November 14, 2011
President Lee Myung-Bak’s visit to Hawaii for the APEC Leaders’ Summit 2011 will involve some awkward moments. However, these moments may also reflect a sign that South Korea is about to lose the momentum it has gained in trade liberalisation.
Chief amongst the awkward moments will be Lee’s talks with President Obama. South Korea failed to pass the Korea-United States (KORUS) Free Trade Agreement (FTA), despite officials from both sides hoping that an announcement on its passage could be made on the sidelines of the meeting.
The ruling party is likely to have to force the passage of the KORUS FTA through the National Assembly before public opposition grows. Failure to do so will present a challenge to Korea’s relations with the United States, potentially from within the presidential office. Obama faced down significant internal opposition to ensure the passage of the KORUS FTA—spending political capital that will prove meaningless if Korea is unable to implement the existing deal.
President Lee is also likely to run into Australian Prime Minister Julia Gillard. Just over one year ago, Prime Minister Gillard visited Seoul for the G20 Economic Summit. She returned to Australia with a promise of greater political support for the Korea-Australia FTA. This support has failed to materialize, with the Lee administration remaining silent on the FTA, despite officials on both sides admitting negotiations are essentially completed.
Any meeting with Canadian Prime Minister, Stephen Harper will also be difficult. Canadian officials and more importantly, the Canadian media regularly express exasperation at the failure of repeated attempts to progress bilateral FTA negotiations with South Korea.
Finally, President Lee will also inevitably face questions regarding South Korea’s failure to participate in the Trans-Pacific Partnership (TPP). The TPP includes the United States, Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, and Vietnam. With the Japanese announcement that it will also participate, the TPP has the potential to become the world’s largest economic bloc, exceeding the size of the European Union. Importantly, the TPP also reflects a renewed US focus on the Asia-Pacific region.
While Lee is facing domestic challenges with trade in South Korea, the challenge at APEC will be no less difficult. South Korea is currently at risk of losing its leadership in trade liberalisation. Since its late entry into the FTA race, obtaining an FTA with Chile in April 2004, South Korea has completed a number of highly successful negotiations. There are now signs that this momentum has come to a halt at APEC 2011.