【Cooperation between European and Indo-Pacific Powers in the US alliance system project：Policy Paper Vol. 7】
Navigating the Opportunities and Challenges in NATO–South Korea Defense Industrial Cooperation

Publication of Policy Papers for the SPF Project “Cooperation Between European and Indo-Pacific Powers in the U.S. Alliance System”

　IINA (International Information Network Analysis) hosts a series of policy papers featuring analyses and insights from U.S., Japanese, South Korean, Australian and European experts, which discuss constructive cooperation among U.S. allies in Europe and the Indo-Pacific. The series aims to provide readers with valuable perspectives on the future of NATO-IP4 (Indo-Pacific 4) cooperation for regional and global security.

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This is a critical juncture for NATO and South Korea to strengthen their defense industrial ties. The security fronts in Europe and the Indo-Pacific are increasingly intertwined as North Korea and other actors contribute to Russia’s war in Ukraine, amplifying mutual interests and posing a direct threat to the security of the US alliance. Amid these shifting and dire security landscapes, NATO members and South Korea increasingly recognize the strategic value of defense industrial cooperation, which transcends economic considerations and the urgent need to restore stockpiles.

NATO’s new Industrial Capacity Expansion Pledge outlines its commitment to enhancing defense industrial cooperation with capable partners, including IP4 countries South Korea, Australia, Japan, and New Zealand, to address pressing challenges in the current security environment.[1] The EU, through its European Defence Industrial Strategy, also emphasizes the importance of collaborating with like-minded countries to bolster defense readiness and safeguard its security, prosperity, and democratic values.[2] In parallel, South Korea seeks to expand its defense industry network with countries that share its values, including deeper ties with European partners, in line with its strategy to promote a “free, peaceful, and prosperous Indo-Pacific.”[3]

NATO members and South Korea share the belief that their defense industrial cooperation will play a crucial role in jointly addressing the growing threats to democratic values and the rules-based global order. In light of this, the potential for cooperation in defense technology innovation and industrial resilience is particularly notable.

Partners in Defense Technology Innovation

The Russia-Ukraine War demonstrates the role of dual-use and advanced technologies as game-changers in modern warfare, pointing to the urgent need for US alliance cooperation to maintain a technological edge over adversaries. In response to North Korea’s increasing drone threat, South Korea became the first country to publicly announce the mass production of its own low-cost laser weapon, the Block-I, which can also provide affordable air defense to US allies.[4] Meanwhile, Seoul announced plans to purchase the Polish Warmate 3 suicide drones to counter North Korea’s threat.[5] This implies the potential of defense industrial cooperation between South Korea and NATO members to strengthen mutual defense capabilities.

Moreover, the potential for NATO–South Korea defense innovation is highly promising, given their shared enthusiasm and abilities to pool financial, human, and technological resources. Seoul, the world’s third-largest defense R&D investor,[6] has committed approximately $300 million (400 billion won) in 2024 alone to develop advanced defense technologies, with a particular focus on dual-use tech industries, and is actively seeking global partners.[7] Its continued focus on developing “needs-based” weapons systems[8] presents fundamental challenges, possibly leaving it less prepared to respond to the evolving nature of modern warfare. This lack of preparation highlights the necessity of forging partnerships. European defense companies offer a compelling partnership opportunity for South Korea, driven by their technological prowess and expertise in developing emerging technologies.

South Korea ranked ninth globally in defense science and technology in 2021, trailing behind European defense industry powerhouses France, Germany, and the UK.[9] Notably, as South Korea faces challenges in aerospace and surveillance and reconnaissance technologies,[10] Europe’s strengths in these fields position it as an attractive partner. South Korea’s high-quality human resources and its role as a major producer of memory chips and other critical tech components also enhance its attractiveness to NATO. Moreover, it became the first Asian nation to sign NATO’s airworthiness certificate,[11] signifying NATO’s recognition of its defense technology capabilities. As a notable example, Airbus signed a memorandum of understanding with South Korea’s Ministry of Trade, Industry, and Energy in May 2024 to establish an international technology center in South Korea—an R&D hub focused on aviation, space, and defense.[12] This initiative reflects their aligned interests and underscores the potential for deeper collaboration in defense innovation between NATO members and South Korea.

Partners in Defense Industrial Resilience

The war in Ukraine calls attention to the strategic importance of US allied cooperation in strengthening defense production capacity and industrial resilience—critical elements of enhancing defense capabilities and deterrence posture. South Korea’s NATO-compatible weapons and its capacity for rapid delivery, apparent in Poland’s reception of its first K2 tanks and K9 howitzers just four months after placing the order,[13] have been instrumental in enabling NATO members to respond swiftly to Russia’s aggression. While South Korea’s policy prohibits the direct provision of weapons to Ukraine, observers worldwide understand that its arms exports to NATO countries have facilitated Ukraine’s military buildup.[14] Russia’s repeated warnings to South Korea against supporting Ukraine’s armament underscore the significance of arms collaboration among US allies in bolstering military capabilities and countering aggressors.[15]

Furthermore, cooperation among NATO members and South Korea to build defense industrial resilience through joint production and development offers considerable long-term strategic value in strengthening the deterrence and defense capabilities of US allies. The war in Ukraine, frequent economic coercion, and rising tensions on the Korean Peninsula and in the Taiwan Strait all signify the growing risks of overdependence on a single source for arms manufacturing.[16] This reliance exposes the US and its allies to potential disruptions that could jeopardize arms production and threaten national security. Diversifying the supplier base across two geographically distinct theaters—the Indo-Pacific and Europe—with reliable partners helps mitigate these risks and improve production capabilities.

In this regard, South Korea’s Made in NATO initiative extends beyond simple marketing, serving as a vital step toward US and allied security.[17] In Poland, Hanwha Aerospace is advancing localization and technology transfer of Chunmoo multi-launch rocket systems and CGR-080 missiles under the Homar-K program.[18] Meanwhile, Hanwha Ocean and HD Hyundai are proposing technology transfers and co-development in their bid to join Poland’s Orka submarine program.[19] These collaborations undoubtedly strengthen NATO members’ defense industries and capabilities. Moreover, South Korea’s major weapons manufacturers are concentrated in Changwon, Kyungsang Province, making its arms production facilities vulnerable to potential attacks from North Korea. For this reason, joint production and development with trusted European partners are crucial for strengthening its defense and deterrence posture against North Korea.

Challenges and Policy Implications

Given the defense industry’s intrinsic connection to national security, enhanced cooperation between NATO and South Korea demonstrates their growing commitment and ability to strengthen military and political ties. This sends a clear message to Russia, North Korea, and their partners: as their deepening ties threaten security in Europe and the Indo-Pacific, NATO and South Korea will respond with greater unity.

However, defense industrial cooperation between the two sides has been slow-moving and faces numerous hurdles that cannot be resolved overnight, complicating sustained, long-term partnerships. Above all, a deeply rooted competitive mindset and protectionism pose fundamental challenges. Some European countries advocate excluding non-European nations from the development of Europe’s defense industrial base. For instance, French President Emmanuel Macron publicly stated, “It is always better to buy, often American, sometimes Korean, but how can we build our sovereignty, our long-term autonomy, if we do not also take responsibility for developing a European defense industry?”[20] South Korean defense companies frequently face intense domestic competition, which hinders both internal and external collaboration.[21] Particularly concerning is what will happen after the war in Ukraine ends and arms demand suddenly drops. This could accelerate competition and create additional hurdles for cooperation despite the ongoing need for long-term collaboration.

Mapping defense industry cooperation between NATO members and South Korea, both bilaterally and multilaterally, provides a strong foundation for exploring cooperation options and specifying security and economic interests. The US and its allies, including South Korea and several NATO members, took a significant step in October 2024 by holding the first Partnership for Indo-Pacific Industrial Resilience (PIPIR) meeting to accelerate defense industrial base cooperation. This meeting established workstreams to develop concrete projects focused on four themes: sustainment, production, supply chain resilience, and policy and optimization.[22] The partnership should promote closer interactions among experts from both the private and public sectors, spanning areas such as the defense industry, emerging technologies, and international relations and security.

Creating a road map based on specific analytical data, reflecting both industrial capabilities and geopolitical factors, enables countries to leverage their industrial bases for mutual benefit and foster long-term cooperation. This road map would also enrich dialogue and consultation, stimulate more practical and effective policymaking, and uncover new opportunities for cooperation.

(2025/03/28)