South Korea Intends to Maintain Trade with Iran: Ambassador
Ryu didn’t rule out the challenges in Tehran-Seoul relationship, caused by the US sanctions, while expressing hope that the two countries’ good ties wouldn’t be solely limited to economy.
Here’s the full text of interview with South Korean Ambassador:
Q: The issue of the continuation of sanctions waivers for Iranian oil imports and the possibility of trade between Iran and Korea has been one of the most important matters after the withdrawal of the US from the nuclear deal. What is your prospect of the future?
Ryu: Our countries are two close friends. Recently due to the US unilateral withdrawal from the JCPOA and re-imposition of sanctions, we have both faced problems to deal with. Doing trade with Iran and importing condensates are of great importance to Korean businessmen. Great firms such as Samsung, LG and SK have big branches in Iran and are enduring hardships.
Despite unfavorable trade situation between our two countries, when I met President Rouhani, we agreed that sanctions would stay for a short time and some countries’ policies can’t stop Iran Korea friendship. We would find a way to continue our friendship and trade despite this difficult situation. My embassy would do all it can for the continuation of a solution or way to boost not just economic ties, but people to people communication and cultural cooperation as well as tourism.
Q: South Korea halted Iran oil import after US withdrawal from the JCPOA. How would you see the future of Iran-Korea economic cooperation, with respect to the importance of trade between the two countries?
Ryu: The announcement by the US on the ceasing of issuing waiver to eight countries, came as a sudden measure, while we had expected a gradual approach which would give us enough time to make changes to our petrochemical industries for better adaptation. Our refineries are designed to refine Iranian condensates and any changes would be time-consuming and costly, therefore we had asked the US for the extension of waivers.
We are in a difficult situation, where we are seeking continuation of trade with Iran through utilizing Iranian reserves in Korean banks, but we’ve received no clear response on this issue from the US. They emphasize getting Iranian trade and oil import to zero.
We gave them a comprehensive description of the hardships faced by Korean companies. The great volume of trade with the US has put them in a difficult position. While being in need of the important Iranian market, they can’t simply ignore US policies.
Q: Does the issue include big companies, too?
Ryu: Big firms are not the only ones dealing with these issue. SME’s are also grappling with the same challenges. Korean government puts great emphasis on supporting SMEs so that they can continue trade with Iran, which is again a tough issue since US sanctions also include banking transactions.
Currently, our main focus is on non-sanctioned items such as the ones aimed at serving humanitarian purposes and essential everyday life items.
In line with our humanitarian goals, we’ve assisted Iranians dealing with hardships caused by food and medicine shortage. Great advancements have been made in Korea in the field of medicine and medical products, enabling us to help Iranians in distress.
Q: When you talk about finding a way to continue trade, do you mean that you would do it through the US or you would do it separately with Iran? Are you hopeful of getting waivers from the US?
Ryu: US sanctions have different categories and we are primarily focused on non-sanctioned items, while continuing negotiations for possible waivers.
Q: when you refer to trading with non-sanctioned items, do you mean trade through barter, or bank payments?
Ryu: There are a lot of detail involved in this issue. What I can say is that we can currently trade with Iran by focusing on non-sanctioned items, which demands resolving banking issues, which we intend to get over through negotiations with the US. Unfortunately, the US refuses to give a proper response and refers the issue to different governmental bodies.
Q: Are you still in contact with the US over sanctions waivers?
Ryu: We will continue our contact with the US. Our embassy in the US holds meetings on the issue almost on a daily basis. In the past, Korean diplomacy was focused on super powers including, the US, China, Russia and Japan, but the current administration is advancing with its policy of diversification which includes important regional players such as ASEAN countries in south eastern Asia, India in southern Asia, Iran in the Middle East and Australia in the Pacific. Strong ties with these countries are of great importance to us and is in line with our national interests.
Q: You said before that Korean authorities were seeking to gradually find a high quality replacement for Iranian oil. The question is that have you received any suggestions from the US for replacing Iranian crude?
Ryu: This is our stance: Iranian condensate has the greatest quality in the world and Iran is the number one exporter of condensate in the world. Korea is also the number one importer of Iranian condensate. Almost 50% of our condensate imports are from Iran. The reality is that we cannot change our facilities in one day, therefore we need more time.
We have stored a certain amount of Iranian oil and we’re not sure of how long we could continue using our reserves. Maybe a few months or a year. After we run out of our reserves, we would have no choice, but to change our facilities.
Q: Have you received any recommendations from the US in order to change the procedure? What is their solution to this issue?
Ryu: They have announced that each country has to deal with its own issues. Korea, India, Turkey and China are all grappling with the same problem. We either have to continue negotiations with the US or find another way.
Q: 20 to 25 percent of Korea’s trade with Iran are household appliances. There are reports that LG and Samsung staff have left Iran, and the firms stopped business activities in Iran. With that in mind, do you visualize any solutions to this issue? Will sanctions remain this way?
Ryu: I had a meeting with Korean businessmen at my residence last week. After the US announcement of an end to sanctions waivers, they all told me that it’s hard for them to continue business. At the same time they are fully aware of Iranian market’s importance. They have been investing and doing trade in this market for 40 years now. A number of Korean construction firms chose to stay in Iran and continued business despite war between Iraq and Iran. The issue is that they have to be able to receive the products from Korea, which requires a resolution to cargo ships’ insurance issue.
Q: Allow us to distance ourselves from the issue of sanctions and move to the situation in the Korean Peninsula. So far we’ve seen two summits by the North Korean Leader and the US President, both of which bore no fruits. North and South Korea are neighbors and many analysts believe they can resolve their own issues themselves. Why don’t the two Koreas decide to resolve their issues without getting assistance from the US?
Ryu: In Hanoi, the two sides failed to reach an agreement or sign a document. I think this was an indicator of how difficult the North Korean issue is. A long road is ahead and it’s filled with obstacles. Many were surprised after the first summit, thinking that the issue can be easily resolved through a top-down strategy.
Just like the Issue of Israel and Palestine, which is among the Middle East’s complicated issues, the issue of North Korea is a very complex problem to deal with. Recently, North Korea launched a number of projectiles and the US warned North Koreans about their actions. We, South Koreans, are in between and that puts us in a difficult position, but in general, we believe we’ve made good progress so far.
A year ago, North Korea was testing nuclear bombs and its long-range missiles. We were afraid of an imminent war, but President Moon made great efforts to meet the North Korean Leader. He also facilitated Chairman Kim’s meeting with Mr. Trump.
We are still in the beginning stages and are in need of further negotiations in order to bridge the gaps and reach a common understanding.
Q: South Korea was the first mediator in its efforts to resolve Peninsula’s issue, but lack of progress in negotiations has led to a reduction of President Moon’s approval rating to less than 50%. Do you think this lack of progress in negotiations, is mostly because of the US or North Korea? Which one is to blame?
Ryu: In Korea we have a multi-party system which consists of two main parties: conservative and progressive. Currently the progressive party is in power and our President is a member of that party. The conservative party is mostly concerned with security issues and has a more hardline view over the North Korean issue. Domestically, we are dealing with different challenges and the parties oppose each other impeding many of the ruling party’s proposals.
Despite all the opposition, many people believe that the North Korean issue has to be resolved peacefully; not with waging a war, but through negotiations. They want a denuclearized North Korea and denuclearized Korean Peninsula. This is Koreans' shared view.
South Korea’s attitude on North Korea is a logical one. I’m not making this statement as a public officer. I studied politics at university and I know that this is the only way. North Korean issue is intricate and time-consuming. Currently the viable solution is peaceful co-existence. North Korea can be a trusted International member and see its industry making progress. This is to the benefit of the Peninsula.
Q: Apart from the emotional aspect of the issue, some analysts speculate that South Korea could use North Korea as a great market, while benefiting its cheap labor force in order to become a bigger economic power and a serious rival for China and Japan.
Ryu: You referred to an important point. The unification of the Peninsula is of importance in both humanitarian and economic perspective. A united Peninsula would be a bit smaller than Japan, which itself is a reasonable size. This is good for Korea. This is the reason why some neighboring countries are not so interested in the reunification of Koreas. Chinese think that American soldiers can get close to their borders and stand face to face with them in a united Korea. There are numerous complicated issues that adds to its complexity.
Q: Regarding North Korean Leader’s trip to china and Russia, do you see the possibility of the negotiations going back to their 6-party talks’ style and therefore weakening South Korea’s role?
Ryu: I don’t believe that the North Korean Leader's trips were taken in line with that issue. We need to realize that this is not an issue exclusively related to the US, but China, Russia, and maybe Japan are also involved and 6-party talks could act as a good tool. Bilateral summits are also crucial. President Moon has a warm and friendly approach toward North Korea. At the same time we are experiencing a lot of ups and downs in our path. In general I believe that good progress is being made in line with bringing peace to the Korean Peninsula.
Q: Mr. Ambassador referred to the good relationship between the two Koreas, while the negotiations have taken a trajectory where some sources are talking about the possibility of Japan entering the talks, since Shinzo Abe and Trump enjoy closer friendship. What is your take on that?
Ryu: Japan and the US have had a meeting recently. Also in a phone conversation, they talked about the issue of Korean Peninsula. Powers surrounding the Peninsula are also grappling with the North Korean issue, but eventually I believe that the two Koreas are the main players of the Peninsula. With good coordination among the four powers surrounding the Peninsula, we can peacefully resolve the issue.
Q: So you’re not worried about the situation?
Ryu: Japan can definitely play a significant role, since it used to be a 6-party-talks member. Our relationship with Japan is not so good due to historical issues, which complicates the challenges. This is while Japan and Korea are two neighbors who have to collaborate to find a resolution to the North Korean problem.
Q: What do you think of Iran after spending a year in this country?
Ryu: I was surprised when I came to Iran a year ago. I found Iranians stronger than I had expected. Before coming to Iran, I had read that due to sanctions, Iran’s infrastructure is old and not enough, but when I set foot inside the country, I realized that it has great and diverse potentials. Its geographical diversity stretching from Tochal’s icy peaks to scorching weather in Bandar Abbas is amazing. Your soft potential is more important than these. You have well-educated youth and this is Iran’s main source of power. Iranian youth are competitive and they are the ones who will shape Iran’s bright future. It depends on politics and politicians and the decisions they make. Iranians are friendly and hospitable. It is saddening to see that they are under pressure because of economic hardships. I believe this situation will be replaced with a brighter future.
Q: Thank you for accepting our invitation and answering our questions
Ryu: I also thank you and express my gratitude for your invitation.