FM SONG ON FTA, 6PT, U.S.-ROK ALLIANCE, AND IRAQ

C O N F I D E N T I A L SEOUL 001052

SIPDIS

SIPDIS

E.O. 12958: DECL: 04/10/2017
TAGS: PREL PGOV EAID EFIN KS KN IZ
SUBJECT: FM SONG ON FTA, 6PT, U.S.-ROK ALLIANCE, AND IRAQ

REF: A. SEOUL 1016


B. STATE 46243

Classified By: Amb. Alexander Vershow. Reasons 1.4 (b/d)


1. (C) SUMMARY: On April 10, Foreign Minister Song Min-soon
told the Ambassador that the ROKG and USG should stay
coordinated on the KORUS FTA to avoid any perception that
different interpretations existed on what was negotiated.
Some in the ROK were concerned that the U.S. Congress might
push for additional measures on labor and the environment and
reopen FTA negotiations, something that was not politically
feasible. On North Korea, Song opined that the DPRK had not
intended to get so entangled in the BDA issue, so once
technical issues were addressed, the Six-Party Talks could
get back on track. The ROKG had "penciled in" the end of
June for a possible presidential summit in the United States,
but was reluctant to publicly discuss it until the
appropriate time. Song also suggested that "symbolic
gestures" on environmental issues in connection to USFK base
returns could address ROK public perceptions. The Ambassador
delivered Ref B points encouraging the ROKG during Iraqi
Prime Minister Maliki's upcoming Seoul visit to support the
International Compact with Iraq, perhaps by accelerating
disbursement of ROKG assistance; Song undertook to study the
matter. END SUMMARY.

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KORUS FTA
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2. (C) During an April 10 meeting with the Ambassador,
Foreign Minister Song Min-soon said that it was important for
the USG and ROKG to stay on message and remain coordinated on
interpretations of what was signed by the FTA negotiators.
Echoing statements ROK Prime Minister Han Duck-soo made to
the Ambassador on April 3 (ref a),FM Song said that
potential differences of opinion on "Outward Processing
Zones," like the Kaesong Industrial Complex (KIC),could
hinder a smooth ratification of the FTA. KIC might come to
be perceived as a barometer of security on the Peninsula, and
if Six-Party Talks went well, and once the FTA was ratified,
a swift convening of the committee to discuss the KIC would
be a positive sign. Second, Song noted that the KORUS FTA
negotiations were conducted in English, but since both Korean
and English versions would be authentic, it would be
essential to complete the agreement's documentation without
complications. Finally, Song expressed the concern of some
ROK National Assemblymen that a Democratic U.S. Congress
might seek to, essentially, reopen FTA negotiations to demand
tougher labor and environmental provisions. Song said that
the ROKG was willing to listen, but USG efforts to insist on
new labor and environmental provisions, after the
negotiations were concluded, would be "disastrous."


3. (C) The Ambassador reiterated congratulations to the ROKG
for the successful conclusion of the FTA. As he had told PM
Han, although there might be differences in presenting the
agreed solution on the KIC, the USG stood by its commitment
on "Outward Processing Zones." Both sides should strive to
avoid misleading their publics that the FTA had already
included goods from the KIC. Once Six-Party Talks saw more
progress and after the appropriate period following FTA
ratification, it might be more realistic to focus on the KIC.
Hopefully by that time, ambiguities that remained about
labor conditions in the KIC would be cleared up. Labor and
environmental issues were a delicate subject with the U.S.
Congress at this time, but the issue was less about ROK labor
standards than about conditions in other FTA partner
countries. He urged the ROK to keep an open mind.

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SIX-PARTY TALKS
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4. (C) Song expressed frustration, lamenting that the DPRK
was hard to handle and could barely manage itself. Song
insisted that the DPRK had not intended to stall on the BDA
issue nor had expected to get so entangled in the banking
technicalities. All sides needed to find a solution to
regain progress in the Six-Party Talks (6PT). Song said that
if the DPRK were reasonable, it would find a way to resolve
BDA and make progress toward implementing the February 13
"Initial Actions" agreement. Unfortunately, the DPRK was not
being reasonable. Asked about a possible 6PT Foreign
Ministerial, Song said it was not prudent to discuss a
ministerial; the focus now should be on BDA.

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U.S.-ROK ALLIANCE
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5. (C) Song said that the ROKG had "penciled in" the end of
June for a ROK Presidential visit to the United States, but
did not want to publicly discuss it because the ROKG's
current focus was on domestic issues, such as addressing
concerns of FTA opponents. The Ambassador noted that the
advantage of a late-June visit could be that it would come at
the end of the 90-day review period for the KORUS FTA, the
6PT should have regained momentum and talks would be focused
on Phase II of denuclearization, and it was enough ahead of
the ROK December general election to avoid significant
politicization. That said, there had been no decision yet in
Washington.


6. (C) Song mentioned that Special Measures Agreement (SMA)
transparency and accountability issues could cause a problem
for the ROKG, especially if SMA money was used for base
construction. On USFK base returns, although the ROKG could
not satisfy all ROK environmentalists, its objective was to
address the general public's assessment that more needed to
be done. Song suggested that even USFK symbolic gestures
would be welcomed. The Ambassador said that we could help
manage appearances as long as there were no obligations that
went beyond the SOFA commitments. The package deal agreed
during the February Defense Minister's meeting should be
honored.

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INTERNATIONAL COMPACT WITH IRAQ
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7. (C) The Ambassador delivered Ref B points and Treasury
Deputy Secretary Kimmitt's letter that encouraged the ROKG to
be represented at the Ministerial level at the May 3 meeting
in Egypt, where the International Compact with Iraq (ICI)
will formally be signed by Iraq and the international
community. During the upcoming visit to Seoul by Iraqi Prime
Minister Maliki, the USG hoped that the ROK would decide to
provide additional support for the Compact, perhaps in the
form of accelerated disbursements of USD 149 million of the
ROKG's Madrid pledge. It would also be helpful for the ROKG
to encourage PM Maliki to reach out to Saudi Arabia, UAE and
Kuwait as well as to take additional reforms that could be
highlighted at the May 3 meeting; Song undertook to look
further into the issue.
VERSHBOW