Tag Archive | "nuclear weapons"

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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Seoul, Washington, and Pyongyang: Delicate Diplomatic Triangle for President Moon Jae-in

By Robert R. King

The campaign is over; ballots have been cast; the result is clear—Moon Jae-in will be in the Blue House within a few days.

The most critical foreign affairs issue on the agenda of the new President is the South’s relationship with North Korea, and entwined with that issue is its relationship with the United States.  Though the new American President passed his first 100 days in office just a few days ago, there is still considerable uncertainty about the direction of American foreign policy, and one of the most sensitive issues facing the United States is North Korea and its nuclear ambitions.  The relationship with North Korea is the most critical question for the South and its new president, and because of the military ties with Washington, how to deal with the North will also be the key issue in relations with Washington.

President Moon begins his contacts with the new American president at something of a disadvantage.  When President Trump moved into the White House, South Korea was in the midst of the impeachment of Moon’s elected predecessor Park Geun-hye.  As a result, Trump met with Japan’s Prime Minister during the transition (his first post-election meeting with a foreign leader) and again after his inauguration in Washington and at Mar-a-Lago.  The American President also met in early April with Chinese President Xi Jingping.  The American Secretary of Defense and Secretary of State have both met with counterparts in Seoul in recognition of the importance of Korea in American policy, but the chemistry and content of bond between the two presidents has yet to emerge.

It is also not clear where there may be differences on the North between the two leaders.  During the campaign, Moon has expressed the desire for engagement with the North and better relations.  Trump has expressed serious concern about North Korea’s nuclear and missile programs, but he has also expressed a willingness to meet directly with the North’s leader Kim Jong-un.  His first statement was made early in his tenure, but he repeated it again just last week.  Trump told Bloomberg News just a week ago that he would meet with Kim Jong-un under the right circumstances—“If it would be appropriate for me to meet with him, I would absolutely; I would be honored to do it.  If it’s under the, again, under the right circumstances. But I would do that.”

South Korea’s new president, who was still a candidate ten days ago, cited this statement by America’s President and concluded that Trump is “more reasonable than perceived” and suggested that he and Trump were taking a similar position in favor of bringing the North back to negotiations on the nuclear issue.  It remains to be seen, however, how close the two presidents are on the details of how best to bring the North into denuclearization negotiations.

Another potentially serious issue that could create problems between the two presidents and their countries with regard to policy toward the North is THAAD, the U.S. defensive missile system now deployed in the South as agreed to by Moon’s predecessor.  The U.S. rushed to get the system in place before the election, although Moon expressed concerns about the deployment and the belief that the next government should review the decision, his political and ideological allies were vocally opposed to the deployment throughout the election.  This will likely be a serious point of contention that could create difficulties for relations between the U.S. and South Korea.

It is made more complex by the fact that China has been particularly opposed to THAAD and has taken steps to make the deployment more costly for the South by significantly cutting back Chinese tourism to South Korea—a major source of income and consumer goods sales in the South—as well as boycotting retail outlets in China owned by the South Korean conglomerate which sold land to the South Korean government on which THAAD is based.  THAAD is an issue that has serious security and domestic political implications for President Moon, but one of the most difficult will be the effect the issue has on the American-South Korea relationship.

Making the issue even more awkward and controversial was President Trump’s pronouncement last week that he expected the South to pay the $1 billion cost for the missile defense system.  His comment came less than ten days before the South Korean election, and was certainly not welcomed by pro-U.S. presidential candidates in the South.  Trump’s statement calling for the South to pay for THAAD was linked to his call for a renegotiation of the U.S.-South Korea trade agreement (KORUS).  The U.S. National Security Advisor, General McMasters, however, reassured his counterpart in Seoul that the U.S. would keep its previous commitment on the missile system.

The bottom line is that uncertainty and shifting policy signals from the Oval Office will not make the task of the new South Korean president an easy one.  He will likely have his own learning-curve and unintended missteps, which will make his task harder.  The relationship between Seoul and Washington is critically important for both countries, however.  It will take a great deal of maturity and understanding on the part of both presidents to deal with North Korea.  There is a great deal at stake for all sides.

 

Robert R. King is a Non-Resident Fellow at the Korea Economic Institute of America.   He is former U.S. Special Envoy for North Korea Human Rights.  The views expressed here are his own.

Photo from Morning Calm Weekly Newspaper Installation Management Command, U.S. Army’s photostream on flickr Creative Commons.

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A Conversation on THAAD from the Chinese Perspective

KEI Communications Director Jenna Gibson, host of the KEI podcast Korean Kontext, recently interviewed Yun Sun, Senior Associate with the East Asia Program at the Stimson Center,  about the Chinese perspective on the THAAD missile defense system.

 The following is a partial transcript of that conversation. The rest of the episode can be found here.

 Jenna Gibson: Can you start by giving us kind of the big picture here from Chinese perspective? Why are they so opposed to that and how serious are they about trying to stop this deployment?

Yun Sun: Well, the Chinese explanation is that they believe this is a military threat to China’s nuclear capability. It’s because the radar could reach as far as 2,000 kilometers, so the Chinese view that their military deployment and their military exercises, basically any military operations inside mainland China, will not be able to escape the radar that the THAAD system will encompass, so they feel vulnerable. So, there is a security argument there.

There’s also a political argument where the Chinese argue that they see this as an effort by the United States to reinforce and re-strengthen their alliance relations with South Korea. And even with the possibility of the integrated missile defense system in Northeast Asia, the United States is intending to create a Northeast Asia NATO against China. That is a political dimension.

There is also an interesting leadership dimension. If you look at President Xi Jinping’s policy towards the Korean Peninsula since his inauguration in 2013, it is a very interesting shift as Xi Jinping had been trying to pull South Korea closer to China. So, there had been a deterioration of relations between China and North Korea, but at the same time, what forms a sharp contrast to that is a warming or rapprochement between Beijing and Seoul. So it’s almost like Xi Jinping’s personal foreign policy achievement that under him, South Korea has become much closer and much friendlier towards China. So, this THAAD deployment must have been very disappointing for the top Chinese leader, that this is his creation, his baby, and his campaign, and now it’s not coming to a good result.

Judging from the economic sanctions that Beijing has been willing to impose on South Korean, not only government, but primarily South Korean companies. I’d say that the Chinese are very serious about punishing South Korean entities for the deployment of THAAD. That represents Beijing’s determination and their seriousness to stop the deployment. But, I also think they understand that at this point, budget has already been allocated, the land has been secured, and the deployment has started. So, they have to understand that this is going to happen with or without their support or sanction.

 Jenna Gibson: So, things have seemed to come to a bit of ahead in a week or so with China allegedly cracking down on streaming of Korean TV shows, going after Lotte department stores, and possibly banning travel agencies from selling trips to Korea. Why has China seemingly stepped up their economic pushback against the missile defense system?

 Yun Sun: The timing is because the deployment is finally going to happen materially. In the past, although the decision to deploy the THAAD system was made almost last summer, it was a political decision. So the Chinese have been persistently using different policy instruments, trying to change the calculus, change the decision by the South Korean government. So, I would say that until the deployment is completed and until the South Korean government tells Beijing unequivocally that the decision is permanent and is final, the Chinese will not stop pushing. So before the deployment is completed, Beijing will keep pushing.

 Jenna Gibson: So, I have a personal theory. I think that China is killing two birds with one stone here. They are seizing upon an opportunity to cut down on the popularity of Korean pop culture in China, which Beijing has been upset about it for years. What do you think about that? Is this more than just the missile defense system?

 Yun Sun: If you look at how the Korean pop culture had been received and perceived in China by the Chinese government, you will find this interesting distinction that basically under President Lee Myung-bak, Korean pop culture was regarded as almost toxic in China. But, we will have to assume that this was very closely linked to the judgment that President Lee Myung-bak was pro-U.S. and anti-China.

Then, under President Park, the Chinese government policy towards Korean pop culture was actually quite positive. You’ll see Korean pop stars appearing on the Chinese New Year’s Festival gala on the Chinese Central Television, which is quite a high prominent treatment for foreign movie actors or pop stars.

So, I would say that the Chinese attitude towards Korean pop culture is still very much related to the political climate between the two countries. When the political relations are good, the Chinese are more likely to treat Korean pop culture with positive reception. But, when the political relations are bad, you will see that there is almost a ban for any Korean soap operas on Chinese TV today.

  Jenna Gibson: I will be really curious to see the things go forward, you know, how much are the Korean companies, how much is k-pop, how much are Korean dramas affected going forward? Is there any pushback? I’ll be really curious to follow that.

 Yun Sun: Yeah, so far, we haven’t seen that much of a pushback from the Chinese general public. You see this anti-Korea demonstrations in some of Chinese cities as well. You also see that one point, Korean cars were pretty popular in China, and now there are people who are vandalizing Korean cars on the street. So, what that says is the government’s ability to influence the public opinion on these matters is really strong.

There’s also the fact that local governments would assume that the central government want to see this anti-Korea sentiment bubbling from their locale. So sometimes, the central government may not be behind certain movement against a certain Lotte supermarket. But, a local government might be.

  Jenna Gibson: Now that the U.S. is clearly in the middle of this, too. We are the ones who are deploying THAAD and of course we are close allies with South Korea. So, what advice would you give to the United States in this situation? Is there a way to work with China on the North Korean issue right now? I know President Trump has been really emphasizing that China peace in solving the North Korean problem. Do you think that that’s the right way to go?

Yun Sun: I think the U.S. is doing the right thing. The deployment of THAAD is not about China, it is about North Korea. And if China doesn’t like it, it must address the source of the problem, which is the North Korean nuclear provocation. So, I think the U.S. is absolutely doing the right thing here.

And for the Trump administration, the U.S. does have this first mover advantage. After the Taiwan controversy, the Tsai Ing-wen phone call, and after President Trump’s comments in the past about how he is going to punish China on trade and is going to negotiate with China for a good deal, I think the Chinese are put on alert. They are very sensitive about what the U.S. might do to China next. And they are not in a very confident position to challenge President Trump. So that almost gives President Trump and his administration an edge, an advantage over China’s policy because China does not want to start a fight with the Trump administration either over North Korea or over the South China Sea.

So, I feel that there is room for the U.S. to push China. For example, there have been talks about more sanctions on North Korea, so China already preempted that. We are already suspending our co-import from North Korea for the rest of this year. What else do you want? You have to be very specific. If you ask us to cut our aid, especially the energy transfer and our food supply to North Korea, the United States will have to answer difficult questions like — what if this creates a humanitarian disaster in North Korea. So, I think the United States has to be very specific about it wants China to do and stand ready to answer the counter-questions that the Chinese will raise.

KEI Intern Jennifer Cho assisted with transcribing this interview.

Image from USFK’s photostream on flickr Creative Commons.

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China Cuts Off Imports of North Korean Coal: Economic Impacts Depend on Pyongyang’s Reaction

By William Brown

Beijing’s Commerce Ministry surprised everyone on Friday, announcing a halt to imports of any coal from North Korea in 2017, a much deeper reduction than was called for by the November 30 UNSC resolution, which allows 7.5 million tons for the year, worth up to $401 million.  Only Beijing knows the reasoning for its abrupt change in policy—it had been resisting sanctions that hurt North Korea’s economy at large—but presumably it was due to Pyongyang’s solid fuel missile test two weeks ago, the killing of Kim Jong Nam in Malaysia, last week, or even something discussed during Secretary of State Tillerson’s meeting with Chinese Foreign Minister, Wang Yi, also on Friday.

For years, China has argued in the Security Council against a shut off in North Korean coal exports, saying it would go beyond the specific intent and focus of the sanctions on the military and nuclear establishments and would harm the general economy, so it makes sense for us now to speculate just what impact this might have.  Coal exports, all to China, earned about $1.2 billion in 2016, 45 percent of overall North Korea earnings from China.  At second-half 2016 levels and prices, North Korea, without sanctions, would have earned well over $2 billion in 2017, as prices in China have soared in recent months. Reductions in earnings of even the November limits, let alone this complete cut-off swamp any other recent sanctions on Pyongyang, and come on top of the loss of Kaesong Industrial zone income last year and other sources of foreign income.

The impact on the economy could be devastating if Beijing indeed holds to this decision for the entire year, and Pyongyang’s economic planners don’t react well to what must come as a shock. If there are positive things to be said about the Kim regime so far they are that, unlike his father, he has been able to steady the market exchange rate and eliminate hyper- inflation, probably by allowing significantly more market activity, which has led to productivity increases and a relatively buoyant economy.

  • Well worth watching in the next few weeks and months is what happens to the won/dollar exchange rate and the won price of rice as shown in the Daily NK website—and we wish higher priority could be made by the news service or others in presenting this data  daily rather than at two-week intervals. If it is true that the market is taking hold in North Korea, and that people soon become aware of the Chinese actions, the won price of the dollar should rise significantly as dollars will be seen as increasingly scarce. And after that the price of rice measured in won also should rise. These prices could jerk upwards, moreover, if panic should ensue.
  • If the prices do not change, we can only guess that the spread of information in North Korea is much less than we think, that there is something wrong with the data collection, that the government is taking extraordinary measures to support the currency, for instance by selling whatever dollars its holds and buying won, or lastly, and most worrisome, that new restrictions on holding and trading dollars are coming into play reminiscent of the botched currency revaluation of 2009. Any of these would be bad news for the economy and ultimately, I suspect, for social stability.

A better choice by Pyongyang would be to continue the liberalization of finance but this will take bravery on the part of the officials in charge, given the markets are likely to be pushing against them with a high potential for the return of hyperinflation. The government, while virtually without credit, internationally, has huge real resources that it could liquidate to capture dollars currently circulating within the economy, and use these to support the won. Speeding privatization, moreover,  improves productivity and could increase exports of non-sanctioned goods, for instance textiles, that in the longer term hold more promise than coal.

The more likely alternative may be to resort to the tired but true juche policy, cutting back on imports and trying to regulate prices and wages, returning as much as it can to the command or rationed system to prevent inflation and a loss of people’s living standards.  Stalinist planners, in fact, might even like the new sanctions, given they will have a better chance to control coal production and direct it toward domestic use, especially to the stretched electric power sector. But re-regulation of the economy will expose it to all the inefficiencies of the past, even to a collapse of consumer spending and eventual ruin.

Beijing probably had good reasons for not cutting off coal imports so completely in November, and we should emphasize that the new cut is time limited, only through 2017.  We shall soon find out if those worries about the economy and social stability were on the mark, or not, and if Beijing can effectively use this powerful sanction to change North Korean policy.  Even more intriguing is the potential for China to ultimately use its crude oil card—virtually all petroleum used by North Korea comes free of charge from Daqing oilfield—an issue never openly discussed by Chinese officials except to say they do not want to destroy the North Korean economy by turning off those valves.

William Brown is an Adjunct Professor at the Georgetown University School of Foreign Service and a Non-Resident Fellow at the Korea Economic Institute of America. The views expressed here are the author’s alone.

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An Agenda for U.S.-Korea Relations Under the Trump Administration

By Troy Stangarone

As the Trump administration settles into Washington, DC, it inherits an alliance with South Korea that is not only in good shape, but that has been well run for nearly a decade now under both Republican and Democratic administrations. While the Trump administration inherits a solid base from which to begin its relations with South Korea, it also faces a potentially more difficult environment than the administrations of George W. Bush and Barack Obama. As the Trump administration begins to build its foreign policy, what should its agenda be for relations with South Korea and handling North Korea?

To develop an agenda for any administration it is necessary to consider the challenges and opportunities it is likely to face in the near and long term. In the case of the Trump administration and the Korean peninsula the immediate term is likely to present the most challenges. The impeachment of President Park Geun-hye has changed the political environment and the Trump administration will need to manage relations with the interim administration while preparing to build a relationship with the successor to President Park Geun-hye either later this year or in early 2018 depending on how the Constitutional Court rules on President Park’s impeachment.

At the same time, at some point during the first year of the Trump administration North Korea will likely present the administration with a crisis by conducting another nuclear test or the test of an intercontinental ballistic missile. With pressing needs related to North Korea and political change on the horizon in South Korea, there are five key areas where the Trump administration should focus its efforts in relations with South Korea.

Maintaining the Current Strength of U.S.-Korea Relations

With the alliance between the United States and South Korea in good shape, the first priority should be to make sure it stays that way. With South Korea entering a period of political transition this will present the administration with new challenges, but since it may also seek change in the alliance new opportunities. To best maximize those opportunities and maintain good relations the administration should begin building relationships with all of the four major political parties in South Korea to help identify areas of common agreement where the relationship can be grown.

The New Frontier Issues

Growing the relationship between South Korea and the United States beyond the security alliance has been a hallmark of the past two administrations. One area of opportunity for the Trump administration is continuing the New Frontiers initiative. The New Frontiers are efforts by the United States and South Korea to cooperate on issues such as cybersecurity, global health, and climate change. While the new administration may have its doubts about climate change, energy cooperation, a subset of any climate change initiative, is one area ripe for potential cooperation in light of South Korea’s need for energy and the United States ability to supply both LNG and renewable sources, and hence to could be an opportunity for the new administration to expand job growth in the United States.

Both the United States and South Korea also face increasing threats from cyberattacks, and a common adversary in this realm in North Korea. In light of North Korea’s suspected hacks of banks and government facilities in South Korea, and Sony pictures in the United States, Seoul and Washington have a shared interested in cooperating on detecting, deterring, and defending critical infrastructure from North Korean and other attacks.

Trilateral Relations Between the United States, South Korea, and Japan

Much as with the Obama administration, the Trump administration will need to focus on the trilateral relationship with Japan. While the Obama administration put significant effort in bringing the two countries together, South Korea’s relationship with Japan is still fragile. While the December 2015 agreement on the comfort women remains in place, some South Korean presidential candidates have suggested that it might not be adequate.  Japan has recently temporarily recalled its ambassador to South Korea and paused talks over a currency swap in response to the placement of a statue honoring the Comfort Women outside of its consulate in Busan. The intelligence sharing agreement between South Korea and Japan is also relatively new and controversial in South Korea. With this relationship still in a fragile state, like the Obama administration, the Trump administration will need to work behind the scenes to maintain a working trilateral relationship and allow South Korea and Japan space to continue to work through their difficulties.

Negotiating a New Special Measures Agreement

More of a medium term issue for the Trump administration will be negotiating a new Special Measures Agreement (SMA). The SMA is the vehicle through which South Korea’s contribution to the stationing of U.S. troops is set. The current agreement is set to expire in 2018. Increasing the contribution of U.S. allies has been a key issue for President Trump and the new SMA negotiations will provide the administration an opportunity to increase South Korean contributions. If the Trump administration seeks an increase in line with prior negotiations, it should be able to achieve its objective of increasing South Korean contributions. However, one tactic it should avoid is seeking to reopen the current SMA or issue a threat to withdraw U.S. troops until Korea pays all or nearly all of the cost of stationing our troops on the peninsula. That could lead to pushback in South Korea and, in light of the increasing threat from North Korea, would be a case of fighting the wrong battle at the wrong time.

North Korea Policy

When it comes to dealing with North Korea, the Trump administration will need to maintain close coordination with South Korea. The alliance functions best when the United States and South Korea are on the same page on North Korea, and this will be increasingly the case as Pyongyang looks to finish the development of its nuclear weapons program and its related delivery systems.

There are three main areas where the United States needs to ensure common agreement with South Korea – sanctions, engagement, and missile defense. The first is the overall approach to North Korea.  This is where sanctions and engagement come into play. The Obama administration and the Park administration have sought to pressure North Korea to return to talks over its nuclear program. It seems likely that the Trump administration will pursue a similar policy and it will be important to ensure that that there is bipartisan support in Seoul for continued sanctions, especially if the Trump administration chooses to be more aggressive on sanctions than the Obama administration.

The new administration in Seoul may seek to increase its engagement with North Korea, so the Trump administration will need to develop a sanctions policy that could dovetail with engagement by South Korea, preferably by working with Seoul to develop ways to engage North Korea that do not undermine efforts to roll back Pyongyang’s nuclear program. Similarly, President Trump has suggested in the past that he would be willing to meet with Kim Jong-un. If either administration in Seoul or Washington seeks to hold a summit meeting with North Korea, there will need to close coordination to make sure misunderstandings to not develop and that policy remains coordinated.

There will also need to be coordination on defensive matters such as the deployment of the Terminal High Altitude Area Defense (THAAD) system and missile defense more broadly. As deterrence plays a more important role in containing a potentially nuclear armed North Korea, improved missile defense in both South Korea and the region will be a key policy issue. However, China will continue to pressure South Korea to refrain from deploying a missile defense system and the alliance will need to maintain a common position on the issue.

The dynamics of North Korea and political change in South Korea, along the with Trump administration’s desire to develop a new type of relationship with U.S. allies, will make navigating U.S.-Korea relations more challenging than in the past. Ultimately, however, the Trump administration’s goal should be to develop the relationship with South Korea so that it that passes the alliance it inherited on to future successors in as good or better shape as it received it. If this means scaling back some of the administration’s own ideas for the alliance or finding a way to find successful compromises that meet both countries objectives that would good policy and alliance building. As the old saying says, “if it ain’t broke, don’t fix it.”

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 Gage Skidmore’s photostream on flickr Creative Commons.

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U.S.-Korea Relations: The Obama Years

By Troy Stangarone

Summing up a presidential legacy is a complex endeavor. There are countless details that are either unknown or just too difficult to fit into the flow of a single piece. There are choice that in the immediate term may seem wise, but in the hindsight of years less so. While mistakes today may come to be viewed as prudent years on. This is even more the case when it deals with only a single aspect of one part of the presidency, the relationship between the United States and the Republic of Korea. A relationship that while vibrant and strong, is also inevitably tied to both countries’ relationship with the Democratic People’s Republic of Korea.

For the last eight years, we’ve seen a relationship that has grown beyond the Cold War confines of the threat from North Korea and that has begun to evolve into more of a partnership that works together both in the region and on the global stage. This shift was possible in large thanks to the relationship that the Obama administration inherited and the partners they had to work with in South Korea under the Lee Myung-bak and Park Geun-hye administrations.

When President George W. Bush handed U.S.-Korea relations over to President Barack Obama on January 20, 2009, he handed over an alliance that was in good shape. While the relationship between the United States and South Korea had been rocky at times during the early years of the Bush administration, even during those difficult times progress was made on the alliance. As a result President Obama inherited an alliance that was already growing and changing as Bush administration left a legacy of a completed but unratified free trade agreement with South Korea (KORUS FTA), and agreements to move U.S. Forces Korea from Seoul to Camp Humphreys near Pyongtaek and to transfer wartime control of South Korean forces back to the South Korean government.

Over the last eight years, the Obama administration has built on the foundations of the alliance it inherited. While the alliance remains rooted in the United States’ commitment to defend South Korea against North Korean aggression, the Obama administration has worked with South Korea to move the alliance beyond deterring North Korea. Perhaps most critically in this was the administration’s support for Lee Myung-bak administration’s efforts to see South Korea contribute more to the global community. As part of these efforts, the Obama administration supported Seoul’s efforts to host the G-20 leaders summit in 2010 and asked South Korea to host the second Nuclear Security Summit as part of the Obama administration’s efforts to enhance global nuclear security.

Beyond summits, the Obama administration has sought to increase cooperation with South Korea in a wide range of areas that are now referred to as the New Frontier issues and include areas such as cyber security, climate change and global health. As an example, in the area of global heath South Korea worked with the United States and other nations to deal with the Ebola outbreak in Africa in 2014.

In the economic relationship, the Obama administration engaged South Korea in additional negotiations to address concerns related to trade in autos with the KORUS FTA. After reaching an agreement, the KORUS FTA went into effect on  March 15, 2012. The administration also negotiated a new 123 agreement to continue civilian nuclear cooperation between the United States and South Korea.

At the core of the alliance, defense cooperation, the administration has proceeded and largely concluded the efforts begun by the Bush administration to move U.S. troops from Seoul to Camp Humphreys. It also updated the decision to transfer wartime operational control to South Korea by moving the agreement from a deadline based transition to a conditions based agreement that would implement the transition only once South Korea has developed the intelligence and command infrastructure necessary to undertake operational control of forces.

If the relationship with South Korea has been a boon for Obama, than it is the relationship with North Korea where the long eye of history may have more to say in the years to come. While he inherited a North Korea that had already tested a nuclear weapon, North Korea has gone on to conduct four additional nuclear tests during his time in office and he will pass along to the Trump administration a much more dangerous North Korea than he inherited.  Many have criticized the Obama Administration’s “strategic patience” approach, but alternatives are limited if the goal is a denuclearized North Korea within a short time span.  There may have been other tools that the Obama Administration used over the past eight years that are not in the public domain to prod change in North Korea that only time and change in North Korea may tell.

Much as in the case of South Korea, leadership has likely played a role in the deteriorating situation with North Korea. If President Obama was fortunate to have willing partners in South Korea, the death of Kim Jong-il left a much more aggressive Kim Jong-un in charge of North Korea. While Kim Jong-il famously slapped away Obama’s inaugural offer of talks, it is unclear if diplomacy could have played much of a role in convincing Kim Jong-il or Kim Jong-un to roll back North Korea’s nuclear program.

Shortly after Kim Jong-un came to power, the Obama administration negotiated a moratorium on missile launches that North Korea would soon violate and despite efforts by the Park Geun-hye administration in South Korea to build relations with North Korea Kim Jong-un instead chose to greet her administration with confrontation through an ICBM test, a nuclear test, and the withdrawal of North Korean workers from the joint North-South industrial complex in Kaesong. It is perhaps telling that a U.S. administration that, despite domestic opposition, negotiated a nuclear deal with Iran and reopened relations with Myanmar and Cuba found North Korea an unwilling partner for improving relations.

With the path to negotiations closed the administration instead pursued a course of increasing pressure on North Korea. It’s perhaps most significant achievement on this end was the development of increased cooperation with China on sanctions in the United Nations. While the robust sanctions negotiated after North Korea’s fourth nuclear test in January of 2016 were found to have been flawed, those sanctions were revised after North Korea’s fifth nuclear test to close loopholes and being to bring real pressure on North Korea.

In addition to international sanctions, the administration took advantage of new sanctions authorities granted to it by Congress, though perhaps reluctantly and not to the degree critics of the administration might have hoped. Perhaps most significantly on this front, the administration has sanctioned both Kim Jong-un and his sister personally for their roles in human rights violations in North Korea.

Perhaps the last legacy item for the Obama administration in regards to North Korea has been its efforts to increase the deterrent capabilities of the alliance. It reached an agreement with South Korea to expand the range of South Korean missiles to allow Seoul to be able to target any area of North Korea and to help facilitate its “kill chain” concept of being out to take out North Korean nuclear facilities prior to an imminent attack. On the more controversial side, it also worked with Japan to develop new defense guidelines that would allow Japan to play a more active role if the U.S. were to come under attack and which would also aid in a contingency on the Korean peninsula and for the deployment of the Terminal High Altitude Area Defense system to protect parts of South Korea against North Korean missile attacks.

For President Obama it will be a strong legacy he leaves with South Korea, a nation that he visited more often than all but France, the UK, Germany, and Mexico and developed close personal relationships. It is North Korea where time may judge him more harshly, or depending on the actions taken by Kim Jong-un and the Trump administration come to view him as prudent. By his own standards, President Obama has done well.  He once described his foreign policy philosophy as looking for singles and doubles, and “don’t do stupid s@#%.” By that standard, President Obama has managed U.S.-Korea relations well. He’s made progress on a range of issues and avoided serious mistakes, and despite challenges presented by North Korea, he stands to hand the alliance over to his successor, Donald Trump, much as President George W. Bush did to him, in good shape.

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 The White House’s photostream on flickr Creative Commons.

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16 Issues for the Trump Administration to Consider in Developing a New North Korea Policy

By Troy Stangarone

As the United States transitions from the Obama administration to the Trump administration, there is significant uncertainty regarding the future direction of U.S. foreign policy. During the campaign, President-elect Trump broke from many of the orthodoxies shared by Republicans and Democrats in the area of foreign policy and since the election has begun to potentially shift gear on some of his campaign pledges. His ultimate foreign policy is still largely unknown.

One area where there will be significant interest in the new administration’s future policy direction will be North Korea. Pyongyang’s increasing efforts to develop both a workable nuclear warhead and multiple delivery systems has made North Korea a problem that will need to be addressed by the Trump administration. While it is still unclear if President-elect Trump will merely tweak existing policy or implement policies that rethink U.S. foreign policy and specifically how the United States addresses the challenges presented by North Korea. If the Trump administration were to consider a significant overhaul of U.S. policy on North Korea, here are 16 issues the incoming administration should consider in developing a new policy:

North Korea and the Trump Administration’s Foreign Policy Priorities

The most important question for the new administration to consider is where North Korea is on the list of foreign policy challenges? While North Korea’s growing weapons programs should make it a priority, other challenges could come to dominate the administration’s agenda and push North Korea down the list. Any White House where decision making is centralized can only handle two or three significant foreign policy issues at a time. If North Korea is not in that top tier, the administration will have to set a policy more in line with an issue of lesser priority. However, if the Trump administration is willing to delegate authority, more issues could be handled simultaneously.

Beyond shaping the approach and resources dedicated to addressing the North Korean nuclear issue, the level of priority the administration gives to resolving the crisis will impact how it handles other foreign policy issues. For example, if North Korea is a top priority for the Trump administration, it impacts how the administration handles relations with China. Most experts consider China a key player in resolving the nuclear issue, something President-elect Trump himself stated during the election. If the administration decides to push for a resolution to the nuclear issue early in its term it will need to consider developing a China policy that will elicit the cooperation needed rather than one that will push China to use North Korea as a wedge against the United States. As with much in life, foreign policy is about tradeoffs and compromises because everything cannot be achieved at once.

Where is North Korea in Terms of U.S. Priorities with China?

If North Korea is among the United States’ foreign policy priorities as one key consideration, the same is true for how the Trump administration will prioritize North Korea among its other challenges in its relationship with Beijing. During the campaign, President-elect Trump ran on a platform of bringing back U.S. jobs and getting a fair deal for American workers. While not a major campaign issue, the South China Sea and China’s military modernization are likely to remain a priority for a Trump administration. Another major issue in the relationship is climate change and the Paris accords. Since election, President-elect Trump has suggested that he might seek to reshape the United States relationship with Taiwan. If the new administration places a priority in its relations with China on addressing trade relations and seeks to withdraw the United States from the Paris accords, it might find Beijing less than willing to help address North Korea. If it seeks to redefine relations with Taiwan, Beijing’s willingness to cooperate on North Korea might be even less.  At the same time, if it prioritizes North Korea over other issues in its relations with China, it may need to refrain from engaging in trade disputes with China or other controversial issues to elicit Beijing’s support for a more effective stance against Pyongyang. Again, the priorities in the U.S. relationship with China will impact the type of North Korea policy the United States will be able to pursue.

How Likely China is to Squeeze North Korea?

China is seen as the key to the North Korea issue. While China has worked with the United States to pass tougher new sanctions on North Korea after each of its nuclear tests this year and has, to an extent, implemented those sanctions, there is a perception that China is not doing as much as it could or not stringently enforcing sanctions. If the new administration views China as the key, how likely is China to truly squeeze North Korea and what might incentivize it to do so? Similarly, if China will not truly squeeze North Korea and the new administration determines that the United States does not have acceptable leverage to shift China’s position that would necessitate a different approach to the North Korea than if the administration determines that China will squeeze North Korea or that it has sufficient and acceptable leverage to do so.

Does Russia Have a Role to Play?

Much like President Obama early in his administration, President-elect Trump has suggested that the United States should have better relations with Russia. While Russia was part of the Six Party Talks, it was not a primary player in the negotiations. Could Russia play a larger role or could it be a potential spoiler?

If relations with Russia improve, the administration will need to determine if Russia could manage a larger role. However, if Russia demurs, it will be important to consider how Russia could impede the process. In the two most recent UN sanctions debate Russia held up the process to water down the sanctions. If China were to come on board for stronger sanctions, including cutting off North Korea’s oil, Russia could serve as an alternative source. While Russia has its own reasons for not wanting to see North Korea’s program advance, Putin has shown a willingness to back outsiders when he thinks it could bring a geopolitical advantage. The one challenge for Russia would be keeping North Korea in line, as it has historically been a less pliant client than Russia’s more recent efforts at developing useful clients.

What Type of Deal is the Trump Administration Willing to Cut?

In the past, the United States has sought the complete, verifiable and irreversible disarmament of North Korea. Should that remain the goal of the United States? Should the United States pursue only a freeze or a final deal that addresses the nuclear issue and a wider range of issues? In light of prior efforts to negotiate with North Korea, should Pyongyang also be prohibited from utilizing nuclear power or should it be allowed to maintain certain aspects of a civilian nuclear program? What elements should be in any agreement with North Korea? Should it only cover the nuclear program or should it include elements such as a peace treaty ending the Korean War? What type of concessions would the administration be willing to make to North Korea to secure an agreement? These are just a few of the elements of a potential deal that the administration will need to consider.

What Would a Trump Administration Be Willing to Trade Away?

The art of any good deal is finding a way to meet the needs of the negotiating parties in a manner that is acceptable to all involved. Over the last three decades the complexity of what is acceptable for North Korea, South Korea, the United States, China, Russia, and Japan has kept a comprehensive deal out of reach. If the Trump administration decides to enter into negotiations with North Korea, they will have to determine what they are willing to give Pyongyang in return for it abandoning its nuclear program.

In the past, there has been an assumption that North Korea wanted some combination of recognition by the United States, security guarantees for the regime, and energy and economic assistance. In regards to security, North Korea has often called for the end of U.S. troops on the peninsula and the abdication of the U.S.-South Korea alliance. While the administration should not trade away items which would remove the ability of South Korea and Japan to defended themselves against North Korean aggression after any deal, it will need to give consideration to what hard choices it is willing to make to reach an agreement. If it is unwilling to take minimal steps such as provide some type of security guarantee or recognition of the regime, a policy other than negotiation will likely be needed.

The Importance of U.S. Allies to North Korea Policy

In the campaign President-elect Trump broke from long-standing U.S. foreign policy and suggested that he saw relationships with allies as more transactional in nature than as part of a broader relationship where the United States will live up to its commitments to defend allies. Since the campaign, some of that rhetoric has been walked back, but in dealing with North Korea the administration will need to determine how it views alliances and what their role is in tackling the North Korean nuclear issue.

If the Trump administration is going to “re-baseline” U.S. alliances as incoming National Security Advisor Michael Flynn has suggested, the administration will need to determine what advantages does having supportive allies in South Korea and Japan bring in terms of military and diplomatic contributions. What would be the costs to the United States of pursing a more independent or transactional policy in dealing with North Korea, specifically if the U.S. was no longer willing to assure allies that their concerns would be met. What is the tradeoff in having willing partners in dealing with North Korea as opposed to partners who might become more aggressive in pursuing their own interests solely if the U.S. were to as well?

What Are the Military Options?

As North Korea continues to make advancements on its missile program calls for the United States to take preemptive action before North Korea is able to demonstrate or utilize an ICBM that could reach the United States will likely grow. What are the merits and potential downsides of either blowing up a North Korean ICBM on the launch pad prior to liftoff or shooting a North Korean ICBM down in flight? If the U.S. choose to preempt a launch how would North Korea respond and what are the prospects for escalation? If the U.S. were to shoot down a North Korean ICBM, a successful intercept would likely be a strong deterrent, but what would be the consequences of a failure to intercept the missile?

Perhaps more boldly, are there other military options on the table such as covert operations that could slow the program or remove key individuals that could change North Korea’s decision structure. If you engage in military operations beyond those that are clearly defensive in nature, such as shooting down an ICBM on a trajectory for the United States or one of its allies, what are the prospects that China would be drawn into any escalation in conflict?

For all of these options, the administration would need to determine if they are willing to accept the risks and costs that any military option from shooting down an ICBM to engaging in a new war would entail not only for the United States, but also for our allies in the region. The bottom line for the administration will be is there a military option that has a high degree of success that will also minimize the potential for significant retaliation on the part of North Korea.

Is the Obama Strategy Working?

There is a tendency for incoming administrations to follow an “anything but” the previous administration policy, especially if the prior administration is one of the opposing party. Sometimes a change of course is good policy, but sometimes as President Obama found with aspects of President George W. Bush’s terrorism policy the process of governing means embracing some of your predecessor’s legacy. President-elect Trump has already demonstrated on healthcare policy that he is willing to keep some of the Obama policy in place, even on an issue that is unpopular with his party, so there is no reason to believe that a Trump administration would simply abandon the policy of the Obama administration.

What are the key characteristics of that policy? First, maintain tight policy coordination with U.S. allies. Second, increase the alliance’s defensive capabilities. Third, increase pressure on North Korea through sanctions and other measures? Fourth, work to discourage those who support the North Korean regime from doing so. Lastly, be open to negotiations with North Korea if those talks are designed to address the nuclear issue. If this is a sound approach, rebranding may be all that is needed. If it is not working, what steps might be more successful?

Is the Iran Example a Useful Model?

President-elect Trump has described the Iran nuclear deal as one of the worst deals he has ever seen. However, during the election, Secretary Hillary Clinton’s team had made clear that they saw it as a model for dealing with North Korea. While more nuanced than this, the Iran model is the idea of imposing crippling economic sanctions to force North Korea into negotiations over its nuclear program.

In the case of Iran, it was allowed to maintain parts of its nuclear program and the agreement was only for ten years. North Korea has stated that they will not negotiate an Iran style deal, but the final details of the agreement point to issues that the Trump administration will need to consider in any negotiation. Will the administration keep to the standard of complete, verifiable, and irreversible dismantlement (CVID) of North Korea’s nuclear program? Or, should Pyongyang be allowed to maintain parts of its nuclear program as was the case with Tehran. This was part of the Agreed Framework, but North Korea ultimately cheated on that deal. Alternatively, is there already a mismatch in terms of the value of North Korea’s nuclear program? Pyongyang likely believes it should get a better deal for actual nuclear weapons and the administration likely believes that North Korea should receive more stringent conditions for having developed them. Also, the administration will need to thoroughly consider in what ways North Korea differs from Iran, to see how useful any lessons from that experience may be. If the two situations are different enough, there may be few useful lessons. Alternatively, if the Iran model is not a good one, what would a different approach look like? These are the types of questions the Trump administration will need to ask as it decides whether or not to utilize the Iran precedent.

How Stable is North Korea?

Since the end of the Cold War there have been predictions that North Korea was near collapse. While many other Cold War regimes have collapsed, or undertaken significant economic reforms such as China and Vietnam, North Korea has taken only minimal steps towards reform.

Historically stability mattered because the sense was that, if the regime was on the verge of collapse, there was little reason to negotiate with it or make a substantial offer for the nuclear program. However, the Trump administration should consider the regime’s stability for two reasons. If the regime is stable, pushing it in the hopes of collapse may not yield the desired result, but a stable regime could be in the position to reach a deal, even if it is not an optimal one for the United States and its allies. If the regime is unstable, negotiations will have little effect as a weak regime would be unable to make the political choices needed to give up or significantly reduce the nuclear program and survive. Depending on the perception of the stability of the regime, it impact whether engagement or pressure is likely to be a more useful tool, while the wrong assumption could lead the administration to develop a flawed policy.

How Susceptible is North Korea to Sanctions?

North Korea is less connected to the global economy than most other nations and survived a famine in the 1990s in which over a million North Koreans may have starved to death. Iran’s economy was much more open to the global economy and therefore more susceptible to sanctions than North Korea, and it still took three years after sanctions were placed on Iran’s oil to negotiate an agreement on its nuclear program.

If North Korea is less susceptible, the Trump administration will need to consider what that means in regards to timelines for action on North Korea. The administration will also need to give consideration to what areas North Korea may be most susceptible to sanctions and what types of sanctions would be most likely to be effective in that area. While the focus has been on coal as in recent years as that has been North Korea’s primary export, there may be other areas or types of sanctions the administration should consider. For example, imposing more sanctions on financial institutions that have dealings with North Korea. At the same time, it will need to consider the costs that the regime is willing to bear to complete its nuclear program before the sanctions force it to do otherwise. A nation is willing to let a significant portion of its population starve to death is likely willing to bear a significant cost.

Will North Korea Give Up Its Nuclear Weapons?

Negotiating a solution to the North Korean nuclear issue is only possible if North Korea is willing to engage in talks on the dismantlement of its nuclear and missile program. For much of the Obama administration the belief was that North Korea was not. Discerning North Korea’s intentions helps to shape whether the Trump administration should seek to engage or pressure Pyongyang.

If the Trump administration reaches the same conclusion as the Obama administration, seeking talks with Pyongyang would be of minimal utility. Instead the administration would need to develop a program designed to create conditions which might change the regime’s perspective, similar to the case of Iran, or take steps to enhance U.S. and allied defense so as to deter North Korea from using its nuclear weapons. Both of these options could also be taken simultaneously.

However, if the regime believes that North Korea would be open to a deal, talks should be the primary course of action. The key for any negotiations would be finding a way to ensure that they were not a play for time by North Korea to finish its nuclear program while reducing pressure on the regime.

Why Does North Korea Want Nuclear Weapons?

The North Korean regime has suggested that it has developed its nuclear weapons program to protect itself from U.S. hostility, but the reunification of the Korean peninsula on North Korean terms still remains a goal of the regime. Determining whether the regime views the nuclear weapons as the key to its survival or a tool to achieve political ends could have a significant influence on how a policy is shaped. If nuclear weapons are synonymous with regime survival in Pyongyang, it may be impossible to provide the assurances needed to convince them to give up their weapons. However, if the nuclear weapons are for a political end, demonstrating through pressure that even with nuclear weapons that goal is not achievable without threatening the regimes survival might create room for negotiations. It is a difference that could shape the policy the administration chooses.

Are Human Rights Part of the Equation?

In the last year the United States has placed sanctions on Kim Jong-un and his sister for the regime’s violation of human rights. It is unclear how the Trump administration will approach the issue of human rights, but in the case of North Korea they will have to decide if the issue of human rights and sanctions related to North Korea’s human rights violations should be linked to North Korea’s nuclear program. If the administration does wish to link the issues, it will need to consider whether human rights sanctions encourage or discourage North Korea from engaging on the nuclear program. At the same time, it will have to determine if it would be willing to remove the sanctions to make progress on the nuclear issue in the absence of progress on human rights in North Korea.

If You Break North Korea, Are You Willing to Fix It?

In the run up to the Iraq War, Colin Powell famously cautioned President George W. Bush that if “you break it, you own it.” A similar consideration should apply to any aggressive sanctions policy or kinetic action that the Trump administration decides to take in regards to North Korea. In the case of North Korea, regime stability will always likely be a question. How much pressure can it stand before collapse does ensue? So far, China has pushed back on any sanctions that it thought might truly endanger the regime. Nevertheless, China could miscalculate the pressure the regime can withstand, or preemptive military action could precipitate a conflict that leads to collapse. If there is good reason to believe North Korea is about to strike either the United States or its allies, action will need to be taken. However, if the administration decides to pursue significant pressure, it also need to consider what actions it would take if the pressure proves to be too much. Would it be willing to contribute to rebuilding the North under a unified Korea, and would it be willing to actively support South Korean claims to sovereignty over the North in the face of strong Chinese resistance. If so, then more aggressive measures may be advisable, but if not a more gradual approach may be called for with North Korea.

While this is not necessarily an exhaustive list, it is designed to show how complex the North Korean nuclear crisis is and how different understandings of issues can influence how policy would develop. To see this, we look at how different outcomes would occur given variations on two issues: North Korea’s willingness to negotiate and China’s willingness to pressure North Korea.

If the Trump administration believes that North Korea will not negotiate on its weapons program and that China will not truly pressure the regime, than that would argue for a policy of increased deterrence. However, if the administration believes that China would pressure North Korea further but North Korea will not negotiate, that impacts policy more generally towards China to ensure that Beijing remains onboard in pressuring North Korea. The caveat, of course, is where then North Korea fits in regards to the administration’s priorities. If North Korea is the priority, that then affects how the Trump administration approaches China on trade, Taiwan, the South China Sea or other issues. Ultimately, solving the North Korean nuclear issue is more complex than simply a question of whether to sanction the regime more or engage in negotiations.

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 Uri Tours photostream on flickr Creative Commons.

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Korea and the Trump Administration: Confirmation Questions for State and Defense Nominees

This is the first in a two part series looking at the potential questions senators should ask Trump Administration officials on North and South Korea policy during their confirmation hearings. The second part looking at the nominees for Commerce and USTR can be found here.

By Mark Tokola

Article II, Section 2, Clause 2 of the United States Constitution requires that the President make appointments with the advice and consent of the Senate.  Confirmation hearings are part of Senate’s process of giving “advice and consent.”  Although the confirmation process has become increasingly partisan, including for appointments to the Supreme Court, it still provides an opportunity for a public discussion of the policy views of incoming Administration officials as well as an examination of their personal backgrounds and qualifications.  Confirmation hearings also provide an early window into how Administrations see the world, what their priorities are, and how they intend to deal with challenges.

Those who have been through the confirmation process, and even those who just watch it, are often frustrated with the time-consuming speeches of the questioners, leading questions intended to push a policy line rather than to learn anything from the candidate, unnecessarily evasive or picayunish answers from the candidates, and the always unhelpful approach of “Just answer the question ‘yes’ or ‘no’!”  The shortage of time also means that important topics never have the opportunity to surface.

For the purposes of those with a particular interest in Northeast Asia, and Korea in particular, following are questions that we would love to see asked and answered during the upcoming confirmation hearings.  Even if they do not come up in the hearings, we will still be watching to see how the Trump Administration will deal with them over time:

For Rex Tillerson, Secretary of State Designate (Confirmation Hearing: January 11-12):

  • What is your diplomatic strategy in regard to North Korea?  Will you offer bilateral talks or do you support reinvigorating the Six-Party Talks framework?
  • Recent policy has been to not allow daylight between the United States and South Korea on North Korea policy. Will that continue in the Trump Administration? If the next South Korean government seeks a new approach to North Korea, what would the U.S. stance be?
  • In the absence of the Trans-Pacific Partnership, how will you strengthen economic ties with our Pacific allies?  Would you consider a bilateral trade agreement with Japan similar to the one we have with Korea?
  • Do you support the Regional Comprehensive Economic Partnership (RCEP) as a means of liberalizing trade within Asia or do you see it as a threat to U.S. interests?
  • There have been plans to replace our 1962-vintage U.S. Embassy in Seoul for over thirty years.  Are you finally going to carry through with the project?

For James Mattis, Secretary of Defense Designate (Confirmation Hearing: January 12):

  • Is there a “red line” for the North Korean nuclear weapons program that would trigger a U.S. action?  Wouldn’t it be advisable to let them know where they must stop?
  • Given modern military capabilities, how really necessary is it to have U.S. troops stationed in South Korea and Japan?  If a fair burden sharing agreement cannot be reached, would you be willing to withdraw them?
  • Apart from questions of funding, what roles do you foresee for our Pacific allies?  What tasks should the Korean, Japanese, Australian, and New Zealand militaries assume?  Shouldn’t they be helping with Freedom of Navigation exercises in the South China Sea?

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

Photo from lukexmartin’s photostreamn on flickr Creative Commons.

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