By Dave H. Kim

The Korean government announced on June 26 that it would halt Iranian oil imports starting in July and join in the sanctions enforced by the United States and the European Union.

The very next day, the Iranian Ambassador to Korea Ahmad Masumifar reportedly stated that in retaliation Tehran will halt all imports from Korea. Rather than be swayed by such statements or other domestic pressure, the Lee Myung-bak administration needs to remember some of the fundamentals.

While diplomatic relations with the United States and the European Union are not insignificant, Seoul’s decision ― which makes Korea the first major consumer in Asia to suspend Iranian oil shipments ― will do more than just improve its standing in the international community. Multilateral sanctions as a tool of foreign policy have failed more often than not, and their use and legitimacy are still debated. A commonly cited reason for failure is the lack of support for sanctions by others, which continue to trade with the sanctioned country.

China, the largest buyer of Iran’s oil, is increasing Iranian oil imports, even as the United States and European Union have asked the global community to cut them and threatened sanctions against financial institutions conducting business with Iran’s energy sector. Instead, its oil imports from Iran jumped 35 percent from April to May, and a foreign ministry representative defended the increase by saying, ``China’s importing of Iranian oil is based on its own economic development needs.”

Certainly, Korea does not wish to be grouped with Beijing, often viewed by the West as less than cooperative on Iran and Syria, not to mention the South China Sea disputes involving several countries. More importantly, multilateral sanctions require tough decisions by partnering countries to be effective, as noted above. Without sanctions as a viable tool, the probability of others resorting to more drastic measures only increases.

Another reason is Iran’s pursuit of a controversial nuclear program and its impact on the nonproliferation regime. Despite repeated calls, Iran continues to defy legitimate and transparent nuclear energy development channels by denying access to International Atomic Energy Agency inspectors. Whatever success Tehran achieves in delaying or circumventing the U.N.’s nuclear watchdog, it can only serve as a lesson for the North Korean regime with its own nuclear ambitions. Seoul’s cooperative role in the sanctions sends a clear message of carrots and sticks approach to Pyongyang ― it will reward compliance or punish noncompliance.

Naturally, the potential negative economic effects on Korea’s industries cannot be ignored. Korea imported over 2.24 million barrels of crude oil per day in 2010, making it the fifth largest crude oil importer. For an economy that relies on imports for virtually all of its oil fuel needs and where exports comprise a significant portion of its gross domestic product, this is all the more true.

However, it is worth noting the relatively small amount of trade between the two economies. In 2010, Korea’s oil imports from Iran made up 7 percent, behind much smaller countries such as the United Arab Emirates (13 percent), Kuwait (12 percent), and Qatar (8 percent). In addition, Korean officials had already reduced much of its Iranian oil imports. Official data showed nearly 40 percent declines in Iranian crude oil imports in May 2012 from a year earlier, and Deputy Minister Moon Jae-do of the Ministry of Knowledge Economy reported that most of the Iranian oil has already been replaced by other sources.

Conversely, Korean exports totaled $429 billion in 2010, and exports going to Iran accounted for only $4.35 billion, or roughly 1 percent. While Iran was Korea’s 19th largest export destination, the European Union ranked second ($50.75 billion, 11.9 percent) and the United States ranked third ($47.33 billion, 11.1 percent). Considering the size of potential losses in exports, as well as the political gains from joining the international community on nonproliferation and sending a strong message to North Korea, the decision to halt Iranian oil imports is the right decision.

The writer was a former research associate at the James Martin Center for Nonproliferation Studies in Monterey, California. He is a Ph.D. candidate at Korea University in international studies. He can be reached at davehkim@korea.ac.kr.