Despite its incredible economic growth, the role of the Republic of Korea (ROK or also South Korea) as a small-sized country among the Asian giants has often been overlooked and undervalued, with the country even referred to as a “shrimp among whales”. Under its new administration led by President Yoon Suk-Yeol, South Korea has been trying to escape this name tag while becoming an economic and political powerhouse in the region, a strategy which was echoed in President Yoon’s latest foreign agenda. On the other side of the globe, the European Union (EU) has often been perceived as an enormous economic power with a limited political voice. With key upcoming elections in different parts of the world in sight throughout 2024 and the uncertainties these may create, it is essential to assess how EU-South Korea relations may be strengthened and how their cooperation can be advanced to jointly achieve common strategic goals and address global challenges.
The Yoon government came into power in 2022, after an extremely tight presidential race that saw his People Power Party winning with a razor-thin margin of 0.8% points. Since then, the newcomer of Korean politics has shaken up many of the previous government’s major international strategies and plans, besides trying to implement radical changes in the ROK’s domestic policy. The administration’s national measures have often proved to be disliked by the Korean citizens, leading to a continuous decline in Yoon’s approval rates. Domestically the country’s situation is entangled between a politically increasingly unpopular leader and pressing foreign issues. South Korea’s domestic situation remains very delicate, and despite its handling of and resistance to the Covid-19 pandemic, the country’s economy and society are facing a variety of issues that are deeply rooted and have remained relatively unaddressed or have been aggravating in some cases. The main concern remains the ageing and shrinking population, a problem that has seemed unsolvable by the many presidents that have already attempted to do so in the past. Another major cause of distress is related to the surging housing prices in South Korea’s main cities. Other unpredictable events caused a sink in consensus in Yoon’s and the PPP’s approval rates, such as the Itaewon disaster, where 159 people died due to a crowd stampede, or the floods that took place during the 2023 summer and which have been considered as one of the largest of the last 100 years.
Yoon’s Foreign Policy
In terms of international relations, Yoon has focused mainly on revitalising South Korea’s trade relations and on its geopolitical role. Yoon identified exports as the key to resolving the nation’s economic woes, but trade deficits have persisted over 2023.
Under Yoon, South Korea joined the “Indo-Pacific Economic Framework for Prosperity“ (IPEF), a US-led initiative with the aim of improving and strengthening trade in the Indo-Pacific, which has allowed the ROK to improve its economic ties with the United States. It also initiated its “Trade Investment and Promotion Framework” (TIPF) programme in order to relax its export dependence on China and introduce a more diversified approach towards emerging economies, like for instance in Africa and Southeast Asia. Yoon’s focus on diversification relates tightly to South Korea’s dependency on China as its main trade partner, which has been sparking fears of potential economic retaliation against Korean political moves. Initiatives such as the K-Rice belt, which provided African countries with Korean high-yield rice and agricultural technologies, proved to be of key importance in showing South Korean engagement in the African region, a well-considered expansion and first-of-its-kind leap in Korean politics. Many critics have highlighted that Yoon has focused a lot on South Korea’s image around the world, while the actual status of its trade with global partners may not be so idyllic, especially in the semiconductor sector where due to the disruption of global supply chains, South Korea saw an export reduction of almost 20%. For Yoon, trade and exports are still considered as the main drivers of economic growth, thereby aiming at improving South Korea’s rise and profile in the technology sector, including the construction of Korean nuclear power plants abroad. The rationale behind this strategy has grown historically. Export has consistently served as the primary driver of the South Korean economy and its growth, maintaining an export-to-GDP ratio of approximately 40-50% since 2010, surpassing the OECD average of 35%.
Regarding the ROK’s relations with North Korea (the Democratic People’s Republic of Korea – DPRK), there has been a complete turn in policies and actions under Yoon, distancing himself from his predecessor. Already during his electoral campaign Yoon showed a more aggressive and intimidating approach towards the North. This resulted later in more hawkish policies aimed at forging a change in the DPRK’s approach to human rights and denuclearisation, which translated into economic sanctions and political isolationism. In practice, this strategy was not as effective and merely increased the tensions with the North to an all time high, eventually leading to the DPRK declaring in its constitution that the South should be regarded as a permanent enemy. This shift in the ROK approach leaned more towards the US line of action threatening the North, creating more tensions and distance on the Korean Peninsula.
Despite heavy domestic criticism, from an external perspective Yoon’s foreign policy can be seen as one of its most successful policies thus far. From the beginning he managed to put his mark on expanding the ROK’s role in the world and improving its image, with South Korea becoming a more vocal and active player on the international chessboard. Yoon’s most impressive move can be found in the acceptance and ratification of the Camp David Agreement, strengthening the ties with the US and Japan. Given the seemingly rising tensions between South Korea and Japan at the time of its signing in August 2023, the agreement came as a rather unexpected move, instigated by the US. The agreement’s effects on the ROK’s foreign policy were mostly to be found in shaping Yoon’s diplomatic alignment with Japan, causing distress in South Korea’s domestic sphere, as its society still perceives Japan in a prevailingly negative light. In addition, Yoon travelled several times to Europe, fostering agreements and cooperation with the EU and its Member States, as well as with NATO. A recent example was the visit he made to the Netherlands in December 2023, where he managed to gain exclusive cooperation between the two countries on AI chip production. These agreements ought to help make South Korea’s global supply chains more resilient and diversified. Most of the agreements so far regard economic investments, such as the one stipulated with the UK. They should also grant the country more diplomatic autonomy and activity with respect to China and the United States. All these measures were taken under Yoon’s main foreign policy agenda of making the ROK a “Global Pivotal State”, playing a major role in the most important world affairs and to becoming one of the most important political players in Asia, heavily focusing on multilateralism.
South Korea maintains strong relations with most of the major global powers, especially the G7 ones and the European Union, and enjoys their respect and consideration. The ROK is also very active as a major investor in the Global South. The country has been strengthening its alliance with the US, while it has also stressed its strong relations with the EU. The ties between the EU and South Korea have become more economically and politically intertwined, on the one hand forging a multilateral approach in securing stronger global supply chains and technological cooperation, while at the bilateral level they celebrated 60 years of diplomatic relations, stressing the need to reinforce their common vision of a globalised and democratic world, the denuclearization of the Korean peninsula, as well as support for Ukraine. The ROK has become more vocal in EU affairs than ever before, by expressing its stance through high-level bilateral dialogues. Yet, at the economic level, a stronger and more aligned and centralised EU approach, especially in critical technological sectors, would be more effective and beneficial for both partners, as opposed to the various ad hoc partnerships in place between the ROK and the EU’s individual Member States. These scale and centralization effects could make the partnership stronger and more efficient, exploiting the countries’ synergies and dismissing the inherent weaknesses of their single economies.
Yoon’s Domestic Policy
Before diving deeper into the policies that have been adopted under Yoon, it is worth analysing what political preconditions have incentivised certain approaches in Yoon’s government. In 2020 the Korean legislative elections resulted in a landslide victory for the Democratic Party (DP), guided by Lee Jae-Myung, the party currently representing the main political opponent to Yoon. This allowed for streamlined legislative processes under President Moon Jae-In. After winning the 2022 presidential elections, Yoon and his PPP faced a parliament dominated by the DP, constraining his policymaking amid low support. The Korean political system faced an impasse as bills proposed by the DP, including investigations into PPP leaders and the first lady, were repeatedly vetoed by President Yoon. This situation emerged amid Yoon’s efforts to reverse Moon’s policies while advancing his own political agenda. This moved ineffectiveness, causing an even lower level of consensus. However, despite his extremely difficult political situation, Yoon managed to implement several bills through executive decrees. Overall, Yoon’s policy agenda has been centred around the following main areas.
- Domestic Economy
The first thing Yoon tried to implement domestically was a reduction of state-led interventionism in the economy, something that was useful and essential during the covid pandemic and in general fostered by the Moon government. Given the still sluggish economic situation in South Korea (with a growth rate of 1.4% in 2023) Yoon soon had to give up on this policy switch, being faced with the necessity to continue government participation in the country’s economic activity. An example of this is the massive investment plan announced in January 2024 to boost finance in the semiconductors industries with over 500 billion USD.
Along the same line, Yoon kept an inflexible stance against the labour unions, remaining unwilling to grant them any additional rights or benefits. He has focused mainly on liberal economic principles, leaving aside the consideration of furthering workers’ rights. This topic represented one of the main tensions between Yoon and the Democratic Party, which through its supermajority tried to pass several laws in favour of the unions – that got vetoed by Yoon every time. Another law that was unsuccessfully proposed by Yoon regarded the possibility to extend the working-week hours, leading to several protests across the country and a shrink in Yoon’s electoral base.
- Employment
In terms of unemployment South Korea is in a very peculiar place. Since the instalment of his government Yoon tried to lower the unemployment rate through several economic measures. The effect was overall beneficial, currently having an all-time low unemployment rate of 2%. At the same time a major problem persisted with youth unemployment being steadily high at around 40%, considered one of the highest among OECD countries. This may be an essential factor for Korean government support, given the appeal of the democratic party for young people. To win the election it would thus be crucial for the PPP to win more votes from the younger generation through policies that address their concerns and youth unemployment in particular.
- Education and Science
A more pragmatic approach has instead been adopted in tackling education disparities. The education minister managed to pass a bill to reform the structure of the famous university admission exam (Suneung) by eliminating extremely difficult questions that were only covered in private academics, making the exam revolve only on the public schools’ curriculum. Yoon’s government also managed to implement a plan to expand medical school access quota, one of the most popular measures taken so far.
Science and innovation are the parts where the government has been able to be more effective. Despite cutting the budget for researchers by a mere 10%, Yoon gave primary importance to sectors such as AI, semiconductors and biotech, increasing the state-led investment in those strategic areas. The amount of investment increased by about 20 billion USD.
- Environment/Energy
The main measure taken by Yoon’s government was the scrapping of the nuclear phase-out that was initiated under the Moon administration. This was done to increase South Korea’s energy self-sufficiency. At the same time, major issues further compromised the president’s reputation both at the national and international level. Yoon backed the plastic straws act enacted by Moon, which led to the shutting down of several paper straw factories and consequential protests from the environmentalists. The plan was initiated in 2019 by the Environment ministry in order to reduce the waste from disposables. It had been a controversial measure since its introduction due to the economic burden posed on small businesses.
Overall, due to the continuous internal opposition both at the political and civil level, Yoon’s government has thus far not been able to attend to many of the promises made during his electoral campaign. This has partly led its government to focus more on the international aspects of its policy, making the “lame-duck” president fly all around the world. By taking up a more active role internationally, Yoon managed to change the South Korean profile at the global and multilateral level and alter the status quo with several of its partners or rivals, with the most prominent cases being Japan and China.
Elections Ahead: Possible Future Evolutions of EU-ROK Relations
On 10 April 2024, South Korea’s people will be voting for their next legislative elections. These elections seem particularly important for the current presidency given the problems previously underlined in terms of economic security and growth as well as internal clashes, particularly in the education and environmental sectors. It may not become easy for president Yoon to gain the necessary parliamentary majority that would allow him to move away from a lame-duck presidency, where his insufficient parliamentary support has not allowed him to implement his governmental agenda. The two main contending parties in the election will be the People Power Party and the Democratic Party. The former is the one attached to president Yoon, led by Han Dong-Hoon, the current minister of justice in Yoon’s government. The latter is led by Lee Jae-myung, who lost the Presidential election against Yoon in March 2022. The race between the two parties seems to remain very tight. The most recent polls estimate a share that ranges between 30-40% of votes for each of the two parties. This has been leading to a tough and more polarised political campaign including several reciprocal accusations. The DP’s main attack was made towards First Lady Mrs. Kim Keon-Hee for receiving a Dior bag from an American pastor during a visit to the US. The DP voted to form a parliamentary committee to investigate the case, to which Yoon posed a veto. The election debate seems to become more polarised by the day, up to the point of violent assaults towards prominent politicians.
The stakes are extremely high for both parties. Should Yoon’s party manage to gain a majority in the National Assembly, this would give him more space to manoeuvre and conduct his political agenda and would likely lead to an increased government approval rate. On the other hand, the DP has the interest to keep its majority, allowing for more control over Yoon’s government and to conduct a fierce opposition in the run up to the upcoming presidential elections.
A parliamentary PPP majority would allow Yoon to focus more on domestic policies. This could reduce his more prominent engagement in global affairs, giving priority to the most cogent international matters. For the ROK’s international partners like the EU this could lead to a more passive Korea internationally and at the multilateral level, also in terms of economic and trade affairs. As regards security on the Korean peninsula, this could however pave the way for a more active EU role in peacebuilding and better align international interests with Yoon’s political agenda. Should the PPP lose the legislative elections, this would incur no major change to the current situation, invoking a similar approach from Yoon focused on an expansion of the ROK’s influence in Asia and the world. Yet, Yoon’s hawkish approach to the North could lead to a further escalation of tensions on the Korean Peninsula and a deterioration of the relations between the North and the South.
An Evolving Partnership: The EU’s Strategic Approach to South Korea in a Shifting Global Landscape
The Yoon administration marked a radical shift in South Korea’s foreign policy. Yet, ROK relations with the EU seem to be well-aligned with common western democratic and liberal goals. The promotion of freedom, human rights and democracy as well as human and economic prosperity often represent the most commonly shared values between both South Korea and its main partners. Still, many global and domestic challenges lie ahead, especially in 2024, in which many of the political cards will be shuffled through elections around the world.
Yet, the EU should keep a focus on the ROK as one of its most relevant partners in the region, leveraging the country’s technological and economic development and its solid integration in the Asian economy. The EU should also push South Korea to maintain its “Global Pivotal Strategy”, allowing it to keep a more independent voice and become more vocal as a nation in the region. Nevertheless, how this plays out will also heavily depend on the ROK’s domestic situation and its relations with the DPRK. The best strategy for the EU would be to continue to foster economic security in the region and to uphold itself as a strong peacebuilder besides the US military presence. The EU should also increase its economic ties with South Korea, enhancing its ability to leverage its multi-faceted diplomatic instruments as a like-minded partner for the ROK and other partners in the region.
Author: Giacomo Vavassori, EIAS Junior Researcher
Photo credits: Image by baragaon22 from Pixabay