President Moon Jae-in and Sunshine Policy 3.0

Marcus Noland (PIIE) and Kent Boydston (PIIE)

May 9, 2017 3:45 PM

As ballots are being tallied, exit polls strongly suggest that progressive candidate Moon Jae-in will be the next President of the Republic of Korea with around 41 percent of the vote, beating out conservative Hong Joon-pyo and Ahn Cheol-soo who look to have garnered 23 percent and 22 percent, respectively. On the surface, Moon’s election looks like a “reset” moment in inter-Korean relations as he has promised to bring back large engagement-oriented policies, a kind of Sunshine Policy 3.0—following the first two different iterations of the Kim Dae-jung and Roh Moo-hyun administrations—but new constraints on his options may make it much more difficult to carry out his big plans.

During the last decade, North Korea has moved the goal posts by conducting five nuclear and numerous missiles tests. The international community has moved decisively towards a more sanctions and less engagement approach with North Korea and even South Korea’s own domestic laws will make grandiose unaccountable inter-Korean engagement more difficult. Is South Korea going to play the sanctions buster role?

Moon Jae-in’s Sunshine Policy Part III

Moon worked for President Roh Moo-hyun’s administration from 2003-2007 during the peak of the Sunshine era, including serving as chairperson of the promotion of the second inter-Korean summit in 2007. As such, he has long held an affinity for Sunshine-esque engagement policies. In his 2015 Korean Independence Day speech, he argued to expand inter-Korean economic cooperation in order to spur South Korea’s own economic growth. This idea is not fundamentally different from former President Park Geun-hye’s unification as “jackpot” argument, but unlike Park, he has not argued for quid-pro-quos. He wants to undo actions taken by his predecessors who shut down the Mount Kumgang tourism zone in 2009, and Kaesong Industrial Complex indefinitely in 2016. Moon has even called to expand Kaesong eight-fold.

Last week he outlined a broad plan for inter-Korean cooperation, which was translated by NK News here. Moon argued for a restart of meetings for separated families, which have happened rarely under the conservative governments. These meetings are sadly used as political chips by the DPRK government, which places less importance on them than the South.

Next, Moon argued for the enactment of inter-Korean cooperation agreements into law by both South Korea’s National Assembly and the DPRK’s Supreme People’s Assembly, which he argues will result in the “increase of predictability and permanence of inter-Korean policies.” Moon then reiterated his argument that economic integration will lead to greater growth for South Korea. He suggested that GDP will increase by an additional one percent as the Korean market grows toward 80 million people.

Moon’s economic argument plays into concerns in South Korea over domestic economic issues, which are generally more salient to voters than inter-Korean policy. In his 2015 speech, Moon argued that an integrated Korea could mean entry into the “3080 Club,” countries with 80 million consumers and GDP per capita of $30,000. Taking both Koreas in the aggregate, achieving this milestone will be a far stretch. Moon further linked his argument to the youth unemployment rate which is around 8 percent, a record high in South Korea. As he assumes office, expect Moon to continue to hammer home the benefits to the South Korean economy of his North Korea engagement plans.

While analysts often use the term “Sunshine” to encompass the forward-leaning engagement policies of Presidents Kim and Roh, there were actually deep differences in the approaches. For Kim, the policy was explicitly instrumental—it was to encourage sufficient transformation of the North Korean system to create a durable basis for national reconciliation and eventual national unification. Indeed, the term “Sunshine Policy” has its origins in the Aesop fable “The Sun and the Wind” in which the Sun successfully induces the traveler to remove his coat by warming him. Roh’s policy was closer to appeasement—buying external peace to establish hospitable conditions to pursue a program of domestic transformation. With which vision of “Sunshine”—Kim Dae-jung’s or Roh Moo-hyun’s—Moon is in closer accord, will be a critical issue in handling the existing sanctions regime, relations with the U.S., and relations with the UN.

As he assumes office, expect Moon to continue to hammer home the benefits to the South Korean economy of his North Korea engagement plans.

Moon Jae-in and U.S.-ROK Relations

Moon’s work on Roh’s side during the President George W. Bush administration has shown him firsthand the complications of formulating inter-Korean policy amidst U.S.-ROK divergent interests. For his part, he has taken the standard line of his Sunshine predecessors, speaking about the importance of the U.S. alliance to deter North Korean aggression, and in the last several months has taken a more measured resistance than he had in the past to the decision by the Obama and Park administrations to install Terminal High Altitude Area Defense (THAAD) batteries, a move which has angered China. But he told Anna Fifield at the Washington Post in an interview last week that he opposed the U.S. rushing the installation of the batteries before the election, and argued for the establishment of Kill Chain and Korea Air and Missile Defense (KAMD), ostensibly a subtle jab at THAAD’s necessity. Kill Chain is a system designed to provide improved detection capabilities to strengthen South Korea’s ability to preemptively strike North Korea’s nuclear and missile assets if a North Korean attack is imminent. KAMD is an indigenous ballistic defense system South Korea is developing to destroy incoming North Korean missiles at lower altitudes than THAAD. (See Jun Ji-hye’s overview of Kill Chain and KAMD for the Korea Times here and Sukjoon Yoon’s discussion of KAMD and THAAD for The Diplomat here)

President Trump has done no service to the U.S.-ROK alliance by demanding in an interview last week that South Korea pay for THAAD’s $1 billion price tag. As mentioned on this blog last week, such comments play very poorly to South Koreans. Even the generally pro-U.S. Chosun Ilbo was critical of Trump’s comments. Moon wants the National Assembly to decide on THAAD, believing that the U.S. and Park Geun-hye’s decision to install THAAD batteries ran counter to democratic processes. But now that it’s there, will he really tell the U.S. Army to pack it up and take it back home?

Moon has also called for the U.S. to speed up OPCON transfer, which would give ROK forces operational control of their military during wartime. OPCON transfer has been kicked down the road multiple times by both conservative and liberal administrations; Most recently, in 2014 the Obama and Park administrations agreed to delay OPCON indefinitely. In his speech last week, Moon said that OPCON “will be transferred to South Korea in early stages. Seoul will actively utilize the U.S.’s strategic assets, but we will take the responsibility for our defense.” OPCON transfer is certainly a political matter as it is viewed as a reassertion of South Korea’s sovereignty. But on a technical level, it is also one of capabilities, and South Korea’s insufficient capabilities compounded by tensions on the Peninsula have led to repeated delays.

Moon has been fairly positive on Trump, agreeing with him that Obama’s “strategic patience” toward North Korea was a “failure.” In his Washington Post interview, Moon stated that he agreed with Trump’s sanctions policy toward North Korea, even as Anna Fifield notes, it is essentially the same as Obama’s policy. Moon believes that Trump is “more reasonable than generally perceived” and is more open to a pragmatic approach to resolving the North Korean nuclear issue. It is likely that Moon and Trump’s staff will set up a meeting shortly and as Duyeon Kim wrote in her Foreign Affairs piece yesterday, “It is crucial that Trump and the next South Korean president strike up instant, positive chemistry in their first meeting to help work through any bilateral differences.”

What can Moon actually do?

Moon faces significant constraints that will prevent him from going back in a time machine to the 2007 Sunshine era. North Korea is a much more sanctioned country now, and while his Sunshine predecessors may have been able to argue that sanctions did not apply to inter-Korean relations, this argument is a much harder sell now. For instance, under existing UN sanctions, establishing banking relationships with DPRK entities is now banned so if South Korea were to re-open Kaesong and Mount Kumgang, there would be the simple matter of how to pay DPRK authorities, which control payroll for North Korean workers.

The temptation will be to say, “this is Korea,” and to simply ignore the UN Security Council resolutions. Such an action would bring South Korea into immediate diplomatic conflict with the U.S., and undercut China’s already tepid willingness to implement sanctions.

Yet, this appears to be the tenor of South Korean policy—even before the election. Last week, the South Korean Ministry of Land, Infrastructure, and Transport (MOLIT) sent out a document calling for South Korean firms to submit bids on infrastructure projects in North Korea, with a particular focus on the mining sector. (See NK News’ coverage here and the actual MOLIT documents in Korean here). But the mining industries listed by MOLIT—iron, coal, gold, copper, zinc, magnesite—are all banned by either UNSCR 2270 or 2321. Put another way, MOLIT is putting out a call for bids to violate sanctions. The call for proposals was not Moon Jae-in’s doing but points to the direction that the South Korean government may head next. If South Korea is going to bust sanctions, then why should China comply? Moon has called for continued pressure on North Korea but these exhortations ring hollow if you yourself are supplying the regime with cash, as Park Geun-hye concluded last year when she shut down Kaesong.

Another constraint Moon may face could come from the ROK North Korea Human Rights Act passed last year by the National Assembly. The legislation calls for humanitarian assistance to be provided according to internationally accepted standards where pregnant women, infants, and the vulnerable should be prioritized. If Moon is to maintain this standard, he will have to demand consistent accountability from DPRK counterparts, which North Korea is typically loath to do. Indeed, he was accused during the campaign by a former colleague in the Roh Administration of permitting North Korea to influence South Korean voting on human rights in the UN (an accusation he has vehemently denied). He will face a choice of enforcing the law and eliciting pushback from Pyongyang or soft-pedaling the law and facing criticism from the opposition in the National Assembly.

How the U.S.-ROK relationship unfolds will be crucial to what kind of policies Moon can enact and how effective they will be. Trump’s overarching North Korea strategy is still unclear, so how deep the fissures will be between the U.S. and South Korea is hard to predict. However deep they are, Moon will likely find that he is far more constrained than past Sunshine presidents as the dynamics on the Korean Peninsula have changed considerably in the last ten years.

Next time: Moon and the China angle.

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