Troy Stangarone (ts@keia.org) is the senior director of congressional affairs and trade at the Korea Economic Institute.
Since the debut of ChatGPT in late 2022, generative AI has been viewed as a key component for economic growth and technological development. How best to integrate this new technology, however, is the key challenge faced by companies and countries alike.
The June 2024 announcement that North Korea and Russia were upgrading their relationship and entering into a new mutual defense treaty caught many off guard. The move was concerning enough that South Korean National Security Adviser Chang Ho-jin suggested that Seoul would reconsider its long-standing policy of not providing lethal aid to Ukraine. However, Russia and North Korea’s growing partnership is a rational, if disturbing, development in the current geostrategic environment.
By Troy StangaroneIn recent years, the approach to joint statements and the balance of issues has changed at U.S.-Korea summits. The joint statements became more detailed. Economic issues were given more weight in the relationship and North Korea became less prominent. While North Korea's resumption of weapons development since last year pushed extended deterrence to the top of the April 2023 Yoon-Biden summit agenda, cooperation on economic issues related to climate change, technology and space remained prominent and the summit consolidated an economic vision for the future of the relationship.That vision was articulated by President Yoon Suk Yeol, who called for the relationship to “leap into a new phase” to tackle complex issues and to move towards increased cooperation on innovative technologies. This vision is perhaps best encapsulated by U.S.-Korea cooperation on climate change. Climate change represents a global challenge that cannot be solved by any nation alone. Over the last three years has become an important aspect of cooperation in the U.S.-Korea relationship
By Troy StangaroneFor more than seven decades the U.S.-Korea alliance has provided peace and stability on the Korean Peninsula. It is one of the most successful alliances of the post-World War II period and has been a focal point for what has become a robust and wide-ranging partnership. It is a moment well worth celebrating and one that the United States and Korea will mark with a state visit in Washington, D.C. later this month. But it is also a moment for pondering the future of the relationship. With this year marking the 70th anniversary of the alliance, there are expectations for a new joint vision statement, but the United States and Korea should avoid the temptation to announce a vision for the next 70 years.When the alliance began seven decades ago, the world was much different than it is today. Technologies that we take for granted did not exist. Sputnik, the first satellite, was not launched until 1957. The U.S. military didn't begin using GPS until the late 1960s and commercial usage did not begin until the 1980s. The first cell phones wouldn't come out until the 1970s. W
By Troy StangaroneManufacturing has historically been one of the keys to Korea's economic success. Korean firms have moved up the value chain to become world-class manufacturers in high-value sectors such as semiconductors, automobiles, consumer electronics and shipbuilding. However, that development has come at the expense of the Korean services sector. In an age where artificial intelligence (AI) and new innovations such as ChatGPT are emerging, an underdeveloped services sector could hinder Korea's future economic growth.According to the World Bank, manufacturing accounts for about 25 percent of Korea's GDP. In contrast, manufacturing accounts for only 17 percent of global GDP and just 11 percent for the United States. Even in Germany, another highly industrialized economy, manufacturing accounts for only 19 percent of GDP.While Korea has seen some successes on the digital side of the economy with Naver and Kakao, neither makes the Forbes 2000 list of the largest global companies. In contrast, Samsung is the world's 14th-largest company but has yet to add a strong digital or softw
By Troy StangaroneLate last year, Korea released its first Indo-Pacific strategy. The initial commentary on the strategy often focused on issues of the great power competition or whether the document had mentioned China enough. While the development of Indo-Pacific strategies by countries in Asia, North America, and Europe is being driven by the emergence of a new great power rivalry, the most interesting part of Korea's strategy may be the section on climate change and energy security and what that means for its emerging clean tech industry.Russia's invasion of Ukraine has highlighted the importance of energy security. For much of last year, the war fueled price increases, not just in Europe, but in global energy markets. In Korea, the energy disruptions from the war resulted in rising costs for imports of fossil fuels. Despite the overall volume of imports of fossil fuels increasing by only 3 percent, Korea paid nearly 60 percent more for its imports of fossil fuels in 2022. These cost increases have been partially passed on to consumers in Korea through four price increases by KEP
By Troy StangaroneSince its passage in August, the Inflation Reduction Act (IRA) has been a significant source of tension between the United States and Korea. While designed to reduce U.S. emissions of greenhouse gases by nearly 40 percent by 2030, the tools the Act uses to promote the domestic sale of electric vehicles (EVs) to achieve those objectives have caused concern in Korea and among other U.S. trading partners.Chief among these concerns are provisions in the Inflation Reduction Act that require EVs to be assembled in the United States, Canada or Mexico for U.S. buyers to be eligible for a $7,500 tax credit. Without production facilities in North America for electric vehicles, Hyundai and Kia currently produce EVs in Korea for export to the U.S. market. These vehicles are no longer eligible for the consumer tax credit for EVs.There have recently been some positive developments in addressing the tax credit issue for foreign-built EVs in the United States, but also clear indications that achieving more significant adjustments to the Inflation Reduction Act's EV provisions will
By Troy StangaroneI'm often asked how South Korea should manage relations with China. It's a complex question. One that often requires deeper answers than can come in an interview or on the sidelines of a conference. Given that complexity, it is perhaps better to think about what are the key issues that should be considered when thinking about managing relations with China rather than what is the best specific policy approach. The question often arises as part of a discussion about growing U.S.-China tensions. While a focus on policy is understandable, in this context, South Korea's perception of China's values and interests, as well as its understanding of the reshaping of the geopolitical order, will be a key factor.In Seoul's relationship with Washington, the two countries often emphasize the shared values of democracy, freedom of expression and free market economics. At the same time, the two countries also share a range of interests from the peaceful denuclearization of North Korea to regional stability and an open economic system.While the passage of the Inflation Reduction Act
By Troy StangaroneShould South Korea acquire its own nuclear weapons? This question tends to arise periodically whenever Pyongyang significantly ups the pace of its nuclear and ballistic missile tests. With North Korea growing increasingly provocative with its ballistic missile tests and adopting a policy that allows for preemptive nuclear strikes, it is not surprising that the issue has surfaced again. However, any debate should include a robust discussion of the cost of going nuclear.?The arguments in favor of South Korea acquiring its own nuclear weapons have tended to fall into four categories, and a fifth has been added by some experts recently. One, that has been somewhat changed by North Korea's willingness to engage in a preemptive strike, is that Pyongyang is seeking to develop a second strike capability that would alter the military balance of power on the Korean Peninsula and that a South Korean nuclear weapon is needed to counter the growing threat from the North.??Another argument that is often used to justify a South Korean nuclear weapon is that the international commu
By Troy StangaroneEarlier this month, the Korea Economic Institute, along with partners in South Korea and the European Union held a conference at George Washing University to discuss the potential for trilateral trade cooperation between the United States, South Korea and the European Union. While there are obstacles to deeper U.S.-Korea-EU cooperation, the general consensus was that there are real opportunities. Traditionally, trilateral cooperation in the context of the U.S.-Korea alliance has meant a focus on U.S.-Korea-Japan cooperation grounded in the threat all three face from North Korea's pursuit of nuclear weapons and ballistic missiles. However, a changing geopolitical context requires new thinking and new partners.In little more than a decade, the world has faced disruptions from the 2008-2009 Global Financial Crisis and more recently from the pandemic. These disruptions have been paralleled by growing Chinese assertiveness, Russian military adventurism, a failure to adequately address climate change, and shifts in technology that have placed a greater emphasis on the nee