Increasing Trade, Diplomatic Ties Foster Optimism : Communist World Quickly Warms to S. Korea

SEOUL — Until recently, South Korea did not exist as far as the Communist world was concerned.

As the Communists saw it, there was only one Korea, and that was North Korea. They supported it militarily, economically and diplomatically.

But much has changed over the past six months. Three Communist countries--including the Soviet Union, which announced the action Saturday--have set up trade offices in Seoul and allowed South Korea to do the same in their capitals. As many as four others are expected to follow suit.

According to wire service reports, the Moscow-Seoul accord, in the form of a memorandum, was signed by Vladimir Golanov, vice president of the Soviet Union’s Chamber of Economy and Industry, and Lee Sun Kee, president of the state-run Korea Trade Promotion Corp.

Korean officials said a formal agreement will be signed in December when Lee visits Moscow.

Handle Consular Affairs

One official, requesting anonymity, said the two sides came to an understanding that in the absence of diplomatic relations, the trade offices will be empowered to handle consular affairs.

Hungary’s premier, Karoly Grosz, has said he wants to visit Seoul, and the foreign minister of South Korea hobnobs with his Hungarian and Yugoslav counterparts at the United Nations.

The opening to the Communist world is “moving very swiftly,” a Western diplomat remarked the other day. It is “pretty heady stuff” and has created high expectations in South Korea, some of which he described as unrealistic.

Some Koreans agree, among them former Prime Minister Kim Jong Pil, and are urging caution.

“There are people in our country who want to move forward by leaps and bounds,” Kim said recently. “We will have to restrain them.”

According to the Western diplomat, who asked that he not be identified by name, South Koreans see the breakthrough as a way to influence North Korea and lessen its threat to their security, which is shored up by the presence here of 42,000 U.S. troops. In this, he said, they have succeeded.

South Korea’s security has been enhanced, he said, adding that the chances of North Korea starting a war “have decreased as the Soviets and Chinese begin to shift to a more balanced position between the north and south.”

Not Sure of Soviet Support

He said the North Koreans can no longer be sure that the Soviets will support them if they start another war. It was North Korea’s advance into South Korea that started the Korean War of 1950-53.

Another analyst, a longtime resident here, said that North Korea “cannot succeed in an attack on (South Korea) without Soviet and Chinese help, given the guarantee of an American response.” But the key to security here, he said, is the Chinese and Soviet fear of a confrontation with the United States “on a North Korean timetable.”

South Korea’s overture to the north, he said, “only improves the atmosphere.”

He and the diplomat both criticized what they called naive thinking and immature emotional responses by some South Koreans. But even so, the diplomat said, many of the South Koreans’ expectations in their dealings with the Communists are “very realistic.”

Events that only a short time ago would have been inconceivable are taking place with astonishing regularity.

On Sept. 13, Hungary agreed to an exchange of permanent missions, headed by diplomats with the rank of ambassador. This was the first de facto recognition of South Korea by a Communist government since the Korean Peninsula was divided in 1948. North Korea called Hungary’s decision a “betrayal” and a “sellout.”

On Tuesday, under a compromise worked out with Communist countries, President Roh Tae Woo will become the first South Korean leader to address the U.N. General Assembly. A North Korean representative, not yet identified, also will address the world body.

Showering Attention on Seoul

China and the Soviet Union, which once competed for influence in North Korea, are now showering attention on Seoul. Neither has offered recognition, but according to Hong Song Young, an assistant minister of foreign affairs, South Korea looks forward to establishing some kind of ties, if not full diplomatic relations, with both “within three to five years.”

On Sept. 16, Soviet leader Mikhail S. Gorbachev said in a speech that “possibilities can open up for forming economic relations with South Korea.”

It was the first time that any Soviet leader had publicly referred to South Korea by name. Although Gorbachev referred specifically to economic relations, he proposed a multilateral conference that would include both Koreas in order to reduce the possibility of a military confrontation on the Korean Peninsula--and this is a very “diplomatic” subject.

Soviet officials who visited Seoul during the Olympics followed up by suggesting that South Korea take part in the development of Siberia. Roh immediately approved the idea.

The Chinese province of Shandong has agreed to set up a trade office here, and, according to officials at the Economic Planning Board, two other provinces, Liaoning and Jilin, will follow suit. South Korean tourists will be permitted to visit China starting next year, and negotiations are under way to begin ferry and shipping service across the Yellow Sea.

Park Jun Kyu, head of a South Korean team of National Assembly members negotiating with their North Korean counterparts, predicts that China and the Soviet Union will both allow Korean airliners to fly over their territory, as they did during the Olympics. Such an agreement, he said, could come as early as next month.

Trade Offices Opened

Hungary and Yugoslavia have opened trade offices here. Czechoslovakia, East Germany, Poland and Bulgaria may soon follow.

Vietnam has been eager for more economic interchange than Korea is willing to permit, the Foreign Ministry’s Hong said. In order to maintain good relations with other Southeast Asian nations, he said, Korea has refused to ship any goods to Hanoi that could be used for military purposes.

“Even without the Olympics,” Hong said, “the trend toward increasing exchanges was there.” But he added that the Olympics--these Games were the first in a country with which none of the Communist countries had diplomatic relations--”certainly accelerated the trend by several years.”

President Roh has called on all Koreans, north and south, to treat each other as brothers. He has made the drive for a breakthrough to North Korea and to its Communist allies the main theme of his foreign policy.

It includes immediate and long-term interests. Hong said Seoul is an attractive source of inexpensive, high-quality goods and technology, and he added that, as a country where government intervention has been an important factor in economic progress, it offers a development model.

A Western analyst pointed out that South Korea’s trade surpluses give it the hard currency the Communists need.

Chinese trade with South Korea reached $1.4 billion in 1987 and is expected to increase to $2 billion this year--or more than that with North Korea. This country’s trade with all other Communist nations is expected to rise by 33%, bringing it to $400 million, Hong said.

China is courting South Koreans to invest in joint ventures with a view to acquiring technology and manufacturing techniques that are closer than those of Japan to the level of skills that prevail on the mainland, Korean businessmen and officials say.

Visits to the mainland have become so numerous that in the words of Kim Young Do, a fur company executive, “unless you’ve been there, you’re out of fashion.” The businessmen of South Korea are paving the way for the diplomats, Kim said.

Prominent among these businessmen is Kim Woo Chong, chairman of the Daewoo conglomerate, who has been visiting Beijing and Moscow for years, sometimes secretly and sometimes openly. Daewoo and other business groups have established task forces to promote trade and investment with Communist countries and have set up offices in Moscow manned by Korean-born citizens of third countries.

New Markets for Cars

Daewoo, which has been exporting near all of the autos it produces to the United States in a joint venture with General Motors, recently found new markets for its cars in China and Czechoslovakia.

Soviet trade with South Korea is relatively tiny at present--only $150 million last year. But in its quest for help in developing Siberia, Moscow is believed to be more interested in Seoul than in China.

South Korea is beginning to make demands of its own for better treatment as the price for cooperation. Foreign Minister Choi Kwang Soo said last month that Seoul will ask China to sign an investment protection agreement.

On the subject of relations between North Korea and South Korea, President Roh said that ultimately a relaxation of north-south tension could allow the United States to reduce the number of troops it keeps in South Korea.