Open Markets a Must, Shultz Warns S. Korea

SEOUL — In a testy exchange with a group of South Korean journalists, Secretary of State George P. Shultz said today that the United States will continue to push South Korea to open its markets to American goods and that “if our saying that causes anti-Americanism, so be it.”

During a prepared speech before the Korean Newspaper Editors’ Assn., Shultz had sought to counteract a recent increase in anti-American sentiment here by assuring his audience that the United States “has long supported” a peaceful reunification of Korea.

An Icy Response

However, responding to questions from the audience, Shultz later icily warned that the United States will keep pressuring South Korea to lift trade restrictions on American products such as tobacco, beef and citrus fruits, even if those actions produce resentment of the United States here.

“Sometimes it seems to us that everyone wants the U.S. market to be open, and that’s as far as it goes,” he said. “ . . . You think we don’t have farmers that notice when they can’t penetrate other people’s markets, and that they don’t raise Cain? . . . So it’s got to work both ways.”

Shultz also said that the United States would welcome a Korean investigation of the Kwangju uprising, the bloody 1980 incident in which 193 Koreans--by official count--died when the regime of former President Chun Doo Hwan suppressed a civilian revolt. South Korean students have charged that the United States approved Seoul’s use of government troops in Kwangju, a charge that Washington has denied.

“The United States would welcome a full and fair investigation,” Shultz told one South Korean reporter who asked about Kwangju. “ . . . There were no U.S. troops involved, and the Korean troops involved were not under American authority at all.”

Appearing here just before the opening of the Democratic National Convention in the United States, Shultz took an extremely tough line with the South Koreans on politically sensitive trade issues. At the same time, he tried to voice general support for South Korean efforts toward unification with North Korea.

‘A Constructive Effort’

During the prepared section of his speech, Shultz voiced general, qualified support for a series of recent proposals by South Korean President Roh Tae Woo for reunifying Korea, terming Roh’s ideas “a constructive and sincere effort.”

Shultz spoke shortly after the Seoul government, advancing its new policy of rapprochement with Communist North Korea, gave its Western allies the green light to actively pursue economic relations with the Pyongyang regime.

Meeting with reporters over the weekend, Foreign Minister Choi Kwang Soo said that his government no longer opposes private trade between North Korea and the United States, Japan or other nations friendly to Seoul as long as military goods are not involved.

“We will not oppose the establishment in North Korea of branch offices for business purposes by private trading firms,” Choi was quoted as saying in reports published here Sunday.

Shultz made it plain in his speech that the United States intends to keep its 43,000 troops in South Korea for the foreseeable future. He stressed that the United States will not leave it entirely up to South Korea to decide how long the U.S. troops should stay.

‘In the Face of Violence’

“They (the American troops) will remain in Korea as long as the people and governments of both the United States and the Republic of Korea deem them necessary to ensure peace,” the secretary said. “North Korea should have no doubt that even as we will support the efforts of our ally in the south to promote dialogue and national reconciliation, we will also stand firm in the face of violence and efforts to intimidate.”

Last month, South Korean students staged a series of violent protests linking the themes of anti-Americanism and reunification of South and North Korea. The students complained that the United States contributed to the division of the Korean Peninsula at the end of World War II.

Early this month, Roh announced a six-point program aimed at improving South Korea’s ties with North Korea. He suggested trade and exchanges of visits between the two Koreas and said that South Korea would be willing to help North Korea end its international isolation.

Because the United States has branded North Korea a “terrorist state,” a move that denied Pyongyang any preferential trade status, Japanese traders are expected to become the immediate beneficiaries of the new economic thaw.

Links With North Korea

Japan has fragile, unofficial links with Pyongyang and is one of the few capitalist powers to maintain economic relations with North Korea. Two-way cash trade has hovered between $350 million and $500 million annually for the past eight years. Japanese banks hold about $480 million of North Korea’s foreign debt, which is estimated to be as high as $4.1 billion--much of it effectively in default since the mid-1970s.

Foreign Minister Choi said that trade between North Korea and Seoul’s Western allies should be confined to “general commodities and technical data” that do not violate security restraints on trade with Communist countries set by the Coordinating Committee for Export Control.

The expansion in trade with North Korea, whose economy is perceived as rigid and stagnant by Western analysts, would mirror South Korea’s own recent overtures to China and the Soviet Union, Pyongyang’s major allies.

Seoul will continue to oppose normalization of diplomatic relations with Pyongyang, however, out of fear that this would upset the balance of power on the divided peninsula, Choi said.

South Korea, meanwhile, has said it will try to open the border with North Korea to duty-free, intra-Korean trade as part of its package of reunification initiatives, which includes proposals for humanitarian and cultural exchanges.

A Negative Response

Pyongyang has responded negatively so far to Roh’s gesture of reconciliation. Most recently, it rejected a request by the South Korean Red Cross to resume talks on visits by families separated by the 1950-53 Korean War.

In his speech today, Shultz attempted to lay out the role that the United States will play in South Korean politics, and he did not touch specifically on economic issues. The secretary of state had meetings scheduled later today with Choi and Roh.

“While we will never seek to dictate events, decisions or formulas, we will attempt to offer ideas, assistance and understanding in support of the process of change,” Shultz said. “And our support will be all the more steadfast when democracies are threatened by hostile external forces. To do less would be to betray our own commitment to democratic values. . . .”

Warning to Demonstrators

The secretary’s speech included a veiled warning to student demonstrators, suggesting that the process of democracy might require a crackdown on violent protests.

“Representative governments have the right--indeed, the duty--to protect their electorates from extremists whose aim is violent disruption of the democratic processes of orderly change,” Shultz said.

Early last year, Washington disclosed that it was ready to lift its near-total ban on trade and allow informal diplomatic contacts with North Korea if the Pyongyang regime would agree to take part in talks leading to its participation in the Summer Olympic Games, which will begin in Seoul on Sept. 17.

Pyongyang reacted favorably, saying that it was “ready to settle the matter of detente with good faith.” Seoul then raised the idea of exploring contacts with the Soviets to “counterbalance” the potential thaw in U.S.-North Korea relations.

Talks Broke Down

Negotiations between Seoul and Pyongyang broke down, however, when the two Koreas were unable to agree on a plan to co-host the Olympics. Pyongyang is now planning to boycott the Games.

The United States subsequently placed North Korea on its list of nations practicing state-sponsored terrorism, blaming it for the bombing of a Korean Air passenger jet near the Thai-Burmese border last November, an act that killed all 115 people on board.

In the past, frequent protests from Seoul have blocked any significant contact between Washington and Pyongyang, including visits to the United States by North Korean scholars.

During his appearance before the South Korean journalists today, Shultz was noncommittal on the question of trade between the United States and North Korea. “As far as our opening of trade ties, I think it’s premature,” he said. “But of course we’ll listen.”