4. Airgram From the Embassy in Korea to the Department of State 1

A–574. Subject: Proposed U.S. Objectives in the Republic of Korea for 1964. Ref: Seoul's A–483, January 8, 1964.2

In the airgram under reference, the Embassy analyzed the present situation within the Republic of Korea, appraised the outlook for the near future, and suggested certain courses of action to be taken by U.S. Government agencies. Those suggestions were not presented in a systematic framework of specific policy objectives. In this message there is set forth in rough order of priority the objectives toward which the Embassy believes U.S. policies and actions in Korea should be directed in calendar year 1964.

Progress Toward Internal Stability

1. In the political field, our efforts should be concentrated on facilitating the successful functioning of constitutional government and democratic institutions which have now been re-established in the wake of military government. While discouraging the government, if [Page 14]necessary, from resorting to authoritarian methods, we should on the other hand make every possible effort to influence the opposition to act in responsible fashion. At the same time we should seek to avoid giving the impression that the United States is interfering in the internal political affairs of Korea.

2. In the economic sphere, the primary goal for 1964 should be the pursuit of sound monetary and fiscal policies and the stabilization of price levels. The exchange rate will have to be adjusted to a realistic level some time not later than mid-summer 1964.

ROK-Japan Normalization

3. It goes without saying that every effort should be made to encourage Korea and Japan to achieve a settlement this year.

Conclusion of a Status of Forces Agreement

4. Full agreement can be reached this year and the pace of negotiations on this agreement should be accelerated. Agreement will remove a vexatious and potentially harmful issue from US–ROK relations.

AID Policy and Effective Use of Available Resources by the ROKG

5. The Embassy and USOM hope that progress can be made during 1964 in persuading the ROK Government to make more efficient use of the resources available to it. We should continue pressing for an increase in exports and for adoption of a more restrictive import policy. We should also continue stressing the need for expansion of agricultural production and seek greater participation in ROK economic development by other governments and international agencies.

With respect to economic aid policy, U.S. assistance programs should continue to be linked to Korean implementation of agreed stabilization goals. The cumulative load of economic adjustments which the ROK economy is being called upon to bear in 1964 and after should be gauged so as not to impose a drag on progress or force a further serious deterioration of the foreign exchange position. We will also need to take into account the ability of the government to bear such adjustments politically in a given period. This will necessitate in the course of the year politico-economic judgements affecting the emphasis and timing of U.S. actions involving among other things the level of support assistance, the MAP transfer program, and the level of PL 480 support.

Force Levels

6. The decision has been made that the U.S. and ROK armed force levels should remain unchanged during 1964. Another review of the military, economic and political factors involved in force level reduction should be conducted toward the end of 1964 to determine whether reductions can be effected in 1965.

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Unification Problem

7. In 1964 we should re-examine our position on the Korean unification question and decide whether our strategy should be reformulated in the light of that review.

Consolidation of the ROKG International Position

8. Continuing support should be given to ROKG efforts to expand its diplomatic relations and strengthen its international position through the widest possible recognition by non-communist governments particularly those African and Asian nations where the ROKG position vis-a-vis the North Koreans appears shaky at present. We should encourage the ROKG to cement relations with those governments with which it has already established diplomatic relations by opening or strengthening, wherever feasible, diplomatic or consular posts and providing technical assistance or training, within its available resources. We should continue to exert our utmost influence against the expansion of North Korean diplomatic relations. As necessary we should be prepared to defend Korea's position in the United Nations General Assembly taking into account any initiatives that may arise from the review proposed in paragraph 7 above.

For the Ambassador:
Philip C. Habib

Counselor of Embassy for
Political Affairs
  1. Source: National Archives and Records Administration, RG 59, Central Files 1964–66, POL 1 KOR S-US. Secret. Drafted by Habib and Fleck; cleared in draft by Rosa, Doherty, and Killen; and approved by Habib. Repeated to CINCPAC, CINCPAC for POLAD, and Tokyo.
  2. In airgram 483 from Seoul, January 8, the Embassy set its appraisal of the political situation in Korea in light of the transformation from military to civilian rule. It also recommended that the U.S. publicly state its objectives in Korea, recognize the threat represented by Pak confidante Kim Chong-pil, study the problem of Korean unification, and accelerate negotiations on a SOFA agreement. (Ibid., POL 2 KOR S)