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Cablegate: Seoul - Press Bulletin; October 16, 2009

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UNCLAS SECTION 01 OF 04 SEOUL 001637

SIPDIS

E.O. 12958: N/A
TAGS: PREL PGOV MARR ECON KPAO KS US
SUBJECT: SEOUL - PRESS BULLETIN; October 16, 2009

TOP HEADLINES
-------------

Chosun Ilbo
Ruling Camp Considers Two Scenarios for Sejong City Project:
Scrapping Government Agency Relocation Plan Altogether
or Relocating Only Five Government Agencies

JoongAng Ilbo
AMD, the World's Second-Largest Non-Memory Chip Producer, Ready for
Legal Battle against Microprocessor Leader Intel

Dong-a Ilbo
ROKG to Establish Organization to Deal with Government Employees'
Labor Unions

Hankook Ilbo
Ruling Party Seeks to Hold Constitutional Amendment Vote
and Local Elections Simultaneously Next Year

Hankyoreh Shinmun
Suspicion Persists over Prosecution's Improper Investigation of
Hyosung Group's Alleged Slush Funds

Segye Ilbo
Nation's Largest Umbrella Labor Group Pledges Fight
against ROKG Labor Bills

Seoul Shinmun
Official Campaigning for Oct. 28 By-Elections Kicks Off


DOMESTIC DEVELOPMENTS
---------------------

The ROK and the EU initialed their bilateral free trade agreement in
Brussels yesterday. The ROK Foreign Ministry plans to have the trade
pact signed early next year and put it into effect in July at the
earliest. (All)

Assistant USTR Wendy Cutler, in an Oct. 14 hearing of the House
Foreign Affairs Committee, said that, "There has been overwhelming
support for the KORUS FTA based on public comments, but I would also
note that there are areas of concern over the auto sector." (Dong-a,
Hankook, Segye, Seoul, KBS)

According to (ruling GNP) sources, U.S. Ambassador to the ROK
Kathleen Stephens told GNP lawmakers on Oct. 13 that patience is
needed for the ratification of the KORUS FTA. (JoongAng)

North Korea's Navy claimed yesterday that ROK combat boats intruded
into its territorial waters 10 times last Monday alone. It warned of
military action if such moves continued. (All)

A senior ROKG official said yesterday that if a high-level dialogue
takes place between the two Koreas, the North Korean nuclear issue
should be on the agenda. (JoongAng)


MEDIA ANALYSIS
--------------
-N. Korea
----------
All ROK media gave attention to North Korea's accusation yesterday
that the ROK frequently violated its territorial waters. The North
Korean Navy was widely quoted as claiming: "Some 16 ROK combat boats
intruded into our waters 10 times last Monday alone. ... We shall
not sit idly by. ROK military authorities should be clearly aware
that warnings will be followed by action." The ROK military was
reported as dismissing the North's claim as "groundless."

Conservative Chosun Ilbo, in an article titled "Another Threat Ahead
of Talks," observed that this North Korean warning came only a day

SEOUL 00001637 002 OF 004


after Pyongyang offered a perfunctory apology for the death of six
ROK citizens in a flash flood caused by its sudden discharge of dam
water. The article quoted an ROK official as saying: "Even during
the current dialogue stage, the North is taking both soft and hard
measures, apparently to make it look as if it's no pushover."
Another ROKG official was also quoted: "The mixed messages could be
indications of a tug of war between moderates and hardliners in the
North."

In commentary regarding a "grand bargain" on North Korea's nuclear
issue proposed by President Lee Myung-bak, right-of-center JoongAng
Ilbo opined: "Japanese Prime Minister Hatoyama described President
Lee's proposal as a 'comprehensive' approach to resolve not only the
North's nuclear and missile issues but also the Japanese abduction
problem. ... President Lee's argument-that the 'grand bargain' is
aimed at getting North Korea to give up its nuclear ambitions, not
bringing North Korea back to the Six-Party Talks-is also quite
different from China's position of attaching great importance to the
resumption of the Six-Party Talks. ... North Korea has dismissed
the grand bargain proposal as a wild dream, and the U.S. is taking
an ambiguous attitude. In order to make the grand bargain proposal
viable, the ROK should present a 'second grand bargain' by modifying
its initial proposal calling for the North to abandon its nuclear
program before receiving economic aid and security guarantees.
Under the second grand bargain, rewords should be provided to North
Korea at the same time as the North's nuclear abandonment. "

Japan to End Refueling Mission in Indian Ocean
Conservative Chosun and moderate Hankook Ilbo carried front- and
inside-page reports on Japan's formal notification to the U.S. that
it will end a naval refueling mission backing U.S.-led operations in
Afghanistan. Chosun Ilbo, in particular, noted that this Japanese
move comes in the run-up to the upcoming visits to Tokyo by Defense
Secretary Robert Gates (Oct. 20-21) and President Barack Obama (Nov.
12-13). Chosun wrote in the headline: "Is the New Democratic Party
of Japan Administration Embarking on Efforts for 'More Equal'
Relations with the U.S.?"


OPINIONS/EDITORIALS
-------------------

ROK, CHINA AND JAPAN ON 'GRAND BARGAIN' WITH N. KOREA: SAME BED,
DIFFERENT DREAMS
(JoongAng Ilbo, October 16, 2009, page 47: Excerpts)

By Senior journalist Kim Young-hie

In the trilateral summit involving the ROK, China and Japan,
President Lee Myung-bak's grand bargain proposal was not heavily
discussed. Chinese Premier Wen Jiabao seemed to put more emphasis
on the talks he had with North Korean leader Kim Jong-il (than on
the summit.) Wen repeatedly stressed Kim's message that North Korea
intends to improve relations with the ROK, the U.S. and Japan. He
even warned that if relevant countries lose the opportunity for
better ties with North Korea, such an opportunity may not come
again. Chinese Premier Wen said that the countries involved should
understand that they may have to pour much more energy (into making
progress on the North Korean issue) if they lose the opportunity
this time around. These remarks sound like an ultimatum rather than
a mere delivery of Kim's message.

In a joint statement wrapping up the summit and during a press
conference by leaders from the three countries, Premier Wen did not
mention the grand bargain, let alone show his support for it.
During the joint press conference, Japanese Prime Minister Hatoyama
described President Lee's proposal as a "comprehensive" approach to
resolve not only the North's nuclear and missile issues but also the
Japanese abduction problem. Hatoyama fell short of fully
supporting the grand bargain, however. As expected, Hatoyama added
a dish of the Japanese abduction issue to the nuclear negotiating
table. He also focused a great deal on North Korean ballistic
missiles, which pose a direct threat to Japan. We want to ask the
Blue House whether the grand bargain really includes the Japanese

SEOUL 00001637 003 OF 004


abduction issue. President Lee's argument-that the "grand bargain"
is aimed at getting North Korea to give up its nuclear ambitions,
not bringing North Korea back to the Six-Party Talks-is also quite
different from China's position of attaching great importance to the
resumption of the Six-Party Talks.

What the three leaders only agreed upon was that they will seek to
denuclearize the Korean Peninsula peacefully through dialogue and
negotiation. Few would object to resolving the North Korean nuclear
issue peacefully. However, there is a big loophole in the three
leaders' agreement. The agreement calls for denuclearizing the
Korean Peninsula peacefully through dialogue, not denuclearizing
just North Korea. Doesn't this mean that the North intends to
change the current North Korean nuclear negotiation to nuclear
disarmament talks that would include denuclearization of the entire
Korean Peninsula and specifically (the withdrawal of) the U.S.
nuclear umbrella? This move is based on the alarming premise that a
nuclear North Korea is an established fact.

North Korea has dismissed the grand bargain proposal as a wild
dream, and the U.S. is taking an ambiguous attitude. In order to
make the grand bargain proposal viable, the ROK should present a
"second grand bargain" by modifying its initial proposal calling for
the North to abandon its nuclear program before receiving economic
aid and security guarantees. Under the second grand bargain,
rewords should be provided to North Korea at the same time as the
North's nuclear abandonment. The ROK also needs to make its position
clear regarding how to pursue the nuclear negotiation while seeking
to better inter-Korean relations.


EARLY RATIFICATION OF KORUS FTA AS WELL AS ROK-EU FTA IS IMPORTANT
(Dong-a Ilbo, October 16, 2009, Page 35; Excerpts)

Even if a Free Trade Agreement (FTA) is signed, it is meaningless
without legislative approval. The ROK-U.S. FTA was signed in June
2007, but it has not been ratified by either legislature. Rep.
Edward Royce, a pro-ROK Republican, recently criticized Congress,
saying that failure to ratify the KORUS FTA "is a huge slight to our
ally, to South Korea, not to mention a missed economic opportunity"
for U.S. businesses. We hope that the Barack Obama Administration
and the U.S. Congress will be more active in the ratification of the
FTA, which will contribute to trade and friendship between the ROK
and the U.S. The ROK National Assembly should also speed up efforts
to approve the KORUS FTA, which managed to go through the National
Assembly Committee on Foreign Affairs, Trade, and Unification but is
still pending at the National Assembly due to objection by some
opposition parties.


FEATURES
---------

U.S. AMBASSADOR: "PATIENCE IS NEEDED FOR KORUS FTA"
(JoongAng Ilbo, October 16, 2009, Page 10)

By Reporter Koh Jung-ae

"Hints in the future Trade Policy Review (TPR) are important."

U.S. Ambassador to the ROK Kathleen Stephens reportedly made a
statement regarding the prospects of the U.S. Congress ratifying the
ROK-U.S. Free Trade Agreement (FTA) during an October 13 meeting
with ruling Grand National Party (GNP) lawmakers, including Rep.
Chung Mong-joon.

According to several officials, Ambassador Stephens made the
statement in response to one attendant's remarks that "State
Department officials have said that if the TPR includes expressions
such as 'FTAs are frozen at the existing level' or 'more focus is
placed on multilateral negotiations like the World Trade
Organization (WTO),' it will become virtually difficult for the U.S.
Congress to ratify the KORUS FTA." Ambassador Stephens reportedly
noted, "It is not time yet for ratification. We should have

SEOUL 00001637 004 OF 004


patience." The TPR, a report on the direction the Obama
Administration will take in regard to trade policy, had been set to
come out in early November but its release is being delayed. GNP
Rep. Hong Jung-wook, who met with U.S. officials during his recent
visit to the U.S., also commented, "I got the feeling that the fate
of the KORUS FTA will be based on what is in the TPR. Most U.S.
officials say that they are 'hopeful but skeptical' or 'despite
difficulties, (we should) not give up.'"


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