Russia's invasion of Georgia last month seriously undermined peace and security in Europe for the first time in years, CDDRL Director Michael McFaul told the House Committee on Foreign Affairs on September 9. Russia's military actions and subsequent decision to recognize South Ossetia and Abkhazia as independent states, McFaul said, represent a fundamental challenge to the norms and rules that help to promote order in the international system.

"Instead of business as usual or isolation, the United States must navigate a third, more nuanced, more complicated, and more comprehensive strategy that seeks to bolster our allies and partners, check Russian aggression, and at the same time deal directly with the Russian government on issues of mutual interest. The long term goal of fostering democratic change and keeping the door of Western integration open for countries in the region, including Russia, must not be abandoned. American foreign policy leaders have to move beyond tough talk and catchy phrases and instead articulate a smart, sustained strategy for dealing with this new Russia, a strategy that advances both our interests and values."

For the past ten years, Japan has undergone aggressive, government-driven reforms aimed at changing its financial systems, labor markets, and corporate governance institutions. Faced with the challenges of globalization and an ageing population, Japan undertook these reforms to regain its former competitiveness. What remains uncertain, however, is whether these reforms will also be effective in creating an environment
that is more favorable to entrepreneurship and innovation. If the reforms are effective, at what pace, and in what shape will new firms emerge? Will Japan’s system mirror the institutions that have evolved in regions such as Silicon Valley, or will it develop into a new framework of innovation?

The persistent decline in Japanese asset values during the 1990s engendered many policy and legal responses. Among these was a series of business policy and associated legal reforms intended to foster the creation of new companies, new industries, and new financial institutions. Starting in 1997, these reforms included changes in how firms are formed. For example, the capital required to start a stock-issuing firm was reduced from ten million yen to a mere one yen. The yugen kaisha—a secondary form of Japanese company—was also abolished and the limited liability partnership created instead. Holding companies were allowed, mergers were deregulated, treasury shares were authorized, and the liability of company directors was limited.

Additional reforms were promulgated to encourage new forms of financial intermediation. Tax benefits created for “angel” investors, foreign venture capitalists, foreign private equity, and foreign lawyers became common. Purchase of shares with shares, triangular mergers, and repurchase of shares were all allowed. Moreover, several new stock exchanges were created expressly for relatively new companies.

Corporate governance laws were also revised. For one, Japanese firms may now use U.S.-style board of director committees, with an upper limit placed on directors’ liabilities. Japanese auditors are now required to be outsiders, and consolidated accounting is likewise compulsory, as well as “mark-to-market” rules for financial reporting. These are just a few of the changes, all of which combine to increase transparency in Japan’s markets.

The results were noticeable. By 2006, new companies were garnering price-to-earnings ratios of greater than 100 to 1 in the new markets; the number of IPOs per year was comparable to the rate during the U.S. Internet bubble; and the mergers and acquisition market was transformed from one of the most moribund in the world to one of the most dynamic. Venture capital firms proliferated, as did new law firms, private equity firms, and foreign banks. Existing Japanese banks merged, new banks formed, and money-lending began again. Some new companies even gained sufficient liquidity and stature to turn their founders into celebrities and some of the wealthiest people in Japan. Rakuten, Mixi, ValueCommerce, and Cybird are just a few of these success stories. Japan is currently in its seventy-first month of economic expansion—the longest of the postwar period.

The future, however, is unclear. As Professor Yoko Ishikura, of Hitotsubashi University, recently observed at a SPRIE seminar at Stanford, “Japan is at a turning point and it is uncertain which direction it will choose.” For 2008, IPO valuations have returned to levels more comparable to those in the United States, and the climate for startups has moderated somewhat. New company startup rates are flat and IPO rates have recently dipped significantly. Some prominent studies of the entrepreneurial climate in various countries rank Japan among the least favorable. Many observers are impatient for more evidence of results from the reforms. It remains an open question whether Japan is being affected by the U.S. slowdown and commodity price increases, or if the country is simply retreating from it entrepreneurial gains.

In light of these developments, scholars remain curious: Are the reforms permanently changing the Japanese economy? Are the reforms sufficient to meet the challenges that Japan faces? Will the reforms be effective? Alternatively, are these reforms even desirable? SPRIE and the U.S.-Asia Technology Management Center, in cooperation with selected experts and research organizations in Japan, are undertaking
a major project to study the seemingly contradictory corporate and social climate in Japan, which is at present stretched between entrepreneurial and more conservative forces.

Japan’s economic relationship with the countries of the Pacific Rim—and indeed with the rest of the world—is vital to all of the economies involved. If Japan is transforming into a new economic culture, an understanding of that transformation is relevant both to global economic development and to the study of entrepreneurial growth.

Southeast Asia in Political Science: Theory, Region, and Qualitative Analysis is now available for purchase from Stanford University Press.  Co-published with the East-West Center, the book is innovative in several respects.

First, it reflects new thinking by younger scholars.  Its editors are all assistant professors  of political science specializing on Southeast Asia:  Erik Martinez Kuhonta (McGill University), Dan Slater (the University of Chicago), and Tuong Vu (the University of Oregon, Eugene).  

Southeast Asianist assistant professors also account for seven of the volume's other contributors:  Regina Abrami (Harvard Business School), Jamie Davidson (National University of Singapore), Greg Felker (Willamette University, Salem, Oregon), Kikue Hamayotsu (Northern Illinois University), Allen Hicken (University of Michigan, Ann Arbor), Ardeth Maung Thawnghmung (University of Massachusetts, Lowell), and Meredith L. Weiss (State University of New York, Albany).  

Three senior scholars round out the table of contents:  Richard F. Doner (Emory University), Donald K. Emmerson (Stanford University), and Ben Kerkvliet (Australian National University).  

Second, the book is a "state of the art" review of political science knowledge of Southeast Asia.  Nothing else like it exists.  What do we really know about, the state, political economy, political parties, ethnic and religious politics, rural politics, globalization and politics, democracy or the lack of it, and political life generally in Southeast Asia?  For scholars, students, and the interested public, this book is a unique place to pursue the answers.  

Third and also distinctive is the book's exploration of unchartered intellectual terrain-the simultaneously productive and turbulent overlap between Southeast Asian studies and political science.  Are the area and the discipline at odds?  Do they offer rival methods and clashing epistemologies?  Or are place-based knowledge and disciplinary ambitions mutually enhancing?  The authors of the volume wrestle with these questions as well.

The idea behind Southeast Asia in Political Science dates from the conference Southeast Asia in Political Science: Theory, Region, and Qualitative Analysis organized by SEAF at Stanford in 2004 while Erik Kuhonta was at APARC as a Shorenstein Fellow.

As oil prices surge through $140/barrel at the time of writing, surely one can at least count on the invisible hand of the market to drive further exploration and production and ultimately bring more supplies on line, right? Or perhaps, more ominously, high oil prices presage a darker future of shortage and conflict as global oil fields pass their geological “peak”? In fact, both positions miss a crucial point about the dynamics of the world oil market — that it is increasingly animated by the counterintuitive behavior of the state-owned oil and gas giants that now control the vast majority of the world’s hydrocarbon resources.

“On average national oil companies (NOCs) extract resources at a far lower rate than international oil companies (IOCs), leaving about 700 billion barrels of oil effectively ‘dead’ to the world market.”So-called “national oil companies,” or NOCs, own about 80 percent of the world’s proven reserves of oil, a percentage that has been on the rise as the persistent high price environment encourages countries to assert even tighter control over the rent streams flowing from their resources. NOCs are curious and variegated beasts, and, contrary to the popular imagination, some are highly capable both technically and organizationally. Brazil’s Petrobras is an acknowledged world leader in deepwater drilling, while Norway’s StatoilHydro is highly regarded for its competence and transparent business practices. Saudi Arabia’s national champion, SaudiAramco, is secretive to the outside world but generally considered to be a well-run, technically capable organization. At the other end of the continuum, government infighting and micromanagement hobble Mexico’s Pemex and Kuwait’s KPC. Once-independent PDVSA in Venezuela has been remade by President Hugo Chávez into a government puppet that spends liberally on social programs but consistently undershoots its production targets. And indeed some national oil companies are hardly oil companies at all — Nigeria’s NNPC, for example, is mostly a rent-seeking bureaucracy.

What NOCs do share in common as distinct from the familiar international oil companies (IOCs) is being answerable to a host government, which inevitably brings with it some focus on objectives other than simple profit maximization. Typically, an NOC arises originally from the desire of resource-rich governments (“principals”) to gain more effective control over resource extractors (“agents”) by creating an oil champion owned by the state. Prior to NOC formation, governments are frequently (and often justifiably) wary of exploitation by the foreign oil operators providing hydrocarbon extraction services. Lacking a deep understanding of the costs of production, states are simply unable to be sure they are taxing their agents appropriately. In addition to enhancing control over the hydrocarbon sector and the revenue it brings, states may hope for other benefits from the NOC: cheap energy to fuel a growing economy, employment and development of local industry to support the hydrocarbon sector, or even foreign policy leverage derived from control of key resources.

Image

A detailed study of NOC performance and strategy at the Program on Energy and Sustainable Development at FSI suggests a useful way of thinking about the effects of NOC resource domination on world oil and gas markets. Price versus quantity supply curves from classical economics assume that increased price will spur efforts to expand supply. Unfortunately, the counterintuitive reality for NOCs is that, when it comes to expanding supply in the current high-price environment, most either 1) can but don’t want to or 2) want to but can’t. The end result is what one could call a “backward-bending” supply curve — additional price increases do little or nothing to boost supply.

“The world has plentiful hydrocarbons in the ground, but that’s where many of them are going to stay due to the unique organizational and political dynamics of the NOCs.”In the “can but don’t want to” category are resourcerich governments that have decided they cannot assimilate any more money. Already, their investments are running into political resistance around the globe — witness Dubai’s failed attempt to purchase U.S. port management contracts, CNOOC’s failed bid for Unocal, or the increasing calls for curbs on the activities of sovereign wealth funds. Nations may decide they have enough cash and are better off leaving resources in the ground where they safely await monetization at a later date.

In the “want to but can’t” camp are countries and their NOCs that are simply unable to provide the stable political and regulatory climate to support additional build-out of expensive production and transport infrastructure. This situation is particularly common for natural gas, where long investor time horizons are needed to bankroll the multibilliondollar capital costs of pipelines or liquefied natural gas (LNG) terminals.

Meanwhile, international oil companies are left on the sidelines salivating helplessly over the vast reserves in NOC hands. Venezuela’s Orinoco region could yield hundreds of billions of barrels of heavy crude, but the government and a nowpliant PDVSA invite favored countries and their NOCs to explore rather than selecting the operators most capable of extracting the challenging but plentiful resource. Technical expertise and massive investment are required to fully develop vast Russian gas fields including Kovykta, Shtokman, and Yamal, but IOCs already burned by nationalizations and shifting rules in these and other Russian ventures are unlikely to be in a position to supply enough of either. In the face of dwindling resources they can tap, IOCs will need to diversify their business models, perhaps tackling technologically challenging options like oil sands or liquids from coal in conjunction with the carbon storage techniques that could make these palatable from a climate change perspective. Ironically, the only “easy” oil for IOCs has become oil that is geologically and technologically difficult.

While oil price is dependent on many factors (including global economic health) and is impossible to forecast with certainty, one can confidently predict continued tight supply of oil and gas, especially given global demand that will be propped up indefinitely by rising consumption in China and India. The world has plentiful hydrocarbons in the ground, but that’s where many of them are going to stay due to the unique organizational and political dynamics of the NOCs. Leverage over the market is weak; measures to reduce demand for oil and gas (though politically unpopular) or to spur development of alternative fuels and associated infrastructure (though slow to develop at scale) may be all that we have.

One of Stanford's many remarkable attractions is the Rodin sculpture garden. And perhaps the most extraordinary Rodin sculpture is his Gates of Hell, inspired by Dante’s “Inferno.” In his Divine Comedy, Dante tells us that the inscription over the Gates of Hell is “abandon all hope, ye who enter here.”

For hundreds of millions of people, that sad admonition belongs over their workplace. Abandon all hope … and not only your hope. Abandon your health and your right to associate; and don’t expect to be paid much.

That problem — the terrible unfairness of so many people having to sacrifice so much simply to make a living — provides the focus for the Just Supply Chains project of the Program on Global Justice (PGJ). Because of resistance to such working conditions, and pressure from movements against sweatshops, many companies have adopted codes of conduct for themselves and their suppliers over the past decade. But studies of these “private voluntary codes” have generated considerable skepticism about their effectiveness in improving compensation, working conditions, and rights of association. The aim of the project is to explore how codes and monitoring for compliance might be improved and also to consider some alternatives to private voluntary codes for regulating global labor markets.

PGJ has held two meetings, with participation from academics (from Stanford and elsewhere), NGOs (Fair Labor Association, Ethical Trading Initiative, Workers Rights Consortium), companies (Ford, Nike, Gap, Coca-Cola, Apple, HP, and Costco), and unions (including the International Textile, Garment and Leather Workers’ Federation). Through wide-ranging discussions, participants identified a set of research topics: whether consumers are willing to pay more for goods produced under decent conditions, whether there is a “business case” for improved labor standards, what the effects on labor standards will be of current reorganizations of supply chains in response to growing transportation costs, and how national labor-inspection systems might work better under conditions of globalized production. The next step is to establish working groups, combining academics and practitioners, to refine these topics and start to answer open questions about how to promote more decent working conditions in global supply chains.

In addition to the Just Supply Chains project, PGJ has been working to launch some other interdisciplinary, policy-oriented research initiatives. Along with colleagues in the School of Earth Sciences, the Interdisciplinary Program on Environment and Resources, FSI’s Center on Food Security and the Environment (FSE), the Ethics Center, and the Woods Institute, PGJ is a partner in an NSF proposal aimed at establishing a training program for graduate students in social sciences and climate science on the differential vulnerability of human-environment systems to climate change, the ethical implications of such differential vulnerability, and the role of institutions in shaping the adaptive capacity of communities.

PGJ is also working on a project on Liberation Technology, bringing together social scientists with researchers in applied technology interested in economically, socially, and politically constructive uses of new information technologies (to enable producers to learn more about markets, citizens to monitor elections and hold officials accountable, and public service providers to identify where those services are most needed). Finally, the Program on Global Justice is launching a Human Rights project, with support from the Presidential Fund for Innovation in International Studies, for historical and comparative research on the roles of political mobilization and legal protections in securing human rights.

Michael Wara and David G. Victor's recent work "A Realistic Policy on International Carbon Offsets" addresses problems with the world's largest offset program, the UN's Clean Development Mechanism. Wara and Victor argue that much of the CDM investment doesn' actually meet the UN's crucial additionality standards, and they outline ways to fix the problem.

David Victor Discusses Climate Policy, Offsets, and Incentives in the Wall Street Journal

In the News: Wall Street Journal on July 23, 2008

Income from carbon offsets has become French chemical manufacturer Rhodia SA's most profitable business. The WSJ estimates payouts to the firm from projects in Brazil and South Korea could total $1 billion over seven years, raising questions about the incentive structure of the CDM. David G. Victor argues that carbon markets are not sending the appropriate signals to the developing world.

• » Wall Street Journal

Michael Wara and David Victor Address the Role of Offsets in California's Cap and Trade Plan

In the News: Science Magazine

California's plan to cut carbon emissions 10% by 2020 relies on offsets as a part of a cap and trade scheme. Michael Wara points out the challenges that face the state as it designs its offset program, and David G. Victor sheds light on difficulties faced by the world's largest offset program, the UN's CDM protocol.

• » Science Magazine

Michael Wara Discusses Coal and the CDM

In the News: Wall Street Journal on July 11, 2008

The CDM Executive Board recently approved several gas-fired power plants under the UN's carbon offset scheme, opening the door for subsidizing coal generation and stoking controversy. Michael Wara questions the additionality of such projects and argues subsidies are better spent on other clean-energy development.

•  
• » Wall Street Journal

Leading matters is an inspirational stanford tour that reveals how the university is changing and reinventing itself. Designed exclusively for Stanford alumni, family, and friends, Leading Matters is being held in 17 locations that stretch from London to Hong Kong. Speakers include Stanford President John Hennessy, distinguished deans, and faculty. Each event features thought-provoking faculty panels, stimulating seminars, and a state-of-the-art media presentation.

Several FSI faculty members presented their research findings at Leading Matters events in Seattle, San Diego, and Hong Kong, which were sponsored by The Stanford Challenge and the Stanford Alumni Association.

In Seattle, on January 26, FSI faculty led the panel, “Emerging Superpowers: Influence and Supremacy in the 21st Century,” which addressed how the landscape of world power has evolved since the end of the Cold War and what factors contribute to the making of current superpowers.

The panel, moderated by Dean Robert Joss of the Graduate School of Business, included William J. Perry, Michael and Barbara Berberian Professor, FSI Senior Fellow, and the 19th secretary of defense; Michael A. McFaul, professor of political science, Peter and Helen Bing Senior Fellow, Hoover Institution, and director of CDDRL; and Stephen J. Stedman, professor of political science (by courtesy) and senior fellow at CISAC and FSI. Said Perry, on efforts to reduce nuclear arms worldwide, “If we want to end the dangers that nuclear weapons pose to our civilization, we should not be waiting for divine intervention. We ourselves must take the necessary action.”

Rosamond L. Naylor, director of the Program on Food Security and the Environment and Julie Wrigley Senior Fellow, presented as part of the panel, “Big Plans for a Small Planet: Can We Feed the World Without Wrecking the Oceans?” moderated by Dean Pamela Matson of the School of Earth Sciences. Addressing some of the economic and environmental ramifications of the world’s growing dependence on the oceans for food, Naylor said, “Promoting environmentally sustainable fish farming operations requires knowledge of waste flows from open netpens, the ecological impacts of farming on wild fish populations, the economics of farming, and the regulatory Decisive Gifts Enable Summer Fellows Program to Continue with Bold Vision institutions governing the industry. Stanford is unique in integrating all of these factors into its analysis of the aquaculture sector.”

In San Diego, on March 8, Dean Richard Saller of the School of Humanities and Sciences moderated a panel on “Clash of Cultures,” featuring Stephen D. Krasner, Graham H. Stuart Professor of International Relations and FSI Senior Fellow; Abbas Milani, Moghadam Director of Iranian Studies, research fellow and co-director of the Iran Democracy Project at the Hoover Institution; and Martha Crenshaw, professor of political science (by courtesy) and senior fellow at CISAC and FSI. They explored how cultural differences influence power relations between nations in the post–Cold War world. Said Crenshaw, “Actually, the ‘new’ terrorism is not so different from the ‘old’ in terms of goals, methods, and organization. Terrorism in a variety of forms has occurred in all cultural contexts. What all expressions of the phenomenon have in common is political motivation. Terrorist violence is best understood as politics, not culture.”

In Hong Kong on April 19, President Hennessy and FSI Director Coit D. Blacker addressed the changing balance of power between the U.S., China, and India. Scott Rozelle, Helen F. Farnsworth Senior Fellow, spoke on the panel, “Troubled Waters,” moderated by Dean Pamela Matson. Noting that more than 1.1 billion people have no access to safe or plentiful water, Rozelle addressed implications for global health and economic development.

Asked Rozelle, “Is China facing a water crisis? Some say yes. It could destablize China. It could even push China to ‘starve the world’ by reducing its ability to produce food and force it to turn to international markets, which would push up the cost of food globally. Can Stanford’s research help build ‘bridges’— sound policy bridges — over troubled waters? Should Freeman Spogli Institute researchers be involved in such work? We believe the answer is unequivocally yes. We are getting involved in the solutions to society’s most complicated problems. We are building partnerships with government officials, academics, and community leaders — and most of all the poorest of the poor, in trying to become builders of bridges.”

Over more than six decades, the partnership between the United States and the Republic of Korea has been subject to many stresses and strains, from the Korean War to coping with the challenge of North Korea’s nuclear ambitions. More recently, the democratization of South Korea has opened the alliance to much greater public scrutiny and pressures from an active and mobilized Korean public. Managing this strategic alliance in an era of democracy has been a focus of the research work on Korea conducted by FSI’s Walter H. Shorenstein Asia-Pacific Research Center.

With the election in December of Lee Myung-bak as South Korea’s president, ending two terms of progressive rule, Shorenstein APARC decided to launch a nonpartisan group of former senior U.S. government officials, scholars, and other American experts on Korea to explore how to revitalize the U.S. alliance with the Republic of Korea (ROK) after a decade of tensions. In partnership with the New York-based Korea Society, Shorenstein APARC assembled this policy study group at Stanford in early February for in-depth discussion of the challenges facing the alliance and then took the group to Korea for meetings with key figures, from President-elect Lee and his advisors to leaders of the opposition, Korean businessmen, and American diplomats and security officials.

Based on these intensive meetings, the members of this “New Beginnings” policy study group concluded that the United States now has a major opportunity to bolster and broaden its relationship with the ROK. Lee, Korea’s first businessman to be elected president and a self-proclaimed “pragmatist,” has stressed that he gives top priority to the United States in his foreign policy. His fixed five-year tenure will coincide with the entire first term of the next U.S. president, allowing the two new leaders an extended period of cooperation.

Immediately before Lee’s first visit to the United States as president in mid-April, New Beginnings members led by Shorenstein APARC Director Gi-Wook Shin, APARC Distinguished Fellow Michael H. Armacost, and Korea Society President Evans J.R. Revere visited Washington, D.C., and New York City to release their report, New Beginnings in the U.S.-ROK Alliance: Recommendations to U.S. Policymakers. They also addressed a forum in San Francisco co-hosted by the World Affairs Council and the Asia Society of Northern California on June 3 to discuss their recommendations and subsequent developments in U.S.-South Korean relations. The report received extensive coverage in the South Korean news media and was noted in American media as well.

Surrounded by a rising China, a more assertive Russia, a Japan seeking a greater international role, and a nuclear North Korea, the ROK can play a key role in working with the United States to maintain peace and stability in East Asia. No effort to address the nuclear and other challenges posed by North Korea is likely to succeed without the closest U.S.-South Korean cooperation. The ROK, as the world’s 13th-largest economy and one of Asia’s most democratic countries, is a model of the virtues of a market economy, of the values of freedom and human rights, and of alignment with the United States. The two countries are also bound by personal ties: 2 million people of Korean descent live in the United States, and 100,000 Koreans come to the United States each year for study and exchanges, more than from any other country.

President Lee’s election reflects four key changes in South Korea: (1) a shift from the political left back toward the center; (2) greater skepticism about North Korea; (3) increased wariness of China; and (4) enhanced support for the U.S.-ROK alliance. The protests against the United States seen in South Korea in 2002 were the result in part of transitory circumstances and no longer reflect the reality there.

President Lee seeks a global partnership with the United States while maintaining good relations with Korea’s neighbors, Japan, China, and Russia. He favors improved relations with North Korea and has stated his willingness to meet North Korean leader Kim Jong-Il. In major departures from the earlier “sunshine” policy of the South Korean government toward North Korea, however, Lee will not provide large-scale economic assistance to the North until after it abandons its nuclear weapons program. In another major departure from the previous ROK policy, he has also criticized human rights abuses in North Korea. Lee supports continued food and other humanitarian aid to the people of North Korea.

New Beginnings group members believe that the United States cannot afford to lose the opportunity presented by President Lee to build a global partnership with one of the United States’ most important allies. The group identified a number of steps that the United States, in cooperation with the ROK, could take to move the alliance into a new era (see sidebar).

The New Beginnings group has announced that it plans to continue its efforts in support of strengthened U.S.-South Korean relations. Among other projects, the group intends to present recommendations early next year to the South Korean government on how to develop a close relationship and bolster the alliance with the incoming U.S. administration.

Recommendations to United States Policymakers

• Global Partnership — Building on the cooperation between Presidents Bush and Lee, the new U.S. president next year should issue a vision statement with Lee detailing their partnership and goals for the alliance. To advise them, the two new presidents should establish a bi-national panel of distinguished Koreans and Americans. The United States and the ROK should also give increased emphasis to the foreign ministerial strategic dialogue they initiated in 2006.
• Security Alliance — We support the ongoing realignment of U.S. forces in the ROK. Congress should increase its budget for the relatively small U.S. portion of the total cost of its implementation. The decision to transfer wartime operational control of Korean forces back to the ROK in 2012 was likewise correct, but the United States should respond positively to any South Korean proposal to discuss conditions related to the transfer. We welcome the Lee administration’s apparent desire to review the main North Korea war plan and to prepare jointly for other contingencies, including that of a North Korean collapse. The United States should conduct regular, joint consultations with South Korea and other allies in East Asia to determine whether security conditions warrant changes in our respective force levels and, if so, in what direction.
• North Korea — The ROK election has brought the United States and South Korea into essential agreement, for the first time in seven years, on how to deal with North Korea and its nuclear aspirations. To avoid the danger that their North Korea policies will again diverge, they must establish stronger consultative mechanisms, including with Japan.
• Economy and Trade — Congress should ratify the U.S.-ROK Free Trade Agreement now. U.S. failure to approve the FTA would not only represent foregone business opportunities; it would damage U.S.-ROK relations and be seen by the international community as a weakening of U.S. self-confidence and engagement, in East Asia and around the globe.
• People-to-People Ties — The U.S. government should set an early target date to include the ROK in the Visa Waiver Program and encourage the Korean government to support a major expansion of the Fulbright Program’s English Teaching Assistant Program. The United States should create a new program to allow U.S. federal employees to intern in Korean ministries and increase the budget for the State Department’s International Visitor Program for young South Korean leaders. U.S. military personnel stationed in Korea should be joined by their families. The United States should, at long last, construct a new U.S. embassy in Seoul.