SENATOR BOND'S MARCH 20 CALL ON MINISTER OF

C O N F I D E N T I A L SEOUL 000935

SIPDIS

SIPDIS

NSC FOR CHA

E.O. 12958: DECL: AFTER KOREAN REUNIFICATION
TAGS: PREL PHUM MASS ECON EAID KN KS
SUBJECT: SENATOR BOND'S MARCH 20 CALL ON MINISTER OF
UNIFICATION LEE JONG-SEOK


Classified By: Amb. Alexander Vershbow. Reasons 1.4 (b, d).

SUMMARY
--------------


1. (C) In a March 20 meeting with Senator Christopher "Kit"
Bond, ROK Minister of Unification Lee Jong-seok underscored
the level of importance the ROKG attached to the U.S.-ROK
alliance, stressing that Seoul looked to Washington to
counterbalance the increasing Chinese influence in the
region. Lee explained that the ROK's engagement policy
toward the DPRK was aimed at persuading Pyongyang to reform
and open its economy. Through inter-Korean economic
projects, such as the Kaesong Industrial Complex (KIC),Seoul
hoped to check China's growing economic clout in the DPRK.
Assuring Senator Bond that the ROK was fully aware of U.S.
concerns about potential human rights issues at KIC, Lee said
Seoul would cooperate with Washington to address all such
concerns, and urged greater U.S. support for the KIC and
other inter-Korean projects. Senator Bond expressed
appreciation for the bilateral discussions on a U.S.-Korea
Free Trade Agreement (FTA) and for ROKG steps toward lifting
the ban on U.S. beef. He called on the ROK to consider the
purchase of Boeing's AWACS aircraft, underscoring that
interoperability and superior ability to control air space
ought to take precedence over price differences. END
SUMMARY.


2. (C) Lee, warmly welcoming Senator Bond to Korea on his
first visit in five years, asked about his impressions of
Korea, to which Bond responded by likening Seoul to the
U.S.-ROK alliance -- clean, alive, vibrant and growing.
Commenting on his meeting with Foreign Minister Ban Ki-moon
(septel),Bond said he respected Ban and, alluding to Ban's
UNSYG candidacy, opined that he could serve the international
community well in "an appropriate position." Lee expressed
gratitude for that point, urging greater support from the
United States.
.
U.S.-ROK ALLIANCE A CORE ROK NATIONAL INTEREST
-------------- -


3. (C) Lee briefed Senator Bond on his areas of interest
both in his capacity as Chair of the National Security
Council Standing Committee, as well as Minister of
Unification. On the U.S.-ROK alliance, Lee said the
bilateral alliance was a core component of the ROK's
strategic interests. The alliance helped counterbalance the
growing influence of China in the region, especially given
the expanding economic ties between Seoul and Beijing. Lee
opined that the alliance relationship was an important
national interest for the United States as well, and that the
alliance might even surpass the U.S.-Japan alliance for its
contribution to regional stability in East Asia, in light of
traditional animosities toward Japan on the part of other
Asian countries.


4. (C) Bond said it was noteworthy that, in his lifetime,
the United States had fought on the side of the ROK for its
independence, and had fought against Japan to prevent its
domination of the region. As a government servant, he had to
work closely with all players in the region to advance the
principles of free markets, democracy, and mutual respect for
territorial integrit. He was therefore greatly interested
in exploring with ROKG officials individual steps for
building on the alliance.
.
POLICY TOWARD DPRK: GIVE THEM A TASTE OF CAPITALISM
-------------- --------------


5. (C) On inter-Korea relations, Lee explained that the
ROK's policy toward North Korea focused on encouraging the
DPRK to reform and open its economy to the outside world. To
do so, Seoul sought to expose as many North Koreans as
possible to free-market economics through various joint
economic projects, such as the Kaesong Industrial Complex
(KIC). The deadlock in the Six Party Talks prevented the ROK
from proceeding with the projects at full speed, but
nevertheless the KIC represented a future vision of what the
ROK hoped to do with the DPRK in the process toward
reunification. The ROKG began developing the KIC in 2003.

The complex, located just a few miles from the DMZ, currently
had 11 companies employing 6,000 North Korean workers. Seoul
expected to expand the operations to employ roughly 200,000
workers by 2012. Lee said he was confident the KIC would
play a big role in giving the North Koreans a taste of
capitalism and in changing North Korean views of the ROK.
.
GROWING CHINESE INFLUENCE IN NORTH KOREA
--------------


6. (C) Lee expressed concern that Beijing was using its
growing economic relationship with Pyongyang to expand its
influence in North Korea beyond economic issues. Although
this might be positive in the short term, as it would
encourage Pyongyang to reform and open its economy to the
outside world, the United States and the ROK should be
concerned about the spread of Chinese influence in the long
term. Such a development would complicate Seoul's goal of
reunifying the Korean Peninsula under democratic,
market-oriented principles, negatively affecting American
interests. Lee opined that the United States and South Korea
potentially stood at a crossroads where actions and policies
could decide whether, in ten to fifteen years, Chinese
influence would spread as far south as the DMZ or the
U.S.-ROK alliance would spread as far north as the Yalu
River. He hoped the United States would express greater
support for investing in KIC to offset China's large-scale
investments in North Korea.


7. (C) Senator Bond agreed that China's economic adventures
throughout the region were troubling. He had seen firsthand
China's willingness to invest in other countries, which had
no assurances or controls on how the Chinese money would be
spent. This was obviously Beijing's attempt to expand
hegemony. Expressing optimism that the United States could
provide the necessary counterweight, the Senator nevertheless
stressed the importance of cooperating with China to persuade
the DPRK to return to the Six Party Talks, abandon its
nuclear ambitions, recognize human rights, and provide
freedom and opportunity for its people.
.
HUMAN RIGHTS CONCERNS IN KAESONG
--------------


8. (C) On KIC, Senator Bond noted that human rights
advocates were raising concerns about possible "slave labor,"
similar to those raised in the context of industrial sites
just across the U.S.-Mexico border. He acknowledged,
however, that the KIC could represent an opportunity to
introduce free-market principles to North Korean workers.
The Senator hoped that the ROK's intended message would get
through to the DPRK.


9. (C) Lee agreed that cooperation with China and the other
parties to the Six Party Talks in persuading the DPRK was
important. To maintain cooperation with China but minimize
its influence over North Korea, it was important to maximize
the ROK's influence over the DPRK, which naturally required
help from the United States. Pointing out that the KIC was
situated along an important attack route used by the DPRK
during the Korean War, Lee noted that KIC also played a part
in ensuring peace on the Korean Peninsula. Moreover, the ROK
understood the U.S. concerns on human rights and would
cooperate with the USG to resolve outstanding concerns about
North Korean workers in the KIC.
.
FTA, U.S. BEEF
--------------


10. (C) Senator Bond expressed appreciation for the
discussions on a U.S.-Korea Free Trade Agreement (FTA),as
well as the ROKG's steps toward reopening the Korean market
to U.S. beef. The lifting of the beef import ban was a clear
example of areas in which free trade benefits all people, as
Korean consumers had access to good-quality beef and U.S.
producers enjoyed market access and favorable prices.
Agricultural issues, as challenging as they were for
governments, had significant implications for developed
countries like the United States and Korea, since resolving
them was necessary for establishing a free and equitable
global trading system for developing countries as well.



11. (C) Lee responded that the ROKG was firmly committed to
an FTA with the United States. The FTA, in addition to
offering potential economic gains for both Washington and
Seoul, would also round out the bilateral alliance from its
traditional focus on political, military and security
interests to a more comprehensive relationship. Lee recalled
that, during his tenure as Deputy National Security Advisor,
he had repeatedly urged President Roh Moo-hyun's economic
advisors to lift the ban on U.S. beef quickly. It made no
sense for Korean consumers to be denied U.S. beef when the
American public, who enjoyed the highest food safety
standards in the world, obviously had no problems from
consuming U.S. beef.
.
F-15s, AWACS
--------------


12. (C) Senator Bond expressed appreciation for the ROK's
recent decision to purchase F-15s, which would greatly
strengthen the ROK military's capabilities and enhance
interoperability of the U.S. and ROK forces.
Interoperability was an important element in considering the
transfer of operational control from the Combined Forces
Command to the ROK. In this regard, the United States would
appreciate Seoul's consideration of purchasing Boeing's AWACS
aircraft to enhance interoperability.


13. (C) Lee, carefully noting that he was not directly
involved in the purchase process, opined that the fundamental
problem was cost. He noted from his experience in the NSC
that Boeing's AWACS cost up to 60 percent more than the
alternative Israeli system. Given that the ROKG had to
maintain transparency in its purchases, it was not easy to
convince the taxpayers. Lee said he did not deny the
superiority of Boeing's product, but many South Koreans
believed that the less-sophisticated Israeli product was
sufficient for the ROK's defense needs. The Senator urged
Lee to consider that the two products were not comparable,
that the superiority of Boeing's product was proven in combat
situations, whereas the Israeli product was untested, and
that the Boeing product was better in terms of
interoperability. Cost ought not be the sole criterion. The
ROK ought to consider interoperability, the Boeing system's
capability to process a combination of information on
friendly and hostile assets, and the ability to achieve
effective control of airspace.


14. (U) Senator Bond has cleared this message.
VERSHBOW