On January 20, 2021, Joe Biden was sworn in as president. What the DPRK expects of it is partly evident from the results of the recent congress. But what about the South?
Officially everyone paid their respects even after the election, and again after the inauguration. ROK President Moon Jae-in congratulated Joe Biden on officially assuming the presidency of the United States. In his congratulatory message, he wrote that “the ROK and the United States are close allies and reliable partners,” and he expressed his readiness to work together.
On November 12, Moon Jae-in had his first phone conversation with Biden. During the 15-minute conversation, the two leaders reaffirmed the importance of the South Korean-American alliance and agreed to meet in the near future. Shortly after the conversation, Moon wrote on Facebook that he affirmed Biden’s firm commitment to peace and prosperity on the Korean Peninsula.
The ruling Toburo Democratic Party also hopes that the ROK and the US will work together to resume the peace process on the Korean Peninsula. According to its chairman Lee Nak-yon, the 2018 Singapore agreements between the US and DPRK should be the starting point for such work. Lee Nak-yon expressed his hope that the Joe Biden administration would remain committed to the arrangements under which the parties agreed to establish a “new relationship”.
South Korean Ambassador to the United States Lee Soo-hyuk even said that the summit between Moon Jae-in and Joe Biden would help boost the countries’ joint efforts to bring permanent peace to the Korean Peninsula.
However, the ROK media frankly writes that Joe Biden can bring both benefits and drawbacks to the ROK, and President Moon Jae-in’s government may find Biden’s team more difficult to communicate with than the Trump administration.
Therefore, it will be easier for the author to break down expectations in each direction.
Decision making system
This applies not only to relations with the DPRK, but while Trump and Moon preferred a “top-down” formula — when the leaders of the countries personally came to a decision, which was then finalized by their team, — Biden will work according to the “bottom-up” principle, when projects are developed by officials at the working level, and summits only record the result of their work. This may be due to overcoming voluntarism as well as to the state of health of the US leader.
Relations with the DPRK
Judging by the actions of the new president, one can assume that the relationship between the US, the ROK and the DPRK may undergo serious changes. Recall that Biden promised to “engage in principled diplomacy and continue to push for the denuclearization of North Korea”. Criticizing Trump’s course, he claimed that the summits gave Kim the global recognition he had long sought, while the US got nothing. He is taking a tougher line on the North than Trump, which reduces the prospect of a breakthrough in the denuclearization talks.
This means that Moon will have little opportunity to advance what he calls the “Korean peace process” without significant progress in the denuclearization of the North. The obvious gap in their perception of North Korean issues is said to have manifested itself in the first conversation. While Biden stressed the need to eliminate the nuclear threat, Moon stressed the importance of denuclearizing the Korean Peninsula, which partly meets North Korea’s demand for withdrawal of US strategic assets from South Korea. Then, Moon praised Trump’s policy on North Korea and expressed high hopes that the Biden administration would inherit it.
Pressure on the DPRK will obviously intensify, and the US administration may oppose Seoul’s initiative to declare a formal end to the Korean War without preconditions related to the denuclearization of the North. The policy of suspending South Korea-US joint military exercises may also face resistance from Biden. Therefore, almost all experts note that Moon Jae-in will have to adjust his inter-Korean policy.
Does this mean we are in for “Obama 2.0,” given that the DPRK has since been able to build up its missile capabilities and China’s influence has increased significantly? – As former foreign minister Kang Kyung-hwa said, the Biden team is unlikely to return to a policy of “strategic patience”. Although Biden served as vice president in the Obama administration for eight years, his public statements do not yet indicate that he will implement Obama’s policies. Biden’s foreign policy adviser Brian McKeown also argued that the new US administration would find its own approach to solving the North Korean problems.
At the same time, half of South Koreans believe that Joe Biden’s assumption of the US presidency will not have a serious impact on inter-Korean relations. According to a November 6 Realmeter poll, 48.8 percent of respondents said that if changes in South-North relations were to occur, they would be small. Only 16.4% suggested that there might be an improvement in the relationship, and 26.5% thought the relationship might worsen.
For now, however, improving relations with the North does not seem to be a priority for Washington because of the more urgent problems, such as overcoming COVID-19, restoring national unity, and other issues.
In this regard, the alliance is expected to be strengthened and the dispute over defense spending resolved. Under Donald Trump’s government, the issue remained unresolved for a long time because of the excessive demands from Washington. Recall that South Korea agreed to increase its burden by 13% from the $870 million it paid in 2019, but the outgoing Donald Trump administration is said to have demanded a 50% increase.
Whenever South Korea was mentioned, Biden reiterated the importance of a bilateral alliance between Seoul and Washington. In an article he specifically published for the ROK media, he promised not to extort money from Seoul with “reckless threats to withdraw troops,” describing the ROK as a strong regional ally of the United States to “promote shared prosperity, values and security as well as to solve global problems.” This means that the issue is pushed to the sidelines for now.
The new US Defense Secretary Lloyd Austin also said a speedy conclusion to the long-stalled talks would be part of an effort to strengthen and modernize the US-South Korean alliance. “The US-ROK alliance is the backbone of peace and security in the region. It is one of the most combined, cooperative, capable and dynamic bilateral alliances in the world and is a reliable deterrent to aggression on the Korean Peninsula.” Austin pledged to focus on modernizing alliances across the Indo-Pacific region and to push for an early completion of cost-sharing negotiations with South Korea as part of that effort.
ROK between the US and China
On the other hand, a trade war between the US and China poses an element of risk for Seoul. Biden may ask Seoul to support his economic policy toward Beijing. As the Korea Times noted, South Korea may find it harder to walk the tightrope between the US and China amid growing superpower rivalry. Moon and his aides sought to keep an equal distance between the United States, their traditional ally, and China, their largest trading partner. Still, it is clear that Seoul cannot allow its vital security interests to be undermined, whatever the benefits of its economic partnership with China.
Given the construction of a complex network of allies and partners against China, the Biden administration could put Seoul on the US side in more principled and subtle ways than the Trump administration.
Experts predict that the Biden government will continue to press China on trade issues, though perhaps with less force. If some issues can be resolved and China agrees to accept some of the US demands, tense relations between Washington and Beijing will ease, which will have a positive impact on the South Korean economy and relieve the need to choose a priority trading partner.
Impact on the economy
Joe Biden’s victory, intent on returning to multilateralism in trade and revitalizing the US economy, could have a positive impact on the ROK economy, which depends on international trade: South Korean exports to the United States account for 15% of the country’s exports. Thanks to this, the South Korean economy could grow by 0.3% in 2021 and exports could grow by 2.2%.
Deputy Prime Minister and Minister of Planning and Finance Hong Nam-gi also believes that Joe Biden’s victory will have a positive impact on the South Korean economy: global economic uncertainty will subside and global trade conditions will improve. At the same time, he did not rule out the possibility of such factors as Joe Biden’s tough policy on environmental protection and the trade conflict between the US and China having a negative impact on the South Korean economy.
Meanwhile, the tightening of investment market conditions may, on the contrary, become a burden for the economy of ROK. There is also attention drawn to the possibility of rejoining the US in the Trans-Pacific Partnership under conditions of stricter tariffs on the environment, investment, automobile and steel industries.
According to a representative of the Korea International Trade Association, the policy of the new US President Joe Biden will be rather predictable. Assuming traditional trade measures, including anti-dumping tariffs, remain in place. Therefore, South Korean companies should develop individual strategies, such as expanding investments in the United States.
For his part, Jeong Gwan-woo, chairman of the Institute for Global Economy, said that Korea should prepare for the medium- and long-term side effects of the new US president’s plan to pursue expansionary fiscal policies. “If expansionist economic policies increase consumption and investment in the US, it could have a positive impact on the Korean economy in the short term. But if economic incentives are seen as the always better choice, even in the medium to long term, there will be no reason for other governments to avoid such policies.”
Jeong warned of an overheated stock market, and advised retail investors betting on Korean and US stocks to be more cautious in their investments and prepare for possible interest rate hikes.
One of the key areas of investment by the new US administration will be in the clean-energy sector, consistent with the policy of expanding South Korean investment in batteries for electric vehicles and renewable energy sources. The media in the Republic of Korea noted that Biden intends to allocate $2 trillion over the next four years for the implementation of the policy of “green growth”. The return of the US to the Paris Agreement on climate change and carbon dioxide reductions will be a new opportunity for South Korean battery manufacturers.
Shares of South Korean battery makers and renewable energy providers have already gone up. As Korea Investment & Securities analyst Baek Chan-gyu noted, “The US administration’s policies will benefit the green energy, utilities and clean mobility sectors”.
But if this US policy is an advantage for the renewable energy industry, the construction and petrochemical industries of the ROK, on the other hand, could suffer.
Thus, the balance of pros and cons from the new government in general does not change. Some of Seoul’s problems with Washington are gone, others arise to replace them.
Konstantin Asmolov, PhD in History, a leading research fellow at the Center for Korean Studies of the Institute of the Far East at the Russian Academy of Sciences, exclusively for the online magazine “New Eastern Outlook”.