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Troy Stangarone
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Troy Stangarone

Troy Stangarone (ts@keia.org) is the senior director of congressional affairs and trade at the Korea Economic Institute.

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Troy Stangarone

Korea needs to innovate beyond semiconductors

By Troy StangaroneAs the world's leading producer of memory chips, the last two years were good for South Korea's semiconductor industry. The adoption of cloud computing and the continued growth in demand for cellphones helped to usher in a super-cycle of rising prices and demand for memory chips that South Korea was well-placed to take advantage of. But for all the success of South Korea's semiconductor industry over the last two years, it also demonstrated an overdependence on memory chips.Memory chips account for all but 5 percent of South Korean production in semiconductors, making producers especially vulnerable to disruption in the memory segments and the industry overall.In a relatively short period of time, memory chips have grown from 5 percent of South Korea's exports in 2014 to just under 14 percent of exports in 2018. In contrast, automotive exports only account for around 7 percent of exports.When the recent super-cycle was taking off, South Korean exports had been stagnant the previous two years, but the growth in exports of semiconductors helped lift exports and accoun

Apr 29, 2019By Troy Stangarone
Korea needs to innovate beyond semiconductors
Troy Stangarone

Humanitarian aid to North Korea

By Troy StangaroneIn the most recent report by the U.N. Panel of Experts (UNPE), the 1718 Committee documented the increasing number of ways that North Korea continues to evade U.N. sanctions. However, the report also discusses the unintended consequences of sanctions, one of which is the impact on humanitarian assistance in North Korea.Aid groups looking to engage in humanitarian activities in North Korea have faced difficulties as the sanctions on the North have increased over the last two years, despite a move by the U.N. to provide exemptions for these.According to the UNPE, they have faced challenges from the deliberative nature of receiving exemptions from sanctions, delays at customs, a disruption of banking channels, a decline in suppliers willing to provide materials, increases in prices, and reductions in available funds.Some of these issues are perhaps inevitable. While the report notes some entities still unwittingly work with North Korea, the increased scrutiny of transactions with Pyongyang will inevitably lead to longer times to clear customs as exports are inspected a

Mar 24, 2019By Troy Stangarone
Humanitarian aid to North Korea
Troy Stangarone

A step back or forward in Hanoi?

By Troy StangaroneAll negotiations face setbacks. In most instances these breakdowns happen at the working level rather than between leaders as occurred in Hanoi. In negotiating problems as intractable as the dismantlement of North Korea's weapons programs, setbacks are likely, but need not preclude a successful outcome if the proper groundwork is laid in advance. Something that is more challenging in the current top-down process between Donald Trump and Kim Jong-un.Of course, as the experience of the six-party talks demonstrates, not all negotiations will necessarily lead to success either.However, the early indications are that some progress was made in narrowing differences. Both sides have also been relatively restrained in their comments after the summit. North Korea has suggested it will not resume testing and the U.S. and South Korea have maintained their suspension of major joint military exercises, indicating a desire on both sides not to close the door on future talks.The talks, perhaps unsurprisingly, stalled over sanctions, but each side may have approached the summit wit

Mar 5, 2019By Troy Stangarone
A step back or forward in Hanoi?
Troy Stangarone

Don't be too quick to judge any US-North Korea deal

By Troy StangaroneWe live an in era of instant analysis. When a major event occurs there is an inclination to immediately declare whether it was a success or a failure. If an agreement is reached, to say whether it is a good or a bad deal. But that can often be hasty.When Donald Trump and Kim Jong-un meet in Hanoi later this week the tendency to immediately judge the results will be on full display, but should it?During the Cold War, the Helsinki Accords were initially seen as a loss by the West. In the analysis at the time, the Soviet Union got the better end of the deal as the Accords finalized the borders in Europe after World War II and included calls for territorial integrity and the principle that boarders should change peacefully. This led to concerns that the West had permanently left those living in areas occupied by the Soviet Union during the war behind the Iron Curtain.However, in time, the human rights provisions of the Accords played an important role in helping to pave the way for the end of the Cold War.Similarly, when Ronald Reagan met Mikhail Gorbachev in Reykjavik

Feb 24, 2019By Troy Stangarone
Don't be too quick to judge any US-North Korea deal
Troy Stangarone

Time to look beyond KORUS FTA

By Troy StangaroneWe live in a time of rapidly changing technology. In the not too distant future, autonomous vehicles will be shuttling us from place to place. The use of artificial intelligence will continue to grow, reshaping an increasingly larger portion of our lives beyond transportation. While these changes will affect how we drive, how we work, and how we search for cures for disease and hunger, they will also create new challenges and opportunities for the U.S.-Korea economic relationship.In recent years, the United States and Korea focused primarily on renegotiating the KORUS FTA. The renegotiation was limited in scope. It focused on improving the agreement's current provisions rather than expanding the FTA to address new areas for economic cooperation, including emergent areas in the Fourth Industrial Revolution where artificial intelligence will play a prominent role. However, with the National Assembly's approval of the modifications to the KORUS FTA in December, there is now an opportunity to consider where economic cooperation beyond the KORUS FTA might be most fruitfu

Jan 27, 2019By Troy Stangarone
Time to look beyond KORUS FTA
Troy Stangarone

2019 will be critical

By Troy StangaroneA little more than a year ago, the prospect of war still hovered over the Korean Peninsula. North Korea had demonstrated the ability to strike anywhere within the continental United States with its November 2017 missile test, despite U.S. President Donald Trump only a month earlier warning North Korea, “Do not underestimate us. And do not try us.”As 2018 winds down, the situation on the peninsula is completely different. Talk of war has turned to talk of improving relations and whether North Korea will dismantle its nuclear weapons and missile programs.For the moment it's difficult to imagine returning to the confrontation of 2017, but it's also unclear where the process with North Korea goes from here. The concerns of war may have ebbed, but diplomacy has only moved in fits and starts in 2018.The sudden turn of events began with North Korean leader Kim Jong-un's New Year address and acceptance of South Korean President Moon Jae-in's offer for North Korea to take part in the Winter Olympics in PyeongChang. The success of North Korea's participation in th

Dec 26, 2018By Troy Stangarone
2019 will be critical
Troy Stangarone

North Korea's future military

By Troy StangaroneAbout two weeks ago, North Korea tested a new weapons system that state media described as a “newly developed ultramodern tactical weapon.” While there is speculation that the test is an attempt to pressure the United States in talks over the dismantlement of North Korea's nuclear weapons, the test also highlights an important question. What will North Korea's military look like after the dismantlement of its nuclear program?While North Korea has been coy about the nature of the test, under Kim Jong-un it has sought to develop more modern weaponry. In recent years, Pyongyang has worked to extend the range of its artillery and develop the capability to launch ballistic missiles from a submarine. It has also sought to move into high tech weaponry with the deployment of drones and robust cyber capabilities. Even with these advances, absent its nuclear deterrent North Korea would likely feel compelled to develop more modern conventional forces to offset the loss of its nuclear capabilities.For much of its existence, North Korea has focused on numerical super

Nov 28, 2018By Troy Stangarone
North Korea's future military
Troy Stangarone

Why US midterm elections matter for Korea

By Troy StangaroneIn less than two weeks, Americans will go to the polls for the midterm elections. It would be understandable if most South Koreans only casually follow the results or missed them entirely. The recent stagnation in job growth in South Korea and changing relations with North Korea are of immediate concern.At the same time, midterms don't see the White House up for grabs, and historically less than half of eligible Americans will vote as well. But this might be one time to watch the results closely.Midterm elections are traditionally a referendum on the current president and there is little reason to see this midterm as any different. Historically, the president's party has lost seats in a midterm election in the House of Representatives every time since the post-World War II era with just two exceptions: 1998 and 2002 due to anomalies that will not be replicated in 2018.In recent years, America has become increasingly polarized and rather than working to bridge those divisions in the tradition of prior presidents, President Donald Trump has sought to benefit from thos

Oct 24, 2018By Troy Stangarone
Why US midterm elections matter for Korea
Troy Stangarone

Shifting the South Korean economy

By Troy StangaroneDespite President Moon Jae-in's successes with North Korea, the last two months have been difficult for the Moon administration on the economic front. The OECD recently downgraded expectations for South Korea's GDP growth in 2018. Perhaps more worrying, job growth has been anemic in recent months. In July only 5,000 new jobs were created and in August job growth fell further with only 3,000 new jobs. Unsurprisingly, these shifts have raised concerns about the impact of the Moon administration's income-led growth strategy.The issue of income inequality is one that has come to the forefront in South Korea in the last two decades. For much of South Korea's economic development, income inequality was relatively low. In 1990, 75 percent of South Koreans were middle class. That has shifted in recent years, with the middle class falling to 65.7percent of the population in 2016. Workers in the bottom 10 percent of income brackets have seen virtually no wage growth in two decades, and income inequality continues to increase. Coupled with growing income inequality, South Kore

Oct 1, 2018By Troy Stangarone
Shifting the South Korean economy
Troy Stangarone

Rethinking economic engagement with North Korea

By Troy StangaroneCan North Korea set aside its nuclear ambitions for economic prosperity? Is North Korea willing to engage in the types of economic reforms that could transform its economy? These are the questions that will ultimately determine if Pyongyang's current dialogue with South Korea and the United States is successful, but the question for South Korea is on what terms will it be willing to economically engage North Korea?With a potential window for resolving the North Korean nuclear issue, it is natural that there is growing interest in South Korea for economic engagement with North Korea. In his Liberation Day address, President Moon Jae-in laid out a vision of a Korean Peninsula at peace, where North and South Koreans have increased opportunities to experience prosperity, and economic cooperation could grow to 170 trillion won ($152 billion) in three decades. It is an ambitious vision. A future with the potential for the people of North Korea to experience the type of prosperity that those in the South have experienced would be a significant shift in North Korea's econom

Aug 26, 2018By Troy Stangarone
Rethinking economic engagement with North Korea
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