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RR RUEHHM
DE RUEHUL #3390/01 2750807
ZNY CCCCC ZZH
R 020807Z OCT 06
FM AMEMBASSY SEOUL
TO RUEHC/SECSTATE WASHDC 0550
INFO RUEHBJ/AMEMBASSY BEIJING 1302
RUEHHI/AMEMBASSY HANOI 2006
RUEHKO/AMEMBASSY TOKYO 1391
RUEHUM/AMEMBASSY ULAANBAATAR 1362
RUEHHM/AMCONSUL HO CHI MINH CITY 0012
RHHMUNA/CDR USPACOM HONOLULU HI
RUALSFJ/COMUSJAPAN YOKOTA AB JA
RHMFISS/COMUSKOREA J2 SEOUL KOR
RHMFISS/COMUSKOREA J5 SEOUL KOR
RHMFISS/COMUSKOREA SCJS SEOUL KOR
RHEHNSC/NSC WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC//OSD/ISA/EAP//

C O N F I D E N T I A L SECTION 01 OF 04 SEOUL 003390 
 
SIPDIS 
 
CODEL 
SIPDIS 
 
E.O. 12958: DECL: 12/10/2014 
TAGS: EAGR ETRD KN KS MARR PGOV PREL
SUBJECT: SCENESETTER FOR HAGEL CODEL TO KOREA 
 
Classified By: CDA William A. Stanton.  Reasons 1.4 (b,d). 
 
SUMMARY 
------- 
 
¶1. (SBU)  Despite a successful summit last month with 
President Bush, President Roh continues to face criticism in 
the press and even within his own party.  Roh still has 15 
months in office, but it is widely believed he is already a 
"lame duck".  Nonetheless, he must still address a number of 
key issues at the forefront of bilateral relations with both 
the U.S. and North Korea.  Roh's legacy will rest on his 
ability over the coming months to successfully transfer 
wartime operational control to the Korean military (OPCON), 
conclude the U.S.-Korea Free Trade Agreement (FTA), renew 
talks with North Korea, and reinvigorate the 6-Party process. 
 END SUMMARY. 
 
PRESIDENT ROH 
------------- 
 
¶2. (SBU)  Roh hoped that a successful summit on September 14 
with President Bush would go a long way in increasing 
domestic support for his leadership and his policies.  The 
Korean press, however, decided there was a definite lack of 
substance in the summit and therefore all of the major 
newspaper reported the meeting from a negative angle.  Even 
on the day of his 60th birthday, a significant milestone in 
Korean culture, there was little to no fanfare in the media 
or on the streets. 
 
NORTH KOREA 
----------- 
 
¶3. (C)  During the Summit, President Bush and President Roh 
agreed that a diplomatic solution still offered the best path 
forward, and that U.S.-ROK discussions of a common and broad 
approach toward the DPRK should continue.  Even as we work 
with the ROK and our other allies to implement UNSCR 1695, we 
are engaging with the South Koreans on a diplomatic strategy 
toward the North.  There is genuine risk that President Roh, 
in an effort to secure his legacy during the final year of 
his presidency, might go it alone if he concluded that the 
U.S. had given up on a diplomatic solution to the North 
Korean nuclear issue.  This could seriously damage our 
Alliance, not to mention our efforts to denuclearize the 
North.  Finally, President Bush and President Roh were united 
in warning the DPRK against a nuclear test.  It is our hope 
that the DPRK understands that such a provocative action 
would result in a fundamental change in regional dynamics and 
inter-Korean relations. 
 
OPCON 
----- 
 
¶4. (SBU)  The decision to transfer OPCON to the ROK and the 
deadline for doing so continue to generate widespread 
opposition.  President Roh has been unsuccessful in 
countering strong opposition from policy elites, retired 
military officers, and the public at-large.  Many fear that 
transfer of OPCON effectively means U.S. "abandonment" of the 
ROK.  Many MND, MOU and MOFAT officials, and members of the 
Defense Committee at the National Assembly who distrust the 
Roh Administration, have also voiced concerns over potential 
instability on the Peninsula, and possible damage to the 
Alliance following the OPCON transfer. 
 
¶5. (SBU)  In addition, some critics question the ROK's 
ability to assume wartime OPCON.  Others doubt the National 
Assembly will approve the sizable increases in defense 
spending that the transfer will require.  We have stressed 
our assessment that the ROK is ready for OPCON and have 
reiterated the U.S. Government's strong, long-term commitment 
to the ROK.  Many nonetheless seek clarification of our offer 
to provide "bridging capabilities."  Timing appears to be the 
most problematic aspect of the issue, because of the politics 
of the upcoming ROK presidential election in December 2007, 
as well as worries that now is not the time given DPRK 
missile launches and a possible nuclear test.  DOD wants the 
transfer to take place in2009, while the ROK is pressing for 
 
SEOUL 00003390  002 OF 004 
 
 
¶2012. 
 
¶6. (C)  In recent weeks Korean opposition to the OPCON 
transfer has included: 
-- All the former South Korean defense ministers. 
-- 70 of 100 retired four-star generals in the ROK. 
-- 160 former diplomats, including 3 foreign ministers. 
-- The "Hope 21" group of moderate Uri Party lawmakers. 
-- The opposition Grand National Party of Korea. 
-- The Chair of the National Assembly's Defense Committee. 
-- 10 military academy alumni organizations. 
-- The Korean Veterans Association. 
We continue to hope that at the October Security Consultative 
Meeting in Washington a roadmap for the transfer of wartime 
OPCON transfer will be concluded.  In last week's Security 
Policy Initiative talks at the Pentagon, little progress was 
made toward a bilateral agreement on OPCON. 
 
JikDo Range 
----------- 
 
¶7. (SBU)  Kunsan Mayor Moon Dong-shin announced on September 
25 that his city had approved the ROKG request to use land 
and sea territory under their jurisdiction, clearing the way 
for U.S. forces' use of the Jikdo air to surface training 
range.  The Ministry of National Defense stated that it would 
immediately begin construction to install a scoring system by 
the end of this year.  USFK requested installation of the 
scoring system in 2005.  So the Kemper Decision removed this 
irritating issue from the agenda.  The scoring system will 
allow U.S. pilots to meet their training requirements.  Once 
the installation is complete, usage of the scoring system by 
the respective Air Forces of ROK and USFK will be 70 (ROK) to 
30 (USFK), versus 80:20 in the past. 
 
FREE TRADE AGREEMENT 
-------------------- 
 
¶8. (SBU)  Our biggest economic priority by far is our 
Korea-U.S. Free Trade Agreement (KORUS) negotiations.  FTA 
negotiations were announced in February and launched in June; 
you will be arriving two weeks before our fourth negotiating 
round, on the Korean island of Jeju.  Korea is already our 
seventh largest trading partner, and we are Korea's second 
largest, after China.  But most economists agree there would 
be significant gains for both countries from an FTA: 
boosting exports in both directions; increasing each 
country's global competitiveness (especially as Korea ponders 
how to cope with the rise of Chinese competition); and 
enhancing consumer welfare, particularly in Korea where high 
tariffs make the cost of living exceedingly high (one recent 
survey named Seoul the second most expensive city in the 
world, after Oslo). 
 
¶9. (SBU)  These complex negotiations will not be easy.  For 
the United States, this is the biggest FTA negotiation since 
NAFTA, and this is by far the biggest FTA Korea has ever 
negotiated.  The toughest issues will likely be: 
agriculture, where Korea currently imposes average tariffs of 
52 percent; pharmaceuticals, where we want to ensure the 
Korean health system offers fair pricing and reimbursement 
for patented pharmaceuticals from the United States; and 
automotive barriers, which have limited U.S. sales in the 
Korean market to only 4000 cars a year (compared to Korean 
automakers' sales of 800,000 cars annually in the United 
States).  The Koreans have their own negotiating priorities 
that will be difficult for us:  amendments to U.S. 
anti-dumping laws; more temporary entry visas for Korean 
professionals to work in the United States; and duty-free 
entry in to the U.S. for products made in the South 
Korean-run Kaesong Industrial Complex, just over the border 
in North Korea. 
 
¶10. (SBU)  As is customary in FTA negotiations, here in Korea 
the opponents of trade - those whose vested interests will be 
affected, as well as those who oppose globalization or the 
United States in particular -- have been much more active 
than the potential beneficiaries, with the result that public 
support for and opposition to the FTA are running 
neck-and-neck.  The Korean Government recently began an 
 
SEOUL 00003390  003 OF 004 
 
 
outreach campaign to promote the FTA, but public opinion will 
be hard to turn around.  One persistent theme in Korea is 
that the expiration of Trade Promotion Authority (TPA) in the 
United States next year imposes an unreasonable time 
constraint on the negotiations.  In response, we have 
emphasized that there is ample time to negotiate a mutually 
acceptable agreement before TPA expires on June 30, 2007 (and 
the Koreans came to this negotiation better prepared than all 
our other FTA partners), but that given the public concerns 
about trade and globalization in the United States, it seems 
overly optimistic to count on Congress extending TPA again. 
The last time TPA lapsed, it took eight years -- and a change 
of Administration -- for Congress to renew it.  You may be 
asked about Congressional sentiment toward trade, both with 
respect to the renewal of TPA and the ratification of any 
Korea-U.S. FTA that we conclude in the coming months. 
 
Resuming Beef Shipments 
----------------------- 
 
¶11. (SBU)  The Koreans have technically re-opened their 
market to U.S. beef, but they have defined SRMs (Specified 
Risk Materials) so broadly that virtually any finding of bone 
fragments in beef shipments will lead to a re-closing of the 
market, making U.S. producers reluctant to resume shipments. 
We continue to urge the Korean Government to employ a more 
reasonable definition of SRMs so that U.S. beef shipments 
become commercially viable and can resume in earnest.  Given 
Nebraska's fame as a beef production center, your ROKG 
interlocutors will be interested in gauging your level of 
concern on the beef issue.  As a tactical matter, we have 
generally found that explicitly linking the beef issue to our 
FTA negotiations has backfired.  Public opinion here will not 
support re-opening the beef market if Koreans believe it was 
the result of political pressure.  Instead, we have stressed 
that this decision should be made on the basis of sound 
science, consistent with global practice and international 
guidelines. 
 
VISA WAIVER 
----------- 
 
¶12. (SBU)  Presidents Bush and Roh renewed their pledge to 
bring Korea into the Visa Waiver Program (VWP) when they met 
in September 2006.  The ROK continues to make progress toward 
joining the VWP - the program whereby citizens of 27 
countries are able to travel to the U.S. for business or 
pleasure without first obtaining a visa - but will not likely 
join in the immediate future.  DHS and State are in the final 
stages of approving a 'roadmap' of specific steps leading to 
Korea's inclusion in the program.  Embassy Seoul officials 
meet frequently with Korean counterparts to discuss the 
current visa refusal rate (presently about 3.5%) which must 
drop below 3% before the ROK can qualify for the VWP.  In 
addition, the ROK must work closely with the U.S. on 
travel-related security issues and must have an e-passport in 
production, which the ROK projects it will have by October 
¶2007. 
 
BUSAN APP 
--------- 
 
¶13. (SBU) Consistent to the Secretary's call for American 
Presence Posts (APP) in regions outside capital in countries 
of high value to transformational diplomacy and American 
interests, Embassy Seoul has proposed to establish an APP in 
Busan.  An APP in Busan would firmly re-establish an official 
American presence in a burgeoning metropolitan region that is 
second only to Seoul in demographic, political, and economic 
significance. 
 
¶14.  (SBU) The United States has traditionally maintained a 
diplomatic presence in Busan, until our Consulate was closed 
in 1998 for budgetary reasons. Our American Center there had 
closed two years earlier after sustaining damage during a 
violent political demonstration.  The ROKG as well as Busan 
city officials have consistently requested that we 
re-establish a permanent presence in Busan.  In fact, since 
the closure of our facilities, U.S. political, economic, 
trade, and public diplomacy interests in the Busan region 
 
SEOUL 00003390  004.3 OF 004 
 
 
have only grown stronger.  Busan hosted the 2005 APEC Leaders 
Meetings, and Embassy officers, including the Ambassador, 
have visited the region with growing frequency.  In response 
to the concomitant rise in local interest in the United 
States, in 2004 we established an American Corner within the 
Busan Municipal Public Library.  The same year, we 
established a seven-person permanent Container Security 
Initiative team in Busan.  Although these measures have been 
helpful, Embassy believes that an APP will better equip us to 
promote our growing interests in Busan.  We note that China, 
Russia, and others have permanent consulates there. 
 
¶15.  (SBU) The Department has approved the concept for an APP 
in Busan to be initiated this calendar year, subject to 
Congressional approval and the Department funding for the 
initial start-up costs, to include staff salaries, and the 
leasing of commercial office spaces in downtown Busan. 
 
YOUR MEETINGS IN SEOUL 
---------------------- 
 
¶16. (SBU)  In scheduled meetings with President Roh, Foreign 
Minister Ban, Defense Minister Yoon and Trade Minister Kim, 
the ROKG will be looking for your assessment of the U.S.-ROK 
relationship and will try to assure you that the ROK is fully 
committed to the Alliance, the FTA, and to working with the 
United States to bring North Korea back to the Six Party 
Talks. 
STANTON