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RUCNASE/ASEAN MEMBER COLLECTIVE

C O N F I D E N T I A L SECTION 01 OF 05 SEOUL 000343 

SIPDIS 
SIPDIS 
FOR THE SECRETARY FROM AMBASSADOR VERSHBOW 
E.O. 12958: DECL: 02/18/2018

TAGS: PREL PGOV MARR MNUC KN KS OVIP

SUBJECT: SCENESETTER: LEE MYUNG-BAK PROMISES A BETTER

RELATIONSHIP WITH THE UNITED STATES 
SEOUL 00000343  001.3 OF 005 
Classified By: AMB. ALEXANDER VERSHBOW.  REASONS 1.4 (b/d). 
——-

Summary

——- 
¶1.  (C) Madam Secretary, the election of Lee Myung-bak, his

appointment of pro-American advisors, and the likelihood that

his party will secure a commanding majority in the National

Assembly elections in April, provide an excellent opportunity

to build a more substantial U.S.-ROK partnership for the

future.  The goals before us are: 
– To ratify the KORUS FTA, which means billions of dollars

for the U.S. economy and the creation of a lasting economic

pillar for our Alliance.  Support for the FTA remains solid

among the Korean leadership, media and public.  Korea’s

National Assembly formally took up the FTA on February 15,

thanks to pressure from Lee’s supporters; ratification will

likely occur some time in the next few months. 
– To solve the beef issue, which is a prerequisite to

Congressional consideration of the FTA.  Lee understands the

importance of resolving this by the time he visits Washington

in mid-April.  While Lee’s team has explained that formal

signature of a new beef agreement won’t be politically

possible until after Korea’s legislative elections on April

9, we have proposed informal exchanges on a new beef

agreement during March. 
– To strengthen our cooperation to denuclearize North Korea

through the Six-Party Talks.  A key challenge for the Lee

administration is to balance its demand for substantial

reciprocal actions by the North as the precondition for

economic assistance against irrevocably damaging inter-Korean

relations.  My recommendation is for you to welcome Lee’s

refreshingly tough stance, but also make him aware that we

support North-South engagement, provided it is closely

synchronized with efforts to achieve denuclearization,

through the Six-Party process. 
– To upgrade the U.S.-ROK Alliance’s mission and structure

so that it can play an enhanced role in fostering peace on

the Peninsula, the region, and elsewhere in the world.  I

recommend you convey to Lee that Washington is committed to

strengthening the Alliance and expanding its global

dimension.  Lee will be very receptive as he has repeatedly

and publicly voiced his commitment to a stronger Alliance and

to a more prominent role for the ROK on the world stage. 
– To work effectively with the South Korean government to

meet the requirements needed to facilitate the ROK’s entry

into the Visa Waiver Program (VWP).  Early admission by the

ROK into the VWP is a very high priority for the Lee

administration. 
¶2.  (C) We would like to see progress on all these goals by

the time of President Lee’s first visit to Washington (April

17-19).  It will not be easy, but there is a great sense of

renewed hope and a palpable flow of energy that has come back

into the U.S.-ROK relationship.  With a president and an

administration that are instinctively drawn to the United

States, there is a real opportunity to restore both momentum

and trust to a relationship that has been underperforming in

recent years.  If there’s any danger ahead, it’s the risk

that no ROK leader can possibly live up to the high

expectations that Lee’s presidency has generated in South

Korea, as well as in Washington.  End Summary. 
—————————————–

Lee’s Domestic Agenda:  The Economy First

—————————————– 
¶3.  (C) At the top of Lee Myung-bak’s Presidential agenda is

his pledge to increase economic growth.  He ran on a “747″

platform, saying he would boost economic growth to 7 percent

a year over the next decade, raise per capita GDP to USD

40,000, and make the ROK the 7th largest economy in the

world.  ROK presidents are elected to only a single 5-year

term, but the energetic President-elect plans to set the

South Korean economy well on its way toward those goals

during his time in office.  Is that what the Korean public

wants?  The answer is clearly yes, as evidenced by the fact

that with 49 percent of the vote, “MB” had nearly twice the 
SEOUL 00000343  002.3 OF 005 
public backing of his nearest competitor in a 10-candidate

field.  Koreans across the political spectrum want a stronger

economy (particularly with growing concern about Chinese

competition) and believe that Lee Myung-bak is the person

best equipped to deliver it.  Few expect he will actually

achieve his ambitious economic goals, but the ROK has enjoyed

tremendous economic growth over the years and clearly does

have the potential to soar to still greater heights.  To this

end, he is focusing on addressing a few key structural

impediments (insufficient foreign investment, high taxes,

over-regulation, labor friction) that should be able to

increase Korea’s already respectable 4-5 percent annual

growth rate. 
———————–

FTA Ratification Likely

———————– 
¶4.  (C) Our highest bilateral priority is the ratification

and implementation of the KORUS FTA, which will create an

enduring economic pillar for our bilateral partnership, as

well as open up billions of dollars in new opportunities for

U.S. businesses.  Korean support for the KORUS FTA remains

solid — among the political leadership, the media, and the

public.  In most Korean minds, the FTA is not just a

tremendously important trade deal (Korea’s largest ever), but

also the key to deepening the bilateral partnership with the

United States, keeping pace with the larger economies of

China and Japan, and breaking with the protectionist policies

of Korea’s past.  Despite pockets of resistance and the

reluctance of some legislators to schedule a tough trade vote

before the upcoming April 9 legislative election, it is

widely expected that once a ratification vote is held in

Korea’s National Assembly, the FTA will pass by a comfortable

margin. 
¶5.  (C) President-elect Lee ran on a platform of strong

support for the FTA, and soon after he won the December

election, his GNP party (currently in the legislative

minority), began pressing the National Assembly to ratify the

FTA quickly.  After some debate, the Foreign Affairs

Committee officially took up the FTA on February 13.  The

Government hopes to get the FTA ratified by the full National

Assembly before the current legislative session adjourns on

February 26 — a goal that at this point remains possible but

difficult.  Failing that, the FTA will likely be ratified

during a special legislative session in the March-May

timeframe, or soon after the newly-elected National Assembly

convenes for the first time in June. 
¶6.  (C) A few Korean legislators have noted the lack of

movement on the FTA in the U.S. Congress and the negative

comments on the FTA by Democratic presidential candidates,

and wondered why Korea should rush to ratify an agreement

that faces serious ratification challenges in the United

States.  But the preponderant view in Seoul seems to be that

since the U.S. ratification debate will be tough, prompt

ratification by Korea (ideally before Lee arrives in

Washington on April 17) could help build pressure on Congress

to ratify the FTA, ideally before the U.S. political

conventions this summer. 
——————-

Beef Market Opening

——————- 
¶7.  (C) While rapid Korean ratification of the FTA would be

useful for us, our more urgent priority is for Korea to

reopen its market to U.S. beef — without which our Congress

will not even consider the FTA.   President Roh committed

publicly to reopening that market in line with international

science (allowing in U.S. beef of “all cuts and all ages”);

but after his party’s shellacking in the December 19

Presidential elections, he overruled his advisors and decided

to defer any action to the new government. 
¶8.  (C) Lee and his team understand the importance of the

beef issue, and have assured us they will work to get it

resolved before the President-elect goes to Washington on

April 17. They add, however, that given its political

sensitivity, they cannot sign any deal with us before the

April 9 legislative elections.  While acknowledging that

constraint, we have noted that there likely won’t be enough

time to close a beef deal by the Lee visit unless our two 
SEOUL 00000343  003.3 OF 005 
sides begin informal discussions of a new beef import

protocol during March.  Some transition team members have

expressed concern that Lee will have to take political hits

to resolve beef without any certainty that it will lead to

Congressional ratification of the KORUS FTA.  We have

explained that, while no one can guarantee the outcome of

Congressional deliberations, finally resolving the beef issue

will guarantee that the Administration (and the U.S. business

community) will be in a position to make the strongest

possible push for the agreement, consistent with President

Bush’s strong commitment to the FTA, most recently expressed

in his State of the Union address (which drew wide and

appreciative coverage here). 
—————————————–

North Korea: Sunshine Policy Not So Sunny

—————————————– 
¶9.  (C) After the economy, North Korea policy is the most

important issue of concern to South Koreans.  Early moves by

Lee Myung-bak and his team regarding North Korea have rattled

the ROK establishment.  These included:  the repudiation of

ten years of Sunshine Policy as appeasement; a plan to

weaken, if not eliminate, the powerful Ministry of

Unification; and a debate within the Transition Committee

about whether even ROK humanitarian aid (fertilizer and rice)

should be conditioned on North Korea’s cooperation in the

denuclearization talks.  As a result, the DPRK has yet to

officially acknowledge Lee’s election, and must be chagrined

that he has made it clear that major economic projects agreed

upon during the October 2007 North-South summit will be

reexamined by his administration case-by-case and in

accordance with South Korea’s economic interests.  Even the

flagship projects, the Kaesong Industrial Complex and Mt.

Kumgang tourist center, will see their subsidies cut.

Pyongyang’s response thus far has been to adopt what could be

a prolonged “wait-and-see” attitude. 
¶10.  (C) We share a keen interest in the question of how the

two Koreas will now interact, and what ground rules they will

use.  Radio silence would benefit neither side and could lead

the North to engage in another of its periodic provocations.

That, in turn, could upset the Lee Administration’s ambitious

economic agenda by increasing a sense of instability in the

marketplace.  It could also erode support among a Korean

public that has grown comfortable with engagement, despite

being disappointed with its one-sided results under Roh

Moo-hyun.  A breakdown in North-South interaction would also

be unhelpful to the Six Party Talks.  I would suggest that

you welcome the President-elect’s refreshing toughness on the

need for reciprocity and giving priority to denuclearization;

you might also express how much we look forward to more

closely synchronizing North-South cooperation with progress

in the Six Party Talks. 
—————

Japan and China

————— 
¶11.  (C) Beyond the peninsula, I am also optimistic that Lee

will significantly improve Japan-ROK relations and

U.S.-Japan-ROK trilateral cooperation.  Born in Osaka, the

President-elect has far less animosity toward the Japanese

than his predecessor who, as you know, subjected visiting

Washington officials to anti-Japanese tirades.  Lee also

recognizes that his goals for economic growth and further

progress in the Six-Party Talks will require Japanese

cooperation.  He has already made an important overture

toward improving relations with Japan by sending his older

brother (who is the vice speaker of the National Assembly) as

his personal envoy to Tokyo to establish personal ties with

Prime Minister Fukuda.  Fukuda will reciprocate that gesture

by joining you at Lee’s inauguration. 
¶12.  (C) The South Korean caveat to Lee Myung-bak’s desire to

improve relations with Japan — and also upgrade the U.S.-ROK

Alliance — is that he and his administration must take care

not to inadvertently worsen the ROK’s good relations with

China.  In fact, Lee has made an effort to assure the Chinese

that Sino-South Korean relations will not suffer under his

administration.  I also recommend that you assure Lee that

Washington does not desire any friction in Seoul’s

relationship with Beijing.  Rather, as allies that share

deeply rooted regional interests, we value Seoul’s good 
SEOUL 00000343  004 OF 005 
relations with Beijing, which can be helpful in managing

regional and global challenges, including but not limited to

North Korea. 
——————————————-

Opportunity to Expand the U.S.-ROK Alliance

——————————————- 
¶13.  (C) Lee Myung-bak’s security policy advisors have made

it clear to us that he would like his first summit with

President Bush to include a joint declaration in which the

two Presidents would articulate a vision of a redefined

U.S.-ROK Alliance.  The Foreign Ministry, acting on

instructions from Lee’s transition team, is already working

on proposed wording for such a statement.  Likely elements

could include the call for a more strategic alliance

partnership with added peninsular, regional and global

dimensions.  Some influential academics in Lee’s camp prefer

that the two leaders call for a study, but most recognize

that we should seize this important opportunity for the two

Presidents to chart the direction in broad yet bold strokes.

Doing so would demonstrate not only that the U.S. and South

Korea remain committed to their continuing mission of

deterring North Korean aggression, but that the Alliance also

has an important future role to play in underpinning the

peace process that is to come.  Senior MOFAT and transition

team officials also point to the presence of U.S. forces on

the Asian land mass as playing an important stabilizing role

in the region by helping steer China toward responsible

policies, while encouraging better Japan-ROK cooperation.

Finally, offering the Lee Administration a true strategic

partnership with the United States would appeal to South

Korea’s aspiration to be taken more seriously on the world

stage.  The ROK has played a global role by dispatching

troops to Iraq, Afghanistan and Lebanon, and its

highly-capable military does not labor under political

constraints as does Japan’s.  But the Koreans could do much

more (e.g. equipping and training the Afghan army, joining

PSI in the years ahead).  Expressing interest in working with

South Korea to craft an updated vision for the Alliance would

prompt our ally to give more serious consideration to future

contributions around the world. 
¶14.  (C) It is also important to implement the agreements we

have reached with Roh Moo-hyun on Alliance transformation.

These include an agreement to relocate our forces from the

middle of Seoul to new facilities 60 kilometers to the South

and a companion agreement to consolidate our previously

scattered military presence on the peninsula into three

strategic military hubs.  Another, the OPCON transfer

agreement, means that after April 17, 2012 a South Korea

4-star general would lead ROK troops in time of war with

support from the U.S. military, rather than the other way

around.  All three agreements are important evolutionary

steps that will serve to transform the Alliance into a more

balanced security partnership, while also making it more

politically sustainable in the South Korean domestic

environment.  Some in Lee Myung-bak’s conservative Grand

National Party (GNP) want to turn back the clock, especially

on the OPCON agreement, but their views don’t reflect the

majority of Koreans who prefer greater self-reliance and to

be treated as an equal partner within the Alliance structure.

 While President Lee will see that political-military

relations with us are conducted in a more constructive

manner, he will need appropriate political cover before

moving in our direction on contentious issues, like

burden-sharing or sensitive environmental concerns

surrounding camp returns. 
—————————

National Assembly Elections

————————— 
¶15.  (C) When it comes to the South Korean economy, the fate

of FTA ratification, North Korea policy, and Alliance issues,

much will depend on the outcome of the April 9 ROK

parliamentary elections when the entire National Assembly is

up for election.  The 299 seats in the unicameral body are

composed of both direct and proportional representatives and

turn over once every four years.  The proximity of the

National Assembly elections to the presidential election is

unusual and presents a unique opportunity for Lee Myung-bak.

Still in the post-election honeymoon phase, Lee’s popularity

and that of his Grand National Party virtually assure him of 
SEOUL 00000343  005 OF 005 
a large majority in the next National Assembly, which will

take office on June 1.  The liberal parties, which are still

in disarray after their resounding loss in the presidential

election, are unlikely to succeed in mounting a serious

challenge outside of a few traditional strongholds.  Some

political pundits predict the GNP may win more than 200

seats, giving the party a two-thirds (constitutional)

majority.  The prospect of a GNP-dominated National Assembly

bodes well for Lee’s ability to push through legislation.  It

would also give him significant leeway in pursuing

potentially unpopular endeavors — such as elimination of the

Ministry of Unification or his grand canal project.  Some

observers worry, however, that such latitude would allow Lee

to wield even more authority than his predecessors, who were

criticized for being too powerful. 
———————————

The Popular Appeal of Visa Waiver

——————————— 
¶16.  (C) Finally, ROK entry to the Visa Waiver Program (VWP)

will be a high priority for the Lee administration and, when

it is realized in the near future, will give a significant

boost to our bilateral relationship.  Korea is the fifth

largest source of foreign travelers to the United States

after Canada and Mexico.  Our Non-Immigrant Visa Unit

processes more visa applications than any other Foreign

Service post (over 460,000 in FY 07) with an approval rate in

excess of 95 percent.  DHS-hosted negotiations in late

January yielded progress on a U.S.-ROK Memorandum of

Understanding on sharing terrorist/criminal information and

other security cooperation required by the “9/11 Law.”

Mechanisms to share information about Korean travelers still

have to be hammered out, but progress is being made.  Less

certain is DHS’s timetable for meeting the law’s requirements

that the U.S. institute an exit control mechanism and

Electronic Travel Authorization system for new VWP members.

Another critical item is the ROKG’s production of electronic

passports, scheduled to begin later this year.  While it is

unlikely that sufficient progress will be made in all these

areas to allow announcement of a timetable for Korea’s

accession during Lee’s April trip to Washington, the ROKG is

determined to see Korea join the VWP, perhaps even by the end

of 2008, as part of the first tranche of new members since

9/11. 
——————————-

MB’s Pragmatic Leadership Style

——————————- 
¶17.  (C) The inauguration of Lee Myung-bak as President of

the Republic of Korea marks a shift to a more pragmatic,

business-like style of governance in South Korea.  Lee has

been a successful private sector businessman (Hyundai Group)

and a respected public sector administrator (Mayor of Seoul).

 He has earned the nickname “The Bulldozer” owing to his

construction industry background and straight-ahead style of

leadership.  During his time as mayor, he was best known for

unearthing a buried stream called Cheonggyecheon that flowed

beneath the center of Seoul, beautifying what had been the

site of a hideous elevated highway.  He turned it into a

urban ecological attraction where residents and visitors

alike enjoy taking long pleasant strolls along the waterway.

As president, Lee will bring similar energy and focus to

national governance.  He looks forward to meeting you and the

President.  You will find him refreshingly frank in his

desire to improve the ROK’s relations with us, and an

amiable, good-humored interlocutor.

VERSHBOW