Diplomatic ties, industry in turmoil as nation yet to stabilize after martial law

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Diplomatic ties, industry in turmoil as nation yet to stabilize after martial law

Published: 08 Dec. 2024, 18:20 Updated: 09 Dec. 2024, 14:11

SEO JI-EUN
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Audio report: written by reporters, read by AI

President Yoon Suk Yeol speaks during the first session of the 19th G20 Summit in Rio de Janeiro, Brazil, on Nov. 18. [YONHAP]

The dismissal of the impeachment motion against President Yoon Suk Yeol has done little to stabilize Korea’s political landscape but raised concerns around the nation’s waning diplomatic leverage and the ripple effects on its booming defense industry.

Prominent U.S. think tanks sharply condemned Yoon’s martial law declaration, calling it a blow to democratic norms.

Victor Cha, Korea chair at the Washington-based Center for Strategic and International Studies (CSIS) and a former director for Asian Affairs at the U.S. National Security Council (NSC), said the move has "opened up a protracted period of political instability in Korea at a most inopportune time," with threats mounting from China, North Korea and Russia.

Writing in the Financial Times on Saturday, Cha warned, “Korea might become the latest victim of democratic backsliding,” adding that the crisis could "come at a high economic and political cost for Korea, the [United States] and the world."

Lee Chung-min, a senior fellow at Carnegie Endowment for International Peace, echoed such sentiments in an article on Thursday, saying, “Yoon should never have chosen to announce martial law, but he did so at the most precarious moment of his presidency and amid mounting external challenges," adding that it will "take several weeks and months before the dust settles."

Republican Presidential nominee and former President Donald Trump arrives to speak at the 2024 Republican National Convention at Fiserv Forum in Milwaukee, Wisconsin, on July 18. [YONHAP]

The implications are particularly concerning as Korea prepares to navigate diplomatic relations with the incoming Trump administration. Former President Donald Trump, who is set to return to office in January 2025, is infamous for his fixed perceptions of allies and his relentless demands for financial contributions from U.S. partners. Analysts fear that Yoon’s damaged reputation could severely limit his ability to manage Korea-U.S. ties effectively.

North Korea could exploit South Korea’s weakened political state with provocations, while escalating U.S.-China tensions threaten to ripple through Korea’s trade-dependent economy.

"Fractured politics at the top will only weaken the government’s ability to respond decisively and win public approval for its response to external challenges," Lee added.

The international ramifications of the political turmoil are already evident, with several high-profile diplomatic meetings having been postponed or canceled.

The Korea-U.S. Nuclear Consultative Group's fourth round of talks, initially scheduled for Dec. 4 to 5 in Washington, were abruptly delayed. The forum, a symbol of the two nations’ strengthened security partnership, was postponed indefinitely despite Korean officials already being in the United States.

Swedish Prime Minister Ulf Kristersson postponed his Dec. 5 visit, leaving critical bilateral discussions in limbo.

“The right to peaceful protest is an integral element of a healthy democracy,” a White House NSC official said Saturday in what appeared to be a veiled critique of Yoon’s martial law restrictions.

While reaffirming the “ironclad” U.S.-Korea alliance, the official said Washington would "continue to call for the full and proper functioning of [Seoul's] democratic institutions and processes, in accordance with the Constitution."

Japanese Prime Minister Shigeru Ishiba attends the East Asia Summit in Vientiane, Laos, on Oct. 11. [YONHAP]

Korea’s relations with Japan, already fraught with historical grievances, have taken another hit.

Plans for former Japanese Prime Minister Yoshihide Suga to visit Korea this month were scrapped. Similarly, a summit between Yoon and current Japanese Prime Minister Shigeru Ishiba scheduled for January is now uncertain, with Ishiba reportedly pivoting to visit Indonesia instead.

Japanese media have voiced concerns that Korea’s internal instability will hinder bilateral cooperation, especially with 2025 marking the 60th anniversary of normalized diplomatic ties. The media described the martial law crisis as a blow to progress in Korea-Japan relations and a potential threat to trilateral cooperation with the United States.

"The confusion caused by Korean President Yoon Suk Yeol's declaration of emergency martial law has left Japan-Korea relations in a state of uncertainty," reported the Nikkei Shimbun on Sunday. "Although the impeachment bill was rejected by the Korean National Assembly, Yoon, who had led the improvement of Japan-Korea relations and worked toward Japan-U.S.-Korea cooperation, has lost his centripetal force."

The Yomiuri Shimbun expressed concerns on "the weakening deterrent power against China, Russia and North Korea."

Korea’s defense industry, a cornerstone of its economic growth, is also feeling the heat. The martial law crisis has cast doubt on the nation’s reliability as a defense partner, especially as defense exports are largely reliant on trust between governments.

Kyrgyzstan President Sadyr Japarov, who was on a state visit when the martial law was declared, canceled a high-profile visit to Korea Aerospace Industries (KAI) in Sacheon, South Gyeongsang, on Dec. 4, where he was expected to observe test flights of the Korean Utility Helicopter. He left the country that day.

A miniature of Hanwha Ocean's Chanbogo-III submarine is displayed during the "Hanwha Ocean Poland Industry Day" in Gdansk, northern Poland, on May 24. [HANWHA OCEAN]

Key players in Korea's defense industry, such as HD Hyundai Heavy Industries and Hanwha Ocean, said that there are currently no planned visits from foreign military officials to inspect their shipbuilding facilities.

“Given the damage to Korea’s international credibility caused by the martial law declaration, it will be difficult to avoid negative impacts on defense exports,” said an anonymous official in the defense industry.

Major international defense projects lying ahead include Poland’s Orka Project, estimated to be worth 3.35 trillion won ($2.35 billion), which aims to acquire three to four advanced submarines. Canada’s Defense Ministry is seeking to procure 12 cutting-edge submarines, estimated at 60 trillion won, representing a major opportunity for Korean shipbuilders.

Industry leaders are urging the government to play a more active role.

“Amid some possible delays from the aftermath of the martial law declaration, the government must not relinquish its position as a control tower for defense exports, maintain stability and actively support Korean companies to secure [critical] contracts,” said Chae Woo-seok, president of the Korea Association of Defense Industry Studies.

BY SEO JI-EUN, PARK YOUNG-WOO [[email protected]]