Tag Archive | "nuclear weapons"

Negotiating a Nuclear Deal with North Korea Just Got a Whole Lot Harder

By Troy Stangarone

If negotiating a nuclear deal with North Korea was already a fraught proposition, President Donald Trump’s decision to no longer certify the Iran nuclear deal despite Iran’s compliance with the Joint Comprehensive Plan of Action (JCPOA) just made that prospect all the more difficult.

For decades one of the main obstacles to resolving the North Korean nuclear issue has been a lack of trust in North Korea’s ability to live up to an agreement. In the late 1990s the United States and North Korea negotiated the Agreed Framework to halt North Korea’s first push to develop a nuclear weapon and then under the Obama Administration the two sides negotiated the Leap Day Agreement to freeze North Korea’s ballistic missile tests. In both cases the agreements fell apart due to actions by North Korea.  Now the United States is taking actions in relation to the Iran nuclear agreement that raise questions about the United States willingness to live up to a negotiated agreement.

In the case of Iran, there is general agreement that it is in compliance with JCPOA. However, the Iran Nuclear Agreement Review Act (INARA) requires the president to certify not just that Iran is in technical compliance with the JCPOA, but also that the suspension of sanctions is “appropriate and proportionate” as well as in the U.S. national interests. It is on the basis that the current sanctions relief is not “appropriate and proportionate” to the steps that Iran has taken under JCPOA that President Trump decided to end certification, not on the basis of Iran’s compliance.

President Trump took this step over concerns centered on issues that the agreement was never intended to address such as Iran’s support for non-state actors such as Hezbollah and Hamas, as well as the regime’s continued ballistic missile tests. In doing so, he has moved to increase pressure on Iran over its broader behavior, but he has also raised questions about U.S. credibility in any efforts to negotiate a nuclear deal with North Korea.

The president’s decision does not mean that the United States has withdrawn from JCPOA. Instead, by refusing to certify Iran President Trump has thrown the issue back to Congress, which now has 90 days to decide whether to re-impose sanctions. The expectation is that Congress will not immediately impose sanctions, but rather work to make changes to INARA. However, should the Congress re-impose sanctions on Iran for its nuclear program the United States would be in violation of JCPOA.

With the agreement back in Congress’ hands, Senate Foreign Relations Committee Chairman Bob Corker has put forward a proposal with the Trump Administration and Senator Tom Cotton to amend INARA. Under the proposal, U.S. sanctions on Iran would snap back into place if the intelligence community determined that Iran had taken steps to enhance its nuclear program that moved it under the one year breakout period for developing a nuclear weapon. It would also use the threat of re-imposing sanctions to remove the sunset clauses in JCPOA, strengthen verification, and limit Iran’s development of advanced centrifuges.

While all are worthy goals, in pursing changes through an amendment of U.S. law rather than new negotiations with Iran the Trump Admiration and Congress would in essence be seeking to unilateral rewrite the agreement. In fact, President Trump stated as much when he said that he would like to “make all restrictions on Iran’s nuclear activity permanent under U.S. law.” If the United States can simply redo significant provisions of an international agreement through its own domestic law, there is little incentive for North Korea to negotiate a deal with a country that will try to use its own laws to unilaterally rewrite an agreement even if North Korea lives up to its end of the bargain?

Beyond undermining U.S. credibility in talks with North Korea, refusing to certify Iran as part of an effort to negotiate better terms also signals to North Korea that any deal might be less advantageous than Pyongyang would be willing to accept. While pressure may bring North Korea back to the negotiating table, reaching an agreement with North Korea will require a tradeoff of benefits and risks on both sides. If the United States now wants better terms from Iran on the nuclear deal, a type of deal which North Korea has already indicated is unacceptable, decertifying Iran only moves the two sides potential negotiating positons further apart should talks become possible.

The decision on Iran also makes maintaining a unified international front with North Korea more difficult. U.S. credibility isn’t merely about North Korea’s willingness to trust the United States in any negotiations, but also that of our partners that the United States is working in good faith and that any agreement reached will be upheld as long as North Korea maintains the terms. If the United States cannot be trusted to keep its word should the political situation change, there is less incentive for countries such as China to bear the burden of sanctions to bring North Korea to the table.

At a time when the United States already faced a difficult nuclear crisis with North Korea, moving to unilaterally alter the Iran deal only complicates matters. The United States could now find itself dealing with two nuclear crises, more reluctance among allies and partners to help the United States, and a North Korea that has an additional reason to be skeptical of negotiating a deal with the United States, none of which are in the United States’ national interest.

Troy Stangarone is the Senior Director for Congressional Affairs and Trade at the Korea Economic Institute of America. The views expressed here are the author’s alone.

Photo from Jen Morgan’s photostream on flickr Creative Commons.

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Contradictions in Trump’s UN Speech and Implications for North Korea Policy

By Troy Stangarone

As President Donald Trump addressed the United Nations General Assembly for the first time he asserted the need for a strong role for national sovereignty in international relations, but also called on the United Nations to resolve the now imminent threat from North Korea. While the ideas of sovereignty and international cooperation need not be in contradiction with each other, the potential tension between the two raises questions about the future approach to resolving the crisis with North Korea, as does President Trump’s suggestion that he might walk away from the nuclear deal with Iran.

In his remarks to the UN General Assembly, President Trump laid out a potentially interesting definition of sovereignty, but one that the administration likely needs to flesh out and clarify. In Trump’s view sovereign nations have “two core sovereign duties: to respect the interests of their own people and the rights of every other sovereign nation.” This definition is in tension with the more established definition of sovereignty from the Treaty of Westphalia that defined sovereignty as the right of states to rule over their territory without interference from other states. There is no expectation for the state to act in the interest of its own people.

In essence, President Trump has augmented the idea of non-interference in the affairs of other states with the idea of the state having a duty to look after the interests of its people and takes a more limited view of modern day multilateralism. In his remarks, President Trump makes clear that the United States does not seek to impose its form of government on others, so the obligations of the state to its people are not tied to a form of government, but rather whether that government is working in the interests of its people.

However, President Trump also seems to suggest that if a state is not meeting its obligations to its population it does not maintain the second aspect of sovereignty – the obligation of other states not to interfere in its internal affairs. In the modern era, the idea of a more malleable version of sovereignty is not uncommon. The European Union functions on the concept of pooling sovereignty to collectively achieve a higher purpose and, hence, accepts a degree of interference in the authority of the state. Or, perhaps more in the context of the United Nations there is the concept of the Responsibility to Protect, where UN member states take on a responsibility to intervene in the affairs of other states to preclude genocide, ethnic cleansing, and other war crimes. It seems unlikely that President Trump wanted to lay out such an expansive concept of the ability of states to intervene in the affairs other states, but in assigning the interests of citizens as one of the duties of states President Trump does seem to be laying out groundwork for when states have failed in their duties and lost their sovereignty.

While President Trump’s remark that the United States was prepared to “totally destroy North Korea” if the United States has to defend itself or its allies, less attention has been given to his remark that this is exactly the type of problem that the United Nations was designed to resolve.  However, his approach to sovereignty seems to make a stronger case for the United Nations to take action on the issue of North Korea due to the regime in Pyongyang’s failure to look after the interests of its citizens rather than the dangers of its nuclear program. While there is clear international consensus that North Korea’s weapons programs are a danger to international peace and security, the emphasis on citizens interests and lack of clarity on where the rights of nations ends potentially complicates dealing with North Korea as it raises questions about whether resolving the nuclear issue is sufficient.

If President Trump’s use of sovereignty potentially complicates collective action on North Korea, his suggestion that the United States might not remain in the nuclear deal with Iran does as well. The Iran deal has been suggested as a potential framework for a deal with North Korea. While Pyongyang has rejected such an arrangement, it does likely represent the starting point for both sides to think about a potential solution. Pyongyang will likely seek a more generous arrangement than what Iran received, while the concerns expressed by the Trump Administration suggest that it would seek an agreement that addressed more issues than merely North Korea’s weapons programs.

However, getting to that point requires finding the political space to negotiate an agreement that would stop North Korea’s weapons development and roll back its capabilities, which has long been the goal of increased UN sanctions. To work, the United States needs to have credibility as a negotiating partner to achieve a negotiated outcome. Leaving the deal with Iran would raise questions about the credibility of the United States in any negotiations with North Korea, but would also reinforce the idea that any deal reached with the United States could simply be changed by any future U.S. administration.

It would also potentially complicate cooperation with states in the region. Any successful agreement requires the continued cooperation of China and Russia to maintain pressure on North Korea. If the United States is not viewed as a credible partner by Beijing in reigning in North Korea’s behavior, it lessens the incentives for China to maintain pressure on North Korea to enter into talks and for all sides to abide by any agreements reached.

In many ways, President Trump’s speech at the United Nations was not a provocative as many have suggested. While President Trump is known for using stronger language than prior U.S. presidents, his suggestion that the United States would forcefully retaliate against North Korean aggression is not inconsistent with prior U.S. administrations and his call for the UN to resolve the crisis have been underplayed. However, his own remarks also raise questions about achieving those ends. Does his vision of sovereignty and a state’s obligations to its citizens suggest greater change in North Korea than many other states may be looking for? Will the administration’s actions towards the Iran nuclear deal undermine efforts to reach a deal with North Korea? These are two key questions which the administration needs to flesh out to avoid creating contradictions in its own policies.

Troy Stangarone is the Senior Director for Congressional Affairs at the Korea Economic Institute of America. A version of this article in Chinese also appeared in Dunjiaodu.com. The views expressed here are the author’s alone.

Photo from United Nations Photo’s photostream on flickr Creative Commons.

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Trump at the UN: A Plea for Help on North Korea

By Mark Tokola

Within minutes of President Trump’s September 19 speech to the United Nations General Assembly, headline writers were irresistibly drawn to the President’s threat to “totally destroy” North Korea and his description of “Rocket Man” (aka Kim Jong-un) as being on a “suicide mission.”  But, the context of the tough talk was President Trump’s call on the United Nations membership collectively to pressure North Korea into abandoning its nuclear program – a call which must be premised on the idea that North Korea can still be stopped without military action.  It is premised on faith in the United Nations.  Trump thanked China and Russia for joining the recent, unanimous Security Council vote to impose tough sanctions on North Korea.  He called on all nations to stop enabling North Korea through trade and financial services.  Trump also reminded the General Assembly of North Korea’s appalling human rights abuses.

Some will interpret President Trump’s remarks on North Korea as moving the United States closer towards exercising a “military option,” and that may be partially true.  The threat to “totally destroy” a country is a step beyond the usual, “will respond to threats appropriately” diplomatic language.  But, no interpretation is necessary to hear what the President unambiguously stated, that North Korea poses a threat to international peace and security, and it is the responsibility of the United Nations and its member states to take steps to preserve peace and security.  North Korea does represent a unique threat.  It is the only nation to conduct nuclear tests in this century.  It is the only nation that gleefully produces videos of nuclear attacks on foreign countries (Washington D.C. and New York being recent subjects).  Kim Jong-un has threatened to turn South Korea into a sea of fire and “sink” Japan.  If that, combined with North Korea’s ICBM and nuclear testing and its international weapons proliferation, doesn’t represent a threat to international peace and security, it is hard to think what would.

President Trump’s United Nations speech seems, above all, to be a plea for help from the international community in dealing with North Korea.  He said, in essence, that the United States is capable of dealing with North Korea militarily, but the preference of the United States is a peaceful solution.  The means to achieve a peaceful solution requires international cooperation.  Trump essentially admitted that the United States alone, or acting in concert with its close allies including South Korea, cannot apply enough economic or diplomatic pressure to thwart North Korea’s nuclear ambitions.  The cooperation of all countries, including China and Russia, will be necessary to preserve the peace which North Korea threatens.  That is a realistic, non-unilateral, internationalist approach – tough rhetoric aside.

Mark Tokola is the Vice President of the Korea Economic Institute of America. The views expressed here are his own.

Photo from John Gillespie’s photostream on flickr Creative Commons.

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New North Korea Sanctions: The Best that Could be Expected

By Troy Stangarone

After North Korea’s sixth nuclear test, there were expectations that the United Nations would pass a new round of sanctions that would potentially be debilitating for North Korea. Early discussions included bans on exports of oil to North Korea and cutting off North Korea’s use of overseas laborers to earn hard currency. Steps that far were always unlikely, but based on initial reporting of the expected measures in the new sanctions resolution and a review of a recent draft of the new sanctions resolution, the United States likely achieved the best result it could have hoped for in a new round of UN sanctions.

With the last round of UN sanctions having been passed only on August 5 and barely implemented, there was likely always going to be resistance to harsh new sanctions before member states had a chance to determine if the last round of sanctions were having an effect. It takes time for sanctions to take effect and states such as China and Russia most likely would not want to pile on a significant amount without knowing how the new sanctions would impact North Korea.

Additionally, complete bans on exports of oil to North Korea and the use of North Korean laborers were always unlikely, despite the serious nature of North Korea’s most recent nuclear test. While the Global Times and others suggested that China should end its supply of oil to North Korea if it tested another nuclear weapon, Beijing also has concerns about the long-terms stability of the regime in Pyongyang, concerns it is unlikely to let go of in the near future.  China wasn’t the only one to back off of the suggestion of cutting off North Korea’s oil supply — Russia also quickly dismissed suggestions of an oil embargo. Without Russia’s support both in the UN and as a potential supplier of oil to North Korea, stringent sanctions on oil were unlikely.

Banning the use of North Korean labor was also always a longshot. China and Russia are the two largest consumers of North Korean labor, and Russia in particular was unlikely to support a complete ban, as North Korea supplies an important source of labor in the sparsely populated Russian Far East.

That being said, the new resolution does move the process forward in terms of restricting North Korea’s ability to earn hard currency and to limit its imports of oil. Much as initial caps on North Korean exports of coal, the new resolution would place a cap on North Korea’s imports of refined petroleum at 500,000 barrels for the rest of 2017 and 2 million for subsequent years. Also similar to the coal caps, it would require states to report their exports to the United Nations on a monthly basis.

It also places a softer cap on exports of crude oil to North Korea, which China provides to Pyongyang as aid. The soft cap limits exports to the amount exported in the prior year, but since China does not report its exports of crude to North Korea and there is no reporting requirement for crude, there is still the potential for China to export more than would be expected to North Korea.

The new restrictions on use of North Korean labor, while a step forward, are also potentially exploitable. While it would prohibit countries from issuing work permits for North Korean nationals except for humanitarian purposes or for objectives consistent with prior UN resolutions, it also allows contracts signed prior to the resolution to continue. This means that we are not likely to seen a reduction in North Korean workers abroad soon.

The resolution also contains a ban on the export of North Korean textiles, potentially reducing North Korea’s earnings of hard currency by $800 million. While this will remove one of North Korea’s major remaining export items, textiles are also a labor-intensive industry. By banning exports of textiles, this also removes one potential tool for reshaping North Korea over time — developing a larger consumer base that can eventually pressure the regime internally.

While this may have been the best that could be achieved at the United Nations, it is disappointing that China and Russia would not support more robust sanctions against North Korea. While the new sanctions continue to restrict North Korea’s ability to earn hard currency, more should have been done in response to North Korea’s test of a thermonuclear device. By holding back on more stringent sanctions, China and Russia risk sending a signal to North Korea that it should not be worried about strict consequences for their actions.

Despite China and Russia’s reluctance to go along with more stringent sanctions, it is important for the United States and its allies to continue to maintain Moscow and Beijing’s cooperation. This is not a problem that the United States can solve on its own.

Troy Stangarone is the Senior Director for Congressional Affairs and Trade at the Korea Economic Institute of America. The views expressed here are the author’s alone.

Photo from United Nations Photo’s photostream on flickr Creative Commons.

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Borkers at the São Paulo Stock Exchange (Bovespa).

Provoking the Market: Investors More Worried about Washington’s Response than Pyongyang’s Provocations

By Kyle Ferrier

Analysts have attributed recent market downturns to North Korean provocations, but investors seem to be reacting more negatively to responses from the Trump administration.

Prior to North Korea’s sixth nuclear test on Sunday, Kim Jong-un was cited as a key contributor to recent developments in global markets. The fall in the value of the dollar and the strengthening of the euro and gold this summer have at least been somewhat linked to North Korean provocations. For the dollar and the euro, North Korea is at most exacerbating these trends, not causing them. Since the end of last year, the dollar has been in general decline and the value of the euro has steadily grown. This is primarily driven by looser monetary and fiscal policy in Europe as the Federal Reserve plans to unwind its balance sheet and the White House faces hurdles in its tax reform and infrastructure initiatives. It is harder, however, to argue Pyongyang has played an equally minor role in higher gold prices. Yet, movements in the price of gold and South Korea’s KOSPI stock index this year suggests investors are more concerned with uncertainty stemming from the Trump administration’s approach to North Korea.

Graph of the price of gold, March to September 2017

Graph of the price of gold, March to September 2017

The conventional wisdom has been that the financial impact of North Korean provocations in South Korea decreases over time. My analysis of North Korea’s nuclear tests, long-range rocket launches, and military provocations along the DMZ through February 2016 (after its second “satellite launch” attempt) found this line of thinking applied to nuclear tests, but could not fully explain the other two categories. It is more accurate to state that the impact of North Korean provocations on markets in Seoul depends on whether a given event is viewed to be outside the context of normal geopolitical developments. That the financial impact of North Korean provocations generally diminished merely illustrated investors had been through similar events and their bottom line was minimally affected. It was not necessarily an indicator of future reactions, particularly as circumstances surrounding each provocation can change dramatically.

KOSPI stock index, March to September 2017

KOSPI stock index, March to September 2017

Significant drops in the KOSPI corresponding with North Korean provocations in January and February last year raised concerns that markets were reacting to Pyongyang at levels not seen since the shelling of Yeonpyeong island in 2010, but these can be chalked up to coincidence rather than cause. These concerns were renewed later last year in the aftermath of North Korea’s fifth nuclear test on September 9. Many news outlets linked the 1.25 percent drop in the KOSPI that day to the test, but this was also coincidence and not cause. Of the 1.25 percent drop, only around 0.07 percent occurred after news first broke of the nuclear test at 9:45am. The fall in the KOSPI as well as the won was much more likely linked to Samsung’s Galaxy Note 7 woes as well as a slowdown in global markets. Thus, from 2010 through the end of 2016, North Korean provocations had a negligible impact on markets in Seoul.

The KOSPI’s reaction to the North’s latest nuclear test is the clearest indication that this trend has ended in 2017. On September 4, the first trading day after the test, the KOSPI opened 1.73 percent lower. Though some of these losses were gained back, it was down 1.19 percent by the end of trading. Unlike the previous test last year, the sixth nuclear test is most likely to blame for this drop. The only other instance of a notable drop in the KOSPI caused by a provocation was in response to the July 4 ICBM, though its impact was minimal: The KOSPI closed 0.58 percent lower that day and took five days to recover. The ICBM launch on July 28 saw almost no change in the KOSPI or the value of the won. And, the August 29 ballistic missile that flew over Japan was only met with a 0.23 drop, which was made back the next day.

Timeline of North Korea's rocket launches and their impact on the South Korean KOSPI stock index

Timeline of North Korea’s rocket launches and their impact on the South Korean KOSPI stock index.

That markets would react to the earlier ICBM launch and the nuclear test makes a degree of sense, considering that both added a new component of geopolitical risk on the Korean Peninsula. The July 4 missile launch was the first time Pyongyang demonstrated its capability of hitting a U.S. state and the nuclear test also possibly revealed its ability to miniaturize a nuclear weapon.

However, from stronger market responses to the Trump administration’s approach towards Kim Jong-un, it is highly likely that Washington is playing a greater role in the negative market reactions to Pyongyang this year. From April 4 to 11, the height of confusion over the whereabouts of the USS Carl Vinson, the KOSPI fell six straight days, totaling to a 2 percent loss. From August 8 to 11, after Trump’s “fire and fury” comments, it fell four consecutive days, amounting to more than a 3 percent loss. “Fire and fury” was also a retort to the July 28 ICBM launch, which ironically had no discernible financial impact in Seoul.

Table of North Korea's nuclear tests and their impact on South Korea's KOSPI stock index

Table of North Korea’s nuclear tests and their impact on South Korea’s KOSPI stock index.

Both incidents also had a bigger impact on the price of gold than did North Korean provocations.  Between April 3 to 13 the price of gold shot up 2.75 percent. It rose again by 2.5 percent from August 8 to 11. Market responses to the provocations in July were mere blips by comparison. Gold rose a quarter percent on July 4, but was back to its previous price within two days, and the price actually fell after the subsequent ICBM launch. Though the August 29 and September 3 provocations were met with steep price increases – 2 percent and 0.68 percent, respectively – these reactions seem to be heavily influenced by Trump’s “fire and fury” comments, evidenced by the current increase in gold prices starting around the time of his remarks.

While harder to judge from the KOPSI alone, the comparison with gold prices implies that this week’s drop in the KOSPI was a product of market nervousness about how the U.S. might reply to the test, not North Korea. Further, if geopolitical concerns did play a role in the KOSPI in early July, they were likely caused by anxieties about a U.S. response, fueled by the USS Carl Vinson incident and Trump’s “disruptive” foreign policy.

Although these reactions are relatively minor and fleeting in the grand scheme of markets, they provide a window into how investors view geopolitical developments on the Korean Peninsula. They may only reflect temporary sentiments, but present the strongest case there has been in recent years that Washington is perceived as the primary driver of risk on the peninsula, not Pyongyang.

Kyle Ferrier is the Director of Academic Affairs and Research at the Korea Economic Institute of America. The views expressed here are the author’s alone. 

Photo from the Rafael Matsunaga’s photostream on flickr Creative Commons.

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Responding to North Korea’s Sixth Nuclear Test

By Mark Tokola

Now that North Korea has defied warnings from the international community not to conduct a sixth nuclear test, including from its friends China and Russia, the challenge is, how to respond?  North Korea knows it has made a hugely provocative step.  The September 3rd test was by orders of magnitude larger than any of its previous tests, indicating a thermonuclear capability.  It comes after a relatively long pause, the last test was in September 2016.  It collapsed a tunnel, showing either by design or by mistake, that it was even more ‘successful’ than intended.  And the test came hours after North Korea broadcast a picture showing Kim Jong-un admiring, up-close, a nuclear warhead (or model thereof) designed to fit into a missile nose-cone.  North Korea must be expecting an international response, or if need be a unilateral response from the U.S., in consultation with South Korea.  What should that response be?

Russia has called for “immediate talks” and talks would be desirable if North Korea was prepared to offer anything, which it has not signaled.  The September 3rd test would seem to indicate that North Korea is still on its path of acquiring a credible, reliable nuclear weapons capability capable of striking the U.S. and its allies, and perhaps to gain a second-strike capability, before it will be willing to talk – if Kim Jong-un is willing to talk at all.  The international community has assumed that North Korea would eventually want to talk to see sanctions lifted.  There is a possibility that Kim Jong-un is relying on the sanctions to internally justify his weapons program.  In that case, Kim Jong-un would only want to talk for the purpose of being welcomed to the international nuclear club.

Following the September 3rd test, the main question is whether there can be a response stronger than the one North Korea undoubtedly expects.  The last, impressively tough, round of sanctions was not enough to deter North Korea from conducting its sixth test.  What kind of response would get their attention?  Among the options are a diplomatic response, an economic response, and a show of deterrence.

A diplomatic response could be to expel North Korea from the United Nations.  This is possible under the U.N. charter and would be a serious blow to North Korea because it cares about international prestige.  This response would show Pyongyang that it lacked any international support, including from Russia and China who could veto the expulsion if they chose.  The grounds are clear enough.  North Korea has repeatedly defied U.N. Council resolutions through its weapons program.  The U.N.’s patience should have limits.  China and Russia would be reluctant to expel North Korea from the U.N., but their patience should have limits, too, and they may prepared to go along with a diplomatic step rather than the alternatives.

An economic response may be to move beyond sanctions and to impose an economic embargo on North Korea, as has been advocated by former South Korean national security official Chun Young-woo.  If no degree of stepped-up sanctions have applied sufficient economic pressure, an embargo would be the last step in the escalatory chain of economic measures.  Would this cause the North Korean people to suffer as well as the North Korean regime?  It would, at least in the short run, but not as much as it would have in the past because of North Korea’s market liberalization of recent years.  Domestically produced food and other necessities would still make their way to the markets.  An embargo might even accelerate the pace of de facto privatization of the North Korea economy.  An exception could be made for medicines and other strictly humanitarian requirements.  It may be worth giving economic measures one last chance to work.

A strong deterrent measure might be to overfly North Korea with short or intermediate range U.S. or South Korean missiles.  North Korea has not hesitated to launch missiles over Japanese territories, so it cannot argue that there is a taboo against such a step.  The North Korean air defense system probably is robust enough that overflying North Korea with military aircraft would be too risky.  They probably would not have the ability to intercept a missile over-flight, and even if they did, the interception of a missile within North Korean air space would still show that its weapons program was not making North Korea any safer.

The goal is still to bring North Korea to a negotiating table.  A strong response to the September 3rd test may be more likely to make that happen than no response at all.

Mark Tokola is the Vice President of the Korea Economic Institute of America. The views expressed here are his own.

Photo from Russ Allison Loar’s photostream on flickr Creative Commons.

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U.N. Sanctions Against North Korea: A Look Back

By Juni Kim

North Korea’s two ICBM (intercontinental ballistic missile) tests last month marked an ominous milestone in the reclusive nation’s weapons programs. For the first time, North Korea demonstrated the capability of launching a missile that could reach the lower 48 states. In response to the recent tests, the United Nations Security Council passed its latest resolution sanctioning North Korea over the weekend. The resolution targets some of North Korea’s most profitable industries, including coal, iron, lead, and seafood. U.S. Ambassador to the U.N. Nikki Haley said in a statement that the new sanctions package would reduce North Korean total exports by a third.

Sanctions have played a foundational part in the international community’s efforts to curtail North Korea’s weapons programs over the past decade. Each sanctions resolution was passed in response to either a nuclear or missile technology test by the North, with earlier sanctions targeting weapons materials and the more recent sanctions targeting North Korea’s trade industries. The effectiveness of such sanctions is still hotly debated in policy circles, but the advances that North Korea has made in its nuclear and missile technology in recent years are gravely undeniable. The fiery rhetoric between the U.S. and North Korea in the past few days has only further highlighted the threat that North Korea poses to U.S. security.

The graphic below shows a selected overview of sanctioned materials outlined in U.N. resolutions. The list is not meant to be comprehensive and is meant to give a general idea of what each resolution sanctioned. The resolutions are not designed to replace previous versions, but usually recall and reinforce the prior resolutions while adding new items, organizations, and individuals to the sanctioned list. It should also be noted that individual nations maintain their own unilateral sanctions against North Korea in addition to the U.N. resolutions. For the original resolution texts, you can click on the corresponding links below.

UNSCR Sanctions 2

Links to the U.N. press release on each resolution and the resolution text

UNSCR 1695 – July 15, 2006

UNSCR 1718 – October 14, 2006

UNSCR 1874 – June 12, 2009

UNSCR 2087 – January 22, 2013

UNSCR 2094 – March 7, 2013

UNSCR 2270 – March 2, 2016

UNSCR 2321 – November 30, 2016

UNSCR 2356 – June 2, 2017

UNSCR 2371 – August 5, 2017

 

Juni Kim is the Program Manager and Executive Assistant at the Korea Economic Institute of America. Noori Kim, an intern at KEI, made contributions to the articles. The views expressed here are the author’s alone.  

Graphic created by Juni Kim. Photo from Ashitaka San’s photostream on flickr Creative Commons.

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Target of New North Korea Sanctions Bill: Finances

By Phil Eskeland

(“That’s Where the Money Is.”[1])

Last week, the House of Representatives and the Senate overwhelming passed and sent to President Trump’s desk a new sanctions bill for his expected signature. The bill originally focused on Russia and Iran when it was first adopted by the Senate, but was expanded after bipartisan, bicameral negotiations to include sanctions provisions against North Korea as well.  With all the talk in Washington about the inability of different sides to work together, few issues unite more U.S. public policymakers on both sides of the political spectrum than getting tougher on North Korea.  Last May, the House of Representatives passed the Korea Interdiction and Modernization of Sanctions Act (H.R. 1644) by another overwhelming bipartisan vote of 419 to 1.  Essentially, this new sanctions bill – Countering America’s Adversaries through Sanctions Act (H.R. 3364) – takes almost every word from the House-passed North Korea sanctions bill to include it as part of Title III.

Much of the attention to this legislation has been directed at the first title of the bill affecting Russia.  The debate has primarily focused Congressional limitations on the flexibility given to the Executive Branch to implement the bill.  In the past, most sanctions-related legislation grants the President some discretion to waive or delay the imposition of sanctions, because the U.S. government may need flexibility in diplomacy and cannot wait for Congress to pass a bill to amend or end sanctions.  If there was any constraints on the Executive Branch, it was usually done when there was divided government (i.e., the Republican Congress passed the Helms-Burton Act in 1996, when Democrat President Bill Clinton was in office, that placed into statutory law many of the presidential Executive Orders affecting U.S. trade with Cuba, and thus cannot be unilaterally lifted or altered by the President without the consent of Congress).  It is interesting to observe a Republican Congress reasserting itself as a co-equal branch of government by imposing a series of constraints on the ability of a Republican president to unilaterally waive part of the sanctions against Russia.

However, any additional Congressional limitations on the President’s ability to waive or delay the imposition of these new sanctions do not affect the provisions of the bill dealing with North Korea, despite a last-minute effort by some Senate Republicans.  Nonetheless, the primary purpose of Title III of H.R. 3364 is to close loopholes and target new areas to deprive the North Korean regime of the money it needs to operate.  The fundamental philosophy behind the effort is to “cut off the Kim Jong Un regime’s access to hard cash” and “to restrict North Korea’s ability to engage in illicit trade.”

How does this bill accomplish these goals?  First, the legislation mandates sanctions against foreign persons who engage in five activities that have been identified as major revenue-generating activities for the North Korean regime – high-value metals or minerals, such as gold and “rare earths;” military-use fuel; vessel services; insurance for these vessels; and correspondent accounts, which are used in foreign currency exchanges to convert U.S. dollars into North Korean won.

Second, H.R. 3364 increases the discretionary authority of the U.S. government to impose sanctions on persons who engage in one or more of 11 different activities that generate revenue for North Korea, including those who import North Korean coal, iron, or iron ore above the limits set by the United Nations (U.N.) Security Council resolutions; who buys textiles or fishing rights from North Korea; who transfers bulk cash or precious metals or gemstones to North Korea; who facilitates the on-line commercial activities of North Korea, such as on-line gambling; who purchases agricultural products from North Korea; and who are engaged in the use of overseas North Korean laborers.

Third, there is a provision closing one loophole in the international financial system that would prohibit North Korea’s use of indirect correspondent accounts.  These accounts temporarily use U.S. dollars when converting one foreign currency into another, such as North Korean won.  The aim of this provision is to further cut off North Korea from the U.S. financial system and restrict the ability of the DPRK to conduct business with other nations.

Fourth, the legislation curtails certain types of foreign aid to countries that buy or sell North Korea military equipment in the effort to dry up another source of revenue to the regime.  Nations will have a choice: buy North Korean conventional weapons or receive U.S. foreign aid to help their people.

Fifth, H.R. 3364 augments sanctions that target revenue generated from North Korea overseas laborers who work under inhumane conditions.  It would ban the importation into the U.S. of any product made by these laborers.  The bill would also sanction foreign individuals who employ North Korean laborers.

The legislation also ensures that humanitarian aid destined for North Korea is not affected by heightened U.S. sanctions.  However, H.R. 3364 did not retain a provision in the original House version that contained an exemption for planning family reunification meetings with relatives in North Korea, including those from the Korean-American community meaning that family reunions will still be subject to sanctions.  In addition, the bill contains a reward for informants who report violations of financial sanctions on North Korea, in the hopes of increasing the government’s ability to enforce these sanctions.  Finally, it requires a report from the Administration within 90 days after the bill becomes law on the efficacy of putting North Korea back on the State Sponsors of Terrorism list. The debate over reinstating North Korea on the list was revitalized in light of the assassination of King Jong Nam, the exiled half-brother of the ruling leader of North Korea, at the Kuala Lumpur international airport in Malaysia using the VX nerve agent, a banned chemical weapon.

H.R. 3364 should not be seen as an end-goal, but as part of a continuing process of ratcheting up pressure on North Korea to denuclearize.  As this bill is implemented, North Korea will find new ways to evade sanctions.  Further legislation or action by other nations and the U.N. Security Council may be required to further clamp down on these loopholes.  However, the question remains unresolved if heightened sanctions from both the U.S. and the international community will produce the desired outcome – a nuclear-free Korean Peninsula – particularly before North Korea acquires the ability to launch a nuclear warhead on top of an intercontinental ballistic missile (ICBM) capable of reaching the mainland of the United States.   Sanctions are only as strong as its weakest link.  Thus, North Korea’s main trading partner, China, needs to do much more if it is to live up to its rhetoric that “they will strive for the complete, verifiable and irreversible denuclearization of the Korean Peninsula.”

Phil Eskeland is Executive Director for Operations and Policy at the Korea Economic Institute of America. The views expressed here are his own.

Image from Shawn Clover’s photostream on flickr Creative Commons.      
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[1] Response by bank robber Willie Sutton to the question as to why he robbed banks, January 20, 1951, edition of the Saturday Evening Post, “Someday, They’ll Get Slick Willie Sutton.”

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The North Korean ICBM Test: A Significant Step, But Still Just a Step

By Mark Tokola

It usually takes some time to figure out the details of what a North Korean missile test has accomplished – what type of missile it was, how it performed, its capabilities – but from the initial information regarding North Korea’s July 4th missile test, it appears that they have successfully tested an Intercontinental Ballistic Missile (ICBM).

The accepted technical definition of an ICBM is a missile that can travel 3,400 miles. The North Koreans test fired their missile to fly a short range but with a high trajectory; it landed off the west coast of Japan. If the trajectory was flattened out, the missile in theory could have flown over 4,000 miles, enabling it to reach Alaska but not the lower 48 states.

Conducting an ICBM test is a significant step in North Korea’s weapons program, but it is just a step. Kim Jong-un’s stated objective is to develop a reliable ICBM that can carry a nuclear warhead to the American homeland. The July 4th missile did not demonstrate that kind of range, and there is no evidence (yet) that North Korea has a nuclear warhead that could be carried by an ICBM. We shouldn’t downplay the significance of this test, but calling it a “game changer” may be an overstatement.

The true importance of the July 4th test is the timing – following a series of other missile launches in 2017, it is clear that North Korea is not slowing the pace of its quest for nuclear weaponry that can threaten the U.S. Further, Kim Jong-un has crudely described it as a “gift for the American b******ds,” implying it was timed for Independence Day. The language choice shows that the North Korean regime sees no hypocrisy in using such language about other countries while having a hair-trigger sensitivity to slights to its own national dignity. The test also comes on the eve of a G20 meeting, demonstrating North Korea’s desire to be in the international limelight.

Perhaps the most important fact about the timing of the North Korean ICBM test is that it comes on the heels of the first visit of new South Korean President Moon Jae-in to Washington, where he spoke clearly of his desire to engage North Korea in dialogue. If North Korea had any interest in demonstrating an openness to President Moon’s overture, it would not have conducted an ICBM test only days after President Moon’s public remarks. We should all hope that North Korea would be responsive to a South Korean initiative to defuse tension, but the July 4th test makes it hard to believe that there is any basis for that hope. North Korea seems unresponsive to China’s efforts to defuse tensions, and even less so to South Korea’s initiatives. North Korea seems single-mindedly focused on trying to acquire a reliable ability to credibly threaten the United States with a nuclear attack — truly a high stakes gamble on North Korea’s part.

Still, it is not too late for a diplomatic solution. That would be in the best interest of South Korea, China, Russia, Japan, the United States – and even for North Korea. That diplomatic path may be narrowing, and it will only be possible if South Korea, China, Russia, Japan, the United States, and others are able to maintain a common front against North Korea’s nuclear ambitions. There is some evidence that sanctions are beginning to bite – which may be also be contributing to Kim Jong-un’s rush. As the world’s leaders gather for the July 7-8 G20 summit in Hamburg, watch for signs of unity or division to see how the international community may handle this growing threat.

Mark Tokola is the Vice President of the Korea Economic Institute of America. The views expressed here are his own.

Photo from Stefan Krasowski’s photostream on flickr Creative Commons.

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How Might the U.S. Respond to a Nuclear Crisis at North Korea’s Yongbyon Nuclear Complex?

This is the fifth in a series of six blogs looking at a nuclear crisis at North Korea’s Yongbyon nuclear facility. Other pieces will look at the prospective issues of a nuclear crisis in North Korea from the perspective of North KoreaRussiaJapan, South Korea and China.

By Frank Aum

In a nuclear crisis scenario at North Korea’s Yongbyon complex, the primary interest of the United States would be to determine and mitigate any immediate security and health threats to our Republic of Korea (ROK) and Japanese allies as well as the U.S. citizens that reside in these countries and China.  A less immediate, but still urgent, consideration would be how this event might affect stability on the Korean Peninsula and in the region.

To better assess the immediate and medium-term security implications, the United States would first seek to obtain the most accurate information about the extent of a meltdown at North Korea’s experimental light water reactor, if it were operational, or the burning of the core at its research reactor. Efforts would also be made to determine any radiation leak through intelligence and military channels as well as through close collaboration with its regional allies and partners.  The United States might evaluate whether its military aircraft could get close enough to measure radiation, as well as work with China—which has the closest proximity to Yongbyon—the ROK, Japan, and Russia to share information about the severity of the crisis.  These countries may also seek to get a United Nations Security Council endorsement of an international fact-finding mission to persuade Pyongyang of the issue’s urgency.

Getting accurate information from North Korea directly, however, would probably be a difficult task.  First, it is unclear whether North Korea would even have the technical capabilities and bureaucratic agility to assess the true scope of the problem quickly and effectively.  Even if North Korea had accurate information to share, it is very possible that the regime would not be willing to do so in order to save face, keep the issue internal, or prevent other countries from using the crisis as a pretext for intervention.  A 2016 investigative report of the March 2011 Fukushima Daiichi nuclear plant meltdown by the Tokyo Electric Power Company (TEPCO), which operated the plant, revealed that TEPCO’s then-president, under alleged pressure from the Prime Minister’s Office, essentially covered up the severity of the crisis by instructing officials not to use the specific term “meltdown.”

Assuming that the United States received accurate information that the crisis is dire and that North Korea’s ability to contain a meltdown or burning reactor core is at best unknown, Washington would then need to consider the security threat to U.S. citizens and regional allies and how to mitigate it.  During the Fukushima crisis, the Japanese government ultimately established a 30 kilometer evacuation zone around the reactor site, with over 60,000 people being evacuated from the prefecture and over 150,000 evacuations total.  The 1986 Chernobyl disaster also resulted in a 30 kilometer evacuation zone but with a far greater area affected by radiation.  Although the greater metropolitan Seoul area is more than 200 kilometers from Yongbyon, depending on the severity of the crisis and the likelihood of prompt containment, the United States would have to consider a range of options, including releasing an advisory on potential health risks, calling for voluntary evacuation of U.S. citizens, and relocating U.S. troops from forward-deployed areas and the greater Seoul area to bases further south, and even evacuation operations from the Korean Peninsula depending on how the situation develops in a catastrophic scenario.  These options would also have to be weighed against competing factors, such as requests for humanitarian assistance and disaster relief operations and the security mission of the 28,500 U.S. service members in South Korea.  Similar considerations may also apply to U.S. citizens and forces in Japan.

Concurrent with addressing the security threats, the United States would also likely offer technical assistance and expertise to North Korea directly or as part of a multinational effort to help resolve the crisis.  Faster containment of the emergency would mitigate the intensity and reach of first and second order effects.  One problem may be that North Korea could be slow in recognizing the urgency of the crisis or asking for assistance, exacerbating the crisis even more.  A worst case scenario might entail Pyongyang’s unwillingness to request or accept outside assistance, leading to internal deliberations within the U.S.-ROK Alliance and China about whether national security concerns demanded military intervention into North Korea.  It is more likely, however, that North Korea would accept limited civilian assistance long before military intervention became a realistic option.  Another possibility, given Yongbyon’s relative proximity to the Chinese border and the potential for instability and refugee outflows, is that the Chinese People’s Liberation Army and People’s Armed Police could take the lead role in providing technical and humanitarian assistance to North Korea, which might be more palatable for Pyongyang than a U.S.-led effort.

There is a potential risk that the chaos of a nuclear crisis and subsequent North Korean evacuation operations from the Yongbyon area could spiral into a breakdown in government and overall instability.  In this case, there might be some concern in Washington that, amid this chaos, separatist factions or opportunistic individuals may have access to sensitive material, technology, or expertise related to weapons of mass destruction that could then be traded or sold outside of the country and delivered into the hands of rogue states or terrorist organizations.  According to the Nuclear Threat Initiative’s 2016 Nuclear Security Index, North Korea ranked last among 24 countries that possessed weapons-usable nuclear materials with respect to the risk of theft of nuclear materials.  This situation would pose a significant dilemma given the ongoing crisis and the lack of access to North Korean territory.  If there was compelling evidence that sensitive WMD materials have been compromised, the United States would have to work with China, Russia, the ROK, and Japan to ensure that these materials do leave the country and enter into proliferation networks.

Frank Aum is a Visiting Scholar at the U.S.-Korea Institute at Johns Hopkins SAIS and a former Senior Advisor for North Korea at Department of Defense. The views expressed here are the author’s alone.

Photo from the Chairman of the Joint Chiefs of Staff’s photostream on flickr Creative Commons. 

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The Peninsula blog is a project of the Korea Economic Institute. It is designed to provide a wide ranging forum for discussion of the foreign policy, economic, and social issues that impact the Korean peninsula. The views expressed on The Peninsula are those of the authors alone, and should not be taken to represent the views of either the editors or the Korea Economic Institute. For questions, comments, or to submit a post to The Peninsula, please contact us at ts@keia.org.