Search

Begin New Search Publishing Institution Korea Economic Institute of America (KEI) Publication Year within 10 Years

11. Renewable Energy in Trade Wars: Solar Power in South Korea’s Energy Mix and the Impact of Protectionism

Author:
June Park
Publication Date:
01-2019
Content Type:
Working Paper
Institution:
Korea Economic Institute of America (KEI)
Abstract:
This paper examines the impacts of global competition in solar panel production and the conflict of domestic interests among solar-related industries in the U.S. on South Korea’s solar-focused renewable energy policy. Examining the Moon Jaein administration’s energy policy amid the impact of the U.S. safeguard on South Korean solar panels, the paper argues a) the U.S. safeguard is a hindrance to South Korea’s path forward on solar panel production, and b) Moon’s sole focus on sustainability and his ambitious solar energy target will result in further adoption of lower-cost Chinese solar panels, foregoing the opportunity to upgrade South Korean panels. As South Korean firms announce their decisions to relocate to the U.S. to avoid U.S. safeguard tariffs, the paper recommends the destinations of South Korean solar panel exports be diversified and the goals of South Korean energy policy be centered on balancing cost, stability, and sustainability. The paper does not necessarily recommend a full-fledged drive on expanding solar energy use in South Korea; rather, it calls for the strategic reevaluation of energy policy upon which a clear and sound strategy for solar energy should be formulated.
Topic:
Energy Policy, Bilateral Relations, Trade Wars, Renewable Energy, and Solar Power
Political Geography:
Asia, South Korea, North Korea, Korea, and United States of America

12. North Korea’s Military Strategy, 2018

Author:
Chun In-bum
Publication Date:
08-2018
Content Type:
Special Report
Institution:
Korea Economic Institute of America (KEI)
Abstract:
As the focus shifted from North Korea’s military advances in 2017 to its diplomatic offensive in 2018, we should not lose sight of the strategic thinking behind gaining the maximum time to develop the capacity to extend its military threat. At present North Korea needs time to perfect its nuclear strike capability. It has been very successful in developing missile capabilities, but it needs additional time to achieve its goals. Starting with high-level North-South talks on March 5, 2018, the DPRK has just gained what it needs most: time. Whenever the first talks begin with the United States and the DPRK, there should be no surprise if the DPRK comes with an improved capability to threaten the alliance. Thus, for an extended period in 2018, as diplomacy proceeds, we should expect a subdued North Korean approach: not flaunting its nuclear weapons and missiles, while striving to boost capabilities for the struggle ahead. In the seven years since Kim Jong-un officially inherited the leadership of the DPRK, his stated policy has been byungjin ( 병진, 竝進), the pursuit of both economic and military development. In conjunction with purges and efforts to eliminate rivals, byungjin may, in part, derive from Kim’s efforts at the outset of his tenure to consolidate political power. Through it, Kim displayed moderate economic flexibility, thereby gaining favor with the North Korean people through facilitating an improvement in living standards. It is tempting to see byungjin as a sign of the regime’s weakness, or as an indication of moderation, either of which would prompt the eventual collapse of the Kim regime. Correspondingly, one might see it as a reflection of Kim’s immaturity, inexperience, and lack of political and strategic acumen. These viewpoints reflect mirror imaging more than a sophisticated understanding of North Korea. Byungjin may be more of a political device and a strategic communications element of a grand strategy, as opposed to the regime’s strategy. It may be a significant instrument in the regime’s effort to maintain elite cohesion and focus the energies of the North Korean people toward productive pursuits that likewise add to the regime’s legitimacy and staying power. It by no means suggests any diminishing of the priority of making advances in nuclear and missile development in order to pose a more serious threat. Since taking power, Kim’s regime has fired close to one hundred missiles of wide variety and range compared to thirty-one for his father and grandfather combined. He has also conducted four nuclear tests, boasting of a thermal nuclear capability. During his 2018 New Year’s address, Kim Jong-un proclaimed that the DPRK had perfected its nuclear and intercontinental missile capabilities, supporting North Korea’s constitutional claim to be a nuclear power. Despite an upsurge in diplomacy after this address, we should keep our eyes on its military advances.
Topic:
Diplomacy, Economics, International Security, Military Strategy, and Weapons
Political Geography:
Asia, North Korea, and Korea

13. North Korea’s Economic Strategy, 2018

Author:
William B. Brown
Publication Date:
08-2018
Content Type:
Special Report
Institution:
Korea Economic Institute of America (KEI)
Abstract:
This chapter takes the perspective of North Korea’s leadership as it confronts difficult economic problems in the remaining months of 2018. The major current and potential issues are listed and prioritized. Short and longer-term remedies are presented, each with trade-offs that affect other economic and policy issues. Given the absence of direct reporting from North Korea, the issues and debates presented are speculative, designed to give the reader a more comprehensive understanding of North Korea’s current problems than is ordinarily presented in western media. Kim Jong-un’s recent diplomatic offensive, reaching out to South Korea, China, and the United States is, in this view, suggestive of these internal economic troubles in addition to the nuclear security issues. The troubles are both short-term—the collapse in trade with China in just the past few months—and long-term, the slow-motion collapse of the communist country’s “command” economy. And much more than in the past, the problems relate to the regime’s unusual and dangerous monetary system, money being a normal issue for most governments but a relatively new one for this still partially rationed, or planned, oriented system. The leadership may have little choice but to let the domestic economy move further from the plan—allowing decentralized market and private activities more sway—than ever before. This would help cushion the central government from losses due to the sanctions and open the door to a much more prosperous future. Without major moves in this direction, inflation and unemployment may cascade into social crisis. It should be noted, that the recent Assembly Meetings, which annually focus on the economy, gave little official indication of policy changes, only a sense of digging in further to protect the regime from outside forces. But just a week later, Kim may have telegraphed an upcoming sea change when, in his address to the Party Central Committee plenum, that he is instituting a new Party Line, socialist economic construction, as the total focus of the Party and the country. Major changes, if they are to occur, will likely come after the upcoming important summits with South Korea and the U.S.1 There is little doubt that the economy in 2018 is in very poor condition, delivering one of the worst productivity rates—productivity in terms of labor and of capital—in the world, but it is important to recognize that this is due not to natural circumstances but to decisions the government has made over the years, and trade-offs it has already made. This suggests that astute government policy can create solutions and restore growth. Remedies of the sort expressed here, for example in liquidating, that is selling or leasing state assets to private buyers, raising fixed prices for state delivered electricity and for water and other utilities, and giving large pay raises to the millions of state workers who now rely on rations, while culling their numbers, would require difficult economic and social trade-offs; one might say there is no free lunch for Kim and his regime although no doubt they are looking for one, even in these summits. The chapter discusses just what kinds of decisions might be made and the likely consequences. Negotiations being set with South Korea and with the United States, and likely more discussions with China, may weigh heavily in how far Pyongyang will be willing to go in these respects. In my view the regime will be looking for: outright aid, payments for pushing back the nuclear weapons program, and premature relief from sanctions, which would only give the regime time to avoid the hard choices needed to permanently fix the broken economic system.
Topic:
Diplomacy, Economics, Sanctions, Services, and Trade
Political Geography:
China, Asia, North Korea, and Korea

14. North Korea’s Diplomatic Strategy, 2018

Author:
Mark Tokola
Publication Date:
08-2018
Content Type:
Special Report
Institution:
Korea Economic Institute of America (KEI)
Abstract:
With an outbreak of diplomacy under way for the Korean Peninsula, a review of North Korea’s approach to negotiations is timely. A summit between North Korean leader Kim Jong-un and South Korean President Moon Jae-in was held on April 27. President Trump has accepted an invitation to meet with Kim Jong-un.1 The secretive nature of the North Korean state makes it difficult to assess how it will engage with and what it expects to gain from talks with the international community—not just with the United States and South Korea, but with China, Japan, Russia, the EU, and others. However, its past behavior, official statements, the testimony of defectors, and the expert opinion of North Korea watchers can provide helpful insights. This chapter presents a brief history of talks and agreements with North Korea prior to the inauguration of Trump, followed by an overview of North Korea’s diplomatic outreach in 2018 to date. It then presents indicators as to what North Korean diplomacy may look like through the rest of the year based on assessments of its stated and implicit objectives—ends it would wish to attain in any event, either through diplomacy or by coercion. I conclude with a list of key upcoming dates and scenarios describing how North Korean diplomacy may play out for the remainder of 2018. North Korea’s recent diplomatic moves mark an abrupt policy change. During 2017, it carried out in defiance of UN Security Council resolutions three test flights of intercontinental ballistic missiles (ICBMs); conducted its fifth and sixth underground nuclear tests, the latter being the most powerful to date and almost certainly thermonuclear; threatened an “unimaginable attack” against the United States;2 and officially announced that it would “never give up its nuclear weapons.”3 If North Korea is indeed now willing to negotiate denuclearization with the United States and South Korea, its diplomacy can at least be described as agile.
Topic:
Security, Diplomacy, Nuclear Weapons, and Weapons
Political Geography:
Asia, South Korea, North Korea, and Korea

15. North Korea’s Public Relations Strategy, 2018

Author:
Eun A Jo
Publication Date:
08-2018
Content Type:
Special Report
Institution:
Korea Economic Institute of America (KEI)
Abstract:
Tension on the Korean Peninsula had reached a boiling point by the time Kim Jong-un delivered his New Year’s address—a tradition set by his grandfather that he had revived in 2013. Beyond the talk of a “nuclear button,” which triggered another round of fiery exchanges with Donald Trump, Kim devoted a considerable segment of his speech to calling for improved inter-Korean relations. Though signaling an ambiguous friendly overture to the South has become an annual exercise for Kim, this year’s speech was uncharacteristically specific in that he offered to send a delegation to South Korea’s highly anticipated Pyeongchang Winter Olympics. But sports diplomacy is hardly new to Kim; an avid sports fan himself, Kim is acutely aware of its propaganda value and utility as a channel for diplomacy. For Kim, the Pyeongchang Olympics presented a timely opportunity to remake the regime’s flailing image at home and abroad. In this chapter, the Pyeongchang Olympics are used as a case study to understand Kim’s public relations strategy. Before exploring the strategic intentions behind Kim’s diplomatic campaign, both the old and new features of his image-making efforts are examined, focusing in particular on his use of sports diplomacy. How Kim’s charm offensive in Pyeongchang is communicated internally and received externally is then analyzed, yielding important insights about the prospects of reconciliation between the two Koreas post-Olympics.
Topic:
Diplomacy, Weapons, Public Relations, Olympics, and Kim Jong-un
Political Geography:
South Korea, North Korea, and Korea

16. North Korea's Strategy in 2018

Author:
Korea Economic Institute of America
Publication Date:
08-2018
Content Type:
Special Report
Institution:
Korea Economic Institute of America (KEI)
Abstract:
What does North Korea seek at a time of unprecedented sanctions and pressure against it and suddenly developing opportunity, as South Korea and four great powers explore diplomatic overtures? This set of four chapters completed at the height of anticipation for summits in 2018 approaches Pyongyang’s strategy from diverse angles: public relations—how it is striving to shape images of itself, beginning by taking advantage of the Pyeongchang Winter Olympics; diplomacy—how it is engaging one state after another to forge an ideal diplomatic environment for securing maximum concessions; economy— how it is coping with sanctions and preparing to realize byungjin by boosting the economic side while deriving credit from the military side; and military—how it continues to develop threat capacities and prepare for contingencies. There is a lot that is unknown about what is driving Kim Jong-un’s behavior with some accentuating the strength achieved by building his threat capacity and others emphasizing the weakness exposed by draconian sanctions. These chapters explore the drivers behind his moves through the lens of strategic objectives, recognizing that the North Korean leader sees a mix of opportunities. This volume covers well into the spring of 2018—including the New Year’s Day address by Kim Jong-un that opened the door to a public relations blitz, the delegations sent to South Korea to kick-start “smile diplomacy” against the backdrop of the Winter Olympic Games, the personal diplomacy by Kim with South Korean officials followed by his outreach to Donald Trump and then a hurried visit to Beijing to meet Xi Jinping, and finally the Panmunjom summit with Moon Jae-in in the last week of April. This whirlwind of public relations and diplomacy against diverse interpretations of their economic and military background captured the world’s attention. Yet, Kim’s strategic intentions largely remain a mystery. Does he expect to retain his missiles and nuclear weapons and be recognized as one of the nuclear powers on essentially equal footing with the world’s great military powers? Does he seek to cut a grand bargain, eliminating these threatening weapons in return for acceptance in the international community with guarantees of security and bountiful economic assistance? Is Kim Jong-un playing a multi-stage game with long-term objectives hidden as he capitalizes on differences among five countries to maneuver in ways still difficult to fathom? Much remains unknown, as we delve into his strategic choices.
Topic:
Diplomacy, Nuclear Weapons, Military Affairs, and Grand Strategy
Political Geography:
South Korea and North Korea

17. Advancing East Asia’s Trade Agenda: A Korean Perspective

Author:
Kijm Sangkyom
Publication Date:
08-2018
Content Type:
Special Report
Institution:
Korea Economic Institute of America (KEI)
Abstract:
According to the WTO, in 2018 there are 459 regional trade agreements, the most in the institution’s recorded history.1 Countries are now more actively engaged in regional trade agreements as a policy option to achieve their outward growth strategy. In addition to efforts to build up trade and investment links, regional integration is expected to spill over to more complicated socioeconomic issues, covering a wide range of areas such as gender, environment, labor, and cultural exchanges. Given this upsurge, policy coordination within the framework of regional agreements has attracted considerable attention from policymakers and other stakeholders. This is certainly the case in Korea, where the promise of such agreements is widely recognized, and recent challenges are actively discussed in the hope of overcoming them. Regionalism is a relatively new concept for most East Asian countries.2 Through most of the 1990s, East Asian countries generally engaged in regional integration discussions as a pathway to eventual multilateral trade liberalization under the auspices of the ASEAN and ASEAN+ processes. The subsequent proliferation of FTAs was the result of a number of economic and political factors, which had much in common with similar processes in other world regions, but advanced with particular intensity in East Asia and states closely connected to it. Today, all Asia-Pacific economies are involved in the regional economic process and are active participants in the establishment of multilayered FTAs. The growing interdependence and interconnectedness of the global economy has intensified the need for most East Asian countries, including Korea, to engage in regional economic cooperation and integration. Korea’s high dependency on trade explains its preference for the rapid expansion of regional trade agreements. This chapter begins with a review of the trends, key characteristics, and implications of East Asian economic integration, followed by an examination of potential opportunities and challenges facing regional integration. Korea’s FTA strategies are then reviewed, and its expected role in advancing the regional trade agenda is addressed.
Topic:
Regional Cooperation, World Trade Organization, Economy, and Trade
Political Geography:
Asia, South Korea, and North Korea

18. Re-Energizing Economic Integration between South Asia and East Asia

Author:
Pradumna B. Rana
Publication Date:
08-2018
Content Type:
Special Report
Institution:
Korea Economic Institute of America (KEI)
Abstract:
This chapter focuses on economic integration (linkages) between South Asia and East Asia.2 The topic is important for three reasons. First, South Asia-East Asia (SA-EA) trade is a component of South-South trade and could be a useful buffer should North-South trade soften, or populism lead the North to view trade as a “zero-sum” game, as is presently the case in the United States and several countries in Europe. The withdrawal of the United States from the Trans-Pacific Partnership (TPP) in January 2017 and President Trump’s reiteration of his “America First” trade policy at the 2017 APEC meetings in favor of bilateralism and “fair trade” has generated interest in alternate trade policy options in the EA region.
Topic:
Economy, Regional Integration, Trans-Pacific Partnership, and Trade
Political Geography:
South Asia, East Asia, Asia, South Korea, North Korea, and United States of America

19. Economic Regionalism is Key to Openness and Growth: An ASEAN Perspective

Author:
Sanchita Basu Das
Publication Date:
08-2018
Content Type:
Special Report
Institution:
Korea Economic Institute of America (KEI)
Abstract:
The 10 members of the Association of Southeast Asian Nations (ASEAN) are involved in several regional economic arrangements, not only their own ASEAN Economic Community (AEC), but also those in a bigger geographic area, such as the ASEAN+1 Free Trade Agreements (FTAs) and the Regional Comprehensive Economic Partnership (RCEP). A subset of these countries are partaking of Asia-Pacific deals, namely the latest Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) and the Asia-Pacific Economic Cooperation (APEC). Some are pursuing bilateral deals in pursuit of deeper economic cooperation. Finally, all ASEAN countries are members of the Belt and Road Initiative (BRI), which although not labelled a trade agreement, is concerned with trade-related measures including transport infrastructure, policy coordination, economic connectivity through trade and investment, customs modernization, financial cooperation, and people-to-people linkages. A common feature of all these trade agreements is that they are not just focused on removing restrictions on trade, i.e. lowering import tariffs and quotas, but are much more comprehensive and include issues like trade in services, investment, labor, intellectual property rights, regulatory standards, and health and safety rules. All of these agreements deal with cooperation measures beyond national borders and can be called deep economic cooperation. They go beyond the WTO framework and are often labeled “new regionalism,” understood as state-led projects in the context of global developments. The extent of deepness varies, mainly depending on the participating countries’ development stage and the economic competitiveness of domestic sectors. What do the ASEAN countries aim to achieve? Theory has elucidated that governments have motives ranging from politics to economics when entering an economic cooperation arrangement. The political motives could be confidence building, i.e. if an international relationship was blemished by a history of conflict, economic cooperation can introduce a process of confidence building.3 For smaller countries, it could be seen as a means to increase bargaining power with the international community. Countries often see economic cooperation as a means to hasten their domestic economic reforms so as to increase attractiveness to foreign investors.4 Governments could follow a regionalism exercise also to defend domestic interests that are threatened by regionalism elsewhere. As for the economic motives, countries prefer cooperation among a limited number of players as it enables continued protection in a bigger geographical space and shuns producers from non-members. This enables them to exclude “politically sensitive,” noncompetitive domestic sectors completely from trade liberalization. Finally, regional economic arrangements are essential for creating economies of scale for producers and offering a larger market for consumers, which increases attractiveness to potential investors. This chapter elaborates on ASEAN’s perspective on economic regionalism in the Asia-Pacific. It examines key initiatives that ASEAN countries are currently negotiating or implementing in their national economies, discusses economic and strategic motives, and views the future of regionalism from an ASEAN perspective. It concludes that although the ASEAN countries are facing some uncertainties in their pursuit of economic regionalism, they will continue to support the endeavor as it serves their economic structure of openness. The countries have realized the benefits of economic integration in terms of confidence building of investors, thereby bolstering economic growth.
Topic:
Economics, Treaties and Agreements, Economic growth, and Regional Integration
Political Geography:
Asia and Southeast Asia

20. Japan in the Driver’s Seat? Reshaping the Regional Trade Order without the United States

Author:
T. J. Pempel
Publication Date:
08-2018
Content Type:
Special Report
Institution:
Korea Economic Institute of America (KEI)
Abstract:
On January 28, 2018 representatives from eleven countries, following the strong leadership of Japan, agreed to a modified version of the Trans-Pacific Partnership (TPP). This new pact —renamed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTTP), or TPP-11—was formally signed in Chile on March 8. The treaty will take effect once ratified by at least six member countries. Japan is planning to push the treaty through the Diet within 2018 and anticipating that it will come into force sometime in 2019. The agreement represented a major recovery by the eleven countries following initial expectations that TPP was dead after the election of Donald Trump. Trump, as an early follow through on his xenophobic and unilateral campaign promises, signed an executive order pulling the United States out of the TPP within one hundred hours of his inauguration. With that stroke of his pen, Trump wiped out 10 years of work on the so-called “Pacific” route to regional trade integration, anchored on the U.S. market. It also defied multiple analyses demonstrating the strong economic benefits that TPP would provide for the United States. Turmoil immediately prevailed among the remaining eleven signatories. Japanese prime minister Abe, for example, only weeks after Trump’s election announced, “TPP is meaningless without the U.S.” Singaporean prime minister Lee Hsien Loong argued, “if the TPP does not go ahead, it would be a great loss for the rest of the member economies.” The National Interest was typical in its skepticism about both the survival of TPP and the long-term implications for the Asia-Pacific. In an article entitled “TPP is Dead; Now What?” it observed: “The United States’ withdrawal not only throws away the potential for a trade agreement but may cause countries that expended significant political capital for the TPP to retreat from free trade for the foreseeable future.” That China will be the primary beneficiary of Trump’s withdrawal was a widespread conclusion.5 In fact, as the signing of the CPTPP indicated, all eleven countries were prepared to recommit themselves to the deal and to continue to advance the goals of a liberal trading order in the region.
Topic:
Treaties and Agreements, Economy, Trans-Pacific Partnership, and Donald Trump
Political Geography:
Japan, China, Asia, North America, Korea, and United States of America