By Donald Kirk, East-Asia-Intel.com

The image of South Korea’s highly conservative, arch-capitalist President Lee Myung-Bak waving happily in a sea of little paper flags featuring a gold star in a red field was just another ceremonial photo for the Seoul media.

The picture, Lee smiling as he and Vietnam’s President Truong Tan Sang and wife Mai Thi Hanh clasped hands with well-wishers, flashed on the front pages of the Korean media Wednesday without a passing note of the irony. How, no one bothered to be asking, had the flag of Communist Vietnam come to be accepted so joyously?

Grizzled Korean War veterans, dressed in old uniforms with ribbons on their chests reminding one and all of their service in “South” Vietnam alongside U.S. forces, demonstrate regularly against the evils of North Korea, but none was heard saying a negative word about the visit of the president of modern Vietnam — the first in more than a decade — on a three-day mission this week.

Two generations since the Vietnam War was raging to a climax, comparisons between the reunification of “North” and ”South” Vietnam bear little relevance to the persistently insuperable divide between South and North Korea. The Korean War ended in uneasy armed truce at Panmunjom in July 1953 ten months before the French surrendered at Dien Bien Phu in May 1954 and a decade before U.S. forces began plunging into the jungles of Vietnam; those dark days are the stuff of history texts while the North-South Korean confrontation raises fears of a second Korean War.

If the presidents of Korea and Vietnam were mindful of the paradox of their nation’s histories, they showed none of it in meetings that solidified a tremendous economic relationship in which Korea, ”South” Korea, may be Vietnam’s best friend in Asia. Just as unstated as the memory of the wars fought by both countries, the former the ally of the Americans, the other the deadly enemy of the U.S., is the common cause they now share against a foreign behemoth much closer at hand.

That would be China, which claims varying degrees of sovereignty over large bodies of water lapping up on Chinese shores in both Southeast and Northeast Asia; that is, the South China Sea and the Yellow Sea. The Chinese have repeatedly tried to put the Vietnamese in their place when it comes to the South China Sea while responding with indignant outcries whenever the U.S. navy sends its warships there or to the Yellow Sea in a show of force against China’s protectorate, North Korea.

China may have sided militarily with “North” Vietnam, providing the AK-47 rifles, ammunition and much else needed to fight the American and “South” Vietnamese well after Chinese “volunteers” drove the Americans and ”South” Koreans out of North Korea, but that contrast is all but forgotten. If North Korea’s leader Kim Jong-Il has to kow-tow to China, however he hates to do, Vietnam’s leaders are eager to escape any sign of dependence on their one-time Vietnam War benefactor.

It was in that spirit that the two presidents came up with what’s called an “overall joint proposed plan” under which South Korea would be supplying Vietnam with two nuclear energy reactors. Korea’s 21 nuclear reactors provide 30 percent of the country’s electrical power, and the South has already concluded a U.S.$20 billion deal for building and installing four nuclear reactors for the United Arab Emirates by the end of the decade. Last Friday, Turkish Prime Minister Recep Tayyip Erdogan also asked for South Korea’s participation in the nation’s first nuclear plant.

The movement toward a nuclear deal between Seoul and Hanoi only compounds the the irony of the history of shifting alliances. Remember, in 1994 the U.S. and North Korea, after another one of those cyclical nuclear “crises,” signed the Geneva framework agreement under which the North was to shut down its nuclear weapons facility in return for twin light water nuclear energy reactors. South Korea was to cover most of the costs, $4 billion for building the reactors, far more than Japan, which was to pay another $1 billion, while the U.S. promised to ship 500,000 tons of heavy fuel oil to the North every year, at an annual cost of approximately $50 million, until the reactors went online.

The whole deal exploded eight years later, in October 2002, with the revelation that North Korea was busy on a secret program for enriching uranium after having shut down its five-megawatt “experimental” reactor for producing plutonium. South Korea’s Doosan Heavy Industries, the company that builds all South Korea’s reactors, having already begun work on the North Korean reactors, had no trouble going on building them for use in South, not North, Korea.

South Korea and Vietnam are not yet at the stage of signing a contract, but the terms of the proposed deal are already fairly clear. The Vietnam reactors would be of the same design as those for the UAE, and the cost per reactor would probably be the same as well — possibly $10 billion for a pair, maybe somewhat more.

Whatever the terms, these negotiations show South Korea’s desire to compete as a manufacturer of reactors as it does in so many other industrial products. Vietnam, having already agreed to buy reactors from Russia and Japan, has turned to South Korea on the basis of a growing record of trade and investment.

It was very different 20 years ago. In 1992, South Korea opened relations with Vietnam after having sent a total of 300,000 troops to “South” Vietnam in the decade-long Vietnam War. More than 5,000 South Koreans had died in Vietnam — nearly 10 percent of the number of Americans killed there. South Korea’s White Horse and Tiger Divisions, plus special forces, gained a reputation for cruelty in Vietnam that far exceeded that of American forces.

Like much else to do with the war, that record has receded into largely forgotten history while leaders and business people focus on far different statistics — trade that’s coming close to $20 billion this year, $24 billion in South Korean investment in Vietnam, more than that of any other country, and upwards of $1 billion in aid to Vietnam.

“The huge presence of Korean companies in Vietnam, the billions of dollars invested and construction projects completed there have resulted in tremendous socio-economic progress for Vietnam,” wrote Philip Iglauer in The Korea Times. While labor costs in Vietnam keep rising, he went on, ”the top priority for the Vietnamese diplomatic mission here is to keep Korean investment and development assistance flowing into Vietnam.”

A final deal on nuclear energy reactors would clearly top the list of all Korean investment in Vietnam — and have an indirect impact on North Korea. More than likely, the North Koreans in future talks will resurrect the old promise for a pair of reactors made in South Korea — though North Korea undoubtedly would want them for nothing.

With eyes on a deal, the Korean and Vietnam presidents eagerly proclaimed 2012 as “the year of Korea-Vietnam friendship” — the 20th anniversary, after all, of bilateral relations. As for China, no one is suggesting the Chinese would enter the bidding war to send reactors to its old Vietnam ally.

  Doosan Heavy Industries, energy and strategic ties, Korean War, Lee Myung-Bak, Mai Thi Hanh, nuclear and strategic ties, South China Sea, Truong Tan Sang, Vietnam War scars fade as Seoul and Hanoi celebrate economic, Yellow Sea