Identifier
Created
Classification
Origin
08SEOUL2502
2008-12-31 05:05:00
CONFIDENTIAL
Embassy Seoul
Cable title:  

SCENESETTER FOR THE SECRETARY'S JANUARY 8 VISIT TO

Tags:  PGOV PREL KS KN 
pdf how-to read a cable
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RUEHMO/AMEMBASSY MOSCOW PRIORITY 9150
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C O N F I D E N T I A L SEOUL 002502 

2ND C O R R E C T E D COPY (ADDING CAPTION & CORRECTING DISTRO)

For the Secretary from Ambassador Stephens
SIPDIS

E.O. 12958: DECL: 12/31/2018
TAGS: PGOV PREL KS KN
SUBJECT: SCENESETTER FOR THE SECRETARY'S JANUARY 8 VISIT TO
SEOUL

Classified By: Ambassador Kathleen Stephens. Reasons 1.4(b/d)

C O N F I D E N T I A L SEOUL 002502

2ND C O R R E C T E D COPY (ADDING CAPTION & CORRECTING DISTRO)

For the Secretary from Ambassador Stephens
SIPDIS

E.O. 12958: DECL: 12/31/2018
TAGS: PGOV PREL KS KN
SUBJECT: SCENESETTER FOR THE SECRETARY'S JANUARY 8 VISIT TO
SEOUL

Classified By: Ambassador Kathleen Stephens. Reasons 1.4(b/d)


1. (C) Madam Secretary, We at Embassy Seoul are delighted
that you are able to make this visit. Foreign Minister Yu is
eager to see you, especially as he had to cancel his visit to
Washington last month due to key National Assembly hearings.
President Lee Myung-bak wants to thank you and the President
for strengthening trust between our two countries during the
first year of the Lee Administration, and for receiving him
so warmly in Camp David last year. FM Yu and President Lee
will be keen to hear your advice on how to manage U.S.-ROK
relations through the transition period. They will also want
your counsel on other issues, especially the KORUS FTA
ratification in the U.S., the global financial downturn, the
Six-Party Talks and the Kim Jong-il regime, and how Seoul and
Washington can maintain our close Alliance relationship.
This is your sixth visit to Korea as Secretary of State. As
before, your visit will demonstrate to the Koreans the
importance we attach to this relationship, and our
appreciation for their support around the world, most
recently in Iraq.

--------------
ROKG Domestic Context
--------------


2. (C) This has been a year of enormous domestic political
changes in South Korea, with the conservative Grand National
Party (GNP) winning the executive and legislative branches of
the government. The transition has been very noisy.
Unhappiness with Lee Myung-bak's style of leadership was
almost immediate, beginning in the streets when tens of
thousands of Koreans gathered in May and June to protest the
government's decision to reopen imports of U.S. beef. In
July and August the struggle was among the political parties
as the GNP engaged in contentious negotiations with the
opposition Democratic Party (DP) about the structure of the
National Assembly's committees. This upheaval is still
playing out in the National Assembly, where the GNP's recent
decision to exercise its majority has both parties resorting
to physical force. The GNP is committed to pushing through
more than 70 mostly economic-related bills before the end of

the current legislative session on January 8. Among these is
the Korea-U.S. FTA, which DP lawmakers are trying to block by
occupying the Assebly hall, despite the fact that former
President Roh Moo-hyun, himself a DP member, concluded the
agreement.


3. (C) Fairly or unfairly, South Koreans have blamed Lee for
everything, ranging from poor cabinet selections to the
financial crisis to deteriorating relations with the North.
President Lee's approval rating has hovered around 25 percent
for the past six months, a steep descent from a year ago when
he was elected with an unprecedented 5.3 million vote margin
of victory over his nearest rival.


4. (C) In the past month or so, President Lee has clearly
decided that he must regain authority over the domestic
political process. Among the first steps he has taken is to
force through a package of bills that, even if they do not
spur the economy, will help remake it. With a comfortable
GNP majority in the National Assembly and disgust with the
opposition mounting each day as the DP lawmakers remain
camped out on mattresses on the Assembly floor, Lee has a
chance to capitalize on his legislative strength. Another
step will be a Cabinet reshuffle, which is likely in
February, when Lee will have been in the Blue House for one
year. If he succeeds, President Lee will emerge in firm
control, empowering his administration to implement a
far-reaching conservative agenda, including reforming
taxation, labor and education laws. If he fails, President
Lee will continue to struggle and could even become
irrelevant, because the Korean constitution allows for only a
single term in office.
--------------
Economy: Bad News
--------------


5. (C) Disappointing economic performance is a key factor
behind President Lee's lack of popular support. Korea has
been severely affected by the global financial crisis and
economic slowdown. The Korean won has fallen by about 29

percent over the last five months, although it was down by
approximately 50 percent at one stage in late November.
Export markets are slowing (November exports fell 18 percent
from last year). Korea's stock markets have fallen by
roughly the same percentage as U.S. indices since mid-summer,
recovering somewhat in December from a steeper October
decline. While President Lee Myung-bak has recently warned
of negative GDP numbers for the first and possibly second
quarter of 2009, most economists still predict positive GDP
growth for Korea next year. These numbers are a far cry,
however, from the seven percent growth Lee promised in his
election campaign.


6. (C) Unlike some other countries, in Korea the image of the
U.S. economy and financial system has actually emerged
reasonably unscathed thus far. The actions of the
Administration, especially the Fed's October 29 announcement
of a USD 30 billion currency swap line with Korea and
President Bush's strong support for including Korea in the
November 15 financial summit, were seen as a big vote of
confidence for the Korean economy, loudly applauded by the
Korean public.

--------------
KORUS FTA
--------------


7. (C) President Lee has been the biggest advocate of the
KORUS FTA, submitting it to the National Assembly for
ratification on October 8. The opposition DP does not
fundamentally oppose the FTA, but wants additional trade
adjustment measures for affected sectors of the Korean
economy to be put in place before ratification. It also
argues that Korea should not ratify before the prospects for
U.S. Congressional action are clearer. In the current
polarized political environment, the FTA legislation, like
other government-sponsored bills, are now waiting for the
"showdown," which could mean that the FTA could be ratified
with only GNP legislators participating. We have refrained
from inserting ourselves into what is largely a domestic
debate.

--------------
North Korea
--------------


8. (C) South-North cooperation and dialogue have deteriorated
sharply since President Lee's inauguration in February.
South Korean officials will justify their stance toward the
North as consistent and reasonable: offering dialogue and
continued economic engagement in exchange for progress on
denuclearization. Indeed, the ROKG has continued to call for
dialogue even after North Korean security personnel shot and
killed a South Korean tourist at Mt. Kumgang in July. The
DPRK, however, has refused dialogue and demanded an ROK
commitment to honor the October 2007 agreement between
outgoing President Roh Moo-hyun and Kim Jong-il, which
promised billions of dollars of aid to North Korea, as a
pre-condition for talks. To pressure South Korea, the North
is trying to create a crisis atmosphere, most recently by
shutting down or restricting all inter-Korean land borders,
which resulted in cancellation of once-popular Kaesong city
tours and severe limits on the number of South Koreans who
can go to the Kaesong Industrial Complex.


9. (C) Of deep concern to the South Koreans is the North
Korean tendency to ignore Seoul while improving ties with
Washington. FM Yu and President Lee will want to hear from
you that Pyongyang cannot drive a wedge between Washington
and Seoul, neither now nor under the Obama Administration.
They want us to continue to reinforce to the North Koreans
that inter-Korean relations should be improved and Pyongyang
should tone down its rhetoric; FM Yu has even suggested
informally to me that we might consider doing this in writing
so that the message is delivered undiluted to KJI. The ROK
will also be interested in your read on the incoming
Administration's intentions for the Six Party Talks, which
the ROK favors continuing, even though it shares our
frustrations.

--------------
Strategic Alliance
--------------


10. (C) In the Camp David summit meeting last year,
Presidents Bush and Lee committed to transform the U.S.-ROK
Alliance into a value-based strategic global alliance. We
should encourage President Lee and FM Lee to move forward in
several areas:

-- Afghanistan: The ROKG is considering various aid options,
including deploying a military unit, which will be
politically difficult, requiring National Assembly consent.
To date, the ROK has pledged USD 30 million at the June 2008
Paris donors conference and USD 5 million in transportation
aid on December 12.

-- Iraq: The ROK,s Zaytun Division, which contributed to
the stabilization and reconstruction efforts in Iraq,
returned to Seoul on December 19. On November 12, President
Bush wrote to President Lee thanking the ROK for its
contribution. The Korean Development Agency intends to
remain in the Erbil region for one year with a $10 million
budget to provide reconstruction and stabilization assistance.

-- Anti-piracy: After announcing its intention to deploy a
naval warship to the Horn of Africa to participate in
counter-piracy operations, the ROKG decided to delay the
deployment for budgetary reasons; the estimated cost is
around USD 30 million. Our contacts now predict that it will
be February or March before a ROK ship deploys. In the
meantime, the ROKG supported the adoption of UN Security
Council Resolution 1851 on December 16 and is planning to
participate in the inaugural meeting of the Contact Group on
Somali Piracy proposed for January 13-14, 2009 in New York
City.

-- China and Japan: Much more than his predecessor,
President Lee wants to work with Japan. Although tensions
flare up now and then over history and disputed sovereignty
over the Liancourt Rocks, Lee has been quite warm in engaging
his Japanese counterparts, establishing good relations with
Fukuda. We understand that PM Aso will make his first
official visit to Korea in January, thus continuing the
so-called "shuttle" summits. With more diligence and
enthusiasm, Lee has courted the Chinese, because he would
like to see all aspects of ROK-PRC relations expand. While
such closer ties are natural and welcome, Seoul needs to be
more aware of China's non-transparent policies on issues
ranging from economic assistance to trade to human rights to
its dealings in Iran, Burma and Sudan.

-- New Embassy: Under President Lee and Foreign Minister Yu,
we have made progress toward agreement on a New Embassy
Compound. It would be helpful for you to encourage your ROKG
interlocutors to complete the process expeditiously so that
we can move to new facilities which are more representative
of the caliber of the U.S.-ROK relationship.

--------------
Long List of Accomplishments
--------------


11. (C) Your list should not be confined to homework,
because FM Yu and President Lee will see your visit as an
opportunity to say farewell and to thank you and President
Bush for standing firmly behind Korea for eight years. It
has indeed been eight years of strong ties between our two
countries. During this time, our two countries have deployed
soldiers in support of the war on terror in Iraq and
Afghanistan; concluded negotiation of a far-reaching free
trade agreement; laid the groundwork for repositioning U.S.
forces on the Peninsula; and worked together on the Visa
Waiver and Work, English Study, Travel (WEST) programs to
bring our two peoples closer. These are enormous
achievements, ensuring that the United States has a key
strategic presence on the Peninsula, which is very much
wanted and welcomed by the Koreans.


12. (C) You should also take this opportunity to highlight
the Administrations achievements on North Korea. Thanks to
the Six-Party Talks, this part of the world now has a genuine
multilateral initiative that can deliver a denuclearized
North Korea and much more. Our two government have also
worked together to improve North Korean human rights. In
2008, the ROKG under President Lee broke precedent by
co-sponsoring a UN resolution -- long a USG priority --
deploring the human rights situation in the DPRK and calling
for improvements. The ROK also resettled close to 2,500 DPRK
defectors in 2008, more than ever before, and our two

governments cooperated so that additional defectors could be
resettled in the U.S. With ROKG facilitation, the Voice of
America now has a new agreement to begin for the first time
in January 2009 broadcasting Korean-language programs into
the DPRK from South Korea, increasing the chances that North
Korean citizens will hear about the outside world. This
values-based cooperation between our two governments and
peoples sends the strong message that the United States is
committed to working with the ROK and like-minded partners to
address and improve the situation of vulnerable North Koreans
both in and out of the DPRK.
STEPHENS