Major Developments in 2017

		The Overall State of U.S.-South Korea Relations

Between 2009 and the end of 2016, relations between the United States and South Korea (known officially as the Republic of Korea, or ROK) arguably were at their most robust since the formation of the U.S.-ROK alliance in 1953. North Korea's escalation of provocations, and particularly its two tests in July 2017 of long-range ballistic missiles, which some observers characterized as having intercontinental range, have driven closer security cooperation in recent weeks. Additionally, many analysts think that cost-sharing for defense will become an issue of greater friction than in the recent past, with the Trump Administration demanding more from South Korea. The Administration has stated that it hopes that pressure will convince the North Korean regime "to de-escalate and return to the path of dialogue." Thus far, the Administration has emphasized pushing China, which accounts for around 90% of North Korea's trade, to fully implement United Nations Security Council (UNSC) sanctions and take other steps to pressure North Korea. But ... it is not unimaginable to have military options to respond to North Korean nuclear capability. President Moon has argued against what many critics called the Park-Obama "sanctions-only" approach toward North Korea. The essence of his approach appears to be that denuclearization policy—including sanctions—and low-level inter-Korean initiatives—such as humanitarian assistance—are complementary and for the time-being should operate on parallel tracks. Producing nuclear fuel for such submarines would require negotiations with the United States. THAAD Deployment

On July 29, 2017, shortly after North Korea's long-range ballistic missile test, President Moon's government agreed to a full deployment of the controversial U.S. Terminal High Altitude Area Defense (THAAD) ballistic missile defense (BMD) system in South Korea. The Trump Administration has focused specifically on the growth in the bilateral U.S. trade deficit with South Korea over the five years the agreement has been in effect. Since early 2016, the three countries appear to have closely coordinated their responses to North Korea's nuclear tests and missile launches. Background on U.S.-South Korea Relations

		Overview

While the U.S.-South Korea relationship is highly complex and multifaceted, five factors arguably drive the scope and state of relations between the two allies, as well as congressional interest in U.S.-South Korea relations:
the challenges posed by North Korea, particularly its weapons of mass destruction programs and perceptions in Washington and Seoul of whether the Kim Jong-un regime poses a threat, through its belligerence and/or the risk of its collapse; China's rising influence in Northeast Asia, which has become an increasingly integral consideration in many aspects of U.S.-South Korea strategic and economic policymaking; South Korea's transformation into one of the world's leading economies—with a strong export-oriented industrial base—which has led to an expansion in the number and types of trade disputes and helped drive the two countries' decision to sign the South Korea-U.S. Free Trade Agreement (KORUS FTA), which Congress approved in 2011; South Korea's continued democratization, which has raised the importance of public opinion in Seoul's foreign policy; and the growing desire of South Korean leaders to use the country's middle-power status to play a larger regional and, more recently, global role. North Korea in U.S.-ROK Relations

			Coordination over North Korea Policy

Dealing with North Korea is the dominant strategic element of the U.S.-South Korean relationship. Under the Obama Administration and the successive South Korean presidencies of Lee Myung-bak (2008-2013) and Park Geun-hye (2013-2017), the United States and South Korea in effect adopted a joint approach to Pyongyang, sometimes called "strategic patience," that had four main components:
keeping the door open to Six-Party Talks over North Korea's nuclear program but refusing to restart them without a North Korean assurance that it would take "irreversible steps" to denuclearize; insisting that Six-Party Talks and/or U.S.-North Korean talks must be preceded by North-South Korean talks on denuclearization and improvements in North-South Korean relations; gradually attempting to alter China's strategic assessment of North Korea; and responding to Pyongyang's provocations by tightening sanctions against North Korean entities and conducting a series of military exercises. Under the agreement, U.S. military personnel have maintained a continuous presence on the Korean Peninsula and are committed to helping South Korea defend itself, particularly against any aggression from the North. South Korea is included under the U.S. "nuclear umbrella," also known as "extended deterrence." The United States maintains about 28,500 troops in the ROK. At the same time, provocations from North Korea have propelled more integrated bilateral planning for responding to possible contingencies. The Relocation of U.S. Economic Relations

South Korea and the United States are major economic partners. Five Years of the KORUS FTA

For five years, the KORUS FTA has been the centerpiece of U.S.-South Korean trade and economic relations. Reviews of the agreement to date are mixed. The Trump Administration has repeatedly criticized the KORUS FTA.
Overview
South Korea (officially the Republic of Korea or ROK) is one of the United States' most important strategic and economic partners in Asia. Since the early 1950s, the U.S.-ROK Mutual Defense Treaty commits the United States to help South Korea defend itself. Approximately 28,500 U.S. troops are based in the ROK, which is included under the U.S. "nuclear umbrella." Washington and Seoul cooperate in addressing the challenges posed by North Korea. The two countries' economies are joined by the Korea-U.S. Free Trade Agreement (KORUS FTA). South Korea is the United States' seventh-largest trading partner and the United States is South Korea's second-largest trading partner (China is its first-largest). Political changes in both countries in 2017 along with North Korea's increasing military capabilities have produced strains in the relationship.
Coordination of North Korea Policy
Dealing with North Korea is the dominant bilateral strategic concern. The Trump Administration appears to have raised North Korea's nuclear and missile programs to a top U.S. foreign policy priority, and has adopted an approach of increasing pressure on Pyongyang in the hopes of convincing the North Korean regime "to de-escalate and return to the path of dialogue." The Administration has emphasized pushing China, which accounts for around 90% of North Korea's trade, to do more to pressure North Korea. North Korea's two tests in July 2017 of long-range ballistic missiles, which some observers characterized as having intercontinental range, has heightened the U.S. sense of urgency over the North Korean issue.
ROK President Moon Jae-in, elected in May 2017, has said he supports the continuation of sanctions against North Korea if it is aimed at bringing North Korea to the negotiating table. He also argued, however, against a "sanctions-only" approach toward North Korea. Instead, President Moon envisions denuclearization policy and low-level inter-Korean initiatives as complementary and in July 2017 proposed holding several inter-Korean dialogues. These initiatives appear to have caused some tension in U.S.-ROK relations, but North Korea's lack of a response to them and its continued missile testing appear to have ameliorated disagreements between Washington and Seoul, at least temporarily.
The U.S.-ROK Alliance
Since 2009, the United States and South Korea have accelerated steps to reform their alliance, including the relocation of U.S. troops on the Korean Peninsula and boosting ROK defense capabilities. Provocations from North Korea have propelled more integrated bilateral contingency planning, for instance by adopting policies to respond more swiftly and forcefully to attacks and by deploying the Terminal High Altitude Area Defense (THAAD) missile defense system in South Korea. China has protested the THAAD deployment and appears to have taken retaliatory measures against ROK companies and economic interests. President Moon at first delayed finishing the deployment but then reversed himself after North Korea's July 29, 2017, long-range missile test. According to U.S. military officials, South Korea pays roughly half of the nonpersonnel costs of stationing U.S. troops in South Korea. Many analysts think that the Trump Administration will demand that South Korea increase its cost-sharing payments.
Bilateral Economic Relations
The KORUS FTA has been the centerpiece of U.S.-Korea trade and investment relations since its entry into force in 2012, but views on KORUS FTA's economic outcomes are mixed. Most U.S. business groups highlight market access improvements and a more robust mechanism for dispute resolution, but others have raised concerns over implementation, for example with respect to specific issues such as country-of-origin verifications. The Trump Administration has repeatedly criticized the agreement, focusing on the growth in the bilateral trade deficit since its entry into force, and has called for modifications. Following a U.S. request, the two nations are expected to convene a special committee under the KORUS FTA to discuss the agreement and possible changes. The scope of these discussions remains unclear but may be limited to date, as the Administration has yet to officially notify Congress of its intent to negotiate with South Korea, a requirement for any trade agreement negotiation to receive expedited legislative consideration.