U.S.-ROK ALLIANCE MANAGEMENT - LOOKING AHEAD TO

C O N F I D E N T I A L SECTION 01 OF 05 SEOUL 004260

SIPDIS

SIPDIS

STATE ALSO PASS USTR AND COMMERCE

E.O. 12958: DECL: 12/14/2016
TAGS: KS PREL
SUBJECT: U.S.-ROK ALLIANCE MANAGEMENT - LOOKING AHEAD TO
2007

Classified By: AMB Alexander Vershbow. Reasons 1.4 (b/d)

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SUMMARY
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1. (C) With only 12 months left until the next presidential
election, President Roh finds himself stuck in the lowest
approval ratings ever for a Korean president -- 5.7 percent
according to the most recent poll, low teens according to
others. Roh's desperation to recover and have some say in
the choice of his successor will color virtually all aspects
of ROK political life in the coming year. Inevitably,
U.S.-ROK relations will be involved. Our actions and words
will be scrutinized and criticized, and there will be much
more than the usual quota of exaggeration and fabrication by
the Korean press and politicians. The following issues come
in "fragile: handle with care" packaging:

-- PRESIDENTIAL ELECTION. The USG must vigorously and
continuously battle the South Korean conventional wisdom that
the U.S. favors a GNP candidate; the top priority is to avoid
the U.S. becoming an election issue as in 2002, when Roh
Moo-hyun's campaign exploited the death of two schools girls
hit accidentally by a USFK vehicle.

-- NORTH KOREA. President Roh continues to believe that his
best chance of leaving a legacy -- and, at the same time, of
regaining some popular support -- is through a "home run" on
North Korean issues. Since a breakthrough in the Six Party
Talks is unlikely, at least in the short term, Roh may seek
to arrange a North-South summit to demonstrate that
engagement with Pyongyang is still working, despite the
likely dearth of any concrete results. Our challenge is to
pursue denuclearization of North Korea divorced from South
Korean domestic political developments, and to keep the ROK
from breaking ranks in the Six Party Talks.

-- THE KORUS-FTA. The latest round of discussions in Montana
was a disappointment, although an FTA deal is still
achievable. Nevertheless, we need to prepare for the
possibility that, lacking leadership from the top, the ROKG
team will be unable to make the tough decisions required on
our most sensitive issues. A failure to come to an agreement
could take a toll on our bilateral relations; the challenge
would be to avoid recriminations that could make "resisting
U.S. pressure" a campaign issue.

-- USFK ISSUES. The overarching issue is to maintain
momentum toward alliance transformation, preparing the ground
for transfer of wartime operational control (OPCON),USFK
realignment, and range sharing. The Defense Ministers'
meeting (SCM) in October did not decide on the exact date of
OPCON transfer. This politically charged decision must now
be made during the first half of election year 2007.
Reaching agreement on the related issue of the transfer of
Armistice maintenance responsibilities will also be extremely
difficult. Other thorny USFK issues include base closures,
training needs, and the move from Yongsan Garrison to
Pyeongtaek.


2. (C) While 2007 will be a turbulent year for Korean
politics, we need to minimize the ups and downs in our
bilateral relationship. We believe the new foreign policy
team led by Song Min-soon could prove to be helpful, probably
more so than some may expect in Washington. Song, the
dominant foreign policy player within the ROKG, now has
reached the pinnacle of his chosen career; he must be prodded
to pursue broader interests and perspectives rather than just
following Roh's political agenda. For our part, we need to
assure the Koreans that we are doing everything possible to
achieve a negotiated solution to the North Korean nuclear
issue and that we are not opposed in principle to the ROK's
policy of engagement with the DPRK, while doing our best to
keep Seoul on the same page in the Six Party Talks. We also
need to manage USFK issues, such as OPCON and base
relocation, so that they do not become domestic political

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footballs. These policies, implemented consistently and
transparently, will place the USG in a better position to
protect the Alliance and work with the next ROK president,
whoever that might be. END SUMMARY.

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DESPERATION POLITICS
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3. (C) Few in South Korea would dispute that Roh is the
lamest of lame duck presidents. He has virtually no control
over his party, the legislative agenda, or high-level
appointments. A recent poll show Roh's approval rating at an
amazingly low 5.7 percent. Even at the height of the "IMF"
crisis, when the South Korean economy was rapidly sinking
with the won-dollar exchange rate at over 2000, Kim Young-sam
had a higher approval rating. Roh's recent woe-is-me
comments about possibly being the first Korean president not
to finish his term illustrate his profound frustration and
desperation.


4. (C) After having promised so much -- new politics based
on ideas, not regionalism -- Roh is deeply disappointed that
his own political party wants to abandon him to form an
alliance with the Democratic Party, a regional party from
which Uri members broke away and whose support is exclusively
from the eastern region of the country. Over the next month
or so, things will get worse for Roh as neither the
opposition GNP nor the ruling Uri will cooperate with him on
issues such as education reform, real estate prices, and
possibly the budget for next year.


5. (C) Roh has nobody but himself to blame. From the
beginning, Roh has attempted to put in place policies and
ideas out of the mainstream, including the reform of the
national security law and education reform. Equally
troubling were his appointments, such as Rhyu Shi-Min at the
Ministry of Health and Lee Jong-seok at the Ministry of
Unification, who were ideological and divisive. Perhaps
worst of all, Roh's penchant for publicly verbalizing his
private thoughts -- his anti-American tendencies, hatred of
the Japanese, loathing for the South Korean elite and
educated class, and revisionist tendencies in all things
North Korean -- have alienated even many of his supporters.


6. (C) Still, Roh is not a quitter and we don't expect him
to act on his recent musings about not finishing his term.
Rather, throughout his political life, Roh's strategy has
been to create deep divisions, which he then takes advantage
of, allowing him to survive and even prosper. For example,
in 2004, Roh used the impeachment triggered by the opposition
GNP to appeal directly to voters, allowing his newly formed
Uri Party to gain a majority of the seats in the National
Assembly elections that year. The GNP, having learned its
lesson in 2004, is not likely to give Roh another such
opportunity.


7. (C) Roh's strategy has also been to tap nationalism to
his advantage. Nationalist sentiment played a key role in
Roh's election in 2002, and has been a prominent theme
throughout his presidency, from his vision of Korea as a
regional "balancer," to his calls for Korea's resumption of
OPCON, to his aggressive denunciations of Japan's historical
record. Knowing that these issues resonate deeply with the
Korean public, it is likely that Roh will amplify some or all
of these issues in his final year in office.

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NORTH KOREA
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8. (C) Issues related to North Korea present such political
opportunities for Roh. For Roh, the developments in
North-South relations during his tenure rank among his
greatest achievements and biggest disappointments. He is
proud of his engagement policy, which he believes has brought
about a reduction in tensions with North Korea, and of the

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launch of projects like the Kaesong Industrial Complex that
are supposed to encourage Chinese-style reforms in the DPRK.
At the same time, Roh is acutely aware that the DPRK's
development and testing of nuclear devices represent a
failure of his North Korea policy. Over his remaining time
in the office, Roh will press for virtually any nuclear deal
to achieve vindication. Our MOFAT contacts have told us that
Song Min-soon, as foreign minister, will be the day-to-day
manager of the Six Party Talks. As the talks resume in
Beijing and inevitably become laborious, we can expect Roh to
show increasing mood swings as he vacillates between
Pyongyang and Washington in dishing out the blame.


9. (C) North Korea is very much a "wedge" issue.
Domestically, Roh will defend engagement as the only way to
maintain peace and stability on the Peninsula, appealing to
the broadest possible electorate while trying to portray
conservatives as reckless warmongers. To highlight the
peace-vs.-war theme, Roh may seek a summit meeting with Kim
Jong-il as a kind of electoral wild card, even if there is no
assurance of a substantive outcome. Roh has said on many
occasions that he is prepared to meet with KJI anywhere,
anytime. So far, KJI has shown no indications of obliging,
but the electoral dynamics in the South -- not to mention
monetary benefits -- could sway the North Korean leader.


10. (C) North Korea issues in the ROK will inevitably
involve the U.S. As his time in office runs out -- and as
his frustrations at the lack of progress in the Six Party
Talks likely mount -- Roh is fully capable of blaming U.S.
hardliners for the problem and making new overtures to
Pyongyang.

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USFK ISSUES
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11. (C) Polls consistently show that a sizable majority of
the Korean public supports the presence of U.S. troops in
South Korea, and we believe that support has increased as a
result of the DPRK July missile launches and October nuclear
test. Still, specific issues and unexpected events involving
USFK are likely to be exploited during the election campaign.
Some of the following items could become domestic political
issues next year:

-- The transfer of wartime operational control (OPCON) to the
ROK. Progressives will cast it as the return of Korean
sovereignty. Conservatives will argue it weakens South
Korea's national security. Similar arguments will surround
the related issue of the transfer of Armistice maintenance
responsibilities to the ROK. Despite election-year rhetoric,
we need to work behind the scenes to ensure that the ROKG is
taking the steps necessary prepare for assuming OPCON.

-- Basing and training issues, most notably implementation of
the Yongsan Relocation Plan (YRP) and Land Partnership Plan
(LPP) provide a host of political targets at which
politicians will take aim. Topping the list are cost
concerns, real estate issues and the environmental impact on
local communities posed by the consolidation and relocation
of a significant portion of the U.S. Forces on the Peninsula.

-- The ROK troop deployments in Iraq and Afghanistan will
also likely remain controversial throughout the ROK
presidential campaign, particularly if the security situation
in either area of operation worsens.


12. (C) The new Defense Minister, General Kim Jang-soo,
promises to be a good ally in our combined effort to
implement this very heavy POL-MIL agenda in 2007 and to
transform the alliance, but he clearly lacks the strong
political influence enjoyed by Song Min-soon and other Blue
House confidants of President Roh. We must nonetheless
encourage the entire ROK national security team to stand up
for the U.S.-ROK alliance and to educate the Korean populace
about the fact that the Mutual Defense Treaty, and our joint

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commitment to it, are as important now to the security of the
region as they ever were. More specifically, we should try
to clear the decks of as many unresolved alliance issues as
possible in the first half of 2007, to reduce the risk that
alliance problems could become campaign issues.

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FTA
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13. (C) The successful conclusion of the KORUS-FTA next year
would mark another major step forward in the alliance, but we
must also be prepared for a different outcome, particularly
since ROKG senior leaders have done little publicly to make
the case for the FTA, or to explain why the short-term
economic costs are worth the long-term benefits. Indeed,
supporters of the FTA (most of them in the opposition GNP
party) are highly critical of Roh, many of them doubting
there was ever strong support for the FTA at the highest
levels of his government. Others in Roh's own party question
whether he carefully assessed the extent of the changes and
market openings needed to conclude a deal. Such doubts --
magnified by the media, National Assembly, and anti-FTA
lobbies -- have contributed to the lack of progress in the
negotiations. The most recent round in Montana again
revealed a big gap on key issues, including trade remedies,
pharmaceuticals and autos, not to mention long-standing
differences on agriculture, services and textiles.


14. (C) The KORUS-FTA has to be concluded by March 31 to
allow Congress enough time to review it before Trade
Promotion Authority expires on June 30, 2007. While there is
still a chance we can resolve the tough issues in the next
2-3 months, we need to prepare for the possibility that
negotiations might not conclude in time. As March 31 draws
nearer, we will be better able to assess how much more work
remains to be done. If the gap still remains large, we will
have to decide whether to seek an extension of Trade
Promotion Authority or just shelve the work until a later
date. Walking away from the talks, if agreed upon by both
sides, must be carefully justified to minimize the political
damage to the alliance that many will read into it.


15. (C) We would add that success in achieving an FTA will
bring its own set of challenges, given the strong political
opposition here -- including a significant fraction of ruling
party politicians. We will need to press the ROKG to be more
forceful in selling the FTA to its own constituents, rather
than leaving it to us to make the case. Absent their
advocacy for the agreement, the impression will be that the
U.S. gains more from the FTA and that we shoved it down the
Koreans' throats.

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NEW FOREIGN POLICY TEAM
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16. (C) Song Min-soon has moved from the Blue House to MOFAT
with his authority and influence substantially enhanced. He
clearly overshadows the new national security advisor, Baek
Jong-chun, a little known academic (and retired military
officer) from Sejong Institute, who will likely be an advisor
in the Kwon Chin-ho mold rather than someone who oversees
day-to-day foreign policy-making and implementation. Baek's
deputy is Yun Byung-se, a career MOFAT officer close to Song.
In his inaugural remarks to MOFAT staff, Song made it clear
that his number-one priority was to denuclearize North Korea,
followed by strengthening the U.S.-ROK alliance.

17 (C) Song will be a hands-on foreign minister. He has
already told his staff that he wants to run the Six Party
Talks. His first trip abroad will be a short overnight stay
in Tokyo followed by a longer visit to Washington, now likely
in early January. In both capitals, he will have forthcoming
messages. The Tokyo stop is considered symbolic by Song's
staff, because he has had notably poor relations with
Japanese diplomats. Song has been particularly critical of

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Japanese positions in the Six Party Talks, regarding them as
obstacles to reaching a deal with North Korea. In
Washington, Song will make a big effort to correct some of
his remarks critical of the U.S. during his last days in the
Blue House.


18. (C) Combative and outspoken, Song does not instinctively
embrace U.S. views as do some of his colleagues, like Ban
Ki-moon or Former Vice Foreign Minister Yu Myung-hwan.
Still, he has a good understanding of the United States and
an acute appreciation of the importance of the alliance. Our
MOFAT contacts expect him now to champion these traditional
foreign affairs causes a lot more than he did when he was in
the Blue House. We understand that several recent
developments, including the early wrap-up of the negotiations
on USFK's burden-sharing costs, the proposal to deploy ROK
peacekeeping troops to Lebanon, and the proposal to extend
ROK troops in Iraq were all overseen by Song with an eye
toward improving the ROK's standing -- and his own image --
in Washington.

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PROTECTING THE ALLIANCE
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19. (C) Our most fundamental objective is to protect the
U.S.-ROK alliance, which has kept peace on the Peninsula and
the region. The alliance is not just about security or even
economic benefits. It is about shared values -- democracy,
human rights, open society and open markets. It is also
about having a U.S. presence in this volatile part of the
world known for historical enmity and tensions. We need to
be in Korea to help manage the rise of China and defuse
tensions between Japan and its neighbors. A strong alliance
relationship with the ROK is certainly in our interest,
whatever our frustrations with its current leadership.


20. (C) To ensure that the alliance emerges unscathed from
domestic political developments next year, we need consistent
and predictable policy implementation on a number of fronts.

--On the alliance itself, we need to continue the
transformation by sticking to the roadmap of making South
Korea a true partner in alliance evolution: the transfer date
for OPCON needs to be settled; bases have to move.

--On North Korea, we need to reassure the Koreans that we are
committed to a negotiated settlement of the North Korean
nuclear issue and that this will be done through the Six
Party process. We also must combat the strong misperception
among South Koreans that we are opposed to the ROK's
engagement policy, as long as it is calibrated to maximize
leverage in the Six Party Talks and, in the longer term, to
promote real reform in the North.

--On FTA, we should continue to negotiate patiently and see
if there is a procedural move that could placate the Koreans
on trade remedies, but also realize that we may not get there
at all and strive for an amicable conclusion of negotiations,
in the event there is no agreement.

--Finally, on Korea's entry into the Visa-Waiver Program, we
need to make visible progress on our roadmap to send a
powerful message to the Korean people that we welcome Koreans
in the United States.

We are confident that through these steps, taken consistently
and predictably, the United States will preserve a strong
alliance relationship with South Korea and be well placed to
work with Roh Moo-hyun's successor in 2008 and beyond.
VERSHBOW