{"id":2208773,"date":"2025-03-18T14:25:22","date_gmt":"2025-03-18T05:25:22","guid":{"rendered":"https:\/\/koreapro.org\/?p=2208773"},"modified":"2025-03-18T14:25:22","modified_gmt":"2025-03-18T05:25:22","slug":"south-koreas-naval-export-strategy-faces-a-49-billion-test-in-canada","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2025\/03\/south-koreas-naval-export-strategy-faces-a-49-billion-test-in-canada\/","title":{"rendered":"South Korea\u2019s naval export strategy faces a $49 billion test in Canada"},"content":{"rendered":"

South Korea\u2019s \u201cOne Team\u201d defense partnership between HD Hyundai Heavy Industries and Hanwha Ocean reflects a strategic move to boost naval exports and aligns with South Korea\u2019s broader goal of becoming a top-five global arms exporter, but unresolved internal rivalry and weak government coordination threaten its success.<\/span><\/p>\n

Success in securing high-profile contracts, particularly Canada\u2019s $49 billion submarine deal, could elevate South Korea\u2019s status as a global defense exporter. However, internal tensions, legal conflicts and inconsistent diplomatic support pose significant risks to this ambitious strategy.<\/span><\/p>\n

TARGETING THE CANADIAN DEAL<\/b><\/p>\n

HD Hyundai and Hanwha Ocean\u2019s combined effort to secure the Canadian submarine contract marks South Korea\u2019s most ambitious naval export project to date. The Canadian government <\/span>plans<\/span><\/a> to acquire up to 12 submarines by 2035, with a contract expected to be finalized in 2028.<\/span><\/p>\n

The South Korean consortium faces stiff competition from Germany\u2019s ThyssenKrupp, Sweden\u2019s Saab, France\u2019s Naval Group and Spain\u2019s Navantia.<\/span><\/p>\n

South Korean officials have begun diplomatic outreach to support the bid. Representatives from South Korea\u2019s Defense Acquisition Program Administration (DAPA) <\/span>met<\/span><\/a> with their Canadian counterparts in Ottawa on March 7, promoting the \u201cOne Team\u201d strategy as a means to deliver high-quality submarines at competitive prices with early delivery.<\/span><\/p>\n

Shin Seung-ki, a research fellow at the Korea Institute for Defense Analyses (KIDA), said South Korea\u2019s Jangbogo-III (KSS-III) class Batch II submarine is a strong contender for the Canadian program, requiring minimal modifications to meet Ottawa\u2019s requirements.<\/span><\/p>\n

\u201cSouth Korea\u2019s conventional submarine technology offers distinct advantages,\u201d Shin said. \u201cThe KSS-III is unique as the only non-nuclear submarine capable of launching ballistic missiles, complemented by efficient production and competitive pricing.\u201d<\/span><\/p>\n

Shin also dismissed concerns about meeting NATO standards, saying South Korea has long developed its systems in line with its U.S. alliance and can make any necessary adjustments.<\/span><\/p>\n

If successful, the Canadian contract would position South Korea as a top-tier naval exporter, opening the door for future deals in Europe and Southeast Asia. This would also strengthen South Korea\u2019s defense partnership with Canada, potentially leading to expanded defense cooperation and technology sharing.<\/span><\/p>\n

\"\"

DAPA Minister Seok Jong-geon and representatives from HD Hyundai Heavy Industries and Hanwha Ocean after the signing of a Memorandum of Understanding for the Formation of a Unified Team for the Warship Export Project, Feb. 25, 2025 | Image: ROK Defense Acquisition Program Administration<\/a><\/em><\/p><\/div>\n

UNRESOLVED INTERNAL RIVALRY<\/b><\/p>\n

Despite the strategic cooperation agreement, tensions between HD Hyundai and Hanwha Ocean remain unresolved. Their rivalry stems from years of legal disputes over military technology, including the contentious KDDX destroyer project.<\/span><\/p>\n

Hanwha Ocean <\/span>previously accused<\/span><\/a> HD Hyundai of stealing destroyer designs between 2012 and 2015 \u2014 a case that led to criminal convictions of HD Hyundai executives.<\/span><\/p>\n

Choi Gi-il, a professor at Sangji University\u2019s National Security Division, noted that the companies\u2019 ongoing conflict over the KDDX project reflects deeper structural issues in South Korea\u2019s defense industry.<\/span><\/p>\n

\u201cThe $5.6 billion KDDX destroyer program exemplifies these challenges despite being separate from export initiatives,\u201d Choi said.<\/span><\/p>\n

Both shipbuilders were <\/span>named<\/span><\/a> finalists in February to build six 6,000-ton Aegis warships for South Korea\u2019s navy, but disagreement over the contract terms has stalled the project. HD Hyundai argues it should receive the contract through sole-source procurement as the original designer, while Hanwha Ocean is pushing for competitive bidding.<\/span><\/p>\n

The dispute remains <\/span>unresolved<\/span><\/a>, with DAPA officials postponing a decision until at least April 2.<\/span><\/p>\n

\u201cThe government needs to act as a mediator, but it has been too passive,\u201d Choi said. \u201cUnresolved governance issues could lead to further legal battles and eventually undermine South Korea\u2019s global competitiveness.\u201d<\/span><\/p>\n

Tensions over the KDDX project have exposed broader weaknesses in South Korea\u2019s defense industry, where internal rivalry and inconsistent government oversight have complicated previous export attempts. Without a unified domestic approach, South Korea\u2019s ability to compete in high-stakes defense markets remains compromised.<\/span><\/p>\n

\"\"

From left: South Korea’s design for its next-generation KDDX destroyer and ROK Navy Chief of Staff Yang Yong-mo | Image: HD Hyundai Heavy Industries<\/a>, ROK Navy, edited by Korea Pro<\/em><\/p><\/div>\n

LESSONS FROM AUSTRALIAN FAILURE<\/b><\/p>\n

South Korea\u2019s <\/span>failed bid<\/span><\/a> for Australia\u2019s $7.3 billion light frigate program in Nov. 2024 highlights the risks of poor diplomatic coordination and internal discord. Despite offering ships at half the price of competitors, South Korea\u2019s proposal was rejected in favor of bids from Germany\u2019s ThyssenKrupp and Japan\u2019s Mitsubishi Heavy Industries.<\/span><\/p>\n

The rejection also set back South Korea\u2019s long-term goal of becoming a vital Indo-Pacific naval power.<\/span><\/p>\n

South Korea has a strong track record of exporting land-based weapons and missile systems, including the K9 Thunder howitzer and the Cheongung M-SAM air defense system. However, potential flash points in the Indo-Pacific \u2014 including the Taiwan Strait, disputed island chains and the South China Sea \u2014 require forward naval deployments that South Korea has yet to develop fully.<\/span><\/p>\n

Meanwhile, China has rapidly expanded and modernized its navy, increasing its dominance in regional waters. Further, South Korea has expressed interest in joining <\/span>AUKUS Pillar II<\/span><\/a>, which would focus on developing advanced defense technologies and enhancing naval interoperability among allies. However, success in securing major naval contracts is essential for building credibility as a maritime power.<\/span><\/p>\n

Ban Kil-joo, a professor at the Korea National Diplomatic Academy, attributed the failed bid to weak diplomatic engagement and unresolved corporate conflicts.<\/span><\/p>\n

\u201cJapan has cultivated security ties with Australia for decades, while South Korea only recently began high-level defense dialogues,\u201d Ban told <\/span>Korea Pro<\/span><\/i>. He contrasted the Australian outcome with South Korea\u2019s successful defense contracts in Poland, where government backing was more substantial.<\/span><\/p>\n

Ban argued that South Korea must apply these lessons to the Canadian bid and future export efforts. \u201cWithout a unified approach backed by long-term market stability, South Korea risks losing its competitive edge in global defense exports.\u201d<\/span><\/p>\n

South Korean shipbuilders\u2019 internal competition weakened their ability to present a unified front in Australia. In contrast, Germany and Japan leveraged strong government support and long-standing security ties with Canberra. Failure to address these issues in Canada could lead to a repeat of the Australian outcome.<\/span><\/p>\n

\"\"

South Korean and Australian officials, including Australian Deputy Prime Minister Richard Marles, South Korean Defense Acquisition Program Administration Commissioner Seok Jong-gun and Hanwha Aerospace Chief Executive Officer Son Jae-il attend the H-ACE opening ceremony in Geelong, Australia, Aug. 23, 2024 | Image:\u00a0Hanwha Aerospace<\/a><\/em><\/p><\/div>\n

DIPLOMATIC SUPPORT CRITICAL<\/b><\/p>\n

South Korea\u2019s ability to secure major naval export contracts hinges not only on technical capabilities but also on strategic diplomatic engagement.<\/span><\/p>\n

While South Korea has established <\/span>defense cooperation frameworks<\/span><\/a> with the U.S., government support for defense exports remains inconsistent. Experts argue that DAPA\u2019s current approach is too industry-focused and lacks integration with broader foreign policy objectives.<\/span><\/p>\n

Ban emphasized that shipbuilding collaborations must incorporate broader security considerations, particularly in relation to U.S. strategic interests.<\/span><\/p>\n

\u201cAmerican stakeholders view these initiatives as both industrial revitalization and national security imperatives,\u201d Ban said. \u201cSouth Korea\u2019s economic and security priorities must be integrated.\u201d<\/span><\/p>\n

Ban stressed that government mediation is essential for the \u201cOne Team\u201d initiative to succeed. \u201cIf market conditions change or there are no guarantees, this initiative won\u2019t last,\u201d he said. \u201cWithout government coordination, the two companies can\u2019t manage this collaboration alone.\u201d<\/span><\/p>\n

Shin of KIDA echoed this concern, highlighting that the success of South Korea\u2019s Canadian bid will depend on both internal cooperation and strong diplomatic engagement.<\/span><\/p>\n

\u201cIf orders include only one vessel type, the company with relevant expertise must support the other,\u201d Shin said. \u201cTheir willingness to share proprietary knowledge will determine the success of South Korea\u2019s defense procurement prospects.\u201d<\/span><\/p>\n

\"\"

ROKS Shin Chae-ho, the last of South Korea\u2019s Jangbogo-III (KSS-III) class Batch I submarines on duty, April 4, 2024 | Image: ROK Defense Acquisition Program Administration<\/a><\/em><\/p><\/div>\n

STRATEGIC IMPLICATIONS<\/b><\/p>\n

The \u201cOne Team\u201d initiative represents a calculated effort to position South Korea as a global leader in naval defense exports. Success in the Canadian bid would not only strengthen South Korea\u2019s reputation but also open doors to new contracts in other markets.<\/span><\/p>\n

However, failure would reinforce the perception that South Korea\u2019s defense industry is hindered by internal conflict and weak government coordination.<\/span><\/p>\n

Ban warned that South Korea\u2019s defense industry needs to adopt a more coordinated, long-term strategy that balances economic goals with strategic security considerations.<\/span><\/p>\n

\u201cSecurity and diplomatic considerations must be central to these partnerships,\u201d he said. \u201cLeadership from the presidential office is needed to transform this intergovernmental initiative into a comprehensive national strategy that harmonizes economic interests with security requirements.\u201d<\/span><\/p>\n

Choi of Sangji University added that without resolving the underlying rivalry between HD Hyundai and Hanwha Ocean, South Korea risks losing its competitive edge in future defense contracts.<\/span><\/p>\n

\u201cNational leadership has failed to provide clear direction,\u201d Choi said. \u201cWithout resolving these fundamental conflicts, continued infighting will undermine South Korea\u2019s global competitiveness.\u201d<\/span><\/p>\n

As South Korea pursues high-stakes naval contracts in Canada, Poland and the Philippines, the success of the \u201cOne Team\u201d initiative will depend on the government\u2019s ability to mediate internal disputes and align economic objectives with strategic diplomacy.<\/span><\/p>\n

Edited by John Lee<\/span><\/i><\/p>\n

Business & Economy<\/span><\/a>Defense & Security<\/span><\/a>Inter-Korean & Foreign Relations<\/span><\/a>Technology & Cyber<\/span><\/a><\/div>","protected":false},"excerpt":{"rendered":"

South Korea\u2019s \u201cOne Team\u201d defense partnership between HD Hyundai Heavy Industries and Hanwha Ocean reflects a strategic move to boost naval exports and aligns with South Korea\u2019s broader goal of becoming a top-five global arms exporter, but unresolved internal rivalry and weak government coordination threaten its success. Success in securing high-profile contracts, particularly Canada\u2019s $49 […]<\/p>\n","protected":false},"author":10909,"featured_media":2208779,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21],"tags":[24,26,28,29],"class_list":["post-2208773","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","tag-business-economy","tag-defense-security","tag-inter-korean-foreign-relations","tag-technology-cyber"],"yoast_head":"\nSouth Korea\u2019s naval export strategy faces a $49 billion test in Canada - Korea Pro<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/koreapro.org\/2025\/03\/south-koreas-naval-export-strategy-faces-a-49-billion-test-in-canada\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"South Korea\u2019s naval export strategy faces a $49 billion test in Canada - Korea Pro\" \/>\n<meta property=\"og:description\" content=\"South Korea\u2019s \u201cOne Team\u201d defense partnership between HD Hyundai Heavy Industries and Hanwha Ocean reflects a strategic move to boost naval exports and aligns with South Korea\u2019s broader goal of becoming a top-five global arms exporter, but unresolved internal rivalry and weak government coordination threaten its success. 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