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Originally Processed With FOIA(s): FOIA Number: S; 2004-2265-S S FOIA MARKER This is not a textual record. This is used as an administrative marker by the George Bush Presidential Library Staff. Record Group/Collection: George H.W. Bush Presidential Records Collection/Office of Origin: Speechwriting, White House Office of Series: Speech File Backup Files Subseries: Chron File, 1989-1993 OA/ID Number: 13790 Folder ID Number: 13790-003 Folder Title: Seoul n.d. [OA 7565] [3] Stack: Row: Section: Shelf: Position: G 26 22 2 1 DEPARTMENT OF STATE, U.S.A. WASHINGTON DC 20520 A U.S.MAIL AN EQUAL OPPORTUNITY EMPLOYER POSTAGE AND FEES PAID DEPARTMENT OF STATE OFFICIAL BUSINESS PENALTY FOR PRIVATE USE. $300. STA. 501 Photocopy-Preservation CONFIDENTIAL DECL: OADR DEPARTURE STATEMENT This has been a very successful visit. Our discussions have emphasized our strong and broad-based evolving partnership. We look forward to a unified Korea in the future as a nation with which we will cooperating into the 21st century. We have reaffirmed our intention to work together to not only defend Korea against aggression, but also to help resolve the security problems of the peninsula and bring peace and unification to Korea on terms acceptable to the Korean people. North-South dialogue is the primary means of resolving Korea's problems. Following my September 27 initiative and President Roh's November 8 non-nuclear policy statement, it is now up to North Korea to reciprocate fully and completely. We will cooperate closely with the ROKG and the international community to assure that North Korea does not have a nuclear weapons capability and that it takes steps to negotiate peacefully its differences with the ROK. Our own contacts with North Korea will be solely designed to buttress the ROKG's efforts. Our cooperation on resolving bilateral trade issues will be strengthened, and we must both take actions to ensure a successful Uruguay round. We renewed our Science and Technology Agreement which will ensure greater cooperation this area, to the benefit of both our countries. The U.S. is in Asia to stay, and we have no intention of becoming isolationist. It is the kind of excellent, long-term relations we have with nations like South Korea that make our continuing presence in Asia not only a matter of policy, but one of warm friendship between our peoples. My personal friendship with President Roh is also strong. I told him that his place in the history books is secure for the uncountable accomplishments he has made for the benefit of Korea. DECLASSIFIED CONFIDENTIAL Department of State Guidelines E.O. 12958, SEC 3.4 (B), July 21, 1997 By It NARA, Date 06/07/23 CONFIDENTIAL - 2 - President Roh should take pride in his many achievements in promoting democracy and a more peaceful and secure Korean peninsula. As I leave Korea, I take with me the warm feeling of friendship extended to me and the people of the United States. I look forward to a new era of partnership for our mutual benefit. CONFIDENTIAL CONF IDENTIAL THEMES FOR REMARKS ON SCIENCE AND TECHNOLOGY COOPERATION AT THE KOREAN INSTITUTE OF SCIENCE AND TECHNOLOGY Praise Korea for the progress it has made, through intense efforts, in developing sophisticated technological expertise. Commemorate our long history of Science and Technology (S&T) cooperation with Korea, symbolized by U.S. help in founding KIST, and the renewal of the S&T agreement. Note the vital importance of technology imports to the success of the Korean economy, and underline U.S. 's great role in transferring technology, through government programs, commercial ventures, and our universities which have trained thousands of Koreans. Note that for science and technology to flourish and flow freely, intellectual property rights must be protected. As an emerging producer of technology, Korea should see that it will also benefit from protection regimes. Focus on the vital importance of worldwide S&T cooperation, for contributing to greater knowledge, solving common problems, and stimulating economic growth. Emphasize the necessity for expanding basic research, not simply research which has immediate commercial use. Encorage Korean participation in large-scale cooperative research which we are promoting, such as the Superconductor Supercollider and global change research. CONFIDENTIAL DECLASSIFIED Department of State Guidelines E.O. 12958, SEC 3.4 (B), July 21, 1997 By It NARA, Date 06/07/23 CONFIDENTIAL VISIT TO KOREA INSTITUTE OF SCIENCE AND TECHNOLOGY (KIST) SCENESETTER You should use your visit to KIST on January 6 to promote increased cooperation in science and technology (S&T). Your visit will highlight the renewal of our Science and Technology Agreement (STA). You should give some short remarks on U.S.- Korean S&T cooperation. KIST was founded in 1966, with a $100 million grant provided by USAID. It has become a major research center in Korea, training Korean scientists and engineers, and leading Korea's transformation into a technology-based economy. KEY OBJECTIVES Your remarks should: 1. Praise Korean progress in S&T. 2. Commemorate our long history of S&T cooperation with Korea, through government, business, and universities. 3. Note the importance of protecting intellectual property rights to ensure the free flow of science and technology. 3. Encourage Korea to increase its emphasis on basic research, to help advance knowlege for all, and not simply for immediate commercial gain. Drafted: EAP/K: JMcHale Clearances: EAP/K: JMcHale SEKEC 929 12/03/91 OES: LStaheli D: JWarlick Rm. 7220 P: MMcMillion Rm. 7240 E: WWhyman Rm. 7524 C: RWilson Rm. 7250 EB: DJensen Rm. 3329 OSTP: SBowden CONFIDENTIAL THEMES AND TOPICS FOR PRESIDENT'S AUSTRALIA SPEECHES (November 26, 1991) There will be two opportunities for the President to make major speeches while in Australia. The first will be in Canberra on Thursday, January 2, when he addresses a joint session of parliament. The general focus of this address should be on the bilateral relationship, although global regional themes should also be included. A second speaking engagement will be on Friday, January 3, in Melbourne, where he is invited to speak on regional/global themes at a luncheon for business executives and others hosted by Victoria State Premier Joan Kierner. Parliament Address on U.S.-Australia Bilateral Relations Themes to Include: Though largely focused on bilateral issues, global themes should be included. The address should recognize the close strategic relationship that has existed bilaterally, the success of this relationship, and the need to maintain our partnership in the face of post-Cold War era challenges. Bilateral, regional and global economic issues should also be touched upon. Finally, there should be reference to expanding cooperation in other areas of particular relevance to younger (post-WW II) Australians such as culture and education, the environment, economics and narcotics. Continuing Importance of the Alliance: Our long-standing strategic alliance has served us well. Next year we celebrate the 50th anniversary of the Battle of the Coral Sea. It will be a special commemoration of the close and special defense partnership that had origins in the Second World War. (The President's personal involvement in the Pacific theater during that war can lend special significance to this testimonial.) However, looking ahead over the next fifty years, the post-Cold War Era presents new challenges for our alliance. While East-West tensions have diminished, other problems such as ethnic rivalries, nationalist aspirations and territorial or political disputes -- suppressed during the Cold War period -- are now arising. THEMES Page 2 In these endeavors, Australia has and continues to play an important role: -- Note contributions to the Gulf War, refugee assistance and the ongoing naval interdiction effort in the region. Express appreciation for Australian public support during the Gulf War for the Coalition and its policies. -- Note Australia's active role in developing a framework for the current peace process which is taking place in Cambodia, as well as Australia's contribution to the peace keeping force. | Note strong efforts on proliferation issues, particularly regarding nuclear and chemical weapons proliferation. Our partnership on these and other issues has become increasingly important, especially in the wake of the tremendous changes that have occurred in the world over the last two years. Stress Cooperation on Multilateral Trade Issues: The New Order that is being shaped encompasses not just the political realm but the economic. Both our countries have been at the forefront, pushing hard for free and open markets in the world. We must avoid the creation of trading blocs. And we must continue our joint efforts to shape an international trading system which will foster rather than obstruct free trade, particularly through a successful conclusion of the GATT Uruguay Round. -- Acknowledge Australia's leadership in establishing APEC and in shaping its development as an important international economic entity. Note Australia's bipartisan efforts to press the EC to end agricultural subsidies and for a successful conclusion to the Uruguay Round. Note that what we are pursuing in the NAFTA is not a bloc. We intend to lower internal barriers, not create external barriers. NAFTA will be GATT consistent. THEMES Page 3 Reassure on U.S. Engagement in the Region: o Our reasons for remaining engaged and active in Asia and the Pacific are obvious. The Asia-Pacific region is now America's largest trading partner, with trans-Pacific commerce totalling more than $300 billion in annual two-way trade. This is nearly one-third larger than that across the Atlantic. We will remain committed to our allies and to fulfilling our security obligations. The U.S. will remain engaged in Asia and the Pacific. Our bilateral and multilateral arrangements in this region have worked well. These arrangements will continue to be key to our mutual security in the decades ahead. The regional partnerships which the U.S. enjoys with Australia and other countries have provided the foundation for economic and political stability in the region. Future Relations Between Australia and the U.S. o We have points of differences, but overall our relations are excellent. We share common histories and similar values. And we see this relationship strengthening further in the years ahead. Some trends to point to: In culture and education: | Australian culture increasingly influences American music, cinema and sports. : There is also a solid basis of bilateral academic interchange, including the 40-year-old Fulbright program in Australia and numerous private exchanges involving younger Australians at the secondary level. | The U.S. 4-H organization, Future Farmers of America, and Rotary are among the groups with active exchange programs with Australian counterparts. THEMES Page 4 In bilateral economic relations: -- The importance of bilateral trade: after Japan, the U.S. is Australia's largest trade partner. Annual bilateral trade exceeds US$ 13 billion. -- U.S. firms have over US$ 15 billion invested in Australia, the second highest in Asia after Japan, much of it in leading edge technology in telecommunications, aviation, and informatics, as well as manufacturing, mining, agriculture, and energy. -- Tourism remains very big business for both countries. Nearly one-half million people travel each way each. year. United Airlines and Northwest both inaugurated new routes to Australia in 1991. -- We are broadening economic dialogue, this year initiating bilateral consultations on agricultural issues and continuing our consultations and joint efforts in important international economic fora such as APEC and the GATT. In environmental and resource management: -- Cooperation in conservation and environmental protection is expanding; we have many shared interests and similarities in resource endowments (i.e., coal, oil, gas, hard rock minerals) and topography. There are many recent examples of cooperation: -- Our two governments have established a High Level Group on Energy to exchange information on energy policy, programs, demand; to review ongoing research and development; and to engage in joint research efforts. -- US Interior Department (DOI) Minerals Management Service has recently signed a bilateral MOU with Australia's Department of Primary Industries and Energy (DPIE) for sharing data on offshore minerals development, including environmental protection aspects. THEMES Page 5 -- DOI Bureau of Land Management has initiated a dialogue with DPIE that is focused on the need to balance the extraction of minerals, oil, gas, and timber with the growing demands for recreation, and management of cultural resources, and wildlife and fisheries habitats. Plans include an exchange of technical personnel between our countries. -- USDOC/NOAA officials have recently met with their Australian counterparts to discuss ways in which our two nations can strengthen efforts regarding the important environmental problems of driftnet fishing, endangered species, and the monitoring/assessment of the global warming threat. -- In APEC, where Australia leads the Energy Working Group, our two governments are cooperating closely to establish a regional clean coal technology utilization center. -- The U.S. and Australia recently co-sponsored the creation of an International Forestry Research Institute to focus on issues related to the conservation of tropical forests and the arrest of deforestation and environmental degradation. In fighting illicit narcotics: -- Australia has done much to assist regional countries in their counternarcotics efforts and is an active member of the "Dublin Group" of donor nations that coordinates counternarcotics aid to producer nations. -- Our countries are united in the worldwide fight against drug abuse and trafficking, which is becoming a security threat of the 1990s. THEMES PAGE 6 Other issues: There are some issues on which we do not meet eye-to-eye but which should also be mentioned. -- Encourage continued Australian support for an ambitious Uruguay Round package including disciplines on Trade Related Investment Measures (which Australia continues to oppose) and services, where Australia has been more forthcoming recently. -- Australia remains on the Special 301 Priority Watch list for local content requirements on television broadcasting. This is barrier to cultural interchange. We hope to see a phase-out, not a phase-in, of local content requirements. -- IPR: On parallel import of books, there have been slight improvements in this area, but we urge the GOA to adopt provisions that would completely exempt foreign textbooks from parallel imports. -- IPR: We also are concerned by the Australian Attorney-General's rejection of a proposed amendment to the copyright law to provide an exclusive rental right for sound recordings. While Australia works for stronger standards for IPR in the Round, its actions at home are not consistent with this. One particularly difficult issue is Australian continuing concern over the impact on Australian farmers of the U.S. Export Enhancement Program for agriculture. This issue should be confronted sympathetically but directly: Note the plight of American as well as Australian farmers, our legitimate stake in world grain markets, our intention to continue EEP as leverage on the EC, and our hope that export subsidies will be sharply reduced in the Uruguay Round. THEMES PAGE 7 -- Recognize and regret that EEP is a factor affecting Australian farmers, but note other factors -- especially EC dumping, higher global production, Australia's transport/port inefficiencies affecting competitiveness, the drought, the high cost of agricultural inputs, and the simultaneous collapse of the wool market. -- Stress that we take Australian interests into account in implementing EEP, including setting up a bilateral consultative mechanism that met in August for the first time, and will continue. Melbourne Luncheon Speech on Global/Regional Issues Alsomphosize business Overall themes: Begin with the changes in Europe and move on to the latest initiatives in the Middle East and Southeast Asia. While addressing the changing political winds in the world, the President should also assure continued U.S. commitment to regional stability in Asia and the Pacific. Finally, focus should be placed upon international economic issues of mutual concern. Recognize Australia's Growing International Role: Express appreciation for the leadership role Australia has assumed in the world. -- Australia's contribution to the Gulf War -- Active role in working toward a settlement in Cambodia -- Leadership in forming APEC -- Strong efforts on proliferation issues, particularly regarding nuclear and chemical weapons Our partnership has become increasingly important, especially in the wake of the tremendous changes that have occurred in the world over the last two years. THEMES PAGE 8 U.S. Regional Role to Remain Strong: The regional partnership which the U.S. has enjoyed with Australia and other countries has been the foundation for economic and political stability in the region. o Despite the changes elsewhere in the world, the U.S. will remain engaged, concerned and active in Asia and the Pacific, both in strategic and economic terms. Facing Challenges Ahead: o This is not to say that there are no challenges ahead: : The proliferation of chemical, nuclear and biological weapons of mass destruction remains a problem; Australia's role in achieving international safeguards to reverse the proliferation trend has been critical to this effort. : We share a common view that the formation of protective trading blocs must be avoided, and support for cooperative frameworks such as APEC must be vigorously continued. -- We should do all we can to open markets and foster free trade in order to strengthen international economic cooperation, confidence and recovery. SEANZ 1668 POSSIBLE LANGUAGE FOR THE PRESIDENT'S AUSTRALIA SPEECHES (NOVEMBER 26, 1991) INTRODUCTORY REMARKS -- This is only my second visit to Australia, but my impressions of your vast and beautiful country will always be very special ones. -- (Insert complimentary remarks on Canberra, Sydney and Melbourne -- depending on itinerary. Could also make reference to Australia's size by noting that several states the size of Texas would fit in Western Australia.) THE ALLIANCE -- It isn't just Australia's natural beauty that draws Americans "down under." We share a long-standing friendship established by the special alliance that has served our two countries so well. -- I was deeply moved by my visit to the Australian War Memorial. It evoked memories of the sacrifices that both our countries have made, often side by side. -- Yanks and Aussies fought together in World War I, helping to liberate France. The first U.S.-Australian military cooperation took place when elements of the U.S. 33rd Division joined Australian troops in the capture of Le Hamel, France. -- And in World War II, our troops again fought side by side, and half a million U.S. military men and women served in Australia through that war. -- Together, U.S. and Australian forces fought throughout the Pacific, in tough land, sea, and air combat. Our alliance and partnership has been solid ever since -- in Korea, Vietnam, and most recently in the Persian Gulf. RECOGNIZING AUSTRALIA'S INDEPENDENT INTERNATIONAL ROLE -- While our close and important strategic relationship will continue to be of great mutual benefit, Australia has matured to become a positive force of its own in world affairs. We welcome this; your views are valued and while we may not see eye-to-eye on every issue, the direction of your policies are complementary to our own. Let me cite some examples: -- In the post-Cold War era, we are witnessing a reinvigorated role for the United Nations. Much credit goes to Australia for facilitating this. 2/2/2 -- Your initiative and persistance was key to shaping the framework for the Cambodia peace settlement finally agreed to by all warring factions last October. And Australia continues to ensure that the process toward democracy and lasting peace in Cambodia does not falter. -- You were among the first to dispatch aid and technical support under the United Nations Transitional Authority in Cambodia (UNTAC), to which an Australian was appointed by the UN Secretary General to command. -- Australians also serve under the UN banner in the Western Sahara and are a vital part of the Multinational Interdiction Force, ensuring that UN sanctions against Iraq are enforced under international law. In the Middle East, as in Cambodia, you have been quick to provide humanitarian relief. Last May your defence force provided medical teams and water purification equipment and services to Kurds and Iraqis fleeing Saddam's oppression. -- But even long before the Gulf War, Australia had the foresight to focus world attention on the problems which are now emerging as key concerns for the world community. Thanks to your efforts, the "Australia Group" was established in 1984, and is currently comprised of 22 nations dedicated to preventing the use and spread of chemical and biological weapons throughout the world. -- Australia also plays a lead role in international economics. It was Prime Minister Hawke who pushed the idea of a regional effort to promote freer trade by eliminating trade barriers and establishing common policies. Through his vision and efforts was born the Asia-Pacific Economic Cooperation, a key economic forum we know as APEC. And since its first ministerial in Canberra two years ago, APEC has succeeded in mobilizing the support of all fifteen participants to push for substantive progress in this key GATT Uruguay Round. -- Clearly, Australia has established itself as a strong promoter of multilateral solutions to important international problems, be they military, social, political or social in nature. And in large measure, your goals are shared by the United States. ASSURING CONTINUED U.S. ENGAGEMENT IN THE REGION -- Let me take this opportunity to assure you that we, too, are committed to remaining engaged throughout the world. There are some naysayers who wrongly predict that recent events in Europe and Asia will lead to a more isolationist America. This could not be farther from the truth. 3/3/3 -- America tried to politically isolate itself from the world in the past, and we ended up fighting two bloody world wars. We also tried economic isolation that only helped to set off a devastating world depression. -- Current trends point to our strengthened engagement in Asia and the Pacific in the decades ahead. This region has become our largest and fastest growing trade partner. Two-way trade between the region and the U.S. now amounts to more than $300 billion, nearly one-third larger than that across the Atlantic. -- American firms have invested more than $61 billion in the region, and that will certainly grow. On the other hand, investors from the Asia-Pacific have invested more than $95 billion in the U.S. -- Our bilateral trade relationship with Australia is strong and growing. Total bilateral trade exceeds US$ 13 billion, having grown over 20 percent in the last five years. After Japan, the U.S. is Australia's most important trading partner, taking 12 percent of her exports, and providing 23 percent of her imports. At US$ 14 billion, Australia is the largest recipient of total U.S. direct investment in the Asia-Pacific region, again next to Japan. -- In everything from automobiles to microchips, from baseball to Australian rules football, we grow closer -- not isolated -- with each day. -- Cooperation and dialogue on economic issues can only benefit our respective economies. We must continue this openness in our relationship, and indeed work for greater openess in our trade relations, particularly as we both continue to face economic difficulties on the domestic front. REMARKS ON THE EXPORT ENHANCEMENT PROGRAM -- But while we generally agree on the goals, we sometimes differ on the means. Our use of the Export Enhancement Program to counter the agricultural subsidies of the European Community is one point of difference. -- Let me be clear in stating that I don't favor subsidy programs. They are a burden to the taxpayer. They weaken the mechanism and reduce the benefits of a free trading system. And subsidies take the competitive edge out of industry. -- But let me be equally clear in pointing out that we did not start the wheat war. Talks with the EC on this issue had previously led nowhere. And it is our farmers in the U.S. and Australia who have been badly hurt by continued EC subsidies of wheat. 4/4/4 -- We must both remember that the root cause of depressed international agricultural prices, which have been hurting both our farm sectors, lies with the European Community. -- We are now seeing glimmers of hope. And I believe it is because we have countered EC subsidies with the EEP. -- The U.S. will be unwavering in its efforts to counter EC subsidies with our EEP. I believe it is in the long-term interest of all non-subsidizing nations that this pressure on the EC be maintained. -- At the same time, I have promised to do my utmost to limit the harm that our EEP does to non-subsidizers like Australia. I have also agreed to greater bilateral dialogue on this and other economic issues of bilateral concern. On both points, I have kept my word and will continue to do so. --- Any mature relationship, even between close allies, cannot be without differences. We must continue to seek understanding and work to iron out our differences. THE NEXT FIFTY YEARS The Environment -- We can be proud as we look back over the accomplishments of the last five decades. But we can and must do more to expand our bilateral relationship in ways which will be beneficial to future generations of Australians and Americans. A key area is the environment. -- We share common energy interests which are derived from our large domestic energy resource bases. Together, we are the the world's largest coal exporters. Ministerial meetings were held here last year to discuss upgrading our cooperative research and development efforts in the area of energy. -- At the ensuing high level group meeting held in Washington last April, Australia and the U.S. agreed on the importance of pursuing energy policies that will help promote our energy exports while addressing environmental issues. -- Together, U.S. Energy Department officials are working with their Australian counterparts to develop clean coal technology, energy efficient technologies, and other programs of importance to the environment. 5/5/5 -- Our governments also have agreed to share information on offshore minerals development, which include environmental protection aspects. And there is an increase in our sharing of experiences in balancing the extraction of minerals, oil, gas, and timber with the growing demands for recreation, better management of cultural resources, and environmental preservation. -- Our scientists also are working alongside your scientists to better understand the global climate system. The U.S. National Oceanic Atmospheric Administration, NOAA, collaborates with Flinders University of South Australia in tidal research. NOAA and the University of Tasmania also have a cooperative arrangement for climate and global change research. -- We are collaborating on providing regional governments much needed information and training in preserving endangered forests. Toward this end, the Australian and U.S. Governments are co-sponsoring an International Forestry Research Institute to address conservation, deforestation, and environmental degradation. -- And in managing the delicate balance of our ocean fisheries, Australia and the United States have shared concerns over driftnet fisheries for albacore and other tuna in the South Pacific. We have joined other nations in remedying this serious conservation threat to tuna stocks in the Pacific. Cultural and Educational Interchange -- I began my remarks today noting that Australia is a country graced with much natural beauty. But it is really the spirit of your people which has made it a country so admired by Americans and others throughout the world. We see this in the arts, with the creative works of Australians in all media, including painting, sculpture, dance and, of course, film making. And we hear it in your music, where Australian artists remain extremely popular in the United States. We must continue to facilitate this rich interchange between our people. Let me give you one recent example. Our Consul General in Perth last November invited American musical artist Paul Simon, who was in Australia then on tour, to meet with a number of West Australian Aboriginal musicians in his residence. After the guests had arrived, it was the Australians who made the first move, setting up their 6/6/6 traditional instruments on the coffee table. Soon, Mr. Simon and his fellow American musicians were receiving didgeridoo lessons. And by the end of the evening, he was sharing a few of his own skills with the guitar, completing an evening of musical fellowship. -- In Sydney, at a more institutional level, we have recently initiated a Fulbright-supported American studies lecture series at the University of Sydney American Studies Center. The lecture series is a program which developed from Prime Minister Hawke's initiative to begin a similar program at the Edward A. Clark Center for Australian Studies at the University of Texas, Austin, in 1989. -- While we may have our differences over the EEP program, our young people look beyond the present. In preparing for this trip I was very pleased to learn that our 4-H program and our Future Farmers of America have active exchange programs with young people in your farm communities. Easing Travel Access -- Nearly one-half million Australians visit the U.S. each year, and an equal number of Americans come here. -- To facilitate freer travel between our countries, which should be of help to both our tourism industries, my government has offered to extend the privilege of waiving the issuance of visitor visas to Australian nationals if the Australian government agrees to allow reciprocal treatment for U.S. nationals. Our offer stands, and I hope we will be able to provide this benefit to our respective publics in the near future. -- And to help Australian investors who seek to do business in the U.S., we are prepared to extend "E" visa privileges to your citizens provided U.S. nationals are accorded reciprocal nonimmigrant treatment. -- These examples are real indications of the cooperative spirit that exists between our two nations as we seek to strengthen our economic, cultural and educational ties. They are positive signs of the shape which our bilateral relationship will take over the next five decades. -- Let us continue to work closely together to ensure that the future of our relationship will be as productive a partnership as it has been over the last fifty years. POSSIBLE THEMES FOR SPEECH IN SINGAPORE Security/New World Order -- My generation fought a world war -- in Asia and the Pacific, in Europe, in North Africa. Those of us who experienced that war vowed that it would be the last world war, that the forces of totalitarianism must be resisted and their aggressive designs frustrated. As visionaries, we founded the United Nations; as prudent men and women, we also established a structure of alliances to contain totalitarianism. -- In the largest sense, we have achieved our goals. Despite -- and perhaps in some ways because of -- the advent of weapons of mass destruction, the threat of global war today is smaller than at any time since 1945; indeed, it has almost vanished. The specter of world communism has disappeared; state- controlled economies are discredited; the democractic tide is higher than it has ever been, with elected governments in many nations on all continents; the advantages of the free-market system are evident worldwide. -- For many years the United States, by its military presence and its influence, has fostered stability in several parts of the world. Nowhere have the benefits of that stability been greater than here in East Asia, where many nations have prospered to a degree beyond anything that might have been imagined 20 years ago: first Japan; then the Dynamic Asian Economies of Singapore, Hong Kong, the Republic of Korea and Taiwan; and now Malaysia and Thailand. Others such as Indonesia are following rapidly. Economic growth in East Asia today far outstrips growth anywhere else in the world. -- The alliance structure succeeded in containing totalitarianism and preventing global conflict, but it did not preclude smaller wars or other kinds of regional or local conflict. We are still dealing with some of those situations, but the end of superpower rivalry has made the search for solutionsd more productive. We have reached a stage at which we can realistically discuss what I have called the New World Order, under which nations will resolve their disputes without resort to the use of force. -- We have already seen the United Nations take on new vitality and begin to exercise the role its founders intended for it, most notably in rolling back the invasion of a small state, Kuwait, by a much larger one, Iraq. We have enjoyed good cooperation from the Soviet Union in convening a historic Middle East peace conference. -- Here in Southeast Asia multilateral diplomacy has achieved what we trust will be a notable and lasting success: the case of Cambodia. I will not try to trace here the history of that -2- unhappy country -- a history in which the United States itself is of course involved. But I want to record my appreciation for the solidarity of Singapore and four other ASEAN members with Thailand, the nation immediately threatened in the 1970s and 1980s by the potential spillover of combat. More recently, another ASEAN member, Indonesia, together with France, has led the search for a settlement, in which the four other Permanent Members of the Security Council have joined, together with the United Nations, Australia, Japan and other governments. That long search reached a milestone six weeks ago in Paris with the signing of the settlement documents. -- A settlement in Cambodia truly means the start of a new era. For virtually the first time since World War II, Southeast Asia is without serious conflict. For the United States, that settlement makes possible a process of healing in our relations with the states of Indochina: representation in Cambodia for the first time since 1975, accredited to the Supreme National Council headed by Prince Norodom Sihanouk; a restoration of our diplomatic relations with Laos -- never broken -- to the pre-1975 level; and the start of the process of normalization with Vietnam. Just how far and how fast we move in that process with Vietnam will depend on progress in resolving the cases of our military personnel missing in action -- but the trend in recent months has been decidedly positive. -- For the people and the governments of Indochina, the settlement in Cambodia holds great promise. The embargos on trade and investment which many governments imposed can now be lifted; travel and communications can be opened up; the international financial institutions will be able to lend freely for worthwhile projects. Most important, perhaps, Vietnam, Laos and Cambodia will be able to emerge from their isolation and, if they chose, free themselves of the policy constraints that have hindered their development. In fact, Laos and Vietnam in recent times have both shown a receptiveness to foreign private investment. The United States looks forward to this new era, as, I am sure, do the peoples of Singapore and the other five ASEAN nations. -- Clearly, then, the situation in East Asia has improved in recent months, as has the world situation generally. But we remain in a transitional phase; we cannot wish away continuing threats to peace and stability in such areas as the Korean peninsula, and we cannot rule out sudden threats to world peace and the rule of law such as the one that arose in the Persian Gulf only sixteen months ago. -- For those reasons, the United States will remain engaged militarily in East Asia and the Pacific for the foreseeable future. Here, as in Europe, we will take advantage of reduced -3- levels of threat and of increases in the speed, range and lift capability of our ships and aircraft to slim down our forward-deployed forces and the number of our bases. The character of our presence will change; we will place more reliance on access to a larger number of facilities owned and controlled by others. Our total numbers may be reduced, but our presence in the region could be more widespread and more frequent. -- The agreement signed in Tokyo a year ago by then-Prime Minister Lee Kwan Yew and Vice President Dan Quayle exemplifies this new type of arrangment. Under its terms, our ships and aircraft -- based elsewhere -- are making increased use of Singaporean military facilities. They exercise jointly with Singapore's forces as well as on their own. They are gaining familiarity with the geography and the operating conditions of this part of Asia. We are open to the possibility of similar arrangements with other nations of the region. -- The eruption of Mount Pinatubo in the Philippines in June settled the fate of Clark Air Base there. If we are able to remain at Subic Bay, we shall do so, but if not we shall continue to honor our treaty commitments. We have already relocated headquarters, troops and equipment to Guam. Meanwhile, United States forces will remain in Japan and Korea. Our treaty relationship with Australia, the country I shall visit next, is stronger than it has ever been. We hope the day will come when New Zealand allows us to resume defense cooperation under the historic ANZUS alliance. -- In short, we will stay on the scene in East Asia. The test of our security policy, or of any nation's, is not the size or location of our forces; rather, it is the ability to deal with any and all likely threats to the peace, and to deal quickly and decisively with unpredictable crises, and that is precisely how the United States and its partners in the multinational coalition -- acting through the United Nations -- dealt with the Iraqi invasion of Kuwait. Economic Cooperation -- Interdependence and cooperation are equally important in the world economy. That lesson is fully understood here in Singapore, where total trade is three (??) times the value of your gross domestic product. If the prosperity that so much of East Asia already enjoys is to continue and spread, we must have an open global trading system. To reach that goal, we need a framework for economic integration, and we must avoid regional fragmentation. -4- -- Trade across the Pacific has expanded dramatically in recent years, in step with dramatic economic growth in many East Asian countries. Some ten years ago America's trade with the Pacific surpassed our trade across the Atlantic; today, it is nearly one-third larger. The ASEAN countries, taken together, constitute America's fifth-largest trading partner. Singapore alone is a bigger export market for U.S. goods than Italy, Spain or the USSR. Nations on the eastern rim of the Pacific, from Mexico to Chile, are eager to join in this booming trans-Pacific commerce. I urge U.S. firms take advantage of these dynamic markets and to redouble their efforts to export to and invest in the ASEAN countries. -- The Pacific Basin is a natural trading region, and it is logical that the governments of the region concert to promote that trade by eliminating barriers and establishing common policies. An excellent forum for doing so already exists: the Asia-Pacific Economic Cooperation, or APEC, grouping. The concept had occurred to a number of people in several countries, but it was Prime Minister Bob Hawke of Australia who developed the idea and convoked the first APEC ministerial meeting in Canberra two years ago. -- APEC has since met twice more, here in Singapore last year and again last month in Seoul. Its original group of twelve participants has grown substantially with the simultaneous addition of China, Hong Kong and Taiwan, and APEC can look forward to further growth in the years ahead. -- APEC is performing many useful functions, but none is more important than mobilizing the support of all fifteen participants for a successful conclusion of the Uruguay Round of multilateral trade negotiations to update and extend the system known as the General Agreement on Tariffs and Trade. The nations of APEC are convinced that the GATT system must cover world trade in agricultural products, as it has long covered manufactured goods, and that it must be extended to new realms such as intellectual property rights, services, and investment. -- The alternative is a likely failure of the global trading system, a reversion to exclusionary trading blocs, and, eventually, the constriction of world trade. It is incumbent on all of us -- in North America, in Asia, in Europe -- to overcome parochial interests, abandon protectinist rules and tactics, and expose our economies to the rigors of competition. -- Even while we pursue reform of the global system in the Uruguay Round, we can reduce and eliminate barriers to trade with our immediate neighbors. That is what the United States and Canada are doing right now, and what we and Canada propose -5- to do with Mexico, thereby creating a North American Free Trade Area, or NAFTA, which will have few internal barriers and will be more accessible than at present to other world traders such as Singapore. -- Thailand has proposed that ASEAN establish a free-trade area of its own over the next fifteen years, and the other five governments have agreed. Such action is the direct parallel of what we in North America are doing in NAFTA, and the United States applauds this decision by the ASEAN nations. The Spread of Democracy -- The most inspiring single event of the last few years was the tearing down of the Berlin Wall. The Wall symbolized the worst of totalitarianism, and its destruction stands for the desire of people everywhere to control their destinies and to be governed only by their own consent. -- To a gratifying degree, that is happening. The democratic impulse is alive, whether fed by relative proposerity, as seemed to be the case in China, or by economic failure, as in the Soviet Union and Eastern Europe. And in many places the impulse is flourishing. In recent years elected governments have come to office everywhere from the Philippines to Poland and from Nicaragua to Mongolia. -- There are basic human rights, universally recognized though not universally observed, but there is no copyright on democracy and no one form of government or set of practices to which every nation must adhere. The United States recognizes the legitimacy of diversity. What the United States cannot condone, however, is the suppression of the popular will -- and that is what has occurred in Burma, where the military leadership permitted elections last year but, when the results proved not to the military's liking, refused to allow the winners to take their rightful seats and organize a government. So long as this situation continues, the people of Burma will remain victims, subject to torture and intimidation and deprived of the chance to share in the general properity and well-being which so many of their neighbors already enjoy. (NEEDS CONCLUSION) MORE SOUTHEAST ASIA SPEECH IDEAS 31 years ago this month, on a cold, snowy day in Washington, newly elected American President John Kennedy articulated Americas commitment to our friends and allies throughout the world. That we would stand with them in their efforts to resist Communism, embrace freedom and support efforts to develop economically and thus improve the lives of their people. -- It was a commitment that was to bear a heavy price, over 58,000 dead in Indochina and billions of dollars spent on assistance and maintaining a military presence in the region. -- But it was a commitment that has been shared by Republican and Democratic presidents alike. -- It is appropriate that standing here now in a country which represents one of the most remarkable economic success stories in the world, we can look back and see that the outcome we all worked and sacrificed for has indeed become a reality. -- It is with great pride that I say that history will record that America did indeed keep its commitment to its friends in SE Asia and that together we have built a region which is at once free, at peace, and experiencing unprecedented prosperity, part of the new world order which offers the promise of enduring global stability. -- To judge just how far we have come and to see what we have accomplished, it is instructive to look back 25 years and recall the situation in SE Asia at the time Singapore was first charting its independent course. -- In January 1967, the concern was about the rapid spread of Communist ideology. Almost every country in SE Asia had or was about to have an active Communist insurgency. -- As the war in Vietnam raged, from Jakarta to Rangoon and from Bangkok to Manila, the worry was about falling dominoes. The nightmare vision was of a radical ideology being imposed throughout the region. -- It is important to keep in mind that while there was a large U.S. military presence in the region in the mid 60's, U.S. economic interaction with Southeast Asia was still rather small. -- On the eve of the Tet offensive, the U.S. had a higher trade turnover with Latin America than with East Asia. -- Today, the situation is dramatically reversed. The steadfastness of our military commitments and the stability which they promoted, gave the countries of the region time to grow economically and deal effectively with the political challenge. Having collapsed in Europe and the Soviet Union, Communist is no longer a viable threat, and is acknowledged as a failed and bankrupt economic and political philosophy. -- Democracy, personal freedom and free market economies are demonstrably the keys to real improvement in the quality of people's lives. -- And this has been accompanied by an explosion in trade between the U.S. and Southeast Asia, particularly the six ASEAN countries. U.S. two way trade with Singapore grew from 2 billion dollars to 20 billion dollars since the end of the Vietnam War. In the same period, Thailand went from 700 million dollars to 9 billion dollars. -- This has made the U.S. ASEAN's number one customer. We take one fifth of all of ASEAN's exports, while ASEAN imports from the U.S. have increased 1600 percent since 1975. -- As a result, today U.S. two way trade with ASEAN stands at over 46 billion dollars - just about equal to our commerce with Germany - and exceeded by only three other U.S. trading partners. -- To put it in better perspective, in 1990 the U.S. exported: More to Singapore than to Italy or Spain More to Thailand than to India More to Malaysia than the Soviet Union More to Indonesia than all the rest of Eastern Europe put together. -- But it is not just trade that has brought us closer together. -- Satellites and the expansion of telecommunication technology mean that more messages and images are going back and forth between our people than ever before. In 1975 there were about 300,000 T.V. sets in Indonesia, today there are 7 million (and it seems at least that many more for sale in all of Singapore shopping malls.) Direct dial long distance phones and FAX machines means someone in Manila, the Philippines can place an order in Manila, Iowa in less than a minute. -- We understand each other because of the flow of people between us. In 1975 there was only slightly more than a million Americans of Southeast Asian origin. Today that figure has quadrupled to over 4 million, including one senior member of my White House staff Sicwan Siv who survived the horrors of the Khmer Rouge run Cambodia. Based on this population of SE Asian origin, the U.S. would rank as the fifth largest ASEAN country. There are more Lao in the U.S. than in Vientiane There are more Filipinos in California than in Cebu. -- All of these developments - people telecommunications, jet aircraft, trade, investment, security commitments, and common belief in economics and freedom have created a web of interaction, knitting us together as never before. -- Our challenge is to use this structure to promote continued peace, stability and increased economic progress. And common efforts to deal with the challenges we face in terms of the environment, narcotics, human rights and other scientific and technical areas such as public health. -- There are two mechanisms which promote and enhance this new reality: The ASEAN-Post Ministerial Dialogue in which our foreign ministers and those of ASEAN's other dialogue partners meet to discuss issues and coordinate approaches to dealing with problems; and APEC, which offers the increasingly real promise of cooperation on the full range of economic issues across the entire Asian-Pacific region. Having invested so much in this region in terms of American lives and national treasure and having attained, together with you, so many of our policy goals, the U.S. is not now going to turn its back on South East Asia. -- The U.S. is committed to meeting its obligations in SE Asia and will continue to play the positive role by maintaining our military presence, even with our three year phase out from Subic Bay. Our new Access Agreement with Singapore contributes importantly to this goal. -- The U.S. is committed to a successful transition to a freely elected government in Cambodia. In that regard, I am today announcing that the U.S. has lifted its trade embargo and all other economic restrictions against Cambodia. This should permit increased economic activity which will help solidify and maintain the process. -- The U.S. is prepared to move forward in our relationship with Vietnam, provided that progress continues to be made in Cambodia and on our POW/MIA issue. The countries of Indochina have real promise for economic growth if there can finally be an end to violence and they join the rest of the region in emphasizing development. The U.S. is committed to working productively with our friends in addressing global problems and so therefore I am today announcing a new environmental initiative aimed at enhancing our work together in preserving our planet and natural resources. -- We are truly embarking on a new era - one in which the last remnants of the Cold War are being put behind us -- For America, our Vietnam syndrome is a thing of the past. Konos National Assembly-Speech themes (DRAFT) O Thank you -for providing me with this opportunity to speak to you again. Since I last spoke here in February 1989 the world has changed immensely. We have in fact entered a new era in world history. We are very pleased with the triumph of freedom and free enterprise economics throughout most of the world, and with the continued progress, economically and politically, of the Republic of Korea. However, we remain saddened by the persistent conflicts in many parts of the world, and by the continued division of the Korean peninsula, a situation that is anachronistic in the post-Cold War world. o As we have stated on numerous occasions, the United States supports the peaceful unification of Korea on terms agreeable to all Koreans. We believe that North/South dialogue offers the best path toward eventual discussion O unification and related issues. Consequently, we support strongly the Prime Ministerial dialogue that has been in progress for more than a year, and stand ready to facilitate in any appropriate way. Our support for the process of peace does not, however, blind us to reality and to the threat from the North that still remains. Therefore, our commitment to the security of South Korea remains as strong as ever, and we will continue to consult on matters that affect our mutual interest. To further strengthen security in the region, both of us should also consult and cooperate with our friends the Japanese, who have the economic power to play a vital role in promoting regional stability. We continue to regard the unsafeguarded nuclear program of North Korea as the greatest threat to security in region, and call upon the leaders of that country to meet the international obligations it accepted when it acceded to the Non-Proliferation Treaty in 1985. North Korea should know that neither the United States nor the Republic of Korea poses a threat to its society or way of government. However, we cannot ignore the situation as North Korea builds nuclear weapons, and will use all diplomatic means to assure that it meets its international obligations under the International Atomic Energy Agency (IAEA). As we begin this new era in international relations, S.-Republic of Korea relations are growing in many areas. With the Cold War behind us, we are transforming our relations from a security relationship to a broader-based security, economic, and political partnership. Of crucial importance in this transformation is your own progress toward democracy, well illustrated by the enhanced prestige and power of this body. The ROK's movement to a democratic government, with the military clearly subordinate to civilian government, has been crucial in winning for you the respect of the international community and the stability and credibility necessary for an influential world role. The challenge now is to continue down the road toward full democratization. You have won the political contest with the North and should consider amending your National Security Law, which provides a propaganda advantage to the North, to take account of your strength and confidence. Further steps in democratic development might include greater accountability for public officials and greater transparency in both your political and economic systems. Initiatives in these areas would be consistent with your overall economic and political modernization, and would further strengthen your position vis-a-vis the North. The ROK's democratization is but one of the features that distinguishes it from North Korea, but it is one of the most important, and it is an achievement which should make all Koreans proud. Another of the ROK's greatest accomplishments has been membership in the United Nations. Your entry in the United Nations was long overdue, and your ultimately success is due in large part to wise leadership and persistent effort. However, South Korea's emergence as a full member of international political and economic institutions, carries with it added responsibilities. Over the years, the Korean people have gained tremendously from the open international trading system. Indeed open markets for exports have been a major contributor to your new prosperity. Korea has now become an economic power in the region and the world. Now it is time for the ROK to lend its support to the open international trading system from which it has prospered by actively supporting the Uruguay Round of negotiations, opening its own domestic market to foreign products, and liberalizing its financial system. Your support is vital to assure that the international trade system remains open and that countries like Korea can continue to prosper. The U.S.-ROK friendship has now endured more than four decades of dramatic world events. Yet in the beginning, our close relationship was not one that either of us sought, but rather one into which we were both thrust as a result of World War II. In those years the U.S. entered into its relations with Korea with a keen sense of responsibility, and with determination to preserve the benefits of freedom for the Korean people. It demonstrated its commitment during the Korean War, when more than 33,000 American soldiers and thousands more Koreans, both military and civilian, died to keep freedom alive. Clearly, over the past forty years the American role in Korea has not always been a easy one, and the political environment in East Asia has frequently been one of crisis. Consequently, in carrying out what we perceived to be our responsibilities we have made mistakes. Yet we entered the relationship with the Republic of Korea with the highest ideals, and we have, I believe, pursued the correct path in the long run. Therefore, we too are enourmously proud when we see the great nation you have built from the ruins of war. Today, we again approach the future in the aftermath of a war--a Cold War, and together we have the opportunity to shape and influence a new era as much as we did nearly 50 years ago. We can also define for the next generation a new relationship, a partnership that encompasses much more than merely security cooperation. Our new partnership should be political, economic, nad cultural, as well as security. I urge the people of both countries to look toward the future rather than the past, and to seize the moment to build on our excellent relations, to expand cooperation so we all benefit, and to march into the future as friends and neighbors working together to build a safer and more prosperous world community. Sensitive issues which the Embassy thinks should be addressed explicitly: 1. Make clear our willingness to continue consulting with the ROK on security issues. 2. Describe how we see the Japanese role in the region complementing ours and that of the ROK. 3. Make it clear that transparency and accountability are important to Korea's economic relations with the rest of the world. 4. State clearly what the DPRK must do for improved relations with the U.S. 5. Make it clear that the National Security Law plays into Pyongyang's hands and can be counterproductive to the ROK's North-South goals. Remarks to American Chamber of Commerce Themes could include: -- Strong support for the work of the U.S Chamber of Commerce, which has been vital to U.S. business interests in the ROK. -- Korean economic maturity and U.S. /Korean economic/trade interdependence have brought the two nations to a new era of partnership. -- Mutual interest in further development of open, liberal international trade and financial regimes, in particular, successful conclusion of UR. -- Responsibility on both countries to ensure that their domestic trade and financial markets are open and liberal for the other; that domestic markets are fully integrated into international trade and financial regimes; and that their producers and consumers understand the benefits of two-way open, liberal markets. At a science/education/technology event themes could include: -- The long history of U.S. support for Korean science and technology; nuclear energy is a good example. -- Our admiration for the great strides Korea has made in developing its technological base; -- Recognition that scientific and technological development can only flourish where the economic value of the intellectual property associated with discovery is protected for the benefit of the discoverer. -- Our willingness to continue and enhance cooperation with Korea, symbolized by the U.S.-ROK Science and Technology Agreement; -- Our confidence that Korea will be able to make significant contributions to world scientific research and technological development. -- Recognition that Korea can now assume rights and responsibilities shared by other industrialized countries in world scientific research and technological development through; a. Greater contributions to the world scientific knowledge by increased basic research funding and b. Cooperation with U.S. and other countries through participation in basic megaprojects such as the Superconducting Super Collider (SSC) Themes/Phrases for Presidential Speeches Camp Casey Thirty years ago, in 1961, President John F. Kennedy spoke within sight of the Berlin Wall and lamented the divisions between people there at the front line of the Cold War. As he spoke, the barrier a few miles from here, the DMZ, stood as a parallel tragic division between peoples. As we celebrate the end of the Cold War and the overcoming of barriers between peoples throughout the world, it is tragic that that barrier remains, the last remnant of the Cold War. It also stands as a visible reminder of the ideological battles which once divided the world, and now continue sadly to divide the Korean people from one another. For over forty years the United States has been proud to have played a role in assuring that that barrier against renewed aggression was strong and steadfast. All Korean war veterans and the men and women who have participated in this important and vigilant effort to protect freedom should be proud of their contribution to Korea's security. Throughout that effort, the United States has consistently looked forward to the day when that barrier would no longer be necessary, when the very real threat of North Korean aggression would be no more. As I stand here today within sight of the Berlin Wall of Asia, I renew that hope and that appeal, that someday soon there will no longer be barriers between peoples striving for unification and reconciliation. The atmosphere for leaving behind the fears and hatreds of the Cold War has never been better. The support of the international community for a peaceful unification of the Korean peninsula has never been stronger. I can look forward to the day when it is no longer necessary for U.S. troops to be stationed in Korea to defend against the threat of North Korea, when that threat is relegated to the history books, when North Korea becomes fully committed to resolving its differences with our good friend and ally in the South. Until that time, I assure the North that our commitment to the security of the South remains rock-solid and unwavering. Nothing will ever change that commitment or the equal commitment to have available the means to protect our ally, the Republic of Korea against aggression. But there remains a parallel commitment to move toward improved relátions with North Korea, as long as it remains an independent state, and to cooperate in ways which can enhance the security of this region and the welfare of its people. The North knows what it will take to achieve that objective, and I hope to see significatn movement in that direction in the near future. I know that the people of South Korea and North Korea both are committed to unification, and I assure them that the people of the United States are in full and complete support of that objective. Earlier today I endorsed President Roh's call for a multilateral approach to resolving the security problems of this region. The United States will do all in its power to make this endeavor a success. We can do no less to enhance the security of our Korean brothers, both South and North. Thus I call on North Korea to come out from behind those barriers, from the bastions of military strength, to present to your countrymen the hand of peace and reconciliation. I for my part offer my hand to North Korea across the divide. Come, work with us for peace and security on the Korean peninsula, in the Northeast Asia Region, and in the world. Key Elements for the Presidential Speech in Japan Historical Setting -- Friendship between the two nations has deep roots. Even before Commodore Perry sailed into Shimoda with his black ships in 1853, a young man from Kyushu named John Monjiro had found his way to Boston and begun the process of cross-cultural communication. It is important to remember that except for the dark period of the 1930s and early forties, productive relations between the two countries have been the norm. -- It is in this context that the American people approached the commemoration in Hawaii of the fiftieth anniversary of Pearl Harbor. We see this event and the war that followed as an aberration in the long positive history of our relationship. As we pay tribute to those who died in the conflict, we will take pride in the strong US-Japan alliance relationship that both countries have built since the end of the war which has made a major contribution to the prosperity of both countries and is the foundation of peace and stability in Asia today. The enduring importance of cooperation -- Rarely in history have two nations with such different geographic and cultural roots formed such an enduring relationship. This relationship is based on shared interests and values and an appreciation of the mutual strategic, economic, and political benefits both countries derive from close cooperation. -- The basis for cooperation is stronger today than it has ever been. - The US-Japan Security Treaty remains the cornerstone of stability in East Asia, a region that still has a range of unresolved conflicts. This treaty allows the US to maintain forward deployed forces in East Asia which serve American, regional, and we believe, Japanese interests. Close cooperation between our military forces and the two-way flow of defense technology makes the most efficient use of our defense resources and helps maintain a strong political link between the two countries. -- Our economies are increasingly interdependent; Japan will sell about $90 billion worth of goods and services to the US this year and the US will sell more than $40 billion to Japan, making each country the others' largest overseas trading partner; Japanese investment in the US creates more than jobs and is an important source of technology and management innovation for the American economy. -- The US and Japan are the world's two largest donors of foreign economic assistance and are destined to play key roles in addressing regional and global issues by virtue of their economic strength and political interests. These roles can best be performed by working together rather than independently. -- The human connections between us are growing. There are more Americans working and studying in Japan than ever before and there are more Japanese residing in the US. America as a Pacific player -- The US has been a major player in the Pacific throughout the twentieth century but it is only recently that Americans have become aware that their country's future orientation will be as much toward the Asia-Pacific region as toward Europe. America's trade with Asia exceeds our trade with Europe. Asian-Americans are the most rapidly increasing ethnic group in America and are becoming political active. And American security continues to be vitally linked to the security and stability of the Asia-pacific region. America's View of Japan -- For America, Japan is the center of Asia, and US relations with Japan are the heart of our policy toward the Asia-Pacific region. -- As seen from Japan, there may be the impression that most Americans see Japan in negative terms. Polls show the "Japan challenge" ranking ahead of the "Soviet challenge"; and various books and articles predict a crisis in US-Japan relations. -- These opinions are present in the US, but the vast majority of Americans admire Japan's economic performance, have warm feelings toward the Japanese people, and regard Japan as an indispensable partner for the post-Cold War era. -- Let me say a word about the impact of the Gulf crisis on American views of Japan. There was considerable criticism in the US press and in the Congress of what was seen by some as Japan's slow and reluctant support of the coalition effort, but this negative impression has all but disappeared. In fact there is now widespread appreciation of Japan's extremely generous $13 billion contribution to the effort, $10 billion of which went to the United States, and to the strong political support of your government. We know the Gulf crisis raised many fundamental questions in Japan about your country's appropriate role in such coalition efforts and that reaching a consensus takes time. This is an issue for the Japanese people and the Japanese political process to decide, but we welcome efforts Japan has made to participate more directly in peace keeping operations. Managing US-Japan Relations for the Future Global Partnership -- We see a "global partnership" between Japan and the United States in which the two countries will work in close collaboration to bring their political, technical, and economic resources to bear to address regional and global issues. -- Global Partnership will be an "equal partnership" -- we will work together to define common objectives and our respective approaches to these objectives. -- Global Partnership will not be exclusive, nor will it represent a US-Japan condominium. We will welcome the participation of other like-minded countries and international organizations. Addressing Economic Issues -- Global partnership can only succeed if we manage the competitive aspects of our relationship, notably in the economic area. -- We have made great progress in the last few years in addressing various sectoral problems and the Structural Impediments Initiative (SII) talks have broken new ground in addressing the sources of tension in our trading relationship, but more needs to be done. We welcome the agreement of your government to reinvigorate efforts in these areas. -- Nothing is more important to sustaining the free trade system that the success of the Uruguay Round. Japan and the United States benefit greatly from free trade and we bear a special responsibility for the successful conclusion of the round. We look to Japan -- Fifty years ago we fought a tragic war. Today we are each others' indispensable partners in trade, investment, defense, and regional and global affairs. -- The Cold War helped create this partnership, but cooperation between the US and Japan does not depend on the external pressure of the communist challenge. Rather our alliance is based on fundamental shared interests in virtually all fields, and the reasons for cooperation are stronger today than ever before. -- It is up to the leadership in both countries to ensure that the competitive aspects in our relationship are managed effectively so that this cooperation can go forward. If we fail, we will have missed an historic opportunity; if we succeed, our citizens, and the citizens of the world can look forward to a more prosperous and stable future. I welcome the commitment of Prime Minister Miyazawa to this joint enterprise and I make the same commitment. to play a leadership role as we tackle the last remaining, and the most difficult, issues, including agricultural liberalization. The US Domestic Agenda -- We recognize that our bilateral trade imbalance reflects far more than the impact of remaining market barriers in Japan. Japan's products are competitive around the world because Japan has saved and invested at a rate double that of the US, focused on applied research and development and new manufacturing technologies, established the world's best quality control systems, developed a highly educated labor and managerial force, and taken a long term view to developing markets abroad. There is much that America should emulate in Japan's example. We are taking steps to improve our competitiveness -- reducing our budget deficit, improving education, and enhancing our productivity. -- The United States is going through a difficult economic period, but we have tremendous fundamental strengths to draw on. American basic research is still the best in the world; our best universities are the world's best; American technology in such advanced fields as computers and biotechnology is at the leading edge; and we have a diverse, energetic, creative, and talented population. -- But we need make more productive uses of these basic strengths to prepare our economy and society for the competitive challenge of the 21st century. The Human Connection -- For all of our interaction and interdependence, the US and Japan need to know a great deal more about each other. Much is already being done in this area. There are more than 1000 young Americans teaching in Japanese schools under the JET program, and thousands of Japanese are studying in the US. We welcome the Abe fund to support greater exchanges between the US and Japan and we are committed to supporting this and other initiatives. Thanks to these programs, by the end of this century both Japan and the United States will have a much larger group of people who have lived in each other's country, speak each other's language, and understand more fully the great importance of our bilateral relationship. Concluding Flourish KOREA -- FROM NATIONAL GEOGRAPHIC, AUGUST 1988 kimchi - incendiary pickled cabbage that no Korean is without status-conscious country WWII Korea freed from 35 years of Japanese occupation Ruled in succession by three dictators: a civilian, Syngman Rhee, and two army officers, Park Chung Hee and Chun Doo Hwan. Following Park's assassination in 1979, Gen. Chun's coup agaisnt the military command succeeded because his close friend, Gen. Rho Tae Woo, supported him by bringing troops into Seoul. On June 10, 1987, Pres. Chun picked Roh (no) as his successor, touching off mass demonstrations and abated only when Roh made a surpise capitulaion to opposition demands for direct presidential elections, the first in 16 years, which he won -- with 37 percent of the ballots -- over a divided opposition. Co-ops are essentially governmental and the only elected officials in the country are the president and members of the National Assembly. All other officals are appointed by the central government in Seoul. Koreans are preoccupied with appearances, especially for foreigners, and they are not comfortable with saying precisely what they think or how they feel. Centuries of Confucian culture -- authoritarian hierarchy on Korean Society (ruler over subject; parents-childred, husband- wife, old-young) 1953 entire penninsula devastated by Korean War, millions dead, 60s still could see bullcarts on streets of Seoul, south bank of Han River (runs through Seoul) was mud flats--today is matasticizing with office and apartment buildings on the horizon 26 years ago, 70 percent of Koreans were farmers. Today there are an impressive number of Ph.D.'s among the bright technocrats, and 65% of the population is urban -- a vast sudden uprooting. 1 of 4 South Koreans lives in Seoul. Traffic jams like Hollywood Freeway -- Seoul is where rthe money, prestige, influence, power, and smog are ECONOMY South Korea claims the world's highest annual growth rate -- 12 percent - in GNP. Now runs a $10 billion trade surplus with the U.S. and a deficit with Japan Koreans have a national savings rate of 33% -- they have no unemployment or retirement benefits and virtually no bank financing for consumers. SK econ dominated by big conglomerates (Daewoo, Hyundai, Samsung, Lucky-Goldstar) 87 Hyundai Excel hottest import in U.S., Pontiac LeMans roll form Daewoo's plant in Puchon. SK manufactures fuselage sections for the F-16 and wing parts for the 747. SK is the world's 12th largest trading nation. the Shrimp among whales; two modern armies - 840,000 troops in NK and 650,000 in SK including 45,000 US soldiers. U.S. soldiers face each other across a no-man's ;and that is dangerous even for browsing deer. As soldiers say - "There ain't no D in DMZ". Korea freed of hated Japanese only to be occupied by and divided by the armies of the cold war. ideology divided by the 38th parallel Seoul 25 miles from DMZ; billboards on the buildings and mountains around Seoul screen guns, rockets, and radar, and the sidewalk flower planters are revetments for mortars and machine guns. There are tank traps on the way to the DMZ and boulders stacked over the rail and road cuts, primed with set charges. Buildings have thicker north walls, with tank drive-downs into basements windowed for guns. A wire fence along much of the coast is studded with painted stones arranged in coded patterns. Patrols check for rocks that have been jarred loose or incorrectly replced and for footprints in the swept sand. Cables are stretched across the golf fairways to clothesline Pyonyang's gliders. three Noth Korean tunnels have been discovered beneath the DMZ and US military experts believe there are more. tae kwon do - Korean martial art three is a good number in Korea for years the Korean government has kept wages low to compete in world markets -- in 25 years, per capita income had made a phenonmenal leap from $90 to $2,800 SK had one of the world's highest percentages of citizens attending college. More than a million do, half of them in Seoul students have held a niche in Korean society as the "national conscience" almost 70 percent of Koreans were born after the korean war powerful nationalism, proud of their culture and history, proud of being Korean background notes [South] Korea United States Department of State April 1987 Bureau of Public Affairs mortality rate (1983)-29/1,000. Life Agriculture (including forestry and SOVIET expectancy-men 64 yrs., women 71 yrs. fisheries, 16.4% of 1985 GNP): Products- UNION Work force (15.4 million, 1985): rice, barley, vegetables. Arable land-22% of Agriculture-24.9%. Industry-30.5%. land area. CHINA Services-44.6%. NORTH Sea of Mining and manufacturing (42.0% of KOREA Japan 1985 GNP): Textiles, footwear, electronics, Government shipbuilding, motor vehicles, petrochemicals, Seoul SOUTH industrial machinery. KOREA JAPAN Yellow Type: Republic with power centralized in a Social overhead capital and other serv- Sea strong executive. Independence: August 15, ices: 41.6% of 1985 GNP. 1948. Constitution: July 17, 1948; revised Trade (1986): Exports-$33.9 billion: 1962, 1972, 1980. East manufactures; textiles; ships; electrical Branches: Executive-president (chief of China products; footwear; steel. Major markets- state). Legislative-unicameral National Sea US, Japan, European Community, Middle Assembly. Judicial-Supreme Court and East. Imports-$31.5 billion: crude oil; food; appellate courts, Constitutional Court. machinery and transportation equipment; Official Name: Subdivisions: Nine provinces, four chemicals and chemical products; base metals administratively separate cities (Seoul, Pusan, and articles. Major suppliers-Middle East, Republic of Korea Inchon, Taegu). Japan, US. Political parties: Government party- Official exchange rate (March 1987): 852 Democratic Justice Party (DJP). Opposition won=US$1. parties-New Korea Democratic Party PROFILE Fiscal year: Calendar year. (NKDP), Korean National Party (KNP). Suf- frage: Universal over 20. Geography Central government budget (1985): Membership in International Expenditures-$17.4 billion. Organizations Area: 98,500 sq. km. (38,000 sq. mi.); about Defense (1986 est.): $47 billion, approx. the size of Indiana. Cities: Capital-Seoul Official observer status at UN; active in many 5.1% of GNP and 31.2% of government (over 10 million). Other major cities-Pusan UN specialized agencies (FAO, GATT, IAEA, budget. About 600,000 active in armed forces. (3.4 million). Taegu (2.0 million), Inchon (1.2 IBRD, ICAO, IDA, IFAD, IFC, IMF, IMO, Flag: Centered on a white field is the million). Terrain: Partially forested mountain ITU, UNCTAD, UNDP, UNESCO, UNICEF, ancient Chinese symbol of yin and yang, a UNIDO, UPU, WHO, WIPO, WMO, WTO) ranges, separated by deep, narrow valleys; divided circle of interpenetrating blue (top) cultivated plains along the coasts, particularly and other international organizations (Asian- and red (bottom), representing the union of in the west and south. Climate: Temperate. African Legal Consultative Committee, opposites. At each corner of the white field is ASPAC, Asian People's Anti-Communist a different trigram of black bars, symbols of League, World Anti-Communist League, People the elements from the ancient pan-East Asian Colombo Plan, Economic and Social Commis- I Ching or "Book of Changes." Together, the Nationality: Noun and adjective-Korean(s). sion for Asia and the Pacific, Geneva Conven- yin-yang and the four trigrams represent Population (1986): 43.3 million. Annual tions of 1949 for the Protection of War Vic- eternal unity. growth rate: 1.5%. Ethnic groups: Korean; tims, Asian Development Bank, INTELSAT. small Chinese minority. Religions: Buddhism, International Whaling Commission, Inter- Christianity, Shamanism. Confucianism. Economy parliamentary Union, INTERPOL); official Language: Korean. Education: Years GNP (1986 est.): $91.750 billion. Annual observer status in African Development Bank compulsory-h Number of students- (member of Africa Development Fund), Inter- growth rate (1961-81): 8%. Per capita GNP 11.121.000. Attendance (1984)-of those (1985): $2,032. Consumer price index (1985 national Labor Organization, and Organiza- eligible. 98.8% attended middle school. 89.7% tion of American States. avg. increase): 3.2%. attended high school. Literacy-over 90%. Natural resources: Limited coal, Health (1983) doctor 1,509 persons. Infant tungsten, iron ore, limestone. kaolinite. and graphite. 28 128 130 Wonsan South Korea yongyann * National capital BUGB Railroad Imjin Expressway North Korea Demarcation Road Line Sariwon + International airport Pyonggang 0 25 50 Kilometers Changyon-Up Ch'orwon Sokch'o 0 25 50 Miles 38 Haeju Ongjin -38 Keesong Munsah Ch'unch' on Kangnung Uijongbu Mukhojin-ni inch on Shoul Samch'ok Ullüng-do Wonju Suwon Yoju Ansong Ulchin Ch'ungju SEA Ch önan Yongju OF YELLOW Ch öngju JAPAN Hamch'ang SEA Kim 11999 Andong Yongdok Taejon Kimch'bn liueb GUOTEN 36 Pohang 36 Kunsan Taegu Chönju Kyongju Ulsan Chinju Masan Chintras Kwangju Pusan V Sunch on Samch oop's Mokp Kōje-da Yongdang Changhung Yasu STRAIT Chin-do 0 CS. 0 8 34 00 KOREA Kitakyushu Cheju Cheju-do Sogwi-ri Sasebo Japan 0 Names and boundary representation Nagasaki are not necessarily authoritative 126 128 130 0 2 GEOGRAPHY south following the division of the penin- divided into the kingdoms of Silla, sula into U.S. and Soviet military zones Koguryo, and Paekche. In A.D. 668, the The Republic of Korea (South Korea) of administration. This southward migra- peninsula was unified under the Silla occupies the southern portion of a moun- tion continued after the Republic of kingdom, rulership of which was taken tainous peninsula, about 966 kilometers Korea was established in 1948 and dur- over in 918 by the Koryo dynasty (from (600 ml.) long and 217 kilometers (135 ing the Korean war (1950-53). About which is taken the name "Korea"). The mi.) wide, projecting southeast from 10% of the people in the Republic of Yi dynasty, which supplanted Koryo in China and separating the Sea of Japan Korea are of northern origin. With over 1392, lasted until the Japanese annexed from the Yellow Sea. Japan lies about 40 million people, South Koren has one Korea in 1910. 193 kilometers (120 mi.) east of Pusan of the world's highest population Throughout most of its history, across the Sea of Japan (called the East densities-much higher, for example, Korea has been invaded, influenced, and Sea by Koreans). The most rugged areas than India or Japan-while the ter- are the mountainous east coast and cen- fought over by its larger neighbors. ritorially larger North has about 20 Major Japanese invasions occurred in tral interior. Good natural harbors are million people. Expatriate Koreans live 1592 and 1597, and the Chinese attacked found only on the western and southern mostly in China (1.2 million). Japan coasts. in 1627. To protect themselves from (600,000), the United States (500,000), South Korea's only land boundary is such foreign buffeting, the Yi kings and the Soviet Union. with North Korea, formed by the finally adopted a closed-door policy, which earned Korea the title of "Hermit Military Demarcation Line (MDL) mark- ing the line of separation between the Language Kingdom." Though the Yis showed belligerent sides at the close of the nominal fealty to the Chinese throne, Korean war. The Demilitarized Zone Korean is a Uralic language, remotely Korea was in fact independent until the related to Japanese, Hungarian, Finnish, (DMZ) extends for 2,000 meters (1.2 mi.) late 19th century, when Japanese on either side of the MDL. The North and Mongolian. Although dialects exist, influence became predominant. and South Korean Governments hold the Korean spoken throughout. the In the late 19th and early 20th cen- that the MDL is not a permanent border peninsula is mutually comprehensible. turies, Japanese, Chinese, and Russian Chinese characters were used to write but a temporary administrative line. competition in Northeast Asia led to Korean before the Korean Hangul Seoul, the capital, is less than 48 armed conflict. Having defeated its two alphabet was invented in the 15th cen- kilometers (30 mi.) from the DMZ, near competitors, Japan established tury. These characters are still in limited the west coast. Seoul's climate is hot and dominance in Korea, annexing it in 1910. use in South Korea, but the North uses rainy in summer; winters are cold, dry, The Japanese colonial era was Hangul exclusively. Many older people and windy, with generally light snowfall, characterized by almost total control and mean January temperature is -5 °C retain some knowledge of Japanese from from Tokyo and by ruthless efforts to the colonial period (1910-45). and most (23 °F). Fall is traditionally the Koreans' replace the Korean language and culture educated Koreans can read English, favorite season, with warm days, cool with those of the colonial power. which is taught in all secondary schools. nights, and clear skies; such weather As World War II ended, the United often lasts into mid-December. States and the Soviet Union agreed at Religion Yalta that Japanese forces in Korea would surrender to the United States PEOPLE Korea's traditional religions are south of the 38th parallel and to the Shamanism and Buddhism. Although Soviet Union north of that line. This Buddhism has lost some influence since Korea was first populated by a Tungusic division of Korea was intended as a tem- the Koryo dynasty (A.D. 935-1392), it branch of the Ural-Altaic family, which porary administrative measure only. migrated to the peninsula from the still commands the greatest number of However, in 1946-47, the Soviet adherents of any faith-about. 18.9% of northwestern regions of Asia. Some of administration in the North refused to the population. Shamanism, the tradi- these people also settled parts of north- allow free consultations with represent- tional spirit worship, is still practiced in east China (Manchuria), and Koreans atives of all groups of the Korean people some rural areas. Confucianism remains and Manchurians still show physical for the purpose of establishing a national the dominant cultural influence; however, similarities-in their height, for example. government, and the United States and its religious adherents are few and Koreans are racially and linguistically the Soviet Union subsequently were mostly elderly. Christian missionaries homogeneous, with no indigenous unable to reach agreement on a unifica- minorities. arrived in Korea in the 19th century and tion formula. South Korea's major population founded schools, hospitals, and other modern institutions throughout the centers are mostly in the northwest area country. Today, nearly 7 million Koreans, Korean War of Seoul-Inchon and in the southern fer- tile plains. The mountainous central and or 16% of the population, are Christian In the face of communist refusal to com- eastern areas are sparsely inhabited. (about 75% Protestant)-the largest ply with the UN General Assembly Between 1925 and 1940, the Japanese figure for any East Asian country except resolution of November 1947, calling for colonial administration in Korea concen- the Philippines. UN-supervised elections throughout trated its industrial development efforts Korea, elections were carried out under in the comparatively underpopulated and UN observation in the U.S. zone of HISTORY resource-rich north, resulting in con- occupation, and on August 15, 1948, the siderable migration of people to the Republic of Korea (ROK) was established north from the southern agrarian prov- According to legend, the god-king there. The Republic's first president was inces, This trend was reversed after Tangun founded the Korean nation in a prominent Korean nationalist, World War II, when more than 2 million 2333 B.C., after which his descendants Syngman Rhee. In September 1948, the Koreans moved from the north to the reigned over a peaceful kingdom for more than a millennium. By the first century A.D., the Korean Peninsula, known as Chosun ("morning calm"), was Soviet Union established the Democratic People's Republic of Korea (DPRK) in of that year, forced him to step down. A strong executive and indirect election of the North under Kim Il Sung, a former caretaker government was established, the president but limited the chief exec- Soviet Army major, who claimed the constitution was amended and, in utive to one 7-year term. Elections were authority over the entire peninsula. On June, national elections were held. The held in early 1981 for a National December 12, 1948, the UN General opposition Democratic Party easily Assembly and an electoral college; the Assembly declared the ROK the only defeated Rhee's Liberals, and, in latter elected President Chun to a 7-year lawful government in Korea. August, the new National Assembly term beginning in March of that year. The United States withdrew its named Chang Myon prime minister. Although martial law ended in military forces from Korea in 1949. On Chang's democratic but administratively January 1981, the government, under June 25, 1950, North Korean forces ineffectual government-the Second laws enacted during the martial law invaded the Republic of Korea. The Republic-lasted until May 1961, when it period, retains broad legal powers to United Nations, in response and in was overthrown in an army coup led by control dissent. An active and articulate accordance with the terms of its Maj. Gen. Park Chung Hee. minority of students, intellectuals, Charter, engaged in its first collective After 2 years of military government clergy, and others have remained critical under Gen. Park, civilian rule was action through the establishment of the of the Chun government and from time UN Command (UNC), to which 16 restored with the advent of the Third to time have organized demonstrations member nations sent troops and Republic in 1963. Park, who had retired. against it. Some of these demonstra- assistance. At the request of the UN from the army, was elected president (and was reelected in 1967, 4971) and tions, such as those in Inchon in May Secretary General, this international 1978). In 1972, a popular referendum 1986 and at Konkuk University in the effort was led by the United States, fall of 1986, have been marked by con- which contributed the largest con- approved the Yushin (revitalizing) con- siderable violence. tingent. UN forces initially succeeded in stitution, which greatly strengthened the President Chun, who is barred from advancing almost to the Yalu River, executive branch's powers. Key provi- which divides the Korean Peninsula from sions included indirect election of the succeeding himself, has pledged to step down when his term ends in 1988. In China, but large numbers of "people's president, presidential appointment of April 1986, the President responded to a volunteers" from the army of the Peo- one-third of the National Assembly, and signature campaign by the opposition ple's Republic of China joined the North presidential authority to issue decrees to New Korea Democratic Party (NKDP), Korean forces. In December 1950, a restrict civil liberties in times of national calling for direct election of the next major Chinese attack forced UN troops emergency. Park subsequently issued several such decrees; the best-known of president by proposing that the assembly to withdraw southward. The battle line try to reach agreement on a constitu- fluctuated up and down the peninsula these, EM-9, banned discussion of false tional amendment. The government until the late spring of 1951, when it rumors, criticism of the constitution or advocacy of its reform, and political party, the Democratic Justice Party, finally stabilized north of Seoul near the demonstrations by students. supported a parliamentary system with a 38th parallel. weakened president and a greatly Armistice negotiations began in July The Park era, marked by rapid strengthened prime minister, both 1951, but hostilities continued until July industrialization and extraordinary elected by the assembly. The NKDP car- 27, 1953, when, at the village of Pan- economic growth and modernization, ended with his assassination in October ried forward its earlier call for a directly munjom, the military commanders of the elected president. Neither side has DPRK forces, the Chinese people's 1979. Prime Minister Choi Kyu Ha shown a willingness to compromise, and volunteers, and the UNC signed an assumed office briefly (the Fourth armistice agreement. Neither the United Republic), promising a new constitution the outcome of the process to create States nor the ROK is a signatory of the and presidential elections. In December what is hoped will be a more open 1979, Maj. Gen. Chun Doo Hwan and his political system with broad support from armistice per se, though both adhere to the Korean people was uncertain as of it through the UNC. No comprehensive close colleagues removed the army chief early 1987. peace agreement has been signed in of staff and soon controlled the govern- Korea, and the 1953 armistice agree- ment. By September, President Choi had ment remains in force. A Military been forced to resign, and General Chun, Armistice Commission, composed of 10 by then retired from the army, was Principal Government Officials named president. President-Chun Doo Hwan members, 5 appointed by each side, is empowered to supervise implementation During this process and in opposition Prime Minister-Lho Shin Yong of the terms of the armistice. to it, demonstrations by campus activists Deputy Prime Minister; Chairman, The armistice called for an interna- and others increased through the spring Economic Planning Board- tional conference to find a political solu- of 1980. In mid-May, the government Kim Mahn Je tion to the problem of Korea's division. declared martial law, banned all demon- Minister of Foreign Affairs-Choi This conference met at Geneva in April strations, and arrested many political Kwang-soo 1954, but, after 7 weeks of futile debate, leaders and dissidents. In Kwangju City, Minister of National Defense-Lee Ki ended inconclusively. Special Forces units reacted harshly to Baek demonstrators who ignored the ban, set- ting off a confrontation which left an Ambassador to the United States-Kim Postwar Developments official estimate of 170 dead. Unofficial Kyong Won Ambassador to the United Nations- Syngman Rhee served as president of sources claim a higher figure. This inci- Park Kun the Republic of Korea until April 1960, dent left a wound that has proven slow to heal. Speaker of the National Assembly-Lee when university students and others, demonstrating in protest against ir- In October, a referendum approved a Chai Hyung regularities in the presidential election new constitution, beginning the Fifth Korea maintains an embassy in the Republic. This document retained key United States at 2320 Massachusetts features of earlier ones, including a Avenue NW., Washington, D.C. 20008 (tel. 202-939-5600). 4 ECONOMY Over the past 25 years, the Republic of Further Information Korea's economic growth has been spec- tacular. The nation has advanced in a single generation from one of the Department of State does not endorse unofficial publications. These titles are provided as a general indication of material published on this country. The world's poorest countries to the Baldwin, Frank. Without Parallel: The threshold of full industrialization, despite American-Korean Relationship Since Studies, University of Hawaii, 1979. the need to maintain one of the world's 1945. Pantheon, 1974. McCune, Shannon. Korea, Land of Broken largest military establishments. Lacking Bartz, Patricia. South Korea, a Descriptive Calm. Princeton: Van Nostrand, 1966. Noble, Harold. Embassy at War. Seattle: natural resources, Korea's greatest asset Geography. Clarendon Press, 1972. Brandt, Vincent S. A Korean Village Between University of Washington Press, 1974. is its industrious, literate people. Paige, Glenn D. The Korean Decision. New The division of the Korean Peninsula Farm and Sea. Cambridge: Harvard, York: St. Martin, 1974. in 1945 created two distorted economic 1971. Chung, Kyung Cho. Korea: The Third Pihl, Marshall R. Listening to Korea: A units. North Korea inherited most of the Republic. Macmillan, 1971. Korean Anthology. New York: Praeger. mineral and hydroelectric resources and 1973. Cole, David. Korean Development: The most of the existing heavy industrial Reese, David. Korea: The Limited War. New Interplay of Politics and Economics. base built by the Japanese. South Korea York: St. Martin, 1964. Cambridge: Harvard, 1971. was left with a large, unskilled labor pool Crane, Paul. Korean Patterns. Seoul: Hollym Rutt, Richard. Korean Works and Days. Tokyo: Charles R. Tuttle, 1966. and most of the peninsula's limited Corporation, 1968. agricultural resources. Although both Harrington, Fred H. God, Mammon and the Wickman, Michael. Living in Korea. Seoul: The American Chamber of Commerce in the North and South suffered from the Japanese. Madison: University of Korea, 1978. widespread destruction caused by the Wisconsin Press, 1962. Korean war, an influx of refugees added Henderson, Gregory. Korea: The Politics of Available from the Superintendent of the Vortex. Cambridge: Harvard Uni- Documents, US Government Printing Office, to the South's economic woes. For these versity Press, 1968. Washington, DC 20402: reasons, South Korea began the postwar Henthorn, William. History of Korea. New period with a per capita gross national York: The Free Press, 1968. American University. South Korea-A product (GNP) far below that of the Lee, Chong-Sik. The Politics of Korean Country Study. 1982. North. Nationalism. Berkeley: University of U.S. Department of State. Key Officers of South Korea's meager mineral California Press, 1963. Foreign Service Posts. Triennial. resources include tungsten, anthracite Lee, O. Young. In This Earth and In That . Korea Post Report. March 1986. coal, iron ore, limestone, kaolinite, and Wind. Seoul, 1968. The Record on Korean Unifica- tion, 1943-1960. 1961. graphite. There is no oil, and energy is a McCann, David R., ed. Studies on Korea in Transition. Honolulu: Center for Korean Major English-language newspapers: Korea concern for ROK's economic planners. Herald and Korea Times. The country's ambitious program to build nuclear power plants is well under- For information on economic trends, commercial development, production, trade regulations, way; this year their sixth plant went into and tariff rates, contact the International Trade Administration, US Department of Commerce, Washington, DC 20230. operation, and five more are under con- struction or on order. The ROK was self-sufficient in rice production in 1977, but rising demand national production was rising and several disappointing harvests have in 1985, low by Korean standards, the throughout the 1960s and 1970s, the since made it a net importer. In 1985, Korean economy rebounded impres- annual population growth rate declined Korea purchased about $1 billion in U.S. sively. Nineteen eighty-six is widely to the current 1.5%, resulting in a agricultural products. Korea is the viewed as the Korean economy's most 20-fold increase in per capita GNP in United States' seventh largest source of successful year ever, as booming exports those two decades. Per capita GNP, imports and its eighth largest market for led once again to double-digit growth of which reached $100 for the first time in exports. The resulting trade imbalance 12%. Korea achieved surpluses in both 1963, now exceeds $2,000, far above its current account balance and the trade was about $5 billion in 1985. Korea's that of North Korea. economy is rapidly approaching full balance in 1986. Long-term growth pros- Internal economic distortions, the pects remain extremely bright, and maturity-a marked change from the political and social unrest that followed 1960s and 1970s, when it was a major Korea continues to successfully manage the 1979 assassination of President recipient of U.S. foreign assistance (U.S. its large external debt (about $45 billion, Park, and the effect of world economic including short-term). direct-aid programs in Korea ended in developments, such as the drastic 1980). The continuing military threat from increase in world oil prices in 1979, trig- the North and the lack of foreign The nation's successful industrial gered a severe recession in Korea in economic assistance require Korea to growth program began in the early 1980. The economy recovered somewhat devote a third of its national budget to 1960s, when the Park government in the following 2 years, but it was not defense. In light of this, Korea must con- instituted sweeping economic reforms until the spring of 1983 and the tinue large defense expenditures while emphasizing exports and labor-intensive strengthening of economic recovery in maintaining economic growth. light industries. The government also the United States that Korean economic carried out a currency reform, performance began to take on the strengthened financial institutions, and buoyancy of earlier days. Korea's FOREIGN RELATIONS introduced flexible economic planning. economic planners have shifted their From 1963 to 1978, real GNP rose at emphasis from high to stable growth. South Korea is committed to peaceful an annual rate of nearly 10%, with After registering 5% real GNP growth settlement of international differences, a average real growth of more than 11% for the years 1973-78. While Korea's commitment best illustrated by its restrained response to a number of armed provocations over the past 15 years. These include the 1968 Blue So "House raid, the shooting down in Korea keeps an observer mission, Pe the September 1983 of a Korean Air Lines headed by an ambassador, at the UN means and to end the atmosphere of airliner by Soviet fighters, and the General Assembly and is active in many hostility that had formerly prevailed. So October 1983 terrorist bombing in of the UN's specialized agencies. Although official visits were exchanged au De Rangoon, Burma, which killed six of the Following the ratification in 1965 of and regular communication was ROK's most valued leaders. a treaty normalizing relations between established through a North-South Coor- As South Korea has cast its lot with the Japan and Korea, the two nations have dinating Committee and the Red Cross, lav West and the noncommunist world. It is developed an extensive relationship no substantive progress was made. The active in international affairs and seeks centering on mutually beneficial contacts quickly broke down and were mi Ju to enhance its already impressive stature economic activity. Although both coun- finally terminated by the North. This in the world community. Although not a tries' historic antipathy has at times breakdown reflected basic differences in in member of the United Nations, South impeded cooperation, relations at the approach, with Pyongyang insisting that U: government level have improved steadily immediate steps toward reunification be ac and significantly in the past several taken before discussion of specific issues CI years. and Seoul maintaining that, given the ac Korea's economic growth, energy two sides' history of violence, any U Travel Notes requirements, and need for basic raw realistic approach to reunification must m Climate and clothing: Korea's temperate, materials and for markets have given be a gradual, step-by-step process. as four-season climate is like that of the eastern economic considerations high priority in President Chun has repeatedly sug- S US. Dress is more conservative than in the US. the country's foreign policy. In light of gested a summit meeting with President ef these concerns, Korean diplomacy in Kim of North Korea to discuss any and W Customs: All travelers entering the ROK recent years has concentrated on all proposals, an agreement to normalize ti must have a visa, which may be obtained from broadening its international base of sup- inter-Korean relations pending reunifica- a a Korean Consulate. Tourist visas are good for 60 days. No immunizations are required of port with Third World nations, the tion, and other specific measures to W travelers from the US. Association of South East Asian Nations reduce tensions and promote C (ASEAN), and the Middle East. humanitarian and cultural exchanges. In V. Health: Health services are fair to good in A recurrent theme in all phases of January 1982, President Chun, for the p most major cities. Many Korean physicians Korea's foreign relations is its perennial first time, addressed the central political K have been trained in Western medicine, and competition with the DPRK for world issue, proposing that the North and hospital services are adequate. Outside of the n stature and recognition. In this effort, South organize a conference to draft a to major hotels, water generally is not potable. constitution for a unified democratic Transportation: International airports serve the ROK has been highly successful: f) while most of the world's nations republic of Korea. The ROK intends to u Seoul (Kimpo), Pusan (Kimhae), and Cheju Island. Extensive intercity air, rail, and bus recognize the reality of two Koreas, present its draft constitution and urges f more maintain diplomatic relations with the North to do SO. The ROK maintains 3 service is available, as is an excellent network services. of local bus, taxi, and (in Seoul) subway the ROK than the DPRK (122 versus that a dialogue should be based on de 103, with 67 countries having relations facto recognition of each other's existing 1 with both). The South's network of inter- political, social, and economic systems. 2 Telecommunications: Seoul is 14 time zones national trading relationships is far Seoul supports the recognition of both r ahead of eastern standard time (13 hrs. dur- ing daylight-saving time). International broader than the North's, and South Koreas by the major powers in the direct-dial service is available to Korea's Korea has been selected to host a series region (the United States, U.S.S.R., major cities. Internal telephone and telegraph of prestigious international events, China, and Japan), and the admission of services are available. including the 1985 International both Koreas to the United Nations pend- Tourist attractions: The Yi dynasty palaces Monetary Fund and World Bank annual ing peaceful reunification. North Korea in Seoul-Kyongbok, Changdok, and Toksu- conference, the 1986 Asian Games, and rejects these ideas on the grounds that are recommended, as are the National Seoul). the 1988 Summer Olympics (to be held in division. they would perpetuate the peninsula's Museum of Korea and the Korean Folk Museum. The folk village at Suwon, located Tension between North and South less than an hour's drive from Seoul, is a fine Korea increased dramatically in the example of a "living museum." Sorok Moun- Negotiating Efforts With North Korea aftermath of the October 9, 1983, North tain and Cheju Island are popular scenic attractions, while Pusan and Masan are Throughout the postwar period, both Korean assassination attempt on Presi- examples of a modern Korean port and Korean governments have repeatedly dent Chun in Burma. North-South sports industrial site. The southeastern city of affirmed their desire for reunification of talks the following spring became Kyongju has many fine antiquities. English is the Korean Peninsula, but until 1971 no acrimonious after the Rangoon bombing. widely spoken at major tourist sites and direct communications or any other con- South Korea's suspicions of the North's facilities in the principal cities; in other areas, tacts took place between the two govern- motives were not diminished by Pyong- English speakers may be less readily found. ments or their citizens except through yang's proposal for "tripartite" talks on the Military Armistice Commission. the future of the Korean Peninsula. This National holidays: Businesses and the US Embassy may be closed on the following In August 1971, the DPRK and the initiative, made public on January 10, holidays-National Day (Independence Day), ROK agreed to hold talks through their 1984, called for talks with the United August 15; New Year. January 1-3; Founda- respective Red Cross societies with the States, in which "South Korean tion Day (commemorating the founding of the stated aim of reuniting the many Korean authorities" would be permitted to par- nation by the god-king Tangun), October 3; families separated during the Korean ticipate. The tripartitie talks would Hangul Day (commemorating the creation of the Korean alphabet in 1446). October 9; war. Following a secret meeting on July replace the armistice agreement with a 4, 1972, North and South Korea peace treaty, which would provide for Chusok (harvest moon festival), date varies, usually in August or September. announced an agreement to work toward withdrawal of all U.S. troops and issue a national reunification through peaceful declaration of nonaggression between North and South. 6 North Korea's offer to provide relief the Korean people's ongoing and suc- goods to victims of severe flooding in Korean-American diplomatic relations cessful effort to deter aggression. South Korea in September 1984-and and President Reagan's subsequent vi On Korean reunification, the United to Korea in the fall of 1983 underscore South Korean acceptance-signaled the States believes that direct, government- beginning of renewed dialogue between the special quality of U.S.-Korean rela to-government talks between the tions and the determination of both the two parties. Both sides began discus- authorities of South and North Korea sions on a variety of fronts-Red Cross governments to further develop that are necessary and that steps to promote relationship. talks that address the plight of family greater understanding and reduce ten- members separated by the division of sion are needed to pave the way for Korea, economic/trade talks, and reunifying the nation. Because the Principal U.S. Officials parliamentary talks. However, citing the United States believes that the fun- Ambassador-James R. Lilley U.S.-ROK Team Spirit joint military damental decisions on the future of the Commander in Chief, UNC- exercise, the North suspended these Korean Peninsula must be taken by the Gen. William J. Livsey talks in January 1986. In addition, both Korean people themselves, it has refused Deputy Chief of Mission-Thomas S. sides have met under International to be drawn into separate negotiations Brooks Olympic Committee auspices to discuss with North Korea, as Pyongyang has Counselor for Political Affairs-Thoma cooperative ways of approaching the suggested. The United States stands P.H. Dunlop 1988 Summer Olympics to be held in prepared to participate in any discus- Counselor for Economic Affairs-Donal Seoul. sions between the representatives of F. McConville North and South Korea, if so desired by Counselor for Administrative Affairs- both Korean governments and provided Robert G. Deason U.S.-KOREAN RELATIONS that both are full and equal participants Counselor for Public Affairs-John M. in such talks. Reid The United States remains committed, Perhaps the most rapidly developing Consul General-Andrew F. Antippas as it has for the past 30 years, to main- area in Korean-U.S. relations is that of Counselor for Commercial Affairs- taining peace on the Korean Peninsula- economics and trade. Korea has become George Mu a commitment vital to the peace and the United States' seventh largest com- Chief, Joint U.S. Military Advisory stability of the entire Northeast Asian mercial partner. The United States seeks Group, Korea-Mg. Todd P. Graham region. The United States agreed in the to improve its trade imbalance through 1954 Mutual Security Treaty to help the greater access to Korea's expanding The U.S. Embassy is located at 82 Republic of Korea defend itself from market and improved investment oppor- Sejong-Ro, Chongro-ku, Seoul (tel. external aggression. In support of that tunities for U.S. business. Korea has 732-2601; telex AMEMB 23108). commitment, the United States main- embarked on an investment liberaliza- tains about 39,000 troops in Korea, tion policy designed to open 90% of all Published by the United States Department including the Second Infantry Division industries to foreign investment by 1988. of State Bureau of Public Affairs Office and several Air Force tactical squadrons. Korean leaders seem determined to of Public Communication Editorial Divi- To coordinate operations between these sion Washington, D.C. manage successfully the complex April 1987 units and the 600,000-strong Korean Editor: Juanita Adams Armed Forces, a Combined Forces Com- economic relationship, and there appears to be widespread recognition in Korea of Department of State Publication 7782 mand (CFC) has been established, the benefits to be gained from greater Background Notes Series This material is headed by a U.S. four-star general who U.S. private sector involvement in the in the public domain and may be reproduced serves concurrently as Commander in country's development process. without permission; citation of this source Chief of the UN Command (CINCUNC). Since the 1950s, the U.S.-Korean would be appreciated. These U.S. forces effectively supplement relationship has developed into one of For sale by the Superintendent of Docu- the most important in Asia. The celebra- ments, U.S. Government Printing Office, tion in May 1982 of the centennial of Washington, D.C. 20402 background notes [North] Korea United States Department of State July 1989 Bureau of Public Affairs spouses of Korean returnees from Japan. Re- Economy* SOVIET ligion: Buddhism, Shamanism, Chongdogyo, CHINA UNION Christian: religious activities have been vir- GNP (1986 est.): $17-$25 billion. Per capita tually nonexistent since 1945. Language: Ko- (1986): $860-$1.200. NORTH rean. Education: Years compulsory-11. Agriculture (including forestry and fish- Sea of KOREA Japan Attendance-3 million (primary, 1. 5 million, ing. 1982-25% of GNP): Products-rice, P'yangyeng secondary, 1. 2 million, tertiary, 0. 3 million). corn. potatoes. fruits. vegetables, tobacco. Literacy (est. )-99%. Health: Medical treat- Industry (including mining and manufac- SOUTH KOREA JAPAN Yellow ment is free: 1 doctor for every 700 inhabi- turing. 1982-70% of GNP): Types-steel. ce- See tants: 1 hospital bed for every 350. Infant ment, textiles, petrochemicals, machines. mortality rate-30/1,000. Life expectancy- Trade (1986): Exports-$1. 5 billion: ma- 65. 5 yrs. chinery and equipment, military hardware, iron, steel, metal ores, nonferrous metals, East China Sea nonmetallic minerals. textile fibers, chemi- Government cals, foodstuffs. Imports-$2. 1 billion: ma- Type: Communist state, one-leader rule. In- chinery and equipment, petroleum, Official Name: dependence: September 9, 1948. Constitu- foodstuffs, coking coal. Major partners- tion: 1972. U.S.S.R., P.R.C., Middle East. East Euro- Democratic People's Republic Branches: Executive-president (chief of pean countries, Japan. F.R.G., France. of Korea state); premier (head of government). (About 70% is with communist countries.) Legislative-Supreme People's Assembly. Official exchange rate: 2 won= = U.S.$1. Judicial- Supreme Court, Provincial, city, county, and military courts (subordinate to Membership in International Supreme People's Assembly). Organizations PROFILE Subdivisions: 9 provinces, 4 province- level municipalities-Pyongyang, Kaesong, UN (official observer status). UN-related Geography Chongjin, Nampo. agencies, including the Food and Agriculture Political parties: Korean Workers' (com- Organization (FAO), International Atomic En- Area: 121,730 sq. km. (47,000 sq. mi.), about munist) Party. Suffrage: Universal at age 17. ergy Agency (IAEA), International Civil the size of Mississippi. Cities: Capital- Defense (1987 est.): Approx. 24% of GNP, Aviation Organization (ICAO), International Pyongyang. Other cities-Chongjin, Wonsan, with about 12% of men ages 17-49 in the regu- Postal Union (IPU), UN Conference on Trade Nampo, and Kaesong. Terrain: Numerous lar armed forces. and Development (UNCTAD), International ranges of moderately high and partially for- Holidays: National Day, Independence Telecommunications Union (ITU), UN Devel- ested mountains and hills separated by deep, Day, September 9; Kim Il Sung's birthday, opment Program (UNDP), UN Educational, narrow valleys. and small cultivated plains. April 15; other holidays. Scientific and Cultural Organization Climate: Temperate. Flag: Two blue horizontal stripes at the (UNESCO), World Health Organization top and bottom; two white narrow stripes; (WHO), World Intellectual Property Organi- People and a wide center band on which appears a zation (WIPO), World Meteorological Organi- red star in a white circle. zation (WMO), International Maritime Nationality: Noun and adjective-Korean(s). Organization (IMO); International Committee Population (1988 est.): 21 million. Annual of the Red Cross (ICRC), Nonaligned growth rate: 2.3%. Ethnic groups: Korean; Movement. approx. 50,000 Chinese; some 1,800 Japanese "In most cases, the figures used here are estimates based upon incomplete data and projections. 8 124 126 128 130 Songhua Hu North Korea Wangqing International boundary Tumen + National capital Unsong Railroad U.S.S.R Road Helong Jiang Hoeryong 0 Tumen 25 50 75 Kilometers 0 25 50 China Musan Najin 75 Miles Komysen-nodongjagu 42 42 Linjiang Tonghua Nanam, Ch'ongjin Hyesan Ji'an Manp'o Yongbah- nit Kanggye Och'onjang Honggun-ni M Kimch aek Toan Fengcheng nex Sakchu Changjin-up Tanch'on Pukch'ong Dandong 40 Sinuiju - Hongwon 40 Kusöng Yomju Kujang-up gang Hamhung Tedong Chongp'yong Chongiu 5 Kunun SEA Sinanju Yonghung Sunch'on OF Kowon KOREA Sain-ni BAY Sunan Wonsan JAPAN Samdung YONGYANG X Onch'on Nam-gang Namp Songnim gang Kuum-ni Chiha-ri Imjin Sep'o Demarcation line Sariwon Chaeryong P'yonggang P'yongsan Changyön-up Ch'orwon 38 Haeju Ongjin Kaesong Ch'unch'on Munsan Kangnung South SEOUL Korea YELLOW SEA Inch on Suwon Coundary representation is 124 not necessarily authoritative 126 128 130 2 GEOGRAPHY Beginning in the mid-1920s, the Ja- divided into the kingdoms of Silla, Ko- panese colonial administration concen- The Democratic People's Republic of Ko- guryo, and Paekche. In A.D. 668, the trated its industrial development efforts rea (D.P.R.K., North Korea) occupies Silla kingdom unified the peninsula. The in the comparatively underpopulated and the northern portion of a mountainous Koryo dynasty (from which is derived resource-rich north, resulting in a con- peninsula about 966 kilometers (600 mi.) the Western name "Korea") succeeded siderable movement of people northward long and 217 kilometers (135 mi.) wide, the Silla kingdom in 918. The Yi dynasty, from the agrarian southern provinces. projecting southeast from China, be- which supplanted Koryo in 1392, lasted This trend reversed after the end of tween the Sea of Japan and the Yellow until the Japanese annexed Korea in World War II, when more than 2 million 1910. Sea. Japan lies about 193 kilometers Koreans moved from the north to the (120 mi.) east of the peninsula, across the Throughout most of its history, Ko- south following the division of the penin- Sea of Japan. North Korea shares bor- rea has been invaded, influenced, and sula into Soviet and American military ders with the People's Republic of China fought over by its larger neighbors. Ko- zones of administration. This southward along the Yalu and Tumen Rivers-and, rea was under Mongolian occupation exodus continued after the establish- with the Soviet Union-along the Tumen from 1231 until the early 14th century ment of the Republic of Korea (South Ko- River. The military demarcation line and was devastated by a large number of rea) in 1948 and during the Korean war (MDL), marking the line of separation Chinese rebel armies in 1359 and 1361: (1950-53). Korea's population is now un- between the belligerent sides at the Hideyoshi launched major Japanese inva- evenly divided, with 42 million people in close of the Korean war, forms the sions in 1592 and 1597. To protect them- the geographically smaller south (38,000 boundary with the Republic of Korea selves from such frequent buffeting, the sq. mi.) and 21 million in the north (R.O.K., South Korea). A demilitarized Yi kings finally adopted a closed-door (47,000 sq. mi.). zone (DMZ) extends for 2,000 meters policy, earning Korea the title of "Her- (just over 1 mile) on either side of the mit Kingdom." Although the Yi dynasty MDL. Both the North and South Korean Language paid nominal fealty to the Chinese Governments hold that the MDL is only a Korean is a Uralic language, remotely throne, Korea was, in fact, independent temporary administrative line, not a until the late 19th century. At that time, related to Japanese, Mongolian. Hun- permanent border. Japanese, Chinese, and Russian compe- garian, and Finnish. Although there are North Korea's terrain consists of nu- tition in Northeast Asia led to armed dialects, the Korean spoken throughout merous ranges of moderately high and conflict. Having defeated its two com- the peninsula is mutually comprehen- partially forested mountains and hills petitors, Japan established dominance in sible. Chinese characters were used to separated by deep, narrow valleys and Korea. The Japanese colonial era was write Korean before the invention of the small cultivated plains. The most rugged characterized by tight control by Tokyo Korean Hangul alphabet in the 15th cen- areas are the north and east coasts. and by ruthless efforts to replace the Ko- tury. Unlike in the south where these Good harbors are found on the eastern rean language and culture with those of characters are still in limited use, the coast. Pyongyang, the capital, near the the colonial power. Japan formally an- north uses Hangul exclusively. A num- country's west coast, is located on the nexed Korea in 1910. ber of specialized terms have been intro- Taedong River. At the April 1945 Yalta Conference, duced in the north, especially in written The climate is temperate. July and the United States and the Soviet Union usage, creating a distinctive vocabulary August are normally the warmest becoming increasingly difficult to under- agreed to establish a joint trusteeship months, with temperatures averaging stand in the south. for Korea. The trusteeship was intended 30 °C (85 °F) at Pyongyang. January is as a temporary administrative measure, the coldest; temperatures often drop be- pending democratic elections of a Korean low - 20 °C (-4 °F). Rainfall is concen- Religion Government. To effect the Japanese sur- trated in the summer months, usually render after the war the United States Korea's traditional religions are Bud- occurring in June and July. Snowfall proposed-and the Soviet Union dhism, Shamanism, and Chongdogyo. is generally light, but the ground is Christian missionaries arrived in the agreed-that Japanese forces surrender covered for long periods. to U.S. forces south of the 38th parallel 19th century and founded schools, hos- and to Soviet forces north of that line. pitals, and other modern institutions In the North, the Soviets initially throughout Korea. Major centers of mis- PEOPLE transferred the administrative powers of sionary activity included Seoul and the former Japanese colonial government Pyongyang. Although religious groups Korea was first populated by a Tungusic to "people's committees," and later to a nominally exist in North Korea, most branch of the Ural-Altaic family, which five-province administrative bureau. un- available evidence suggests that the gov- migrated to the peninsula from the der the nationalist, Cho Man-Sik. Cho ernment severely restricts religious ac- northwestern regions of Asia. Some of was later purged for opposing the deci- tivity, allowing these groups to exist these peoples also populated parts of sion of allied foreign ministers at the only for the sake of its international northeast China (Manchuria), and Ko- Moscow Conference for a 5-year trustee- image. reans and Manchurians still show physi- ship, during which a Korean provincial cal similarities. Koreans are racially and government would prepare for full inde- linguistically homogeneous. Although pendence. The joint Soviet-American HISTORY there are no indigenous minorities, commission provided for by the Moscow there is a small Chinese community Conference met intermittently in Seoul According to legend, the god-king Tan- (about 50,000) and an estimated 1,800 but deadlocked over the issue of free con- gun founded the Korean nation in 2333 Japanese wives who accompanied the B.C., after which his descendants sultations with representatives of all approximately 93,000 Korean return- reigned over a peaceful kingdom for ees from Japan around 1959-62. more than a millennium. By the first century A.D., the Korean Peninsula, known as Chosun ("morning calm"), was 3 Korean political groups for establish- Armistice negotiations began in South. North Korean forces are well ment of a national government. In Sep- July 1951, but hostilities continued until equipped and have a substantial advan- tember 1947, the United States July 27, 1953. On that date, at Panmun- tage (approximately 2 or 3 to 1) in sever- submitted the Korean question to the jom, the military commanders of the al key categories of offensive weapons- UN General Assembly. North Korean People's Army, the Chi- tanks, long-range artillery, and armored nese people's volunteers, and the UNC personnel carriers. The North has per- Korean Conflict signed an armistice agreement. Neither haps the world's second (after the Soviet the United States nor South Korea is a Union) largest commando force (55,000) The Soviet Union and the Korean au- signatory of the armistice per se, al- designed for insertion behind the lines in thorities in the North refused to comply though both adhere to it through the wartime. North Korea now has the fifth with the UN General Assembly resolu- UNC. No comprehensive peace agree- largest army in the world. It also has tion of November 1947, which called for ment has replaced the 1953 armistice more than twice as many combat air- UN-supervised elections throughout Ko- pact. which remains in force. Thus a con- craft as the South, although South rea. Elections, nonetheless, were car- dition of belligerency still exists on the Korean-U.S. forces have a slight qualita- ried out under UN observation in the divided peninsula. A Military Armistice tive edge. North Korean exercises sug- south, and on August 15, 1948, the Re- Commission composed of 10 members, gest an impressive sophistication in public of Korea was established. A Ko- five appointed by each side, supervises terms of joint and combined forces rean nationalist leader, Syngman Rhee, implementation of the armistice. operations. became the Republic's first president. The armistice called for an interna- In addition to their size and capa- On September 9, 1948, the Soviet Union tional conference to find a political solu- bilities, factors of time and distance established the Democratic People's Re- tion to the problem of Korea's division. compound the challenge posed by North public of Korea in the north under Kim Il This conference met at Geneva in April Korean forces. The North (and the Sung, a former guerrilla who, after 1954 but, after 7 weeks of futile debate, South) deploys the bulk of its forces well fighting against the Japanese in Man- ended without agreement or progress. forward, along the DMZ. Over the last churia during the 1930s, served with the several years, North Korea has moved Soviet Army in the Far East during Reunification Policy even more of its rear echelon troops to World War II. Although Kim claimed au- hardened bunkers closer to the DMZ. thority over the entire peninsula, the North Korea has pursued its goal of re- Given the proximity of Seoul to the DMZ UN General Assembly, on December 12, unification by regular and irregular mil- (some 25 miles), South Korean and U.S. 1948, declared the Republic of Korea the itary measures, by terrorism, and by forces are likely to have little warning of only lawful government in Korea. negotiations. any attack. Consequently, a high state of Sporadic guerrilla fighting between Military Measures. North Korea readiness is required at all times. The South and North Korea intensified dur- United States and R.O.K. continue to took no military action during the politi- ing the spring of 1948. After the United cal turmoil in the South in the early believe that the U.S. troop presence re- States withdrew its military forces from 1960s, but subsequently perpetrated a mains an important deterrent against Korea in the spring of 1949, border number of violent acts directed both at North Korean aggression. Recent North clashes commenced. Korean infiltration efforts include con- U.S. and South Korean forces and South On June 25, 1950, North Korean Korean Government officials. These ef- struction of several military tunnels un- forces invaded South Korea. In re- forts included the 1968 infiltration into der the DMZ. This tunneling effort sponse, the United Nations, in accor- continues. Seoul by a 31-agent team, which at- dance with the terms of its Charter, Terrorism. North Korea also is be- tempted to assassinate President Park engaged in its first collective action, es- Chung Hee; the seizure 2 days later of lieved to have dispatched the assassin tablishing the UN Command (UNC), to the U.S.S. Pueblo in international wa- who. while attempting to kill President which 16 member nations sent troops and Park in 1974. killed Mrs. Park. In Octo- ters and the subsequent imprisonment assistance. At the request of the UN ber 1983, North Korean Army officers and torture of its crew; and the shooting Secretary General, the United States, down in 1969 of an unarmed U.S. EC-121 set off a bomb in Rangoon. Burma. kill- which contributed the largest contin- reconnaissance aircraft in international ing 17 members of an official South Ko- gent, led this international effort. airspace. In 1976, North Korean troops, rean delegation and four Burmese. UN forces initially fell back to the wielding axes wrested from an UNC Although former President Chun Doo Pusan perimeter but. after a successful work party, killed two U.S. Army offi- Hwan escaped harm, four South Korean surprise landing at Inchon. rapidly ad- cabinet ministers and several senior ad- cers in the DMZ. vanced up the peninsula. As the main In the early 1970s, as the North visers were among those slain. Most re- UN force approached the Yalu, large cently, on November 29, 1987, two North scaled back its sabotage and infiltration numbers of Chinese "people's volunteers" efforts against the South, it began a ma- Korean agents sabotaged a Korean air- intervened. forcing UN troops to with- jor long-term conventional military liner (KA-858) causing the death of all draw south of Seoul. The battle line flue- buildup. The extent of this buildup went 115 persons on board. tuated back and forth until the late undetected until the late 1970s. The dis- Negotiating efforts. Throughout spring of 1951. when a successful UNC parity between the North and South Ko- the postwar period, both Korean Govern- offensive was halted to enhance cease- rean forces, which resulted from this ments have repeatedly affirmed their fire negotiation prospects. The battle military expansion. led the U.S. Gov- desire to reunify the Korean Peninsula. line thereafter stabilized north of Seoul ernment in mid-1979 to cancel further but until 1971 the two governments had near the 38th parallel. no direct. official communications or planned withdrawals of U.S. ground combat forces from South Korea. other contact. The comparative military balance In August 1971. North and South continues to favor the North. The North Korea agreed to hold talks through their has more than 1 million armed person- nel, compared to about 630,000 in the 4 respective Red Cross societies with the goods to victims of severe flooding in aim of reuniting the many Korean fami- normalize inter-Korean relations as a South Korea in September 1984, and lies separated following the division of step toward reunification, and other spe- South Korean acceptance, led to revived Korea and the Korean war. Following a cific measures to reduce tensions and dialogue on several fronts-Red Cross series of secret meetings, both sides an- promote humanitarian and cultural ex- talks to address the plight of separated nounced, on July 4, 1972, an agreement changes. President Roh, in a speech to families, economic and trade talks, and to work toward peaceful reunification the UN General Assembly in October parliamentary talks. In January 1986, and an end to the hostile atmosphere 1988. offered to go to Pyongyang at any the North unilaterally suspended all prevailing on the peninsula. Officials ex- time to discuss any issue, including talks, arguing the annual R.O.K./U.S. changed visits, and regular communica- North Korea's call for a mutual declara- Team Spirit military exercise was incon- tions were established through a North- tion of nonaggression. In turn, Kim Il sistent with dialogue. The North also an- South Coordinating Committee and the Sung has periodically reiterated pro- nounced a unilateral moratorium on Red Cross; however, the two sides made posals for a North-South confederation, large-scale military exercises and called no substantive progress. These initial first proposed in 1960. In his September upon the United States and R.O.K. to do contacts broke down and ended on Au- 9, 1988 National Day address, Kim Il the same, which responded by reiterat- gust 13, 1973. The breakdown reflected Sung repeated that a summit must first ing their longstanding offer to allow basic differences in approach, with take up the confederation plan and with- Pyongyang insisting on immediate steps D.P.R.K. officials to observe Team Spir- drawal of U.S. forces. In his 1989 New it and by proposing prenotification of toward reunification before discussing Year's address, Kim suggested that Roh military exercises. These proposals were specific concrete issues and Seoul main- come to Pyongyang as a party head in a rejected by the North, and, in 1987, the taining that, given the long history of group with southern opposition and dis- North resumed large-scale exercises. sident leaders. mutual distrust, reunification must be a In a major new initiative on July 7, gradual, step-by-step process. In early 1989. as other dialogue pro- 1988, South Korean President Roh Tae South Korea maintains that a posals made little progress, both sides Woo called for new efforts to promote meaningful dialogue should be based expressed hopes for high-level talks South-North exchanges, family re- on de facto recognition of each other's headed by the respective prime minis- unification, inter-Korean trade, and con- existing political. social, and economic ters. Two preliminary meetings to tact in international forums. He also said systems. South Korea supports the discuss arrangements were held in recognition of both Koreas by the major South Korea was willing to cooperate February. In other forums, the two Na- with the North to promote relations with powers in the region (United States, tional Olympic Committees met to dis- U.S.S.R., P.R.C., and Japan) and the the United States and Japan and that the cuss forming a joint team for the 1990 South would seek better relations with admission of both Koreas to the United the U.S.S.R. and China. North Korea Asian Games in Beijing. But in April. Nations, pending peaceful reunification. North Korea suspended both sets of North Korea rejects these ideas, al- initially responded negatively, calling it talks, blaming South Korea's arrest of a though it applied for UN membership in a "splitist" proposal designed to legalize dissident clergyman who visited North a two-Koreas policy. 1949 (following the lead of the R.O.K.) Korea without government approval. and supported a Soviet Union draft in President Roh's initiative provided Following the R.O.K. Government's renewed momentum to South-North dia- 1957, resubmitted in 1958, which called 1988 decision to allow trade with the logue. Later in July 1988, the National for "simultaneous UN admission." The D.P.R.K., South Korean firms have North now argues that this proposal Assemblies of each side exchanged let- begun to import North Korean goods. would perpetuate the peninsula's ters over the South's request to discuss all via third-country contracts. The division. participation in the 1988 Summer Olym- D.P.R.K. has denounced and denied this pics. (North Korea, which had demanded Tension between North and South trade. By contrast, the North publicized Korea increased dramatically in the af- to cohost the games and had rejected a late January 1989 visit by Hyundai Seoul's offer to host five events, declined termath of the October 9. 1983 Rangoon founder Chong Chu Yong as well as the bombing. North-South sports talks the to participate and asked fellow socialist protocol he signed to develop tourism following spring broke down in acrimony countries to join a boycott. Only seven obliged.) Small parliamentary delega- and other projects in the North. In April over Rangoon; Pyongyang ultimately 1989. these projects were put on hold boycotted the Los Angeles Olympics in tions met at Panmunjom several times from August to December in an incon- amidst the acrimony following the dis- a show of support for the Soviet Union. sident clergyman's visit. South Korea's suspicions of the clusive attempt to arrange a joint meet- ing of the two assemblies, to which each North's motives were undiminished by Pyongyang's proposal for "tripartite" had agreed in principle. The North in- GOVERNMENT talks on the future of the Korean Penin- sisted the assemblies adopt a mutual sula. This initiative. made public on Jan- nonaggression declaration; the South ar- North Korea has a centralized govern- uary 10, 1984, called for negotiations gued that this was properly the role of ment under the rigid control of the Ko- with the United States. in which "South the executive branch. At year's end, rean Worker's (communist) Party (KWP). Korean authorities" would be permitted when the two sides were nearing agree- It is dominated by one man, Kim Il to participate. The North's tripartite ment on an agenda and arrangements for Sung. who, in addition to his titles of agenda would include replacing the armi- a joint session, the North introduced a general secretary of the KWP and presi- stice agreement with a peace treaty, new demand to discuss the annual U.S.- ident of North Korea. is generally re- providing for withdrawal of all U.S. R.O.K. Team Spirit military exercise. In ferred to as "Great Leader." A few troops. and drafting a declaration of non- early February 1989, North Korea re- minor parties are allowed to exist in aggression between North and South. fused to attend further preparatory name only. presumably to present a North Korea's offer to provide relief meetings until Team Spirit ended. facade of representative government to The Roh and Chun administrations the outside world. have repeatedly suggested a summit meeting with President Kim to discuss any and all proposals. an agreement to 5 In December 1972, the Fifth Su- Principal Party and During the early 1970s, North Ko- preme People's Assembly (SPA) ratified Government Officials rea, probably noting the more rapid eco- a new constitution replacing that of 1948. The 1972 document created the position President, KWP Politburo Standing nomic development of the South, Committee (1 of 3), KWP General attempted a large-scale modernization of president and a super-cabinet called the Central People's Committee (CPC). Secretary, Supreme Commander of program through the importation of In theory, the SPA is the highest organ the People's Armed Forces-Kim Il Western technology, principally in the of state power. Its members are elected Sung heavy industrial sectors of the economy. KWP Politburo Standing Committee, By the end of 1986, the North's hard- every 4 years. Usually only two meet- KWP Secretary (1 of 10), son of Kim currency debt had reached more than ings are held annually, each lasting a few Il Sung and de facto heir apparent- $4 billion. It also owed nearly $2 billion days. A standing committee of 19 mem- to communist creditors. Unable to fi- bers elected by the SPA performs legis- Kim Chong Il lative functions when the assembly is not KWP Politburo Standing Committee, nance its debt through exports, it be- in session. In reality, the assembly Minister of the People's Armed came the first communist country to serves only to ratify decisions made by Forces-0 Chin U default on its loans from free market the ruling KWP. The constitution desig- Premier, Politburo Full Member (1 of countries. In 1979, North Korea was able 12)-Yun Hyong Mok to renegotiate much of its international nates the Central People's Committee (CPC) as the government's top policy- Vice President (1 of 3), Politburo-Pak debt, but in 1980 it defaulted on all of its Song-ch'ol loans except those from Japan. In 1986, making body. Headed by Kim Il Sung, who also nominates the other 24 commit- Vice President, Politburo-Yi Chong-ok however, the Japanese also declared the Politburo, Chairman KWP Inspection North in default of more than $200 tee members, the CPC makes policy de- cisions and supervises the cabinet (State Comm-So Ch'ol million. Administration Council). The council is Politburo, KWP Secretary-Kye Largely because of these debt prob- headed by a premier and is the dominant Ung-t'ae lems but also because of a prolonged Vice Premier, Foreign Minister, drought and governmental mismanage- administrative and executive agency. Politburo-Kim Yong-nam ment, North Korea's industrial growth The judiciary is subordinate to the Su- KWP Politburo, KWP Secretary, Chair- slowed in 1976. In that same year, for the preme People's Assembly. The SPA's Standing Committee appoints judges to man of Comm. for Peaceful Re- first time, the North's per capita GNP the highest court for 4-year terms con- unification of the Fatherland-Ho fell below that of the South, and by the current with that of the assembly. Tam end of 1979, per capita GNP in the North Politically, North Korea is divided Politburo, KWP Secretary-Chon was about one-third of that in the South. into nine provinces and four provincial- Pyong-ho The causes for this relatively poor per- Chairman, Supreme People's Assembly formance are complex, but a major fac- level municipalities-Pyongyang, Chong- jin, Nampo, and Kaesong. It also ap- Standing Committee-Yang tor is the disproportionately large Hyong-sop percentage of GNP (more than 20%) that pears to be divided into nine military the North devotes to the military. districts. In April 1982, Kim Il Sung an- Little is known about the actual ECONOMY nounced a new economic policy giving lines of power and authority in the priority to increased agricultural pro- North Korean Government despite the The division of the Korean Peninsula in duction through land reclamation, devel- formal structure set forth in the consti- 1945 resulted in imbalances of natural opment of the country's infrastructure- tution. It is clear, however, that 77-year- and human resources, with disadvan- especially power plants and transporta- old Kim Il Sung, who has ruled North tion facilities-and reliance on domes- Korea continuously since 1948, wields tages for both the North and the South. By most economic measures, after parti- tically produced equipment. Recently, dictatorial power. Kim and a dwindling number of long-time loyalists, all rank- tion the North was left better off in there have been signs of a shift in policy ing members of the Korean Workers' terms of industry and natural resources. emphasis toward expanding trade. In Party, dominate the political system and The South, however, had two-thirds of September 1984, North Korea promul- the economy through an elaborate party the work force. In 1945, about 65% of Ko- gated a joint venture law to attract for- structure and through the civilian and rean heavy industry was in the North eign capital and technology. Currently, but only 31% of light industry, 37% of ag- North Korea's default on its foreign debt military bureaucracies. At the inner- most circle are the three members of the riculture, and 18% of the peninsula's to- is largely responsible for scant foreign tal commerce. interest in joint ventures. The new ver- Standing Committee of the KWP Politi- cal Bureau: Kim Il Sung, his son Kim North and South both suffered from bal emphasis on expanding trade and ac- the massive destruction caused by the quiring technology, however, has not Chong II, and Armed Forces Minister O Chin U. Kim Il Sung is the object of an Korean war. Since that time, North Ko- shifted internal economic priorities away intensive and far reaching personality rea's command economy has concen- from support of military industry. cult. A similar cult is developing around trated its labor force (estimated at 8.4 Kim Chong Il, 47, who has been groomed million in 1986) and natural resources in an effort to achieve rapid economic de- FOREIGN RELATIONS to succeed his father. Many observers now credit the younger Kim with day-to- velopment. Large amounts of aid from other communist countries, notably the After 1945, the Soviet Union supplied day management of domestic affairs. Should this father-to-son transition suc- Soviet Union and China, assisted the the economic and military aid that en- ceed, North Korea would become the regime. In the years immediately after abled North Korea to mount its invasion first country ruled by a Marxist heredi- the end of the Korean war the North's of the South in 1950. Soviet aid and influ- tary dynasty. economy experienced a high growth ence continued at a high level during the rate. war; the Soviet Union was, in large part, responsible for rebuilding North Korea's economy after the cessation of 6 -hostilities. However, the assistance of Chinese "volunteers" during the war and the presence of these troops until 1958 Further Information gave Beijing considerable influence in Pyongyang. In 1961, North Korea con- These titles are provided as a general indication of the material published on this country. The Department of State does not endorse unofficial publications. cluded formal mutual security treaties with the Soviet Union and China, which Baldwin, Frank, ed. Without Parallel: The ley: University of California, 1984. continue in force. American-Korean Relationship Since Lee, Chong-sik. Korean Workers' Party: A 1945. New York: Pantheon Books, 1974. The establishment of diplomatic re- Short History. Stanford: Hoover Institu- Barnds, William J. The Two Koreas in East lations between the United States and tion Press, 1978. Asian Affairs. New York: New York Materials on Korean Communism China, the Soviet-backed Vietnamese oc- University Press, 1976. 1945-1947. Honolulu: Center for Korean cupation of Cambodia, and the Soviet oc- Bucher, Lloyd M. Bucher: My Story. New Studies, University of Hawaii, 1977. cupation of Afghanistan created strains York: Doubleday, 1970. The Politics of Korean National- in North Korea's relations with each of Chung, Joseph S. The North Korean Econ- ism. Berkeley: University of California the two major communist powers. omy: Structure and Development. Stan- Press, 1963. Pyongyang generally has tried to main- ford: Hoover Institution Press, 1974. Merrill, John. Korea: The Peninsular Origins tain an equidistant position between Clough, Ralph. Embattled Korea; The Ri- of the War. Newark: University of Dela- valry for International Support. Colora- Moscow and Beijing, obtaining aid from ware Press, 1988. do: Westview Press, 1987. both and avoiding dependence on either. Nahm, Andrew C. North Korea: Her Past, Cumings, Bruce. The Origins of the Korean Reality, and Impression. Kalamazoo: Since Kim Il Sung's 1984 and 1986 visits War. Princeton: Princeton University Center for Korean Studies, Western to Moscow, Pyongyang has markedly Press, 1981. Michigan University, 1978. strengthened its ties with Moscow. Over Foot, Rosemary. The Wrong War: American Paige, Glenn D. The Korean Decision. New the last 4 years, the Soviets have dra- Policy and the Dimensions of the Korean York: The Free Press, 1968. matically increased assistance. provid- Conflict, 1950-53. Ithaca: Cornell Uni- Korean People's Democratic Re- ing a comprehensive array of advanced versity Press, 1985. public. Stanford: Hoover Institution military hardware to North Korea. In Henderson, Gregory. Korea: The Politics of Press, 1966. return, the North allows Soviet over- the Vortex. Cambridge: Harvard Univer- Palais, James B. Politics and Policy in Tradi- sity Press, 1968. flights and port calls, as well as adher- tional Korea. Cambridge: Harvard Uni- Henthorn, William. History of Korea. New versity Press, 1976. ing more closely to the Soviet line on York: The Free Press, 1971. Ridgway, Matthew B. Korean War. New York: important international issues. Still, Hwang, In K. The Neutralized Unification of Doubleday, 1964. Pyongyang and Beijing continue fre- Korea. Cambridge: Schenkman, 1980. Scalapino, Robert A. and Kim, Jun-yop, eds. quent leadership consultations. Kihl, Young Hwan. Politics and Policies in North Korea Today: Strategic and Do- Despite reliance on Soviet military Divided Korea. Colorado: Westview mestic Issues. Berkeley: Institute of East and Chinese economic aid and its recent Press, 1984. Asian Studies, 1983. parroting of Soviet positions, North Ko- Kim, Hak-joon. The Unification Policy of Suh, Dae-sook. The Korean Communist South and North Korea, 1948-1976: A rea proclaims a militantly independent Movement, 1918-1948. Princeton: Prince- Comparative Study. Seoul: Seoul Nation- stance in its foreign policy in accordance ton University Press, 1966. al University Press, 1977. with President Kim's continued empha- Suh, Dae-sook and Lee, Chong-sik. Political Kim, Ilpyong J. Communist Politics in North sis on the doctrine of self-reliance Leadership in Korea. Seattle: University Korea. New York: Praeger, 1975. of Washington Press, 1976. ("Juche"). Pyongyang seeks to enlarge Kim, Joungwon Alexander. Divided Korea: its representation abroad wherever The Politics of Development 1945-1972. Available from the Superintendent of Docu- possible and has had some success. Cambridge: Harvard University Press, ments, U.S. Government Printing Office, However, following the October 1983 1976. Washington, D.C. 20402: assassination attempt on the South Kim, Young C. and Abraham M. Halpern. The American University. North Korea: a Coun- Korean President in Rangoon. Burma Future of the Korean Peninsula. New try study. 1981. York: Praeger, 1976. broke relations with North Korea, and Department of State. The Record on Korean Koh, Byung Chul. The Foreign Policy of several other countries followed suit. Unification 1943-1960. 1961. North Korea. New York: Praeger, 1969. Similarly, after KA-858. two other gov- Department of the Army. Communist North Koh, Byung Chul. The Foreign Policy Sys- ernments broke ties with the D.P.R.K., Korea: A Bibliographic Survey. 1971. tems of North and South Korea. Berke- and several more took other diplomatic measures against the North. Moreover, various incidents, mostly smuggling and blackmarketing offenses by North Ko- U.S. POLICY TOWARD rean diplomats, have caused some NORTH KOREA To advance this goal and in support of President Roh's 1988 reunification ini- countries to be reluctant to open rela- tions with North Korea and others to ex- tiatives, the U.S. Government on Octo- The U.S. Government supports the pel or decline to admit North Korean ber 31, 1988, announced the following peaceful reunification of Korea on terms missions. North Korea has increasingly steps regarding relations with the acceptable to the Korean people. Recog- D.P.R.K. emphasized its relations with Third nizing that the North's isolation is an in- World nations and aspires to a leadership herently destabilizing factor in the Authorize U.S. diplomats to hold role in the Nonaligned Movement. As of Northeast Asia region, and an impedi- substantive discussions with D.P.R.K. May 1989, North Korea had diplomatic ment to the peaceful reunification of Ko- officials in neutral settings; relations with 103 countries, South Ko- rea, the United States is committed to Encourage unofficial, nongovern- rea with 131, and 72 nations had diplo- drawing the D.P.R.K. out of its isolation mental visits from the D.P.R.K. in aca- matic relations with both Koreas. and bringing it more fully into the world demics, sports, culture, and other areas; community. 7 ECONOMIC THEMES FOR THE PRESIDENT'S TRIP TO ASIA Both the U.S. and Asia benefit from free trade and open markets: Our economic relationship is not a zero-sum game for either partner. The American economy and American jobs increasingly depend on free trade and open markets. - In the United States, nearly half (49%) of our GNP growth between 1985 and 1990 was attributable to exports. - In 1991, U.S. will export close to $700 billion worth of merchandise and services. - Record 7.2 million jobs were supported directly and indirectly by U.S. merchandise exports alone in 1990. - More than 19,000 jobs are supported per billion dollars of U.S. exports. Asia's stake in the trading system is greater than ours. The export strength and economic growth of Asian economies will continue to be dependent upon open international markets for goods, services, and investment. - Asian economies are relatively more dependent than the U.S. economy on exports and imports. - In 1990, exports amounted to 32% of GNP in Korea and 15% of GNP in Japan; by comparison, U.S. figure is 10%. O If the open trading system cannot be preserved and expanded in the Uruguay Round, Asia's prosperity could be jeopardized by stagnant world trade. Asia is increasingly important to the U.S. economy: The United States is a Pacific power, with vital economic, as well as political, interests in the region. Asia is an important and growing market for U.S. exports and a source of U.S. job creation. - Japan (#2), Korea (#6), and Taiwan (#9) were among top 10 markets for U.S. exports in 1990. - In 1990, U.S. manufacturers sold $115 billion of goods in the Asia-Pacific region (29% of total U.S. exports); by comparison, $113 billion in goods were sold in Western Europe. - 2 - - Exports to Japan and the four Asian NIE's alone support an estimated 1.7 million U.S. jobs. Trade with Asia accounts for large and growing proportion of total U.S. trade. - In 1980, U.S.-Asia trade accounted for 24% of total U.S. trade (imports and exports). By 1990, Asia accounted for 34% of total trade. Asia is also a large consumer of U.S. services, including financial services, an area in which the United States has special expertise. - In 1990, U.S. sold $22.9 billion in services to Japan and Australia alone. The westward shift of U.S. population, immigration patterns, and increased cultural diversity in the United States point to ever closer economic relations with Asia and the Pacific. - The U.S. population is increasingly concentrated in the Western states (21.2% of total U.S. population in 1990). - A large and increasing share of U.S. GNP is produced in the Western states. - Asians represent growing share of U.S. population (6.9 million in 1990 or 2.8% of total VS. 1.6% in 1980) and growing share of U.S. immigration. Asia needs our exports: Asia's demand for imports -- our exports -- will increase as Asian economies grow wealthier. Asian consumers need access to foreign goods and services if they are to raise their standard of living and enjoy the fruits of their labors. - Japanese Prime Minister Miyazawa, for example, recently stated that Japan should become a "lifestyle superpower". This will benefit our economy by increasing opportunities for U.S. exporters. Asian countries have cooperated with the U.S.: The U.S. -Asia relationship helps reinforce global cooperation for the benefit of citizens of all nations. Several Asian nations helped shoulder the economic burden of - 3 - the international effort to counter Iraq's aggression. - $10.4 billion was committed by Japan ($10.0 billion) and Korea ($355 million) to offset U.S. military costs of Operation Desert Storm. - $2.8 billion in economic assistance was committed by Australia ($14 million), Japan ($2.7 billion), and Korea ($115 million) to ease impact of Gulf Crisis on the frontline states in the Middle East (Egupt, Turkey, and Jordan). In the G-7 and Economic Summit fora, Japan has helped foster sustainable world growth with low inflation. Japan has also supported U.S. initiatives to resolve the international debt problems of the developing nations. For example: - It pledged $500 million for the Multilateral Investment Fund (MIF) for Latin America, one third of total MIF funding. - Japan contributed almost $500 million to international efforts to clear the arrears owed by Panama, Nicaragua, and Panama to the international financial institutions. Asian countries have helped the U.S. in efforts to strengthen market forces in Eastern Europe and in developing countries. This will help open up these economies for U.S. trade and investment. Treasury Department December 10, 1991 KOREA FINANCIAL SERVICES The Korean financial system is antiquated, over-regulated, and ill-suited to the needs of Korea's dynamic economy. U.S. banks and securities firms face numerous barriers to entering and operating in the Korean market. In addition, elimination of Korea's pervasive controls over interest rates, credit allocation, and capital flows is essential if U.S. financial institutions are to enjoy long- term competitiveness in Korea, and U.S. businesses are to find adequate funding sources. The Treasury Department and Korean Ministry of Finance have made some progress in bilateral talks in addressing both specific national treatment issues and broader financial liberalization. However, much work remains to be done. The USG has also sought Korean cooperation in bringing about a strong financial services agreement in the Uruguay Round; Korea's support thus far has been very disappointing. Our specific objectives for the President's trip include: - A public statement by the ROKG of its commitment to financial liberalization, including support for a strong Uruguay Round financial services agreement. - Issuance of a comprehensive blueprint for financial market liberalization, with a clear timetable for implementation. - Implementation of a commitment last spring to ease restrictions on deferred payment terms for imports by the end of 1991. Treasury Department December 10, 1991 JAPAN ECONOMIC THEMES The U.S. and Japan have the single most important bilateral economic relationship in the world. - With the world's two largest economies, their actions impact many other nations, as well. Despite disputes over trade issues, Japan has cooperated closely with the U.S. (e.g. in the Economic Summit and G-7 framework) to foster sustainable world growth with low inflation, and has been very supportive of a number of U.S. initiatives, including resolving the debt crisis in developing countries. However, a number of contentious economic issues in the area of trade, financial services, and investment plague the bilateral relationship, despite continuous bilateral consultations. Uruguay Round: Agriculture is the key to compromise; Japanese need to show leadership and contribute to a successful conclusion. Also need liberalization in financial services area. Japan's External Surpluses: We are concerned about Japan's rising current account surplus - Surplus is expected to rise from $36 billion in 1990 to $68 billion in 1991, according to the IMF). This imbalance can disturb financial markets and feed protectionism. Although the U.S. trade deficit with Japan fell from a peak of $57 billion in 1987 to about $42 billion last year, it is beginning to increase again and still accounted for two-thirds of the overall U.S. trade deficit through September, 1991. This highlights need for Japanese to maintain economic growth and open markets. Export Dependency and Bilateral Trade: Although both the U.S. and Japan have major stakes in preserving the open trading system, Japan is somewhat more dependent on exports than the U.S. - 2 - - Japan's exports of goods and services accounted for 15 percent of GNP in 1990. For the U.S., the figure was 10 percent. - The U.S. is Japan's most important market, accounting for almost 32% of Japan's exports and almost 22% of Japan's imports in 1990. - Japan is the U.S.' second most important market, accounting for 12% of U.S. exports and 18% of U.S. imports in 1990. - In finance-related service transactions (royalties and license fees, financial services and insurance) the U.S. has a surplus with Japan. U.S. receipts amounted to $4.0 billion in 1990, compared to payments of $1.4 billion. Foreign Investment: The U.S. market is far more open to foreign direct investment than Japan's. This has fed Congressional and popular concern in the U.S. Cumulative direct investment inflows into the U.S. during the period 1981-90 amounted to $355 billion ($80 billion from Japan alone), compared with only $6 billion in the same ten year period into Japan from all sources. - During the period 1981-90, cumulative foreign direct investment in the U.S. represented about 5.7% of total U.S. fixed investment. In Japan, the equivalent number was 0.1%, a difference of more than 50:1. Exchange Rate: Yen/dollar rate has been quite stable since October 1991 G-7 Ministers meeting. U.S. believes rates in G-7 countries are consistent with balance of payments adjustment needs and underlying economic fundamentals. Japanese Financial Markets: Despite U.S. efforts to open up Japan's financial markets, Japanese banks are far more important in the U.S. than U.S. banks in Japan. Japanese banks in the U.S. hold 11% of U.S. banking assets; U.S. banks in Japan hold less than 1% of Japanese bank assets. - 3 - O We have been negotiating with the Japanese since 1984 to liberalize financial markets. Significant progess has been achieved, but more needs to be done. O Recent financial scandals are symptomatic of the continued lack of transparency and competition in the Japanese market. Japan needs to take steps to reform its system and restore international confidence. Structural Impediments Initiative (SII) O SII represents an important initiative to reduce impediments to competition and adjustment of external imbalances. SII success can help to head off protectionism. - For example, U.S. has urged Japan to: increase public infrastructure investment to improve economic well being; reduce monopolistic effects of keiretsu business practices; and open up distribution system to imports, o Some progress has been achieved, but it is essential that we re-energize the SII process by introducing new commitments on both sides. Treasury Department December 10, 1991 AUSTRALIA ECONOMIC THEMES Australia has been an invaluable negotiating partner in the Uruguay Round, especially on agricultural issues like the CAP. Facing its fourth year of declining agricultural income, Australia has pressed the U.S. on farm issues: - It has complained about U.S. subsidized wheat sales, is unhappy with having to negotiate with the U.S. a voluntary restraint agreement on beef, and is concerned about a 34% cut in its sugar import quota due to increased U.S. production. Australia's financial markets have been relatively closed to foreign entry. However, under reforms recommended to Parliament in November, foreign banks would be allowed easier entry and operation. Treasury Department December 10, 1991 SINGAPORE FINANCIAL SERVICES Singapore is an important offshore financial center, and maintains a relatively open market for foreign firms. However, U.S. firms face discrimination in the significantly smaller domestic market. The U.S. seeks Singapore's support for a strong financial services agreement in the Uruguay Round. At a minimum, the U.S. would like to see Singapore stop blocking progress and play a more constructive leadership role. - The lack of support from Singapore and the other ASEAN countries for a strong financial services agreement in the Uruguay Round has been very disappointing. In the bilateral financial services negotiations, the U.S. seeks a commitment from Singapore for a level local playing field in both the banking and securities sectors. Treasury Department December 10, 1991 SII - U.S. Commitments Issue: GOJ officials have criticized the USG for not following through on as many of its commitments as the GOJ has done. By their count, Japan has completed 80 percent of its commitments, while the USG has completed 20 percent, at best. Suggested Talking Points: : What matters most in SII is the significance of the undertakings, not the quantity. The U.S. deserves credit for making substantial progress on its commitments, which, in many respects, have been more difficult politically than those that Japan has undertaken. There is an asymmetry to U.S. and Japanese undertakings. In many cases, Japan is being asked to open up its economy and improve the lifestyle of its people, while the U.S. is trying to cut public expenditures to reduce its budget deficit and stave off protectionist pressure to close the U.S. market. -- The GOJ may have passed a larger number of pieces of SII legislation than in the U.S., but the U.S. has resisted a larger number of protectionist and budget-busting bills than Japan. -- In both countries, we are trying to deal with ingrained structural problems in a way which will have a lasting effect, even if it takes some time for their effects to be felt. The two most important efforts by the United States include: o undertaking major budget reforms, which are holding the line on deficit spending, even in a difficult recession year; - This package included tax increases that were undertaken at great political cost, and an even tighter rein on discretionary spending. - We haven't seen a sustained reduction in the deficit numbers yet; nor has Japan in its trade numbers. The U.S. budget deficit will come down, though, and the reduction will be lasting. - In comparison, the parallel Japanese commitment to increase public infrastructure spending benefits numerous Japanese constituencies and is politically popular. 2 vigorously defending open investment policy; - Administration has maintained its open investment policy in the face of numerous protectionist proposals and growing mood of isolationism. - In contrast, Japan's commitments are aimed at opening its markets, with benefits for the consumer. [May wish to note Presidential Statement strongly reaffirming open investment policy, if released.] -- In addition, U.S. has taken a number of other measures: intensified export promotion efforts, with a particular focus on Japan; embarked on an ambitious program to improve workforce education and training; - In April 1991, President Bush outlined strategy to achieve national education goals, called "America 2000, If which involves major reforms to primary and secondary education system. increased Federal support for research and development efforts; -- The FY 1992 budget proposed to allocate about $76 billion for R&D in 1992, an increase of over $8 billion, or 13 percent over 1991 levels. This is the highest level ever. and continued to work toward strengthening incentives for private saving and long-term investment (e.g., reduction of capital gains tax; enhanced IRAs; Family Savings Accounts), despite strong political resistance. -- U.S. intends to intensify these efforts. 12/9/91 Treasury