ROK-U.S. Strategic Forum 2017: Session III
September 5, 2017
BARK TAE-HO: We will begin the session III. I’m the moderator of the session. My name is Tae-ho Bark, professor emeritus – I just retired at the end of last month, so I call myself professor emeritus – at Seoul National University, and I was the former trade minister of Korea.
Let me first join our previous speakers in thanking the CSIS and the Korea Foundation for organizing such a timely conference as the one we have today.
Since our topic this afternoon is about the future state of the KORUS FTA, let me briefly introduce the recent development on the KORUS FTA to help the audience better understand the situation.
As you know, the KORUS FTA started its implementation on March the 15 th of 2012, which is about five and a half years ago. The KORUS FTA, as far as I understand, seemed to be working in the right direction as a mutually beneficial trade agreement, although occasionally we have a few concerns raised during the process of the implementation.
However, you often hear these days President Trump views the KORUS FTA to have serious problems. So last month a special session of the Joint Committee was held in Seoul between the USTR, Mr. Lighthizer, and the Korean trade minister, Mr. Kim. Of course we do not know the details, what happened to the meeting, and simply expect there will be soon another meeting between the two parties.
However, just before leaving Seoul for this conference, we heard the news that President Trump will discuss about the KORUS FTA on the 5th of September, which is today, with his steps including the possible U.S. withdrawal from the KORUS FTA. This is a situation we are facing.
Let me stop my introduction and move to our discussion. Hopefully we can come out with a few constructive suggestions to both governments.
In our session we have excellent speakers with extensive experiences, from both the U.S. and Korea. In the interests of time, I will not go over detailed bios of the speakers, as they are available in the conference packet.
Let me now introduce time allocation of the session. I would first like to give five to seven minutes to each speaker for their initial remarks. I then ask a couple questions to speakers for another short round of discussion, and finally we have some time for interactions with the audience.
Without further ado, let me invite Professor Kang from Sookmyung Women's University in Korea. Please keep your remarks to five to seven minutes. Please.
KANG IN SOO: Thank you. Thank you for the invitation. And actually, I work for the – on the research institute as the president for the last two years. So maybe some – many people think I can represent some private-sector opinion Korea.
So as Professor Bark mentioned, KORUS has brought economic benefit to the two countries over the last five years. However, as he mentioned, President Trump consistently and – mentioned some negative remark about the KORUS. So it seems to me it is inevitable to modify KORUS at this moment.
But to do this, it is necessary to conduct some kind of joint research about the results of the KORUS FTA for the last five years. For comprehensive judgment, actually, not only the commodity trade but also service trade and direct investment and job creation should be analyzed. In addition, the reactions, the responses of the Korean private sector and the government sector and also the government and American industrial sector should be considered.
So based on the fact, Korea – KORUS should be proceeding in a more future-oriented reciprocal way.
So first part, I want to explain about the balance sheets of KORUS. Korean export to America has increased from 38.8 billion in 2009 to 71.6 billion in 2016 – so increased a lot.
But since there are many other factors affecting export, it is not reasonable to see the increase in trade simply in the – as a consequence of FTA factor. In the – in the fast export growing industries, such as automobiles and general machineries, the U.S. also increased the import from other countries. It means that the increase in Korea’s export to America is also due to cyclical factors, which means the demand for automobile and general machineries increased as the U.S. economy recovered.
In case of automobile, most of the tariff cuts were made last year. That means for the first four years there’s no tariff cut in auto sector.
So let me go to the four sectors. The first is the market share of each country in other country’s market. Korea’s trade surplus for the U.S. expanded from 11.6 billion in 2011 to 23.3 billion in 2016. However, despite the global trade slowdown, Korea and the U.S. have increased their market shares in popular market. During this period the share of the U.S. in Korea’s import market increased by 2.1 percent point from 8.5 percent to 10.6 percent. And the share of Korea in the U.S. import market also increased by 0.6 percent from 2.6 (percent) to 3.2 percent.
The U.S. has about 20 FTAs, but as far as I know, only four FTAs increased the market share of each country, including Chile, Peru and Korea. But the Korean case is quite important. The size is quite big.
So investments – we can interpret it – that’s a result of kind of win-win situation. The statistics – and that comes from the Korean side. For example, the USTR – the U.S. Trade Representative – 2017 report on trade barriers across countries also gave a positive overall picture of the KORUS FTA. The service export of the U.S. to Korean market grew by 23.1 percent. Manufacturing export grew by 3.8 percent. And transparency of the Korean regulatory system increased. And nontariff barriers were eased to improve market access until to before the KORUS actually took effect.
On the cumulative trade balance, Korea’s service trade with the United States recorded 14.1 billion deficit in 2015.
And about the foreign direct investment, Korea’s foreign direct investment into the United States has increased significantly since KORUS FTA took effect, ranking first among foreign investing countries in 2016. The top-tier Korean companies that invested in the United States have created about 37,000 jobs, even that the average wage paid by a Korean invested company was about 10,000 higher than other foreign invested companies. It created good-quality jobs. It’s not like the work Trump mentioned.
In addition, while the cumulative amount of direct investment of the United States into Korea was 20.2 billion for five years, but Korea’s cumulative direct investment for the same period into the United States reached $51.2 billion, more than 25 times and – 2.5 times higher.
So this kind of evidence, this is – this is fact, and this is not the only – the opinion from the Korean side. So that means overall the economic benefit is quite evident. So we need to evaluate achievement of KORUS in a more broad sense.
And the second part is the responses of the Korean and American industries. Recently they’re having more organizations and associations in the United States and South Korea who openly express their opposition to the FTA amendment. In addition to the U.S. beef and pork producers association, which has increased its export to Korea, the U.S. Grains Council, USGC, expressed their concern about the amendment of the KORUS FTA. The U.S. Chamber of Commerce also said that most U.S. companies do not support renegotiation or termination of KORUS FTA. They believe, in general, the KORUS FTA is working relatively well.
The U.S. business community has clear position to the managed trade that forces U.S. products to be compulsory bought. With most mainstream economists, it opposes the claim that KORUS FTA is the cause of significant trade deficit of the United States.
And there are several other survey results about the KORUS FTA. According to the recent survey by KITA, the Korea International Trade Association, 70 percent of 250 Korean firms which invested in Korea – which invested into the United States have difficulties in making business plans due to increased uncertainties after President Trump’s Inauguration. Fifty-seven percent of the responding firms negatively evaluate the trade policies of the Trump administration. The enforcement of import regulation, levy of a border adjustment tax, renegotiation of NAFTA are likely to have a seriously negative effect on business.
And the Korean petrochemical industry do not seem to have serious damages caused by KORUS modification, because the size of Korea’s export to America is only 1.74 billion, which is 10 percent of Korea’s export to China, and most of the major petrochemical products are already tariff-free, even before KORUS FTA. However, there could be indirect negative effect if the U.S. levies high tariffs on Chinese product.
The Korean government submitted an analysis to the USTR, saying the Korea-U.S. Free Trade Agreement has resulted in an increase of export to 40 out of 50 U.S. states. The Korean government has particularly emphasized the fact that Rust Belt industrial zone, which is epicenter of transport, benefited from KORUS.
There are 14 states that have increased their annual export to Korea by more than 50 percent annually for the last five years. In particular, those of Pennsylvania, Ohio, Wisconsin and other areas increased by 45 percent annually. The Korean government wrote that the average export growth rate of the U.S. 50 states were 19 percent per year, and the Rust Belt region are particularly beneficial.
So these kind of things support some mutually beneficial results of the KORUS-FTA. So in this session and for the further development of the KORUS FTA, I want to emphasize some more future-oriented – I mean, the discussions in the future – so in more detailed things, let’s discuss later. Thank you.
MR. BARK: Yes. Thank you very much, Professor Kang. You provide many positive elements on KORUS FTA, not only from the Korea’s position; also you mentioned something about the U.S. industrial positions. Well, we – they are – that kind of arguments are very familiar to me.
But in any case, I want to invite the second speaker, Scott Miller, a senior adviser at CSIS. Please.
SCOTT MILLER: Thank you, and it’s a pleasure to be here this afternoon.
Look, usually when you start a discussion of economic cooperation between the United States and any – really, any other country, but let’s say South Korea, you would begin with thinking about the U.S. economic policy, the U.S. administration’s trade policy and economic policy. I’m going to start at a different place, because whatever the U.S. administration’s economic policy is, I think it’s more instructive and perhaps more predictive to rather look at their narrative on the subject. So instead of talking about policy, I’m going to talk about communication.
As I see it, the Trump administration operates largely off a narrative used frequently in the campaign and used repeatedly since taking office. That narrative – and the narrative’s – a narrative’s very common in almost any kind of communication. It’s a story that helps explain why you’re doing what you’re doing. And so it’s a – any political communicator, really any communicator, is trying to construct a narrative that builds the confidence of the audience and is able to persuade them. It’s basically what we do as – for a living.
The Trump policy for the narrative is actually pretty simple. It’s founded on – the core theme of the Trump narrative on trade is unfairness; that basically, in simplest terms, President Trump and his team tell a story that past administrations have been inattentive to the interests of Americans and given too much access to foreign governments, with too little in return. You hear this over and over again. It was a campaign theme. It’s repeated.
Now this is not – first of all, it’s not a new narrative. I would ask you to go back about 200 years to the Congressional Record. You will find a debate on the Tariff Act – I think it was in Andrew Jackson’s administration, but Senator Henry Clay took to the Senate floor and criticized what he called European pauper labor and that low labor costs in Europe were a burden on American workers and therefore needed to be – and unfair and therefore needed to be corrected. So believe it or not, in 1820 U.S. labor costs were higher than European labor costs. There are actually good reasons for that. But that was – that was a – the theme of unfairness, the point I’m making, is not at all new. It’s repeatedly used and has been used – almost in every political ad about trade policy that I’ve seen in the last 30 years has as its core element something’s unfair here. Usually it’s blaming foreigners for cheating, but it plays on the sense of unfairness.
Now the way President Trump completes the narrative is, he says that what happens now is unfair; I know it’s unfair because trade is imbalanced – and here he looks at bilateral trade balances and says he wants balance. All right.
Then he gives his audience a reason to believe, which is also very important in persuasion. The reason to believe is, I’m Donald Trump; I’m the master negotiator.
So this is the story: The theme is unfairness, the measure of unfairness is trade – is that is unbalanced, and all the president is asking for is balance. And the reason to believe is, I’m the deal-maker. I’m the negotiator.
OK. This has worked for him politically, so stay with me here for a minute.
Now the fact that a narrative works politically is not surprising. That’s why politicians use them.
Narratives run into trouble when they are disconnected from the underlying commercial realities, at least when it comes to economic narratives. And that has – that is where the tension arises with the U.S. business community and others with respect to the Trump trade narrative. The fact is, if you got – corporate executives or agriculture group executives talk about a lot of things, but usually they don’t talk about balance. They don’t talk about trade deficits. They’ll talk about competitiveness or improving global operations or improving customer service or having contestable markets, which are actually really important things in the real economy. And they almost never talk about the trade balance.
Well, why is that? First of all, we all know – who’s kidding ourselves? OK, the trade balance is probably one of the most economically uninteresting things you could even look at.
Here’s Exhibit A: The United States has a trade surplus with Australia. Australia has a trade surplus with China. China has a trade surplus with the United States. Anyone by the United States conference who can tell me anything that that means that is remotely connected to reality, I have a prize on that. (Chuckles.)
The fact is, it’s just an artifact. It’s an accounting – it’s an accounting element and has no practical importance and no connection to economic policy or practice.
So having said that, what you have is a disconnect between people in the real economy, most importantly American business, American agriculture, who look at the U.S.-Korea FTA as a – as a good agreement, and they like the stable set of rules. They’re finding ways to benefit from it. They like the fact that markets are more contestable. Could they find improvements? Sure. But importantly, it doesn’t have anything to do with the narrative that the president talks about of unfairness and the narrative of needing balance.
This disconnect, I would submit, will not long persist, and there’s a reason for that. The main reason is that Congress – while they have delegated enormous authority to the president over time, Congress retained for itself the power to regulate foreign commerce. All right.
So let’s play this out. President Trump and his team take their issues of unfairness and renegotiate, let’s say, the U.S.-Korea FTA. But they do it in a way that’s inconsistent with the actors in the real economy, who ultimately would help form the political coalition to convince the Congress to approve the changes. But what happens? Well, frankly you get a repeat of the Trans-Pacific Partnership. What happened – this is – this is a way, you know, oversimplified version, but the previous administration spent five years negotiating an agreement that wound up back in Washington with too little – too little support from the commercial actors involved and was never even presented to the Congress. All right. Forget that President Trump withdrew us from the agreement. That was – that was a mercy killing, at the end of the day, OK. And we know other options, but what really happened is, you had inadequate support from the political constituency most needed to deliver it.
Now I can tell you this is happening right now. This week, in the NAFTA negotiations, there was a perfect example of this. One of the more sensitive issues is automotive rules of origin. As you know, the auto industry is quite large. It is quite specialized across the three NAFTA economies. They’re highly productive and globally competitive as a recall – result of that specialization. And behind the NAFTA preference, in order to qualify for the NAFTA preference, a vehicle must pass 62.5 percent regional content to qualify for the preference.
So one of the things tabled was rules of origin. The U.S. auto industry says 62.5 percent’s a good number. We want to stick with it. The Canadian auto industry says, we like 62.5 (percent). The Mexican auto industry says, 62.5 (percent) works for us. All right.
At the negotiating table over the weekend, the Trump administration proposed something in the neighborhood of 70 percent, but something different.
Now I didn’t think they were four-party talks. I thought they were three-party talks. But on that issue, you have a four-party dispute. You have three parties who agree: the U.S. industry, Mexico and Canada. And you have one outlier, the Trump administration.
Now let’s say the Trump – let’s fantasize here for a minute. This is a thought experiment. Let’s say the Trump administration succeeds in changing the auto rule of origin to what they – whatever number they like – 70 (percent), who knows. It doesn’t matter what the number is. But let’s say they succeed.
They bring that back in implementing the legislation. What does the U.S. auto industry do? They oppose NAFTA renegotiation in Congress. That’s why this cannot persist. OK. So just take that as not a – not something that actually happened. Think of it as a thought experiment.
But at some point the real economy and the narrative have to merge. They haven’t merged yet. OK. And that creates the – that creates the friction. That creates the sparks that are flying off a lot of our trade relations at the moment.
So what would I do about that? Well, let me give the government of Korea and the industries involved in trade a couple suggestions.
First, have a clear implementation agenda. If there are still issues in KORUS – been in place for over five years – if there are unresolved issues, come on. Put together a plan to resolve them. Fix it. Make it work. Satisfy people. Show progress, because progress is an important balancing narrative to the concern of unfairness.
But second, realize that KORUS, while a very high-quality agreement, one that I supported when I was an advocate in the business community, and I still support, is not the whole story. And I would start a dialogue with American business in Korea about what is the economic agenda past KORUS. In other words, don’t get stuck on an agreement that was conceived in – 13 years ago, if my math’s right, signed 10 years ago, representing commerce from frankly a different era. Lots of other things are going on now. There are lots of ways to boost competitiveness in both countries. There are lots of ways, if you listen to industry, to find ways to make markets more contestable, more available to players that would be good for your growth and good for competition. And I’d find that agenda, which, to my knowledge, doesn’t exist now.
So with those two things, just – please keep the friction and the narrative in mind, and realize we’re – it hasn’t stop being bumpy yet, and it may not for a while.
MR. BARK: Thank you, Scott. Actually, the last part of your remarks I was about to ask you –
MR. MILLER: OK. (Chuckles.)
MR. BARK: After we hear everybody’s remarks.
MR. MILLER: Sure.
MR. BARK: But in any case, very good suggestions.
Let me now invite Professor Choi, Choi Byung-il, from Ewha Womans University.
CHOI BYUNG-IL: Thank you.
Well, I will talk on three points.
First of all, as a previous speaker mentioned, what’s wrong with KORUS? Is anything wrong? I will make argument the implementation issue’s not the main issue.
And second, I will try to provide my own analysis of what happens if Donald Trump, Mr. Trump, is going to terminate KORUS. What is going to happen? Is it going to really serve U.S. interests?
And so – and finally, if time allows, I will talk about how we can change subject, I mean tone of discussion, more constructive and mutually advantageous.
But first of all, what’s wrong with KORUS? Well, the reason why KORUS has been on the limelight again is because of U.S. accusations, mainly about all of a sudden unexpected rise of trade deficit, which is unfavorable to the U.S. side.
But somehow that trade deficit discussion has been transformed into issue-related implementations. The Korean side has been accused of not playing fair, mainly related to automobile regulations. The Korean side has been accused – even with KORUS, the government has tried to come up with some imaginative, creative regulation which is going to be – eventually impede U.S. terms or condition to Korean market. And also the illegal service liberalization – U.S. thought that Korea is going to fully liberalize, like 100 percent ownership. But what the Korean government did was 50-50 joint venture, and still they’re saying that is up to the spirit and the letters of the KORUS FTA, and some other issue, like digital trade and custom clearance and so on.
But if you, you know, focus on implementation, I think the Korean side, Korean negotiators, they also point to U.S. side. We have our own problem with you, like, you know, too unpredictable discretionary invocation – remedy; in recent times, tried to link with – trade issue with security under Section of 3 – 2232, which had never been invoked in recent times.
So if you try to play with unfairness issues, I think, you know, burden of proof falls clearly on both sides. And – but take one step further. If the implementation issue has been resolved to U.S. satisfaction, is it going to resolve problems? No, impossible. Only marginal – you know, the second – second order degree. It’s not going to resolve the trade deficit issue. So that means if the U.S. wants to achieve their negotiating goal, then they have to – two things: They have to rewrite terms on trade, which is something related to KORUS FTA, but again, they require some managed trade. So rewriting KORUS, changing terms of trade, market access condition is not going to solve their own problem.
So what should happen is something like what happened between U.S.-Japan back to 1980s. Korean side should import more from U.S. side outside of trade agreement, and Korean side should export less to the U.S. outside agreement. So we shouldn’t play by rule, but we should play by some additional deal. So system is changing from rule-based system which U.S. has been advocating for a long time because of it – you know, the – we’ve been saying prosperity and stable regime, but they tried to switch from rule-based system to deal-based system. But that even, I doubt, is going to be sufficient enough to solve problem. So eventually, at the end of day, you know, the U.S. will talk about currency issues, like they are going to argue that we have to stop Korean government intentionally undervaluing our currency; we need to appreciate Korean currency. If that happens, you’re going to open Pandora’s box. I haven’t seen any trade agreement ever since World War II. Trade agreement is talking about currency-related issues. So that means, you know, we will open up uncharted territory in world trading system. This is very much dangerous path.
And second question is, what if Trump – just, you know, moving to his bold action of terminating KORUS activity – well, first of all, it’s not going to serve U.S. economic interests, because as we all know, Korea is very much opened and competitive place. Korean government, in past 10 years, they negotiated FTA with more than 20-some countries – 50-some countries. So Korean market is very much open, especially to Australian farmers, Canadian farmers, New Zealand farmers, all these European Union farmers, which means if KORUS is going to be terminated, then U.S. farmers, they need to compete with all these very competitive – you know, the global competitors under very less advantageous terms and conditions. So this is not going to serve their interest.
And what about automobile? Even automotive sectors, they’ve been complaining. But what if, you know, Korea’s 8 percent tariff on automotive is going to be jacked up again? Then this is not going to serve U.S. interests. What of pharmaceutical, and so on? So it is no way to serve U.S. interests.
Then what about strategic interests? Well, this morning and this afternoon we heard a lot about strategic implication, OK? Korea, U.S., they’re showing more divergent views on their alliance. Well, if somehow even any hinting of termination, it’s already sent very, you know, critical signal to Korean – some Korean people: Look, U.S. is not reliable partners.
And don’t forget – perhaps Wendy is going to attest – KORUS negotiation took almost five years from inception to complete, which they had additional renegotiation. And during those five years, Republic of Korea was divided in half between pro-KORUS and anti-KORUS. Then, simply hitting the U.S. president is willing to or even considering KORUS FTA, terminating, is going to send very clear signal to those people: Look, U.S. is not reliable, then what is the implication? Then perhaps, you know, within Koreans this will, again, open Pandora’s box. Many Korean, they believe, well, they may willing to withdraw American soldiers from our continent, then they may tempted to talk about we need to nuclearize ourself and so on. So this is going to be really badly serve U.S.-Korea alliance.
And also, it is not going to serve U.S. strategic interests, because, as I understand, one of more important U.S. strategic goal in terms of grand strategy is engage China effectively. But this is already, you know, sends very clear signal to Beijing, well, from now on, Seoul is going to be more close orbit of Beijing and North Korea is going to be more – you know, the – come down the path of military adventurism. So it’s not going to serve U.S. interests. If, somehow, Donald Trump is willing to walk away from KORUS FTA, then this is not going to make America great again, as he promised. This is going to make America miserable. So this is really bad economic policy. This is terrible diplomacy.
So then, how we can, you know, move away from this? Well, I think for these questions, U.S. want to rewrite KORUS, but my impression from very first meeting two weeks ago in Seoul was the Korean side and the new Moon Jae-in government, they want to defend KORUS as it was agreed. I don’t think the two approach are quite comparable, because it has been negotiated more than 10 years ago. Now we’re experiencing, you know, the evolution of these economy, and so on. So it’s time for upgrade between two country.
And at the same time, it is time for expanding. Expanding, I mean if you’re really concerned about how you can effectively deal with rise of China or assertive China, it’s time to think about having more competitive, open East Asian economy with U.S. presence. So one step toward that direction is, perhaps, you know, the – you may invite Japan to create U.S.-Korea-Japan economic agreement, aiming at embracing China eventually. I’ll stop here.
MR. BARK: OK. Your last suggestion about Korea-U.S.-Japan trilateral FTA, you have been arguing this for quite some time.
MR. CHOI: Yes.
MR. BARK: I don’t know whether this will be really practical issue or not.
In any case, lastly, but not least, I want to invite Wendy Cutler. I don’t know how she’s feeling about the current situation. (Laughter.) You are the major, you know, player in achieving KORUS FTA for many years. So let me invite Wendy.
WENDY CUTLER: OK. Well, thank you very much.
When I first accepted Victor Cha’s invitation to speak here, I thought it was a pretty safe response, that I could come here and talk about why I didn’t think the bilateral trade deficit was the proper measure of the U.S.-Korea FTA. And I also thought that I could explain how, in my view, this was a win-win agreement, that benefits from this agreement are flowing both to the United States and to Korea. I had no idea that this topic would become so timely given the serious consideration by the current administration to withdraw from this agreement. I will just say technically, under the agreement, this is possible. We negotiated 10 years ago a provision which allowed either party to notify the other country of its intention to withdraw from the agreement, as long as it provided a six-month notification period.
So what is motivating the Trump administration to put this issue front and center right now? First, I would say there has been a displeasure expressed by President Trump with KORUS. It started on the campaign trail, and it has continued. As Scott mentioned, he views this agreement as unfair, failed, unbalanced. The good news for Korea is they’re not alone. There are other agreements he views in the same light. I’ve had the honor of working on some of those others, but I don’t take any of it personally.
Second, I think there’s a real NAFTA factor here, and that is, I think the president, in his heart of hearts, would like to withdraw from NAFTA, but he’s repeatedly told that he can’t do that, that the economic stakes are too high and our economies between Canada, Mexico and the U.S. are too integrated. So when he’s told that, his advisers then turn around and say, but maybe we can withdraw from KORUS. So somehow KORUS is second best if withdrawal is on the radar screen.
Third, the outcome of the meeting in late August between the United States and Korea didn’t help. The meeting, as we understand it, resulted in what I would characterize as an impasse between the two sides. They’re just very different views on whether KORUS has worked or not, whether KORUS is responsible for a growing trade deficit between the two countries, and what, if any, steps need to be taken.
And fourth, I’ve heard people say that perhaps the United States is discussing withdrawal as a negotiating tactic, that somehow this will allow the United States to get more from Korea in any – in any upcoming renegotiation. So those are some of the – I think the factors, most of the factors motivating the Trump administration.
In my view, withdrawal from this agreement would be a mistake and something we would live to regret. I think it’s a wrong policy decision at the wrong time. The previous panel discussed in detail how this is the time in our bilateral relationship where there should be no daylight between the United States and South Korea on all issues facing us. And I would just add here, there’s no action-forcing event on KORUS. We don’t have to make a decision on withdrawal today or tomorrow or next week. So in my view, I would recommend that both sides take a deep breath, that they lower the temperature on this issue, and they get back to the negotiating table. I really believe there is a way forward on this agreement, and I think it’s in both countries’ interests to keep it intact.
So let me offer a few suggestions for moving forward. First, Korea has put forward a proposal for some kind of joint study on the sources of the bilateral trade deficit, and also a discussion or analysis of the benefits of KORUS. I believe both issues merit a discussion, but I think both sides need to go into such a discussion open-eyed. I don’t see both sides at the end of this discussion reaching an agreement. I think they can both deepen their understanding of each other’s positions, and that will allow them, then, to work together to address each other’s concerns.
Second, I think it’s important that each side lay out its concerns with the agreement, and I think Korea has concerns with the agreement as well. And then I think after the concerns are laid out, both sides should discuss the best ways to address them.
Third, I think many of these concerns can be addressed through better implementation of the agreement. One of our frustrations with the KORUS FTA when I was at USTR is that many Korean ministries, they were intent on implementing the letter of KORUS but not the spirit of KORUS, and I think that has led to many of these implementation problems. With a new administration in Korea, a new trade minister who has a reputation for a hard charger and someone who has worked effectively with other ministries in the past, I think there’s a good opportunity for the administration in Korea to take a fresh look at these implementation issues and find a way to solve them and address U.S. concerns.
Fourth, I think both sides should keep an open mind about whether certain amendments are needed to the agreement. I would stress I view this as a two-way process. I think the United States needs to expect that Korea also may have suggestions for amending the agreement, and I think both sides should be open to that discussion.
Fifth, I think this – most of this agreement was negotiated 10 years ago, and so I think it’s appropriate for both sides to think of ways to update the agreement in ways that could be very win-win. You know, I think of the issue of digital trade, where the U.S. and Korea, I think, share many, many interests and objectives, and I think an issue like that could be put on the table and, frankly, would lead to a very constructive discussion.
And finally, I think it’s important for the United States to update Korea on the NAFTA negotiations since many of the issues it appears to be raising with Korea, it is also discussing and negotiating with Mexico and Canada. And so I think that type of discussion will also help both sides find a way forward.
So in sum, my recommendation is for both sides to get back to the table and that withdrawal is in neither of our interests, and I believe it’s a – it’s a – if we go that route, it will be a policy decision we will regret for numerous reasons. Thank you.
MR. BARK: Thank you very much, Wendy.
I was thinking of asking a few questions, but some of you already mentioned about the recommendation or suggestions to the future kind of resolving the issues regarding KORUS FTA. So instead of I’m asking you some questions, I will ask you whether you have some comment on other’s remarks, if you want to discuss a little bit further or if some are not clear, you know, things like that.
Maybe, Scott, you want to add something?
MR. MILLER: Well, look, this is not a problem of whose numbers are right, OK? It’s really not. It’s problems with the story, all right? And so I wouldn’t – look, I actually find it fairly convincing that most of the – most of the products which appear to be causing the trade deficit with the United States in KORUS actually are just rapid growth, and frankly, aren’t covered by KORUS. There’s a big – there’s a big Korean export surplus in electronics, which is covered by the ITA, not KORUS. It’s zero tariff because of the ITA. So KORUS didn’t have anything to do with that. And frankly, most of the auto liberalization hasn’t really phased in yet or hasn’t – wasn’t phased in with – in the time it was being analyzed. So growth in autos had nothing to do with the – well, both growth in autos and growth in electronics had nothing to do with KORUS. But – so I’m compelled by that.
But even accepting the – a path that considers the argument grants way too much credence to the notion that a bilateral trade deficit measures anything interesting at all, let alone anything interesting about trade policy. It’s a stupid way to measure it. And I would be – just be happy if every economist except Peter Navarro would make it a practice that every time this question comes up, just say that’s stupid and change the subject, because it is. It is confusing an accounting principle for an economic principle. Accounting is accounting.
Trade is always balanced, by the way. The current account is always in perfect balance with the capital account. Trust me on this. And just like failing companies have balance sheets that balance like successful companies have balance sheets that balance, it’s always – you know, the capital account and the current account are always in balance.
Now, you’ve got to look at the economic principle. The economic principle everybody ignores, and is absent from the arguments that are being made, is all trade is mutually beneficial to the people who are making the exchange. How do I know that so convincingly? Because the exchange wouldn’t happen if both sides didn’t benefit. All right? It’s that simple. We trade because it’s good for both of us. Then I would start there instead of just accepting the argument and publishing wrong numbers – not because the numbers are wrong or the numbers aren’t actually interesting to look at. I just don’t think they’re going to persuade anybody in this particular moment.
MR. BARK: OK.
Dr. Kang, do you want to mention anything?
MR. KANG: So my question is what – you mentioned some kind of balance and you mentioned about the unfairness.
MR. MILLER: That’s what I think Trump is talking about, yeah.
MR. KANG: So what – what’s the object of the – Trump when he talks about these kind of things. So you –
MR. MILLER: Well, this are deeply held beliefs on his part. They’re not – whether they’re –
MR. KANG: Except the political reason, what’s the other reason for this kind of mention?
MR. MILLER: Well, this is his rationale for his policies. I can tell you they’ve been consistent for a long time. So it’s relatively predictable narrative on his part. He’s believed this for a long time. That’s where he is. So what’s our job? Those of us who differ with the president, we have a responsibility to convincing him to the contrary, all right? That’s really our – and convincing him, as Wendy suggested, that what he’s intending would be bad policy and there are better policy arguments. That’s really all our jobs in a democracy, is to – when our political leaders, we think they’re on the wrong course, it’s our job to find ways to change the course or persuade them differently.
And so, for instance, in the tweet storm over the weekend, OK, for me, the best statement was by Senator Ben Sasse. Senator Sasse, the senator from Nebraska, important agricultural state – his statement basically said the Trump administration is pursuing 18th-century thinking with their trade policy, OK? Because they construe it as a zero-sum game. Senator Sasse went on to say that Nebraskans know that trade is mutually beneficial, it is win-win, and we wish our president would agree with us. So it’s that kind – I think there’s an opportunity to persuade, which I personally haven’t given up on. But I think it requires not accepting the premise that you know is flawed.
MR. KANG: So I’m not quite sure what’s going to be the consequences of Trump’s argument if he can make it.
MR. MILLER: Well, he can make it. And Wendy’s right, the text of the agreement gives him the authority to withdraw. I personally don’t think it’s quite that simple, because to eliminate the preferential tariffs – the tariff preference would have to be eliminated by an act of Congress. No president can change a tariff schedule. That part would not be self-executing. And I’ve noticed that federal courts are pretty anxious to weigh in on many of the administration’s decisions. I would say there’s plenary authority for the president to restrict migration due to national security reasons, but the 9th Circuit disagreed and stayed an order. So there’s – lots of things could happen to this. But I wouldn’t worry too much there. I would rather worry about building an alliance with the American companies who are invested in Korea, the traders, the people who are active in this relationship and looking for ways to say what can we do in concert, what can we do together to improve the conditions under which market competition happens, to look for ways to make markets more contestable to benefit our citizens, OK, and have a positive agenda that is the real counter to the claim of unfairness.
MR. BARK: OK.
Professor Choi, quick.
MR. CHOI: Yes.
MR. BARK: We have to have some time –
MR. CHOI: Well, Scott mentioned a storytelling narrative, but he only, you know, mindful of American story to tell.
MR. MILLER: Yes.
MR. CHOI: I think Korean negotiators, they have Korean side story to tell, because, look. You know, the U.S. side is not confronting conservative Korean government, OK? This government, their power based on grassroot. They – perhaps they don’t afraid of seeing terminations. So, you know, that’s something to think about. You have two sides of story to make one picture.
MR. MILLER: That’s very helpful.
MR. BARK: OK. At this moment, I want to spend a few minutes, a couple minutes just on my own view of these issues. I have some understanding about Trump’s view on international trading system. I mean, if you go to the G-20 meeting these days, or any kind of leaders meeting, U.S. don’t say much about protectionism of the United States, because if you look at the – each country’s regime on trade, which country is most open in the world? You answer that.
MR. MILLER: It’s the United States.
MR. BARK: United States.
MR. MILLER: Yes.
MR. BARK: So he’s kind of implying that some countries are having tremendous invisible nontariff barriers, which is unfair.
MR. MILLER: Yes.
MR. BARK: I mean, for that aspect, I can understand. I can share with his view. But another point I want to make is this. Among major trade surplus countries against the United States, China, how much – how big the surplus?
MR. MILLER: Oh, it dwarfs everything else.
MR. CHOI: 360 billion.
MR. BARK: More than 350 or – $350 billion. And then Germany, Japan and Mexico – you know, Mexico is also having some problem through NAFTA. So if you look at Korea, only more than $20 billion, we also feel it unfair, because, you know, we have an FTA with the United States. That’s why we are – you know, Trump is, you know, trying to catch Korea and Mexico, not yet China and Japan and Germany. So this is another view shared in – by some people in Korea.
In any case, I want to open the floor so we have some interaction with the audience.
Yes, please, over there. You should identify yourself and be brief so that we can have many interactions.
Q: John Burton with the Korea Times. I’m wondering if the – if you believe that the threat to withdraw from KORUS is also linked to Trump’s unhappiness about what he calls President Moon’s appeasement policy towards North Korea, and if he’s using this as a way to discipline Seoul.
MR. BARK: Let me get some more questions.
Yes, Danny, and then you.
Q: Danny Leipziger from George Washington.
My comment really is that there’s a choice to respond either technocratically or politically, and I think in most of these foras we talk technocratically, and I don’t think that’s the right answer. So I think we could take a lesson from how China has dealt with the U.S. and apply it a bit to Korea, although Korea has a broader set of interests, obviously, for political and military reasons.
But, you know, I think China handled Trump much better, right? And so I’m thinking that talking about Japan’s voluntary export restrictions, talking about, you know, opening new opportunities, basically I think you’re dealing with a very flawed administration and rationality is not the answer. You have to provide some clear benefits beyond KORUS, right? Whether that involves purchasing X, or limiting exports of Y, or not doing it through third countries – doesn’t matter. The point is, one has to give him something. I take your point that you want to steer, you know, leaders away from bad decisions, but you’ve got to give them something to do. And if NAFTA is his real target and he’s using KORUS FTA as the surrogate, well, that makes it abundantly clear that the technocratic solution and the technical renegotiations and the little tinkerings of an agreement are not going to change the landscape. So I would like to pose that back to the panel to say, politically, you’re in the White House now. Forget about giving lectures on bilateral deficits don’t mean anything. What can you offer that you think Korea could deliver on that would lower the temperature that Wendy suggests?
MR. BARK: Good question. I think to some extent Wendy already included some, you know, answers in her remarks.
Q: Thank you, Steve Landy, Manchester Trade.
I had the pleasure of negotiating with Korea about 25 years before Wendy did, when Korea was the Hermit Kingdom. And it was very protectionist. So those people who seem to think that Korea in any way is unfair, should go back then. My favorite memory was a report that the Korean police were told to go next to cars where the – luxury cars where they saw people smoking, and if the smoke rose in a certain way, it showed it was an American cigarette and they were going to give that person a ticket. Peter Allgeier actually told me that story.
MR. BARK: We were caught during my college, 1970s, by the police.
Q: Who did – with Kim Chun-soo (ph)?
MR. BARK: If you smoke American cigarette, please give me a call. (Laughter.)
Q: You’ve got it. None of them are living now, but that’s a different issue with smoking.
OK, my quick suggestion is one – there was a good point made about managed trade, and my own feeling is that that’s some kind of a middle. I think you do have to listen to what the White House is calling for. Countries do not stand up to the U.S. I mean, we can make a speech that Korea could, the markets are not large enough really to mount an opposition. I’m not going to say yes or no, because Scott has had a hell of a lot of more experience than I did.
But let me put some ideas that you may find useful in terms of dealing. President Trump made a big deal about two or three kind of controversial decisions when companies decided to invest in the United States instead of investing in Mexico, if you remember, at the beginning, even before he was president. So again, given the Korean companies and so on and what they do, I don’t know what you can do in terms of managed trade. I don’t know if you can bring U.S. brands over to Korea and try to sell them. Again, it may not make sense, but if you can have some success stories that the private sector generates, it will be unbelievably effective. I know it’s not trade negotiations.
Secondly, I think all our trade agreements can be improved or the U.S. trade agreements can be improved if we work closer with the country with whom we negotiate to promote trade in third countries, and so on. One example is that Korea has a lot more FTAs than we do, or has some FTAs with countries which we don’t have FTAs, and so on. I don’t know enough about the origin rules of those agreements, but I would strongly suggest you review those origin rules and see if there are opportunities to include U.S. components, U.S. parts in those origins and begin to export. I would also suggest that you begin to promote, quote, KORUS products – define how you want to define them – and you begin to talk about how Korea is helping to export products to the U.S., to third countries, and vis versa. Given your aid programs, your construction projects, wherever they are, you should really make an effort to use U.S. products and you should tend to move in that particular direction, and so on.
And then, thirdly, I think you do need a study, but I have a different kind of – not a study about what’s the cause of trade deficits. They already know that.
MR. MILLER: Yeah.
Q: The one issue that the – Navarro has made – and he makes some – has been the failure in NAFTA, a failure in Mexico for the wages to increase. And the whole theory of agreement is, wages increase, and therefore you become less – therefore the U.S. becomes more competitive. And they haven’t had this wage increase in Mexico. That’s why the standard joke now in Mexico is that maybe the leftist Manuel Obrador should win the election because he was at least focusing on increasing wages, which Mr. Trump may like. I don’t know what’s happening with Korean wages. I don’t know if they’re moving up. I don’t know if in export industries they’re moving up. But I think that’s where you should begin in terms of seeing if you can promise in three, four years will be some improvement in term – or some decrease in Korean competitiveness. Thank you very much for the opportunity to comment.
MR. BARK: OK. Thank you very much. I would like to ask the panel to answer some of the questions. The first question about the security issues and the trade issues. The second one is how to satisfy, politically, to some extent, President Trump. And thirdly, many, many suggestions, but maybe you can pick up some of them.
Wendy, do you want to go first?
MS. CUTLER: Sure.
So with respect to the first issue, the relation between North Korea developments and KORUS, I think that’s an interesting question, and one probably many of us in this room have thought about. And there’s many different ways to think about it. I hope that given what happened this weekend, that the administration thinks long and hard before they do something unfortunate on KORUS, because, once again, I think this is the time of all times we should be united with Korea and we shouldn’t be picking a trade fight with them.
In terms of the other suggestions that were put on the table and this idea that, you know, from a political point of view what is – what does the president get out of all of this, you know, we should kind of rewind the clock to late June, when President Moon came here. And my sense was the meeting went very well between both our presidents. And President Moon brought a lot of corporate executives with him, and they announced large plan – plans to make large investments in the United States. And so, you know, that’s out there. And I think 2016 was a record year in terms of Korean investments in the United States. And these aren’t just investments; these are investments that employ tens of thousands of Americans. So given the new plans, I think that was very well-received by the administration. And then somehow, at the end of the meeting, you know, the president referred to a KORUS renegotiation and even hinting that it was already underway. And my understanding is, that kind of left the rest of the people that work for him to kind of catch up with him, and therefore to request this special meeting with Korea under the agreement.
I would, you know, also just – I listened carefully to what Steve Landy had said. And, you know, it’s a very different world when I negotiated with Korea than when Steve did, and I think it’s a very different world today than when we negotiated KORUS in 2007, 2006-2007. And just one statistic: autos. Import penetration in the Korean automotive market is now 15 percent – 1-5 percent. It was 5 percent 10 years ago. It’s hard to say that market is closed now. I agree that there are probably unnecessary regulations and probably improvements that can be made to make it easier for U.S. companies to operate in Korea, but 15 percent market share and a growth of 10 percentage points over a 10-year period of time is pretty stunning. So let me stop there.
MR. BARK: You know, as far as 2001 or 2000, our foreign care share market share in Korea was .9 percent. So over the period of 15 or 16 years, it grew up to 15 percent. And, Choi, you want to answer?
MR. CHOI: Yes. Well, week ago, U.S. Congressman Ed Royce, he came to Korea, along with three other congressmen. And when he met President Moon, he talked highly about Korean company sees a – make investment in his district to come up with many, many manufacturing jobs employing American workers in producing Korean dumpling food. So that makes of certain interest.
I think similar thing was happening when President Moon Jae-in was coming to USA and he brought a lot of Korean businessmen. So they could promise.
But the thing is, if you ask, you know, businessmen, they are discussing whether or not Donald Trump is a temporary shock or permanent shock. Even if you promise and even relocate a lot of business to USA, but what if, you know, three years or seven years from now, you know, the tide is turning toward more free and open trade? Then I think they made very, you know, irreversible business commitment decisions. So that’s something to think about.
And I think Korean – if the Korean government is run by CEO-minded president, perhaps then he or she could come up with the kind of concession as some of panel or the audience mentioned. But you see, the time is quite different. I like to, you know, remind many American audience in this room where negotiation is not about simply exchanging, you know, deals on the table, as Wendy is going to attest. It is also played in a context of national spirit. In Korea, you know, there truly is a rising tide of confidence, nationalism. We believe we changed the Korean government through, you know, the democratic means. So the – if Korean side is making that kind of concessions, then many Korean media and some NGOs and these grassroots is going to depict this as surrendering to U.S. pressure and yielding to U.S. pressure. So this is likely to be seen as something quite good to government. So government is going to – something to discuss, something to panned between really, you know, play realistic politics or they play with more, you know, listening to domestic audience.
MR. BARK: Scott, do you want to pick up anything?
MR. MILLER: Sure.
I agree with the point that was made that you don’t solve political problems with technocratic means. That’s totally true. Sometimes some technocratic means can help. Like, I think if there were fewer American interests complaining about lack of compliance with the original KORUS, the politics would be a little better. But overall, you’ve got to solve the political problems with politics.
And what I’ve noticed in this administration so far is the president finds sort of action plans very appealing. I would note that the Pence-Aso dialogue, the hundred-day plan with China, those kinds of things. Those seem to have resonated with the president and certainly his messaging about the trade relationship with China, for instance, was much more positive after the announcement of hundred-day plan. Now, you know, those of us in Washington were kind of – you know, squinted at that and said, yeah, OK, they’re going to give us the stuff they promised to give us the last five times, wow, whoopy. But it worked for the president, and it worked for his story about I’m a dealmaker. I’m trying to improve things for the American people. So there may be a nugget there in addition to sort of KORUS implementation issues. That's going to happen behind the scenes.
Out front, something with a higher profile, and perhaps centered on Korean investment in the United States – because ultimately, those jobs really matter. And we won’t tell the president that you increase the trade deficit when Korea invests in the United States. But what you – what you can is tangibly tie it to U.S. workers. So I think given the rate of increase of Korean foreign investment in U.S. enterprises – in the U.S., I should say – is a strong indicator of a communications strategy to go along with that that helps promote in a very tangible way U.S.-Korea economic cooperation.
MR. BARK: Please, Kang.
MR. KANG: About the – Trump’s argument, what I want to say is that this year, actually the trade surplus of Korea against U.S. has dropped a lot, about 30 percent decrease. And that kind of – I mean, the changes in trade should be reflected in the negotiation. I don’t know whether it is possible or not. The mutual understanding is very, very important. So even though it is a political reason, it should be realizing economic area. So economically, we should investigate what’s happened between Korea and USA. So I don’t know. The Korean government suggests some kind of joint research or joint investigation about the impact result of the KORUS. So in my opinion, that kind of result should be – I mean – had both side.
MR. BARK: OK. OK, I want to receive just one last question if you have some urgent questions to our panelists.
Q: Sure. Hi, Mark Manyin with the Congressional Research Service.
I’m wondering if the possibility of increased U.S. sales of LNG natural gas to South Korea could be a possible answer to some of these questions. That’s the first question.
Secondly, is there anything about the South Korean government’s – does the South Korean government have the ability to manage South Korean imports of natural gas – for example, through KOGAS – to direct how South Korean companies or state-owned enterprises’ decisions are on purchasing are being made?
MR. KANG: Actually, the last government announced some kind of plan to put their shale oil and shale gas. So it will decrease the trade deficit.
MR. BARK: Let me also answer to your question. I actually visited Houston last June. We had a kind of seminar. And I know that KOGAS is establishing some kind of facility so they can import shale gas directly from that area. And also, SK Energy, they are investing huge amount of money in Austin and other Texas area to build their own facility to be prepared to import that kind of shale gas and shale oil. So I think this is our efforts in this investment so we can create some more jobs, too.
MR. MILLER: Yes.
MR. BARK: OK, I think it’s about time to close our session. I think we have very constructive discussions, and some of the recommendations made by the panelists will be very useful for both government. We have to find some way to reflect these suggestions to the government so they can use this recommendation.
Before I close, I think we should make efforts – multiple efforts, simultaneous efforts not just for renegotiations – you maybe implementation discussions. You can do that without renegotiations because joint committee is set because, to, you know, we want to discuss this. So including that, and also maybe, you know, we can discuss or prepare for possible acceleration or expansion of market access. That’s another area you already mentioned, Wendy. And also, we want to upgrade our FTA because it is done, you know, maybe 15 – I mean, 10 – more than 10 years ago. So we can reflect new commercial issues or new commercial rules in the KORUS FTA.
And lastly, just maybe Danny’s recommendation, we have to also consider something we can resolve outside FTA packages to reduce our, you know, bilateral imbalances. We don’t like to say this, but somehow we have to – you know, both parties have to have some kind of improvement, so maybe some kind of discussion outside the FTA package will be also important.
Well, this is my own summary of the discussion we have. So with this, I would like to conclude the session three. Please join me in applauding the panelists for this excellent discussion. (Applause.)
LISA COLLINS: Thank you. Please join me in giving a round of hand – a round of applause to our speakers and all of our speakers for the day. We will now have professor – sorry – Ambassador Lee and Dr. Victor Cha from CSIS come to the stage and give some last remarks for this conference. Thank you. If our speakers would just take their seats, thanks.
LEE SIHYUNG : I’m not in any position to assess today’s sessions. First of all, I really appreciate all of you for keeping your seat until the end of the session – of the last session, and I especially appreciate the panelists who gave us quite inspirations and good suggestions. And I found the whole sessions were proceeded very punctual, sometimes earlier than scheduled time, and discussions were really rich.
As I explained why we took September for our forum timing, we expected, last December, when we had first forum here, both agency/institutes thought that by the time of early September 2017, after the summer breaks, we would see many high-ranking positions of the Trump administration would be filled and we would see the basic direction of the policies, and then probably in Korea we might have new administration by this time. But as somebody pointed out this morning, I mean, we heard from the keynote speech, still many major positions in – I mean, Trump administration is yet to be filled. And Koreans are, from time to time, puzzled about statements, announcements made by this administration. The timing we expected was not fully met, but somehow North Korea made our forum really timely. (Laughter.)
I personally set my goal of the – of this year’s forum basically to introduce the Moon Jae-in government’s foreign policies – basically policy toward North Korea to the opinion leaders in this town. In that sense, I believe our team succeeded in introducing and explaining the policy lines of this new administration in terms of North Korea issue, especially.
I think I’m going to make brief – some summary of this forum to the government through Foreign Ministry, basically. That’s what I am thinking of at this point. I personally – well, I just would like to give you my personal feeling of today’s sessions. In the morning session, I said my basic message I wanted to deliver you was – (inaudible) – on Korean Peninsula, in any case. But another point I said – I deleted – was let’s keep up the window of dialogue for the later time whenever it’s appropriate. Well, I believe we agreed upon that now is the time for maximum pressure, not time for dialogue.
But pressure is not the goal by itself. We agreed upon that pressure is a tool to bring North Korea to the dialogue table. Then, hopefully, we would like to see, I don’t know, when it is going to be, but there must be some time for both Korea and the United States to have a dialogue with North Korea. Then we need to be ready for the dialogue. Some of panels talked about this issue.
The winter solstice, which is around the end of December, in Korean traditional philosophy, is thought to be the beginning day of spring. The very cold wintertime, actually, spring begins there. So while the situation is really grave, but at the same time, we need to be ready for the next spring. I’m not saying we need to speak out the necessity of the dialogue with North Korea, but what I’m saying is, we need to be ready for the well-concerted dialogue, for the opportunities, whenever it comes.
Well, I have lived through my school days when I was not allowed, legally or socially, to say something bad about what the president’s mentioned or president policies, whatever – something related to the president. I would not dare to refer to the word of American president tweeting appeasement. I intended not to speak it out – (laughs) – but there already is some speaker said that. The small window of possible dialogue at a later stage shouldn’t be regarded as an appeasement.
I don’t know how the Americans would feel about new Korean government’s position toward North Korea. I personally don’t believe that can be referred to as appeasement. Korean government is trying hard to put maximum pressure on North Korean bad behavior. Appeasement automatically reminds me, as a former student of international studies, of very specific time of history which led up to the Second War. So I really hope, to all you attendants here today, to have better understanding through today’s sessions on the policy lines of the new government of Korea.
So what I would like to do – or not this time, but in the months and year to come, to prepare more opportunities for each other to understand how we want to run our alliance, how we want to have more cooperated and concerted policy toward North Korea to solve this difficult situation. So I’m not summing up any discussions. I’m just telling you what I personally felt today. And I once again appreciate CSIS for this preparation. And I had a good steak for lunch, anyway. Thank you very much. (Applause.)
VICTOR CHA: Well, thank you, President Lee.
It’s been a long day. And I know particularly for our guests from Korea, it’s a very long day because you’ve probably been up since 2:00 this morning because of jet lag.
You know, when we prepared this conference, we – of course, as President Lee said, we had absolute certainty that North Korea would do a nuclear test this weekend – after a long weekend. And that’s a joke, by the way. We had no idea that they were going to do a test. (Laughter.)
And, you know, I think for events like this, I mean, we had – with the congresswoman here and with the vice minister, you know, we expected we’d have a good turnout, but I’m told that our turnout was way off the charts. I mean, we had over 350 people who responded, and then this morning I think we had 16 television cameras here. And I don’t think that is a reflection – well, I do think that’s a reflection of the work of CSIS and the Korea Foundation, but I also think it’s a reflection of the times that we’re now in, the seriousness of the times that we’re now in. And I can see the concern on all of your faces throughout the day as we went through each of the panels, whether we were talking about the alliance, talking about North Korea, or talking about trade issues. And so I agree entirely with President Lee. It’s important for us to continue to have events like this, to raise, to the best we can, the level of conversation and informed discussion and public policy debate on issues related to the United States and Korea as we face the challenges going forward.
You know, I think we’re all under no illusions that it’s going to be easy. I think it’s going to be – it’s going to be challenging. But I think as Congresswoman Murphy said this morning, this alliance is not simply an alliance on paper. It is an alliance that is, in her words, authentic, personal and resilient. And with that spirit, I think regardless of the challenges that we face on – both in Washington, in Seoul, in the rest of Korea and the rest of the United States, we have to move forward with that in mind.
So with that, I want to thank the Korea Foundation and President Lee for co-hosting this conference with us, and personally thank President Lee for all the great work that you’ve done with the Korea Foundation. It’s really been a pleasure working with you. None of this could have happened without our staff at CSIS, who worked tirelessly over the long weekend to iron out all the last-minute details to make sure things ran flawlessly. And then I want to thank Sang Jun and Andy and Lisa for doing that. And of course, Congresswoman Murphy for joining us, again, first – her first appointment back after the recess when, as some of you have seen, there is a hurricane that is bearing down on her state this week. Really extraordinary for her to join us. And then Vice Minister Cho coming all the way from Seoul just for this event was really a great gesture on his part.
I learned a lot personally from each and every one of the panels, and I follow this stuff every day, and I learned a lot from each of the panels. I hope you did as well. And hopefully, we can continue to do this going forward. So thank you again. Thank you to all of you. Have a great evening, and our meeting is now adjourned. Thank you. (Applause.)