Barack Obama will assume the U.S. presidency amidst exceedingly high expectations. Perceptions that direct U.S. engagement with Pyongyang will secure an accelerated North Korean denuclearization, and that Washington will more readily incorporate the wishes of foreign nations, will eventually clash with reality.

As the vagaries of campaign promises are fleshed out with more detailed policy blueprints, differences between the new Obama administration and its Asian allies could arise. U.S. demands for Korean and Japanese ground troops in Afghanistan will not end with the Bush administration. Washington will continue to press Seoul and Tokyo to assume larger regional and global security roles even as the U.S. looks beyond traditional bilateral alliances to resolve pan-Asian problems.

Ideological differences between liberal President Obama and conservative President Lee Myung-bak could cause frictions in the bilateral relationship. This will be most acute in trade relations as a result of a more protectionist U.S. president and Congress. The South Korea-U.S. (KORUS) free trade agreement faces an increasingly hostile environment in Washington. Korean proponents will be faced with the Hobson's choice of accepting more intrusive measures to increase U.S. auto sales or watch the FTA wither and die.

Perhaps most troubling for Seoul may be that Northeast Asian issues do not figure as prominently on the new president's agenda as it would hope. Economic issues will occupy the lion's share of the new U.S. administration's attention during its first year. There will also be pressure for the Democratic Party-controlled Congress to implement legislation in response to a pent-up demand for an expansive social agenda.

The foreign policy discussion will be dominated by Iraq, Afghanistan, and Iran. Yet, North Korea has historically shown an aversion to being ignored. If Pyongyang feels the Six Party Talks or direct talks with Washington are not achieving its objectives, look for Kim Jong-il to return to provocative brinksmanship.

Affirming a stronger and more comprehensive U.S. alliance

During the presidential campaign, Senator Barack Obama emphasized the importance of South Korea as a military ally, a strong economic partner, and a nation that shares the values of freedom and democracy with the United States. Obama commented on the need for strong alliances with South Korea and Japan to achieve U.S. security objectives, including maintaining peace and stability in northeast Asia. He described the U.S.-South Korean alliance as a "remarkably strong and successful one 'that' remains central to U.S. security policy in East Asia."

Senator Obama affirmed President George W. Bush's objective to transform the existing military relationship into a 21st century strategic alliance that goes beyond deterring North Korean aggression and achieving denuclearization of the peninsula to address transnational threats such as terrorism, non-proliferation, energy security, trafficking in persons and pandemics.
 
With a greater role comes greater responsibilities. In adopting a "more collaborative approach on terrorism" that shifts the primary zone of conflict from Iraq to Afghanistan, the Obama administration will "seek greater contributions (in Afghanistan) - with fewer restrictions - from NATO allies as well as our friends and allies in Asia." Washington will continue to look for Seoul and Tokyo to deploy ground units into Afghanistan as part of a renewed effort against extremist groups. South Korea and Japan will find such a request to be problematic due to declining domestic support for these missions. Seoul removed its troops in Afghanistan this year. An Obama administration decision to press its Asian allies on supporting counter-terrorism operations in Afghanistan could lead to friction and even demonstrations if Washington requests combat units rather than combat support units.

Inheriting a lethargic North Korean denuclearization process

The most difficult bilateral security challenge the United States and South Korea will face is achieving a complete denuclearization of North Korea. Yet, there is near euphoria in South Korea that Barack Obama's election will bring about a breakthrough in the long-troubled negotiations. Senator Obama has blamed the Bush administration's initial hardline policy for North Korea's nuclear breakout, neglecting North Korea's role in instigating the crisis.

Pyongyang began violating its international denuclearization commitments during the 1990s in the benign threat environment of the Bill Clinton and Kim Dae-jung administrations. The timing belies Pyongyang's assertions that the program was born of an inherent fear of foreign threat and in response to President George W. Bush's foreign policy.

Maintaining the current Bush approach

President Obama's policy toward North Korea will largely maintain Bush's recent "half a loaf is better than none" strategy which accepts partial North Korean compliance as sufficient justification for maintaining negotiations and providing benefits to Pyongyang.

Proponents argue that this approach focuses on the greatest threat to regional security, namely the plutonium-based nuclear weapons program. This strategy, however, has resulted in important principles, such as the enforcement of international law and attaining sufficient verification measures, being abandoned.

Obama will be more willing than President Bush to engage in senior-level diplomatic engagement, including a potential summit with Kim Jong-il. But it is far from certain that such tactical changes will achieve verifiable North Korean denuclearization. Kim Jong-il has shown a great reluctance to make concessions or an inclination to achieve real progress on diplomatic agreements with the United States or his neighbors. Pyongyang has repeatedly dashed the hopes of those advocating engagement. Perceived progress is habitually followed by threats, cancellations and demands.

Although there will be a perception of a major shift in U.S. policy, Obama will face the same constraints in achieving tangible progress with Pyongyang. During the past two years, the Bush administration has already engaged in the direct, bilateral diplomacy with Pyongyang that Obama advocates. Yet there has been continued North Korean intransigence, non-compliance, and brinksmanship. Nor have diplomats yet begun the real negotiations to discuss the actual elimination of nuclear weapons three years after Pyongyang agreed to do so.
 
Will actions match the rhetoric?

Obama has asserted the need for "sustained, direct, and aggressive diplomacy" with North Korea. He pledged to be "firm and unyielding in our commitment to a non-nuclear Korean peninsula, and vowed not to "take the military option off the table" in order to achieve "the complete and verifiable elimination of all of North Korea's nuclear weapons programs, as well as its past proliferation activities, including with Syria."

But President Obama may be reticent to resort to any pressure tactics when confronted with North Korean intransigence or brinksmanship. The tendency during the past two years of the Bush administration has been to repeatedly acquiesce to Pyongyang's demands and lower the bar for compliance in return for a semblance of "progress" in the negotiations. How willing would Obama be to declare that diplomacy has failed to achieve U.S. objectives or that North Korea has not fulfilled its obligations? How long would he be willing to wait and what criteria would he use to determine diplomacy had been exhausted?

With regards to North Korea's requirement to provide a data declaration, Senator Obama stated that "sanctions are a critical part of our leverage to pressure North Korea to act. They should only be lifted based on performance. If the North Koreans do not meet their obligations, we should move quickly to re-impose sanctions that have been waived, and consider new restrictions going forward." And yet, when Pyongyang didn't fulfill its obligation and produced an incomplete and incorrect data declaration, he did not advocate reimposing sanctions.

Similarly, Obama said a strict verification protocol was an absolute prerequisite for removing North Korea from the state sponsors of terrorism list, as well as for making further progress in the nuclear negotiations. But he accepted Bush's delisting decision even though the verification protocol has significant shortcomings and has been publicly criticized by Japan and privately by South Korea for its verification loopholes.

Strained trade relations ahead

Senator Obama is fiercely opposed to the KORUS free trade agreement, declaring it "badly flawed" for not doing enough to increase U.S. auto sales and gain greater market access in South Korea. During a June 2008 speech in Detroit, Obama stated, "I don't think an agreement that allows South Korea to import hundreds of thousands of cars into the U.S., but continues to restrict U.S. car exports into South Korea to a few thousand, is a smart deal." His criticisms echo the auto labor unions, which are fighting to defeat a trade bill that redresses the very problems they have complained about for years.

He points to the disparity in auto sales, implying a singular causality of Korean non-tariff barriers for the auto trade imbalance rather than a more comprehensive assessment including declining U.S. competitiveness. In May 2007, Obama chastised Detroit for its problems, pointing out that the spiraling cost of health care for retired autoworkers currently accounts for $1,500 of every GM car. He commented, "We have to be honest about how we arrived at this point. For years, while foreign competitors were investing in more fuel-efficient technology for their vehicles, American automakers were spending their time investing in bigger, faster cars ... the auto industry's refusal to act for so long has left it mired in a predicament for which there is no easy way out."

Obama and his supporters have repeatedly asserted he supports free trade and is not a protectionist. Yet he was against the Central America FTA, he opposes FTAs with Colombia and Korea and advocates reopening the North America FTA to insert new labor and environmental standards.

It is unlikely, however, that Obama would abandon his opposition to the FTA at a time when U.S. auto manufacturers are facing a dismal future. Nor would a Democratic-controlled Congress be willing to approve an FTA that is perceived as risking greater exposure to competition when U.S. auto companies are losing domestic market share to foreign firms.

In order for Obama to support the KORUS FTA, significant changes would be necessary to alter the disparity in U.S.-South Korean autos. Neither Obama nor his campaign has identified what measures he would require. Options include: reopening the KORUS agreement for additional negotiations; "side sweeteners" to auto manufacturers, such as a more expansive TAA legislation or U.S. government absorption of Detroit's legacy costs; or managed trade such that U.S. tariffs on the import of Korean cars is tied directly to increased sales of U.S. cars in South Korea.

Even if Obama were to rescind his opposition to the KORUS FTA, he would face an even more protectionist Democratic-led Congress that is increasingly hostile to free trade. As a result of the election, the Democrats gained greater majorities in both houses of Congress. The Democratic Party has historically been more protectionist due to its heavy reliance on support from organized labor. The auto unions, a key Democratic constituency, have demanded significant changes to the FTA.

Bilateral U.S.-South Korean trade relations are likely to be strained during an Obama administration given the certainty of more protectionist policies. Korean proponents of the FTA will have to reassess their strategy in light of the new trade paradigm that exists after the U.S. presidential election. A key decision will be whether to accept intrusive new auto provisions that may not be WTO-compliant in order to achieve U.S. approval of the trade pact.

However, the Lee Myung-bak administration has signaled that reopening negotiations on the FTA would be unacceptable. South Korea's auto manufacturers are also facing significant economic problems and would oppose government intervention to force enhanced U.S. sales. South Korea's auto unions are stridently militant and have frequently resorted to nation-wide strikes and protests to press their demands. Renegotiating the auto provisions of the FTA could lead to the same level of demonstrations against the Obama administration as the anti-U.S. beef demonstrations in early 2008.

What should be done

President Obama will enjoy an initial honeymoon period of enthusiastic South Korean response to his administration. He should use this time to restore U.S. credibility and prestige in Asia. Sending senior officials to Seoul for consultative meetings that underscore shared bilateral objectives and receptivity to South Korean concerns will garner strong Korean support. President Obama's representatives will also need to privately emphasize that the U.S. will continue to pursue its own strategic objectives.

Strengthen the U.S.-South Korean alliance

President Obama should continue military realignment and progress toward the strategic alliance, ensure close policy coordination amongst the United States, South Korea and Japan, and privately emphasize to South Korea that the United States will be looking for greater involvement in Afghanistan and that it would be better for Seoul to get ahead of the curve and offer troops prior to being publicly asked by Washington.

Establish principled engagement with North Korea

North Korean denuclearization is a critically important goal. But the ways and means in which it is attained are equally as important. Being excessively eager to compromise not only rewards abhorrent behavior but also undermines negotiating leverage necessary to get Pyongyang to abandon its nuclear weapons. The Obama administration should:

• Ensure North Korea fully completes Phase 2 (declaration and disablement) of the Six Party Talks and insist on a vigorous verification protocol.
• Use all the instruments of national power (diplomatic, informational, military, and economic) in a coordinated, integrated strategy. The United States and its allies should simultaneously use diplomacy with outside pressure to influence North Korea's negotiating behavior.
• Realize talking is not progress. The United States should favor resolving issues rather than repeatedly lowering the bar simply to maintain the negotiating process.
• Don't treat North Korea differently from every other country in the world. Insist that North Korea abide by international standards of behavior and not allow Pyongyang to again carve out a "special status" within the Non-Proliferation Treaty and IAEA Safeguards.
• Define redlines and their consequences. The Bush administration's abandonment of its stated resolve to impose costs on North Korea for proliferating nuclear technology to Syria undermined U.S. credibility and sent a dangerous signal to other potential proliferators.
• Consider establishing deadlines with consequences for failure to meet them. North Korea can't be allowed to indefinitely drag out the Six Party Talks in order to achieve de facto international acceptance as a nuclear weapons state.
• Begin contingency planning for a failure of the Six Party Talks to achieve full North Korean denuclearization. Pyongyang's obstructionist antics reflect an intent to be accepted as a nuclear weapons state. Identify measures, including financial sanctions, which could be imposed against those companies and nations in violation of U.N. Resolution 1718.
• Ratify the KORUS FTA. Barring that, KORUS proponents in the United States and South Korea will need to conduct a cost-benefit analysis to determine the extent to which they are willing to compromise on auto sector provisions in order to secure Congressional ratification. A changed political and economic landscape brought on by the global financial crisis may provide sufficient political cover for "updating" the provisions of the agreement. Simultaneously, those who advocate doing "something" to ameliorate auto sales disparities should first define their recommended remedies.

Bruce Klingner, is senior research fellow for Northeast Asia in the Asian Studies Center at the Heritage Foundation.