europe and korea: an awakening relationship

EUROPE AND KOREA: AN AWAKENING RELATIONSHIP

Brian Bridges

On May 7, 1984, Gaston Thorn, president of the European Commission, arrived in Seoul on the first visit ever by a commission president. It was evidence not only of the efforts of South Korea to diversify its foreign relations away from a primary focus on Japan and the United States, but also of a growing appreciation in Western Europe of South Korea's increasing importance on the international stage. South Korea's rapid economic growth during the 1970s, despite the rise in energy prices, and its continuing relatively high growth rates after a hiccup in 1980 have led to its being labeled one of the Asian "Gang of F o u r " - - along with the other Asian Newly Indus- trializing Countries (NICs) of Hong Kong, Singapore, and Taiwan--and a "second Japan" or "mini-Japan," terms that evoke mixed feelings in the South Koreans. On the other hand, the destruction of the KAL airliner by a Soviet fighter in September 1983 and the bomb attack in Rangoon the following month, in which four cabinet ministers died, have highlighted the tension that surrounds the Korean peninsula. The signs are that in both the economic and political sphere the West Europeans are beginning to show more of an interest in Korean developments.

It is evident that Western Europe has no vital interests in the Korean peninsula in the sense of interests that, if threatened, would directly or immediately affect the survival of European nations. Nevertheless, there are interests that, if not vital in this sense, are important to the Europeans. For convenience, these can be broadly divided into economic and politico-strategic interests. Given the limited involvement of West European states that are not members of the European Community (EC), discussion will be concentrated on the EC and its constituent states.

ECONOMIC INTERESTS

In 1983 South Korea had a population of 40 million and the combined EC, 272 million. South Korea's average annual real growth rates during the 1970s more than tripled those of the European countries (9.5%, versus the EC average of 3.0%, 1970-80). After a setback in 1980, when negative growth was recorded, the R.O.K. economy recovered to growth rates of 5.6% in 1982 and

Brian Bridges is a research fellow at The Royal Institute of International Affairs, London, En- gland.

BRIDGES 47

9.5% in 1983. Although its per capita GNP of U.S. $1,910 in 1982 leaves it still well below the lowest of the EC countries (Greece, with $4,290), South Korea's GNP doubled during the period 1977 to 1982, and it is a leader in that category of countries loosely known as the NICs.

Throughout the 1970s the EC has suffered from a trade imbalance with South Korea, with the deficit widening from only U.S. $68 million in 1973 to just over $1 billion by 1980. This deficit had grown as South Korea's exports to the EC rose more than eight times while its imports from the EC grew only five times. The last couple of years have seen a reduction in the deficit, but it still hovers around the $1 billion mark. South Korea is not an important trading partner for the EC, representing less than .5% of total EC trade; but for South Korea trade with the EC is more significant, representing around 9% of its total trade (in the case of exports, over 12%). Within the EC, West Ger- many and following at some distance--Great Britain are the main trading partners of South Korea, between them accounting in 1983 for over 60% of the EC's imports from and exports to South Korea. In terms of the Standard International Trade Classification (SITC), just over 50% of the EC's exports to South Korea are machinery and transport equipment, whereas nearly 60% are miscellaneous manufactured articles, such as textiles and footwear.

EC policies toward the developing world combine elements of trade stimu- lation, such as the extension of the Generalized System of Preferences (GSP), and trade deterrence, notably the imposition of tariff and nontariff barriers, including quotas and ceilings within the GSP. Although provision was made in the Treaty of Rome for cooperation between the EC and developing countries with which it had special relationships---countries headed by the former European colonies grouped under the Lome Convention, signed in 1 9 7 5 - South Korea has not met the criteria for a special form of association. In 1971 the EC introduced the GSP scheme, a nonreciprocal exemption from customs duties for manufactured and semimanufactured goods and certain processed agricultural products from developing countries, but in its application the scheme has become "progressively tougher on the more industrialized Third World countries,"l of which South Korea is one of the core examples.

Since there have been no commercial or cooperation agreements between it and South Korea, the EC has taken to concluding sectoral arrangements to cover certain products, deemed "sensitive," which face highly competitive South Korean imports. Textiles was one sector hard hit by recession in Europe from the mid-1970s; imports from the NICs were blamed, and the tightening of controls under the Multi-Fibre Arrangement particularly affected the Asian NICs. 2 In some product categories the quotas given to South Korea were actually cut back from levels established in previous years. The latest bilateral agreement covering the years 1983-86 has shown no lessening of these restrictions. The EC steel industry has also been under pressure and "volun- tary" restraints have been negotiated with South Korea, which agreed to limit

48 JOURNAL OF NORTHEAST ASIAN STUDIES / SPRING 1985

exports to the EC to 218,000 tons for 1984 and to respect traditional trade pattern in the timing of exports, their destination, and the product mix. In return, the EC agreed to allow South Korean steel producers to sell their products at delivered prices (practically the same as those of EC producers) with a certain penetration rebate to ensure competitiveness. 3 A more recent move by the EC has affected South Korean automobile manufacturers. In January 1983, less than a year after the Hyundai group started selling cars in Great Britain, the EC, at British instigation, imposed an import duty of 10.5% on all cars after an initial duty-free 10,000 a year have been imported. 4

In two other sectors the EC has been pushing for R.O.K. restraint to prevent further deterioration in the state of European industry. In footwear, South Korea now exports 45 million pairs of shoes a year to the EC and has become the EC's second-largest supplier. As a result, the EC has tried to persuade South Korea to make allowances for the "state of crisis" in the European footwear market. Among the world's shipbuilders, South Korea is now second only to Japan, and the European shipbuilding nations clearly want to establish a dialogue to prevent further relative deterioration of their position. Despite the assertion of the president of Daewoo Shipbuilding in 1983 that South Korea would assume a "leadership role" in world shipbuilding, over- taking Japan and, in the process, putting many European shipyards out of business, results for the first half of 1984 suggested that the South Koreans are finding it just as difficult as the Europeans to cope with the shipping recession.

These actions by the EC against imports from South Korea are strongly re- miniscent of action taken against Japanese imports in the second half of the 1970s. Therefore, as if guilty by association, South Korea is being sucked into EC-Japan trading disputes; for example, the Japanese "threat" served as the precedent for the EC to impose a bilateral arrangement covering steel from South Korea in 1979, despite the fact that it was still a minor exporter and its domestic demand in 1978-79 actually took up all its proauction. 5 A South Korean Economic Planning Board survey in 1984 estimated that 28% of its exports to the EC were subject to some form of control. 6 The level of imports from South Korea despite these restrictions has continued to concern the Europeans. On his visit to Seoul in May 1984 President Thorn stated that although the EC was not opposed to imports from South Korea it might be forced to act if they grew "too quickly" and were "concentrated on a few sectors."r A similar message was given to Foreign Minister Lee Won-kyung when he visited Western Europe from late June to early July 1984. The South Koreans look wistfully at Singapore, which benefits from being part of ASEAN, and Taiwan, whose products are less sectorally concentrated; both countries have managed to export without the same level of political friction.

Just as the EC-Japan trade disputes have had two 'points of contention---on the one hand, voluminous but sectorally concentrated Japanese exports and, on the other, the difficult-to-penetrate Japanese domestic market--so also the

BRIDGES 49

EC has come to criticize not only South Korea's exporting policies but also its import restrictions on European products. In the mid-1960s South Korea switched from a policy of import substitution to one of manufactured-export promotion linked with a gradual liberalization of import controls. However, certain important products remained "rigorously restricted," to use the words of one senior EC official, 8 and it was not until after President Chun Doo-hwan came to power in 1980 that a significant dismantling of import barriers took place. At present there are no restrictions on 80% of products, and this figure is planned to reach 95% in 1988. Nevertheless, the Europeans complain, sales are still hindered by high customs duties and by emergency "surge" and "adjustment" mechanisms that can be imposed to halt imports that do greatly expand.

Despite South Korea's attempts to diversify its trading partners--to the benefit of the EC--Japan and the United States continue to dominate (in 1983 accounting for 20% and 29%, respectively, of total South Korea foreign trade). A similar pattern holds for foreign investment in South Korea. Cumulative totals from 1962 to November 1983 show Japan as providing 48%, the United States 29%, and the EC 11%. This dominant position built up by the first two countries has not always been welcome to the South Ko- reans. Indeed, in 1978 it was announced that measures would be adopted particularly to encourage European countries to offset this predominance. The largest EC investor has been the Netherlands (more than half the EC total in cumulative value), with West Germany and Great Britain some way behind. Before 1979 there was only one British industrial investment actually in production, but recent years have seen greater British involvement.

The South Korean government prefers its country's firms to pursue technology through licencing agreements, but the realization that certain high technology may be available only through associated foreign investment, in joint ventures, has led to some relaxation in the rules for foreign investment in specified spheres. New regulations designed to simplify administrative proce- dures were introduced in July 1984; the previous "positive" list was replaced by a "negative" list of only those prohibited and restricted products that re- quire the express permission of the relevant ministries. It is doubtful, however, whether the Europeans will be any better placed for competing with Japanese and U.S. sources for investment opportunities. Neither does the dis- appointing experience of British Petroleum in its application to start a joint venture with Samsung to bottle liquified petroleum gas auger well for the bu- reaucratic implementation of government policy proclamations?

South Korean investment inside the EC is still extremely limited (U.S. $11.8 million over the 1963-83 period), with the only two current major in- vestments being Jindo in Great Britain and Samsung in West Germany. Ire- land, however, is likely to receive some investment by South Korean elec- tronics companies during 1985, and further investment inside the EC can be expected if the South Koreans, like the Japanese, come to see it as a means of


circumventing more stringent EC import restrictions. Statistics are not readily available on the service sector, but the announce-

ment in April 1984 of a phasing-out of discriminatory restrictions on foreign banks should give European banks greater opportunities. According to R.O.K. sources, Great Britain is the third-largest provider of loans to South Korea (behind the United States and Japan). Its loans during the period 1950-80 totaled $2.4 billion, including commercial loans of $1.6 billion. Be- cause of its high per capita GNP, South Korea has not qualified for EC aid since 1979, but bilaterally the EC member countries have given about $20 million annually in recent years. West Germany has been the main donor, and according to Organization for Economic Cooperation and Development statistics it provided $18.7 million out of an EC total of $22.3 million in 1982.

The EC's trade with North Korea is small by comparison with EC-R.O.K. trade, in recent years averaging $100 million for EC exports to, and $150 million for EC imports from, North Korea. Precise details of North Korean trade are elusive, but the EC is well behind North Korea's three major trading partners, the Soviet Union, the People's Republic of China, and Japan. Memories of North Korea's overdue repayments on credits taken up during 1972-75 still inhibit commercial intercourse. The Sixth Congress of the Workers' Party of [North] Korea in October 1980 underlined the need to diversify foreign trade partners, but Japan has remained the center of attraction among noncommunist trading partners. The announcement in September 1984 of a new law encouraging joint ventures with firms from capitalist countries, 1~ inspired by China's efforts to use the West for its own modernization programs, has not been greeted with great enthusiasm within the EC, and even the announced French involvement in a hotel construction project in Pyong- yang is not as definite as it first seemed. The South Koreans are concerned that advanced technology with military applications should not be made available to the North Koreans, and the revelation in February 1985 that 80 Hughes helicopters had reached North Korea through a West German firm only rein- forces South Korean efforts to dissuade the West Europeans from any closer economic links with Pyongyang.

P O L I T I C A L A N D S T R A T E G I C I N T E R E S T S

Political and strategic interests cannot easily be separated from economic interests, not least because economic development, to which trade and investment from Europe and elsewhere contribute, is commonly accepted as a prerequisite for political stability.

South Korea established diplomatic relations with the EC in 1965 and maintains contact through its diplomatic representatives in Brussels. The EC does not yet have a delegation in Seoul----the nearest one is Tokye--and there are no immediate plans for the EC to establish one there, despite South Ko-

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rean requests. Informally, South Korea has pushed for a cooperation agreement, but the EC does not see it as being in quite the same group as India, Pakistan, or ASEAN, with which cooperation agreements have been con- cluded. South Korea is in that sense a victim of its own success. However, as a result of a European-R.O.K. symposium on trade and investment, held in Brussels in September 1981 at the initiative of the South Koreans, it was de- cided to hold annual consultations at ministerial level, alternating between Seoul and Brussels. The first of these was held in March 1983, when EC Vice-President Wilhelm Haferkamp led a delegation to Seoul. The second took place in July 1984, when South Korean Foreign Minister Lee Won- kyung visited Brussels.

None of the EC countries has any formally structured alliance arrangements with South Korea; the link is provided by the United States through NATO, which includes the majority of the EC countries, and through the U.S.-South Korea Mutual Defence Treaty. Troops from several European countries fought in the UN forces during the Korean War, but only Great Britain still contributes, through the Commonwealth Liaison Mission, a token force-- about 30 soldiers (often Gurkhas)--to the honour guard of the United Nations Command. One senior British officer also participated in the UN representa- tion at the Military Armistice Commission. This limited British involvement is, nevertheless, valued by South Korea, and by the United States, for its symbolism as a continuation of international support. The European powers, therefore, look to the United States to protect their interests against any direct threat from North Korea.

Only Denmark of the EC countries has diplomatic relations with North Korea---established in July 1973 in parallel with those involving the other Nordic states--but there is little evidence to suggest that North Korea has been able to use it as a window to the EC. Great Britain, despite its usual pragmatic policy of recognizing an established government regardless of its political hue, has not moved towards official relations with North Korea; and, indeed, except for France, EC countries have given little serious consideration to periodic feelers put out by North Korea. Francois Mitterrand did lead a French Socialist party delegation to North Korea in February 1981, but since becoming president he has been rather cautious in moving towards recognizing North Korea. In the summer of 1982 it did seem as if the French Foreign Ministry was giving the question serious consideration but a combination of South Korean diplomatic and commercial pressure (Seoul feared that Greece and possibly Italy might follow a French precedent) and domestic political undercurrents forestalled action. The Rangoon bombing seemed to assure that, as Laurent Fabius, then minister of industry and research, said during a visit to Seoul in December 1983, the question of recognizing North Korea "n 'est pas d'actualite. ''11 Nevertheless, shortly after Fabius became prime minister the French government appeared to make a gesture toward North


Korea by authorizing, to South Korean annoyance, a change of description of North Korea's Paris "trade mision" to "general delegation." South Korea responded by postponing a planned French ministerial visit and threatening commercial retaliation. However, when Fabius did himself visit Seoul in April 1985, he adopted such a conciliatory line that he even pledged not to recognize North Korea without the consent of the South Korean government. 12 For the South Koreans, reciprocity is crucial. In their view, any move towards West European recognition of North Korea must be predicted on East European recognition of South Korea.

North Korea did suffer widespread disapprobation for its terrorist action in Rangoon in October 1983; and after the Burmese revelations of North Korean culpability, a number of EC countries imposed diplomatic sanctions for example, on meetings with North Korean diplomats in third countries. The European Parliament also passed a resolution urging the EC governments not to recognize North Korea.

European political leaders have been generally supportive in public of South Korean proposals for reunification of the Korean peninsula, and of what British Foreign Secretary Sir Geoffry Howe has called South Korea's "attempts to establish a rational dialogue with the North."13 However, in prac- tice the EC countries have tended to leave the attempts to promote some kind of dialogue between the two Koreas to the four powers most directly con- cemed: the United States, Japan, the People's Republic of China, and the So- viet Union.

Nevertheless, the EC countries do have an interest in stability on the peninsula, not only in the sense of a less tense and more stable relationship between the two neighbors but also in the sense of political stability within the two countries. There has yet to be a peaceful transfer of power in South Korea, and disturbances such as those during the period from the assassination of President Park Chung-hee in October 1979 through the rebellion in Kwangju in May 1980 to the seizure of power by General Chun do carry costs that are bound to concern the Europeans.

European governments have been less vocal about the South Korean human rights record than the administration of President Jimmy Carter or certain Japanese governments. Nevertheless, the trial and sentencing to death of a leading opposition figure, Kim Dae-jung, in the autumn of 1980 did produce some diplomatic pressure from the European governments. The French foreign minister, Jean Fran~ois-Poncet, even postponed a scheduled visit to Seoul (he went in April 1981, after Kim's death sentence had been com- muted).

The conflict between the two Koreas finds expression in a competition for legitimacy, particularly politically and diplomatically. Since President Chun came to power the general trend has been in favor of South Korea. Chun's overseas tours; the visits by President Ronald Reagan, Japanese Prime Minis-

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ter Nakasone Yasuhiro, and Pope John Paul II; the holding of the 1983 Inter- national Parliamentary Union convention in Seoul; and the award of the 1988 Olympic Games to Seoul have all added to South Korean prestige. In recent years there has been an upsurge in the numbers of visiting senior EC politicians, including the French, Belgian, and British foreign ministers. However, until the visits by Fabius and Dutch Prime Minister Ruud Lubbers, both in April 1985, Belgian Prime Minister Wilfred Martens had been the only West European chief executive to visit since Chun' s assumption of the presidency.

Successive South Korean foreign ministers have visited EC capitals---Lho Shin-yong in February 1982, Lee Bum-suk in October 1982, and most re- cently Lee Won-Kyung from late June to early July 1984. Prime Minister Nam Duck-woo visited Scandinavia and several EC countries in September 1981. Although there had been some expectation that President Chun might himself visit Western Europe sometime during 1983-84, as the centenary of diplomatic relations with Germany, Great Britain, and Italy was being celeb- rated, Korean fears for his safety prevented preparations for such a visit. However, after his safely undertaken visit to Japan in September 1984 (though he was admittedly under unprecendented security protection) and the visit to the United States in April 1985, reconsideration of a European visit might nOW o c c u r .

South Korea has not attempted to use the European nations as channels for establishing contacts with North Korea, but it has seen them as channels for possibly widening contacts with other communist and Third World countries. On his return from his 1982 Seoul trip French Foreign Minister Claude Cheys- son indicated that he had previously discussed the recognition of South Korea several times with officials of certain East European countries, 14 while British Foreign Secretary Howe in April 1984 offered his good offices to encourage certain countries with which Britain has strong links to recognize South Korea. 15

FURTHERING INTERESTS

What possible future developments could affect European interests and the present pattern of relations?

The experience of the last two or three years suggests that the renewed relatively high rate of growth of the South Korean economy is likely to continue. Provisional South Korean figures for 1984 show overall exports up by more than 20% over 1983 figures, while imports increased only 17%, thus narrowing the trade deficit. Overall GNP growth is estimated to have been 7.6%, versus the 1983 growth rate of 9.5%. The Korea Development Institute, in fact, projects a growth rate of around 7.5% for the rest of the 1980s. Although South Korea's external debt of U.S. $43 billion puts it in the top five of the world's most indebted nations, financial confidence is still high. The govern-


ment is working to reduce its short-term exposure, and the current version of the 1982-86 five-year economic development plan, as revised in 1984, envis- ages a much smaller rate of growth in the external debt than originally pro- jected.

Seoul's main concerns are the growing number of barriers being imposed by the United States on R.O.K. goods and the increasing imbalance in trade with Japan. But the South Koreans are also eager to prevent "protectionist" tendencies in the EC, where industrial sectors losing competitiveness with respect to the developing countries demand more trade protection. For all the pledges about a commitment to "free trade" given by EC governmental representatives to the South Koreans, domestic pressures--at least while unemployment remains high (the unemployment total increased by 6% in 1983 to 12 million)--are likely only to increase the tendency to move against certain South Korean imports. The bilateral negotiations attendant on President Chun's September 1984 visit to Japan suggest that South Korea is still keenly interested in increasing its exports to Japan; but if the United States does become increasingly obstructive (adding measures like the April 1984 imposition of an average 15% duty on South Korean color TV sets), then greater em- phasis will be placed on the European marketplace. With the fall in oil reve- nues much of the shine has already gone off the other major South Korean market, the Middle East.) During 1985 South Korea will start exporting its own videotape recorders, made under technology license deals with the Japanese; although the United Sates is the primary target, some may be sold in Europe. A sharpening of the still relatively low-key economic friction with the EC could follow.

EC exports to South Korea are likely to be affected by the pace of the liberalization of the Korean market and by the competitiveness of European products in derestricted sectors, as well as by the extent to which the two traditional suppliers, Japan and the United States, perceive and are allowed to exploit the opportunities. Following up on its persistent calls for greater technology transfer coupled with complaints about the imbalance in trade, the South Korean government in September 1984 did consider action against imports from Japan, but Japanese companies remain confident that South Korea's dependence on imports from Japan of intermediate goods to supply its own export industries will prevent any blanket action. The Japanese, geo- graphically and culturally close if often emotionally far, are unlikely to reduce exports to South Korea; if anything, the new political rapprochement should lead to increased exports. Like Japan, South Korea looks to the United States as a supplier of raw materials; and, echoing earlier Chinese action, some South Korean politicians have argued that purchases of agricultural products should be switched to other countries, if the United States introduces "exces- sive protectionism" against South Korean goods, le Nevertheless, a South Korean trade mission in the spring of 1984 signed contracts for $2 billion of

BRIDGES 55

American goods and started negotiations to purchase an additional $1.3 billion. There is likely, therefore, to be some increase in imports from the United States--if only to try to take the edge off U.S. criticism of Korean exporting methods. While South Korea's imports continue to increase overall, there do remain opportunities for EC exporters. But some Korean economic planners are worried about the heavy import demand and the trade deficit's widening again after some narrowing over the last few years. Competition to sell in the South Korean market can only intensify.

The EC and South Korea are likely to find themselves increasingly in competition in third markets. Although joint ventures and cooperation in third- market projects do occur--and it has been estimated that as much as 67% of the construction materials used overseas by South Korean companies originate in Europe--the Europeans tend to see the South Koreans in a primarily competitive light. A leading South Korean economist has suggested that the NICs and Europe should effectively gang up against the main competition, Japan, since neither can face the competition alone, 17 but the increasing European willingess in recent years to look for ways to cooperate with the Japanese, both in Europe and in developing countries, is likely to militate against an EC-R.O.K. "axis" against Japan being brought about.

The recent economic growth and trade performance of the Asian Pacific region has increased its relative importance in the world and has led some people to argue that the center of global economic activity is moving toward Asia. U.S. and Canadian trade with Asia exceeds their trade with Europe, and Ja- pan's trade and investment in East Asia is much higher than with any other region. Although much of the trade consists of the traditional exchange of imports of raw materials and exports of manufactured goods, there is a growing two-way trade in sophisticated manufactured goods. South Korea, too, is increasing its trade and investment with Southeast Asia, particularly in countries such as Malaysia, which has adopted a "look East" policy, which specifically includes South Korea as a developmental model to emulate in certain respects.

In an assessment of the long-term prospects for the Pacific region, as well as South Korea's role, the possibility of some kind of Pacific Basin regional community--an idea first raised in the 1960s but not given much impetus until the late 1970s--is relevant. The concept has had a certain interest for businessmen and academics but has had only intermittent support from the governments of the region. Indeed, the South Korean government has been one of the more enthusiastic, and in 1981 President Chun himself proposed holding a summit meeting of the heads of the Asian Pacific states. He is still interested in trying to realize that plan, as shown by his reference to it during his talks with Japanese Prime Minister Nakasone in September 1984. There are still such differences in the conceptions of the form--and the membership---of any Pacific community that no specific impact can be visualized for the next de- cade or so (in private, Japanese diplomats talk about it as a "twenty-first cen-


tury project"). The West Europeans, although conscious of the precedents of the Atlantic Community and the EC regionalist approaches, have been very much watching from the sidelines.

European businessmen have tended to concentrate on markets nearer home, and their views of South Korea--and, indeed, other East Asian countries-- may have been affected by perceptions or misperceptions about Japan. This is not to deny that with South Korea, as with trading with all Asian countries, there are social and cultural differences which for Europeans are considerable. The European entrepreneur is unlikely to perceive opportunities--or profit from them--without a great deal of effort, cultural flexibility, and willingness to adjust trading and production methods.

Inevitably, however, European businessmen tend to consider the political environment and the possibilities of political stability being affected. Trading with South Korea does carry some costs in the sense that trade cannot then be conducted with North Korea; but, given North Korea's debt repayment prob- lems and the limited economic interest it has in Western Europe, these costs are likely to be minimal. More crucial must be instability arising from terrorist action inside South Korea--such as the assassination of the president---or dis- puted successions, either in South Korea in 1988 when President Chun's present seven-year term expires or in North Korea as Kim II-sung tries to install his son, Chong-il. Although President Chun has argued that the next few years are the most likely for a North Korean attack, the faltering steps towards a dialogue, even though the economic and Red Cross talks due in January 1985 were postponed, may lead to an easing of tension on the peninsula. That situ- ation would enable those European businessmen and officials who believe that there are opportunities available for trade and investment in Korea to adopt a more confident profile.

The EC's discussions with South Korea are likely, in due course, to follow the pattern of its dialogues with other Asian partners, such as Japan and ASEAN, intending to move away from a preoccupation with bilateral economic issues to cover broader political and strategic questions. Although the EC fears that South Korea will follow the same path as Japan in its economic policies, the opportunities are there for EC-R.O.K. relations to avoid the somewhat sterile route that EC-Japan relations have taken.

N O T E S

1. Louis Turner, "Western Europe and the NICs," in Louis Turner and Neil McMullen, The Newly Industrializing Countries: Trade and Adjustment (London: George Allen & Unwin for Royal Institute of International Affairs, 1982), p. 137.

2. That imports from the NICs were only a partial explanation for the European textile industry's ills is demonstrated by Stephen Wootcock, chap. 3 in Turner and McMullen, ibid.

3. Commission of the European Communities, The European Communities and the Republic of Korea, April 1984, p. 5.

4. Financial Times, March 24, 1983.

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5. Turner, op. cit., pp. 138-39. 6. Far Eastern Economic Review, November 1, 1984. 7. Agence Europe, May 11, 1984. 8. Financial Times, September 18, 1981. 9. Business Korea, November 1984.

10. A senior North Korean official told a visiting Japanese delegation late in September that his government had been thinking of "mainly the West European countries" as partners in joint ventures. Nihon Keizai Shimbun, October 16, 1984.

11. Le Monde, December 13, 1983. 12. lbid,, November 12, 1984; Korea Newsreview, December 22, 1984; Financial Times, De-

cember 31, 1984, and April 10, 1985. 13. Speech to Royal Asian Society, January 25, 1984, printed in Asian Affairs, June 1984, p.

233. 14. International Herald Tribune, August 10, 1982, 15. Korea Newsreview, April 28, 1984. 16. International Herald Tribune, June 20, 1984. 17. Economics professor and Daewoo adviser Kim Duk-choong, interviewed in Euro-Asia Busi-

ness Review 1, no. 1 (1982): 61.

europe and korea: an awakening relationship

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