ROK FM YU ON ROK'S COMPREHENSIVE DEAL WITH UAE

C O N F I D E N T I A L SEOUL 000002

SIPDIS

DEPARTMENT FOR EAP/K, ISN/NESS, EEB/CBA AND NEA/ARP

E.O. 12958: DECL: 01/04/2020
TAGS: ECON ENRG KNNP PGOV EINV ETRD AE KS
SUBJECT: ROK FM YU ON ROK'S COMPREHENSIVE DEAL WITH UAE

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

DUPLICATE COPY OF SEOUL MRN 2020. TAGS AND ADDITIONAL
ADDRESSEES ADDED.


1. (C) ROK Foreign Minister Yu Myung-Hwan hosted a
one-on-one breakfast with Ambassador Stephens on December 30,
and opened with a long description of the ROK-UAE nuclear
plant deal. Other subjects covered in the breakfast will be
reported septel.


2. (C) ROK Foreign Minister Yu Myung Hwan explained that as
part of the USD 40 billion nuclear power plant contract
awarded to Korea earlier this week, the ROK and the UAE have
also agreed to cooperate in economic and military areas. The
economic cooperation will include a wide range of areas such
as renewable energy and education. FM Yu said the military
cooperation agreement is confidential, and does not need to
be ratified by the National Assembly. It will, however,
allow the ROK to provide military-related training to the
UAE, mostly in Korea itself, and by the use of retired ROK
military officers in the UAE. While this part of the ROK-UAE
is not now public, Yu said over time ROK activities in this
arena could help to get the Korean public accustomed to the
notion of greater global engagement by the ROK, including
militarily.

3. (C) Foreign Minister Yu asserted that the UAE,s decision
to award the USD 40 billion nuclear plant contract to the ROK
was actually sealed during his trip to the country in
November; however, the UAE held out for a visit by President
Lee Myung Bak before making the official announcement. Yu
explained that the French bid was much higher than (nearly
double) Korea, and moreover that France "played dirty" by
casting doubt as to Korea,s quality of work and ability to
deliver. Yu said the UAE was eager for military cooperation
because of its continued "psychology" of threat; although
UAE,s relations with Iran are currently relatively good.

4. (C) As Yu described it, the military collaborative
agreement (which followed last month,s trip to the UAE by
Defense Minister Kim Tae-Young) is significant, and will
include defense industry technology exchanges, cooperation on
military training and support, and exchanges of high-ranking
military officials. Yu noted that the UAE already has
abundant arms and equipment, such as F-16s, that are "more
and better than the ROK,s," but they need training. As long
as the ROK sends small numbers of retired ROK officers to the
UAE, or brings UAE officers to the ROK for training, there
will be no need for involvement by the National Assembly,
which will allow the exchanges to remain confidential and
low-key, he explained.

5. COMMENT: The contract award has been major news in South
Korea, and the Lee Myung-bak Administration clearly views it
as a major accomplishment both in further securing the ROK,s
critical need for a continued reliable source of oil and gas,
and as a huge step in his administration,s goal of making
"green growth" (read nuclear power) an engine of future ROK
commercial success. Already there are expectations that more
contracts in the Middle East will follow. As Seoul deepens
its ties to the Persian Gulf region, we will want to deepen
our own dialogue with the ROKs on the region and encourage
them to be constructive players. END COMMENT.
STEPHENS