence), "service", which indicates something free of charge from a business, and keoning (from "cunning", meaning "cheating"). Terms such as these have been used by advertisers, company slogans, and even local and state government in South Korea, often combined with romaja, Roman letters.

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As such, it also increases the difficulties that North Korean defectors often face understanding Korean when coming to South Korea, since many lack sufficient English education to interpret what must be a bombardment of foreign words. The two dialects have diverged enough to the point where defectors confess they have a hard time living in South Korea. As such, two notable projects have arisen to meet the need for mutual comprehension within the same language. One of these projects is a North-South Korean dictionary, with both North and South Korean delegations meeting several times a year to iron out the problems with words such as juseu ("juice") and da/j/na/("sweet wafer"). However, the 2014 deadline has not been met due to rising tensions between the states. Another project meant to bridge the differences between all citizens of Korea is an application for mobile phones that reads potentially confusing Konglish words and 'translates' them into their Pyongyang equivalents, such asdorieos ("donut") and karakjibang ("ring bread"), The application is targeted towards North Korean defector students struggling to keep up with their studies thanks to the linguistic divide. It is also the hope with these projects to assist with any potential reunification scenarios, preparing Koreans on both sides ofthe DMZ to finally talk to their estranged neighbors.

Lilka Marino received her Masters of Arts in Liberal Studies from Hollins University with a double concentration in leadership theory and social sciences. Her interests include North Korean politics, Korean history, and traditional Korean culture. The views expressed here are her own.

Photo from Alfonso's photostream on flickr Creative Commons.

[1] Hannas, William C. (1997). Asia's Orthographic Dilemma. Honolulu: University of Hawaii Press, pg 67. [2] Hannas, ibid. [3] Taylor, Insup; Taylor, Martin M. (1983). The psychology of reading. New York: Academic Press [4] Brown, R. A. (1990). "Korean Sociolinguistic Attitudes in Japanese Comparative Perspective". Journal of Asia Pacific Communication 1: 117-134. [5] Sohn, Ho-Min. The Korean Language (Section 1.5.3 "Korean vocabulary", pp. 12-13), Cambridge University Press, 2001 Bang Bang Bang: Taking on the North Korean Regime through K-pop

Posted on 24 August 2015. Tags: Kim Jong-un. military affairs, north korea. soft power. South Korea

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Tensions have been high on the Korean Peninsula over the past few weeks after a mine blast that maimed two South Korean soldiers set off a series of escalations from both sides of the DMZ. One of the moves from Seoul was restarting anti-North Korean broadcasts for the first time in 11 years.

The broadcasts avoid criticizing the North Korean government directly - instead, the key point has been "subtlety." So, hidden among news reports and information about Kim Jong Un's health conditions, the broadcasts contained some unusual content - pop music. The broadcast soundtrack includes songs like Ill's "Heart," Girls' Generation's "tell Me Your Wish," and Big Bang's "Bang Bang Bang" — a not-so-subtle message for the North Korean soldiers hearing the tunes.

In response, North Korea began blaring its own propaganda, mainly in an attempt to drown out the messages coming from the South. The regime then declared a semi-state of war amid escalating tensions on the border, and the broadcasts were apparently a "key sticking point" in high-level talks over the weekend. On the surface, it seems like a bit of an overreaction to go to war over ballads and bubble gum pop. But for such a closed^bff regime, any information illicitly making its way into North Korea from outside is a potential threat.

Earlier this year Wired profiled a high-level defector Kang Chol-hwan who has chosen to fight back against the regime by smuggling thousands of USBs filled with movies, TV shows and music into North Korea every year. For Kang, the USBs are like the red pill from The Matrix - they show a reality that most North Koreans could never begin to imagine.

One ofthe smugglers who works with Kang puts itmore bluntly - "What I do is what Kim Jong-un fears most."

And he might not be far off the mark. According to a 2012 study from Intermedia based on a survey of North Korean defectors, more and more North Koreans have access to forms of foreign media- and their views actually have changed because of it. "One of this study's key findings - that a strong relationship exists between outside media exposure and positive perceptions of . the outside world - is clear evidence that the influx of outside media is contributing to a more aware North Korean • citizenry." Dramas in particular were cited as having an effect on North Korean viewers - one that the Kim regime would certainly want to block. According to one defector interviewed for the study, "I think the South Korean dramas are realistic. North Korea only shows beautiful images. But in the South Korean dramas there is fighting and I think that is realistic. There is also poverty, but in North Korea they only show you good things, so it does not seem real."

So when South Korea blasts information across the DMZ, even when that information includes some dubstep, it's no wonder the North gets uneasy.

According to a South Korean military spokesperson, the reason North Korea is so obsessed with stopping the broadcasts is that they lower the morale of the soldiers stationed on the border. That may be why they included songs with lyrics like "Tell me your wish! Aren't you tired of the boring days? Have you become buried by your ordinary life? Now stop and wake up." (Tell Me Your Wish) On Monday, the two countries reached an agreement to de-escalate the situation on the border, so the broadcasts will stop for now. But in future interactions with the reclusive North, the world would do well not to underestimate the power of K-pop.

Jenna Gibson is the Associate Directorfor Communication Technology and Programs at the Korea Economic Institute of America. The views expressed here are the author's alone. Photo from Dominic Alvez's phbtostream on flickr Creative Commons.

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North Korea Blinks

Posted on 25 August 2015. Tags: diplomacy, Kim Jong-un, military affairs, north Korea. Park Geun-hve, security. South Korea

No one apart from the representatives of the North Korean and South Korean governments who took part in the marathon talks over the weekend of August 22 can know exactly what took place. But there is some inevitable spin regarding who came away the "winner." North Korea says that, it forced South Korea to end the loudspeaker broadcasts at the DMZ. South Korea points to North Korea's expression of regret at the wounding of two ROK soldiers from landmines. Until more details become available - which may take a long time - the most reasonable conclusion from an outside perspective is that North Korea blinked, and that is a good thing.

The essential story is that two ROK soldiers were wounded by landmine explosions at the DMZ in an area that the ROK Army routinely patrols. South Korea demanded that North Korea acknowledge responsibility for planting the mines and apologize. North Korea refused. South Korea took the next step of resuming, after a long silence,loudspeaker broadcasts aimed at DPRK soldiers stationed at the DMZ. North Korea threatened war, imposed a deadline, and began moving military forces. Incidentally, North Korea attempted to counter with its own loudspeaker propaganda but because of technical inferiority, their broadcasts were too garbled to be intelligible. At this point, casual watchers of international news may well have concluded that the dangers of war far outweighed the value of the South Korean loudspeaker broadcasts and that South Korea should back down to preserve peace. Park Geun-hye's Administration, however, held its nerve and reiterated its demand for an apology. The two sides agreed to talks that extended beyond North Korea's deadline and, in the end, North Korea did release the statement of regret that South Korea initially demanded. South Korea then ended its loudspeaker broadcasts. In addition, the two sides have agreed to a renewed working-level dialog on family reunions, and announced that they would hold further talks aimed at improving North-South relations.

Was all this what North Korea intended? Probably not. The landmine incident most likely was a misjudgment by the North Korea Army, trying to act a little aggressively to protest the long planned joint ROK-U.S. military exercises, but without intending to trigger a crisis. In the face of the ROK's demand for an apology, North Korea fell back on its traditional bluster and saber-rattling, probably assuming that the ROK would back down and seek a face-saving gesture. When that did not happen, North Korea had no next step, and had no alternative other than to enter into talks and, in the end, issue the apology. The language of the statement of regret is qualified, but it is still a statement of something other than defiance,

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If war does break out on the peninsula, it almost certainly will come about as the result of an accident and events spiraling out of control. The North Korean regime is well aware that War probably would result in great harm to the Republic of Korea, but certainly would mark the end ofthe Kim family regime in the North. The North Korean regime is brutal and dangerous, but not suicidal.

One indicator of South Korea's resolve to not give in to North Korea bluster and threats took the form of their chief negotiator at the August 22-23 talks. Park Geun-hye's representative was Chief of the National Security Office Kim Kwan-jin. Kim was previously the Chief Director of Joint Operations Headquarters on the ROK Joint Chiefs of Staff, and then the fourrstar commander of the Third ROK Army. Following the 2010 North Korean shelling of Yebnpyeong Island, which resulted in civilian deaths, then-President Lee Myung-bak appointed Kim Kwan-jin as the new ROK Defense Minister, sending a clear signal that any further provocations from the North would be met with force. When Park Geun-hye became President, she retained Kim Kwan-jin as her Defense Minister and in 2014 moved him to become her National Security Office Chief. Therefore, when Hwang Pyong-so, a member of Kim Jong-un's inner circle and the North Korean Army's political director, sat down to negotiate with Park Geun-hye's representative, he knew he was facing someone who understood the strategic balance of forces and the military options available to both sides.

Has a new opening been created for productive talks between North and South Korea? We can hope so, but the fact that the recent flare-up in tensions probably was not planned or intended by North Korea introduces an element of pessimism on that point. The key question regarding when productive inter-Korean talks might begin is whether the Kim Jong-un regime is stable and self-confident enough to deal. On that question, the jury is still out. One glimmer of hope is that when the North Korean government described the August 22-23 talks, they said they were being conducted with the "Republic of Korea," rather than using one of their usual epithets such as the "puppet regime." The DPRK usually chooses its words with intent.

Mark Tokola is the Vice President ofthe Korea Economic Institute of America. The views expressed here are his own.

Photo from imcomkorea's photostream on flickr Creative Commons, Of Landmines, Loudspeakers, and Submarines on the Korean Peninsula: What We Now Know About Kim Jong-un Posted on 25 August 2015. Tags: diplomacy, Kim Jong-un. military affairs, north korea. Park Geun-hve. security. South Korea

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4

0By Tro y Stangarone

With the announcement of a deal shortly after midnight on August 25 the most recent inter-Korean crisis averted a military conflict on the Korean peninsula. Though the two sides reached a peaceful resolution, this is now the second significant inter-Korean crisis since Kim Jong-un came to power after the death of his father Kim Jong-il in 2010. The agreement ending the crisis also represents the third major deal that Pyongyang has reached with South Korea or the United States under his leadership. With the crisis now coming to a close, what can we learn from the crises that Kim Jong-un has precipitated and the deals he's made?

How the Current Crisis Developed

The most recent inter-Korean crisis began on August 4 when two South Korean soldiers lost their legs to North Korean mines while patrolling the DMZ. After the seemingly restrained response by South Korea of resuming loudspeaker broadcasts, tensions began to increase on August 20 after North Korea fired a missile towards one of South Korea's loudspeakers and South Korea returned fire. After North Korea made an uncharacteristically specific threat by giving South Korea a 48 hour ultimatum to shut off the loudspeakers or face attack the two sides entered into negotiations shortly before the deadline expired.

As part of the agreement reached between the two sides, North Korea expressed regret for what had happenedto th e two soldiers and agreed to take steps to ensure that it would not happen again. In exchange, South Korea agreed to turn off propaganda loudspeakers it had reactivated after 11 years in response to the attack. North and South Korea also agreed to hold family reunions around the Korean thanksgiving holiday of Chusok this year.

What Can We Learn From the Two Inter-Korean Crises

There have been two significant inter-Korean crises since Kim Jbng-un came to power in 2011 and one thing is clear - under Kim Jong-un North Korea has upped the stakes in its provocations. The first crisis began shortly after Park Geun-hye's inauguration as president in 2013. In that prior crisis Pyongyang engaged in nuclear and missile tests as before, but a study by KEI at the time also indicated that the use of militaristic rhetoric had increased under Kim Jong- un as compared to prior periods of inter-Korean crisis. Additionally, North Korea took the unusual step of withdrawing its workers from the Kaesong Industrial Complex for six months.

In the current crisis North Korea took a series of steps to raise tensions. As was previously mentioned, North Korea provided an unusually specific deadline for South Korea to shut of its loudspeakers or face attack. Kim Jong-un also ordered his front-line troops to a "semi-war state," one ofthe highest levels of readiness for North Korea and one for which it had previously only been declared during the 1968 hijacking ofthe U.S.S. Pueblo and the 1993 nuclear crisis. North Korea also put 70 percent of its submarine fleet to sea, turned on air defense radarsindicating that could detect

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incoming planes, and doubled its artillery along the DMZ. Most disconcerting were reports that North Korea had placed some artillery in the DMZ. If true, it would place Pyongyang in violation of the armistice agreement.

Interestingly, in this case, the North may have gotten ahead of its self with the specificity of its threat as the talks that ultimately brought the current crisis to a close were requested just before North Korea's own deadline by Pyongyang, likely undermining any leverage it had in the discussions and perhaps, along with suspected DMZ violations, allowing South Korea to expand the deal to include family reunions during Chusok.

While the two crises are different in nature, in each case North Korea took steps previously unused to raise the stakes in its showdowns with South Korea. So far this has not lead to an escalation of a military conflict, but if North Korea continues this pattern in future crises the risk of miscalculation increases.

Lessons from North Korea's Deals

For those looking to the lessons from the last crisis with North Korea or the Leap Day Agreement shortly after Kim Jong-un came to power, difficulties could lie ahead. The Leap Day Agreement collapsed shortly after being reached as North Korea violated its commitment not to conduct missile tests.

The outcome ofthe 2013 crisis was only marginally better. As part ofthe resolution, North Korea agreed to work with the South to internationalize the Kaesong Industrial Complex and finally resolve issues related to the usage of cellar phones and the internet in Kaesong. After six months of talks the two sides reached a limited technical agreement ort internet and cell phone usage, but it has yet to be implemented due to tensions between the two governments. However, while agreements to improve the complex's attractiveness to foreign investors have not been implanted, inter-Korean trade, which takes place primarily through Kaesong, has bounced back to a new high only a couple of years after the crisis.

What Comes Next?

Ultimately what may matter is how the resolution of the crisis is seen in Pyongyang among the elite. Kim Jong-un has faced down Park Geun-hye twice with little to show for his efforts. In the first crisis North Korea quickly caved once it was clear that Park Geun-hye was serious in her threat to close down the Kaesong Industrial Complex.

In the current crisis President Park remained firm throughout the crisis that North Korea should apologize and take steps to prevent similar occurrences in the future. The crisis has been resolved and while North Korea's statement of regret may not be as much of an apology as one would have hoped, South Korea did get what it was primarily looking for plus the prospect of renewed family reunions. How will this play among the elites in North Korea and Will it moderate or lead to more provocative behavior in the future?

For South Korea the family reunions will be a key to what comes next. Some 71,000 South Koreans are registered with the government and waiting to see their relatives in the North. The family reunions were the basis of Park Geun-hye's policy of Trustpolitik when she came into office and as a result of North Korean provocations this policy has never really had a chance to be implemented. Will the North find a pretext as in the case of Kaesong to delay or cancel the reunions or will they be a one off? Or, could they be an opportunity to build a new relationship? History would unfortunately suggest that one of the former is more likely than the later.

Lastly, North Korea could turn its eye to the next South Korean presidential election. Pyongyang has traditionally tested new leaders, much as was the case with Park Geun-hye, and we should expect the same when South Korea's next

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president is sworn into office in early 2018. Having now twice underestimated the resolve of Park Geun-hye Pyongyang will likely quickly want to assess if the new leadership in Seoul will be easier to rattle.

Troy Stangarone is the Senior Director ofCongressional AffairsandTrade at the Korea Economic Institute of America. The views expressed here are the author's alone.

Photo from Ben Kucinski's photostream on flickr Creative Commons:

Why North Korea's "Non-Apology

Posted on 26 August 2015. Tags: diplomacy. Kim Jong-un. military affairs, north korea. Park Geun-hve. security. South Korea

In the aftermath ofthe recent tensions on the Korean peninsula some commentators have contended that South Korea is spinning the idea that North Korea apologized for maiming two South Korea soldiers when it didn't directly claim responsibility for the act but merely expressed regret.

An article in The Diplomat on this idea states that:

...The Seoul government had simply spun a highly ambiguous, noncommittal statement signed off on by Pyongyang, in doing so, both sides were given a chance to save face.

The North did not accept responsibility for the attack, nor did it use the common Korean verb for "sorry," Rather, Pyongyang merely expressed "regret" over the incident.

This raises the question, is a statement of regret a statement of admission, as one can regret that something happened for which they had no part?

Context matters in a situation such as this. From a diplomatic perspective, the idea that North Korea would make a clear statement of responsibility was always minimal. Any statement was likely to be fashioned in a way that would allow Seoul to say that North Korea had acceptedresponsibility while Pyongyang could avoid a public statement of direct responsibility.

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It is also questionable whether Seoul would have wanted a direct statement of responsibility rather than something more ambiguous. Aside from the fact that the North likely would not have agreed, it could have made the politics in Seoul more difficult. A clear statement of apology that took responsibility for the landmine incident would have been an acknowledgement of a calculated attack on the South, something for which there would likely be demands for sterner measures agains/the North.

If is rare for Pyongyang even to express "regret" for hostile acts. In his memoir, former South Korean President Lee Myung-bak revealed that after the sinking of the Cheonan North Korea demanded 500,000 tons of rice as the price for an apology. North Korea, in fact, never has apologized or expressed regret over the sinking ofthe Cheonan. In the current crisis North Korea seems to have gained little other than the removal ofthe loudspeakers and an end to the crisis, while acceding to one of Park Geun-hye's key policy proposals - the resumption of family reunions.

In light of the suggestion that it was North Korea that requested the talks to end the crisis and that Pyongyang gained little, it is reasonable to conclude that its statement of regret is most likely is a tacit acknowledgement of its actions and to bring to conclusion a confrontation which had grown more destabilizing than it had planned. Anything more direct was always unlikely.

Troy Stangarone is the Senior Director for Congressional Affairs and Trade at the Korea Economic Institute of America. The views expressed here are his own.

Photo from josh bomb's photostream on flickr Creative Commons. The DMZ: An Opportunity for Science Diplomacy

Posted on 27 August 2015. Tags: diplomacy. DMZ. environment

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By Bradley Sancken

What do the Korean Demilitarized Zone (DMZ), Guanfanamo Bay, and the Galapagos islands have in common? While two ofthe three serve important national security functions, all three share a quality that is unique and unlike anywhere else on the planet, vibrant untouched ecosystems that boast endangered and endemic species.

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Since the creation ofthe DMZ in 1953, the 250 kilometer long and 4 kilometer wide boundary has been untouched by human development, allowing for habitats to grow and thrive. The South Korean government and NGOs, like the International Union for Conservation of Nature (IUCN), have advocated for the space to be used as a peace park, serving as a focal point of peace between North and South Korea in the hopes of promoting better relations. As of yet, North Korea has failed to embrace the proposal. Chairman of the DMZ Council, Kim Kwi-Gon, proposed a slightly different initiative of a Northeast Asia Ecological Network (NEAEcoNET), a cooperation amongst Northeast Asian nations for a continuous ecosystem. While both of these proposals touch on the concept of inter-peninsula cooperation by broadly engaging all levels of society, the DMZ presents a more specific opportunity that both North and South Korea can support for the sake of their own current and future unified national security, science diplomacy.

Now, what is science diplomacy and why does it hold potential for inter-Korean cooperation? In his speech at fheU.S.- Korea Conference on Science, Technology and Entrepreneurship in Atlanta, former Congressman and now President and CEO ofthe Korea Economic Institute of America, Donald Manzullo, explained that science diplomacy holds many different forms: foreign policy discussions on environmental or scientific affairs that require professional scientific input, the act of foreign ministers discussing laws and agreements that might affect scientific affairs, or the union of international scientists for research. In the first two cases, policy makers and government representatives are the primary actors and scientists serve in consulting roles or as the affected body. The latter, however, is centered on the exchange and/or union of scientists for a common purpose or research goal. This last definition is promising for inter- Korean cooperation because it is not a negotiation among politicians or an attempt to push peace talks on the North. Instead, science diplomacy, in the case ofthe DMZ, would allow both states to create a joint research team to analyze the ecosystems and developments within the border. One benefit of a scientific mission to analyze and assess the DMZ's ecosystems is that it is driven by the pursuit for knowledge and is less reliant on civilian engagement and the goodwill of both sides.

Not only is a scientific mission guaranteed to produce a better understanding about Korea's primal ecosystem, it is also necessary for the future ofthe Korean peninsula's health and conservation, making it an invaluable opportunity for North Korea,

Following the ecological disaster solutions serhinar hosted by the American Association for the Advancement of Science, the first international seminar in North Korea since Kim Jong Un'srise to power, Margaret Palmer, director of the University of Maryland's National Socio-Environmental Synthesis Center, reported grave circumstances regarding North Korea's environmental state. Barren fields and hills abound asremnants of both the Korean War and the drought and famine in the 1990s when forests were set ablaze by war or gathered for sources of fuel and nourishment. Overdevelopment of agricultural land, along with over-fertilization of soil with urea, hasrendered th e soil unbearable for seedlings to take root. This is only further intensified by the fact that without trees, no nutrients, such as carbon, are returned to the soil through decomposition, leaving the soil in poor condition.

Additionally, Dr. Palmer said that when visiting a national park she saw "maybe one or two birds, but other than that you don't see any wildlife." Animals are essential parts of the ecosystem helping pollination and the carbon cycle. On top of these issues, the Korean peninsula is subjected to annual Yellow Dust, or Hwang Sa (S^r), an atmospheric stream of dust carried from Northern China and Mongolia. This dust carries pollutants, pesticides, viruses, fungi, bacteria, and heavy metals from China's mass industrial productions, posing a large health risks, such as respiratory infections, for the Korean peninsula. Lastly, climate change and rising temperatures also pose threats to resources such as agriculture, forestry, water resources, and fisheries.

Despite having similar issues to North Korea, research from the Department of Ecology at Peking University suggests neighboring countries underwent a post-industrial environmental upswing, showing that there is a strong

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correlation between economic development and carbon budgets. While the researchers acknowledge there is not enough research concerning anthropogenic effects on the carbon cycle in East Asia, they observed that the rapid urbanization and economic development in Japan, China, and South Korea resulted in an "ecological transition," where high G02 levels are later reduced by vegetation recovery and accumulation in carbon sinks. However, in the case of North Korea, where large areas are without vegetation, it seems unlikely that mass revegetation will take place without a concerted effort by North Korea.

All in all, in light of reports on environmental degradation in North Korea, a research mission to better understand the piylZ's native ecosystem is in South and North Korea's best interests. By analyzing the native ecosystem, scientists, conservationists, and policymakers may make more informed decisions about agricultural production, reforestation, aquaculture, and other environmental solutions. In the short term, it is in South and North Korea's best interest to maintain their environments in efforts curb the effects of immediate concerns, such as Hwang Sa, In the long term, with the assumption that the peninsula will be reunited, it will be essential that the entire country is on the same page environmentally, otherwise reunification and development will pOse larger challenges.

Although it will not be the first time science has been used to engage with North Korea, perhaps a joint scientific mission would encourage North Korea to demine the DMZ for the sake of their own stability, knowledge, and health, and cooperate with South Korea for a better future.

Bradley Sancken holds a B.A. in Political Science and Asian Studies from St. Olaf College in Northfield, Minnesota and is a former intern at the Korea Economic Institute of America. The views expressed here are his own,

Photo from the Republic of Korea's photostream on flickr Creative Commons.

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