Tag Archive | "WMD"

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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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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By the Numbers: The Frequency of North Korean Missile Tests Under Kim Jong-un

By Troy Stangarone

Since Moon Jae-in won the South Korean presidency in May, North Korea has conducted five missile tests. This is somewhat of a quickened pace of tests, with five tests in the four weeks of the Moon presidency, but not unprecedented by North Korean standards. North Korea conducted seven tests, for example, in a four week time period in 2014. Based on the dataset maintained by Beyond Parallel, North Korea conducted 20 missile tests in 2016, the most since Kim Jong-un succeeded his father in late 2012, and only a handful of tests less than all of the tests North Korea conducted under Kim Jong-il.

Since assuming leadership in North Korea, Kim Jong-un averaged 10.8 missile tests per year in the 2012-2016 period. Though, these numbers are driven up by the higher volume of tests in recent years. In 2012 and 2013, North Korea conducted a total of eight missile tests. If those initial years are excluded and only the more recent period where the rate of testing has increased are examined, the average is 15.3 tests per year in the 2014-2016 period.

 

While there is no linear pattern to North Korea’s missile tests, if North Korean tests continue at the same pace as they have so far this year we should expect a new missile test every 2.1 weeks and another 13-14 tests. If that is the case, which it may not be, North Korea would exceed last year’s total number of missile tests by 3-4 tests.

The international community should be prepared to more quickly respond to the advancing pace of North Korea’s missile tests by preparing a menu of tightening multilateral sanctions options that have been informally agreed to in advance.

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

Photo from Prachatai’s photostream on flickr Creative Commons.

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It’s Time to Change How We Handle North Korea’s Missile Tests

By Troy Stangarone

It took all of five days after the election of Moon Jae-in as South Korea’s president for North Korea to test a ballistic missile. The test, perhaps intended to gain maximum effect by simultaneously sending a signal to China, took place only hours before Xi Jinping was set to give a major address at an international summit hosted by Beijing on the One Belt, One Road initiative.  Two additional missile tests have since followed, the first of which was likely designed to simulate the reentry of an intercontinental ballistic missile (ICBM) without provoking the United States by conducting an actual ICBM test, and the second of which was thought to be a demonstration of North Korea’s capabilities.

While the international community has largely focused on North Korea’s nuclear tests, its continuing development of delivery devices is equally dangerous to international peace and stability. In recent years, Pyongyang has made significant progress on its missile development and is likely able to mount a nuclear warhead on a missile capable of reaching South Korea and Japan. It has also made progress on developing missiles that could serve as a second strike capability and which would provide little warning prior to launch. It has been most successful in developing a mobile launched solid fuel rocket, but has also begun the process of developing a submarine launched ballistic missile.

Despite the danger that North Korea’s missile tests present, to date they have largely been consequence-free for the regime. While the international community condemns the tests, there has been little real cost to North Korea for its decision to keep advancing the development of delivery systems for its nuclear weapons. In contrast, its nuclear tests have sparked far harsher responses. Since Kim Jong-un has come to power, North Korea has conducted three nuclear tests and more than 60 missile tests. The United Nations has passed new sanctions resolutions after each of North Korea’s nuclear tests, but only four resolutions related to North Korea’s missile development.

The first resolution related to North Korea’s development of ballistic missiles, Resolution 1695, pre-dates Kim Jong-un and calls for the suspension of North Korea’s missile programs and for member states to prevent missile technology from being transferred to North Korea in accordance with national and international laws. While further resolutions have added sanctions or placed restrictions on missile related activities, only Resolution 2087 was explicitly related to a North Korean ballistic missile test while Resolution 2270 was in response to the quick succession of North Korea’s nuclear test and space launch.

On the international level, this may be slowly changing. The UN Security Council recently passed a small set of new sanctions tied to North Korea’s missile programs which sanctioned four entities and fourteen individuals. However, much as with prior sanctions, the lesson North Korea will likely draw is that there will be little cost to continuing on its current trajectory.

While U.S. sanctions are designed to slow the progress of North Korea’s weapons programs, they do not necessarily impose new costs on North Korea for each additional missile test.

Outside of the sanctions regime, the international community has tried a few other options to cut off the DPRK’s weapons program. For example, the United States and its allies have also worked to interdict the technology that North Korea needs for weapons development, specifically through programs such as the Proliferation Security Initiative (PSI). But there are limits to this approach. While PSI has been endorsed by over 100 countries, key countries such as China, Pakistan, and Iran have not done so to date. In addition, there are limits to interdicting materials in transit, even though UN sanctions also call for the inspection of all cargo destined for  North Korea.

Additionally, military options in the absence of a clear threat by North Korea to attack are unlikely to be a solution. Preemptively attacking missile sites prior to tests or attempting to shoot down North Korean missiles once they have been launched would both entail risks. A preemptive strike could precipitate retaliation by North Korea, while attempting to shoot down a North Korean missile and failing could lead Pyongyang to conclude that the U.S. and allied missile defenses are vulnerable. That leaves increasing sanctions as the only viable option for raising the costs of North Korea’s missile tests.

However, given the frequency of North Korea’s missile tests and the traditional slow pace of the UN Security Council’s response, it’s time to consider a different method. To do this the United States should consider working with China and Russia to develop a new set of sanctions that would go into place incrementally for each additional test that North Korea conducts, while also leaving room to address other issues with the regime in Pyongyang. Without raising the level of sanctions after each North Korean missile test, there is little deterrent to stop the regime from continuing to move its program forward.

While this is something that China and Russia would likely be reluctant to consider, what we do know is this – North Korea will conduct another missile test in the near future. The question is what the international community will do to try and prevent the regime in Pyongyang from perfecting their missile technology.

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

Photo from Ahsitaka San’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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10 Issues to Watch for on the Korean Peninsula in 2017

By Mark Tokola, Phil Eskeland, Troy Stangarone, Jenna Gibson, Kyle Ferrier, and Juni Kim

The Korean peninsula was dominated by unexpected events in 2016. North Korea began the year with a nuclear test that merely foreshadowed a year of significant advancements in its nuclear program rather than its traditional pattern of using tests to provoke a cycle of crisis and negotiations. In response, the Park Geun-hye administration closed the Kaesong Industrial Complex in what would become the first of a series of significant moves to tighten sanctions on North Korea bilaterally by a series of nations and through the United Nations.

On the political front, 2016 saw the surprise election of Donald Trump as president of the United States on a platform that may remake parts of U.S.-Korea relations while redefining the role of the United States in East Asia. Closer to home in Seoul, South Korea was rocked by a political crisis that led to the impeachment of Park Geun-hye.

As 2017 begins the consequences of those events and others from 2016 will begin to play out on the Korean peninsula and Kim Jong-un has again begun the year with a shock announcing that North Korea is close to testing an intercontinental ballistic missile (ICBM). With that in mind, here are 10 issues to follow that will have an impact on the Korean peninsula in the year to come:

Political Dynamics and the Presidential Election in South Korea

Perhaps no issue will have more impact on the Korean peninsula this year and in the years to come than the resolution of the current political crisis in South Korea. Depending on when and how the Constitutional Court rules on the impeachment of Park Geun-hye, South Korea could have a new president as early as this spring or enter into a period of extended political uncertainty with President Park remaining in power until February 25 of 2018.

These political dynamics have implications for South Korea and the peninsula beyond whether Park Geun-hye leaves office early or serves the remainder of her term. The political uncertainty around the impeachment means that needed economic reforms will likely be delayed and that policies enacted by the interim administration or late in the Park administration could be subject to quick reversal after the question of impeachment is resolved. The current environment could also lead to a move towards constitutional reform, an issue that had already been gaining steam prior to the move towards impeachment.

If President Park’s impeachment is upheld a snap 60 day campaign could change the dynamics of the election and favor a candidate who might not ordinarily have performed as well under an ordinary campaign. It may also aid a move towards more populist positions, as is becoming an increasing trend around the world, but in the case of South Korea may come from left rather than the right as we have seen in Europe and the United States.

The election also holds the potential to see a significant shift in policy related to North Korea and Japan, among other issues to watch in 2017.

The Trump Administrations Foreign and Security Policy in East Asia

For the first time since the end of the Korean War, there is significant uncertainty on how U.S. foreign and security policy will develop in East Asia. After decades of bipartisan understanding of both the benefits of the region to the United States and the basic policies that should be put in place to promote U.S. interests, the Trump administration will come into office having campaigned for significant change in U.S. policy and with an air of uncertainty in the region on the shape of U.S. policy to come.

In the campaign, President-elect Trump seemed to place a greater emphasis on international economic issues and question the utility of U.S. alliances and whether countries such as South Korea were contributing enough financially to the deployment of U.S. troops. He also suggested a willingness to withdraw U.S. troops and allow South Korea and Japan to defend themselves with nuclear weapons.

Since the election, we have seen President-elect Trump reaffirm the United States commitment to defend South Korea, but also a willingness to change the nature of the U.S. relationship with Taiwan, potentially increasing tensions with China. For the Korean peninsula, the priorities the administration sets in the region, including whether China or North Korea will be a priority, as well as whether it chooses to purse those policies through negotiation or confrontation will have significant impact on events on the Korean peninsula, including how willing China is to cooperate in pressuring North Korea to denuclearize.

As the Trump administration sets out its new policies, we should expect there to be significant changes that could unsettle the region early in the administration. However, as events and structural challenges in the region necessitate, there will likely be a shift towards a more traditional U.S. foreign policy in the region.

Trump Administration Asia Economic Policy

During the campaign, President-elect Donald Trump castigated U.S. trade policy, including the Korea-U.S. Free Trade Agreement (KORUS FTA).  While the KORUS FTA was cited as an example of a “disastrous” trade deal, candidate Trump did not threatened to withdraw or renegotiate the agreement, as he did with other FTAs.  His first 100 days agenda only reiterated his pledge to withdraw from the Trans Pacific Partnership (TPP).

While the KORUS agreement may be out of the limelight, there are indicators to watch for to see the future of U.S. trade policy.  First, his senior appointees for various posts will determine the extent of Trump’s economic nationalism.  He has nominated Wilbur Ross, a private equity billionaire who specializes in restructuring failed companies, particularly several in “Rust Belt” industries, as Secretary of Commerce, and noted “fair” trade attorney Robert Lightizer, to serve as the U.S. Trade Representative.  In addition, Trump has appointed two individuals to fill newly created positions within the White House – noted trade skeptic and economist, Peter Navarro, as the Director of the National Trade Council, and Jason Greenblatt, who currently is Executive Vice President of the Trump Organization, as the Special Representative for International Negotiations.  It is unclear how all these four individuals, along with free trade advocate Rex Tillerson, who was nominated by Trump to serve as his Secretary of State, will interact to shape a unified trade policy, and how much real power and authority each one of these individuals will possess.

Second, in early February, the annual trade statistics will be released by the U.S. government.  The Year to Date (YTD) trade deficit between the U.S. and the ROK in goods is slightly outpacing last year’s level ($24.07 billion for 2016 vs. $23.997 billion for 2015).  If this trend continues, there could be a renewed attention on KORUS.

Third, even if there is not a direct confrontation of KORUS in the near-term, the Trump plan to focus most of their attention on fixing agreements with Mexico and enforcing trade laws before negotiating any new bilateral deals could have ancillary spillover effects on Korea.  China is Korea’s top trading partner and Mexico is Korea’s ninth largest export market.  Mexico is also becoming a major destination for Korean foreign direct investment.  Thus, while KORUS maybe out of the cross-hairs, actions by the Trump Administration affecting other trading partners could have negative effects for the Korean economy.

North Korean Behavior in Response to a New Political Environment

With a new administration in the United States and the prospects for a new administration in South Korea this year, there is an expectation that North Korea may test the alliance and Kim Jong-un has already suggested that he will conduct an ICBM test.  Observers have tried for years to explain the timing of North Korean nuclear tests, missile tests, and other provocative acts on the basis of North Korean political anniversaries, foreign elections, and other external events such as international summits or Olympic Games. The historic correlations are weak.  It may simply be that North Koreans test their weaponry when it is time to do so on an engineering schedule.  When they are ready to test, they test.  They might wait a matter of days or weeks if tests would interfere with a major political event such as a bilateral meeting, as we would do, but that would nudge the schedule, not drive it.

The tempo of testing has picked up since Kim Jong-un came to power.  Nuclear and missile test are happening much more often than they did during the time of Kim Jong-il.  This might be occurring because Kim Jong-un is still trying to cement his power and has tied his personal prestige to weapons testing.  It may be because North Korea wants to get as far as it can, as fast as it can, before the U.S., South Korea, Japan, and China take stronger steps to try to put an end to its quest for a nuclear arsenal.  It might also reflect Kim Jong-un’s personal impatience.

Will North Korea be a Trump Administration Priority?

U.S. Administrations have limited ability to set foreign policy priorities.  It is a useful exercise to try to set priorities on the grounds that unless you know where you want to go, you are unlikely to get there.  But, foreign policy is unavoidably reactive because decisions by foreign leaders and non-state actors, natural disasters, accidents, and miscalculations require responses.  British Prime Minister Harold Macmillan was quoted as answering a journalist’s question of what Prime Ministers fear most by saying, “Events, dear boy, events.”

Discounting events, North Korea should be a high foreign policy priority for the Trump Administration.  North Korea has threatened military action against the United States, South Korea and Japan and is getting closer to having a nuclear weapon that could strike the U.S. west coast.  That in itself should not be considered a watershed moment, North Korea can already threaten South Korea, Japan, and hundreds of thousands of Americans, military and civilian, living within the range of North Korean military strikes.  North Korea’s belligerency, possible instability, and grotesque human rights abuses should be of great concern to countries in the region, the U.S., and the international community.  A concerted, coordinated policy towards North Korea is necessary.

Are Sanctions Working?

The sanctions enacted this year on North Korea constitute the toughest and most comprehensive framework to date. New information in 2017 will help to gauge whether these measures are working as intended and how they can be strengthened, with China’s enforcement of new sanctions playing a key role. The effectiveness of improvements made to UN sanctions in resolution 2321 and U.S. secondary sanctions targeting financial institutions facilitating Kim Jong-un’s pursuit of hard currency greatly depends on Beijing’s willingness to cooperate with Washington. However, President-elect Donald Trump’s initial approach towards China suggests heightened tensions in the relationship over other issues may pose significant challenges for cooperation on sanctions in 2017.

Nevertheless, the continued use of sanctions as a tool on North Korea may be in question. Several candidates in South Korea’s presidential elections next year favor economic engagement with North Korea. South Korea’s return to engagement would greatly undermine the cohesion of UN sanctions, likely precipitating Russia and China—the most reluctant supporters of sanctions and North Korea’s most influential economic partners—to abandon their support. Even if these candidates are unsuccessful in their presidential bids, should the new sanctions have a limited impact in the first half of 2017 transitioning leaders in the U.S. and South Korea may consider other policy alternatives.

Special Measures Agreement/Burden Sharing 

Ever since 1991, the Republic of Korea (ROK) has provided some financial support to offset the cost of stationing U.S. troops on the peninsula.  During the presidential campaign, Donald Trump questioned on several occasions the alleged low reimbursement for stationing U.S. troops abroad.

Later this year, Korea and the United States will begin negotiations on renewing the Special Measures Agreement (SMA), which is set to expire in 2018, that lays out the terms of the burden sharing arrangement.  Last April, General Vincent Brooks testified before the U.S. Senate that Korea pays approximately 50 percent of the total non-personnel costs of the U.S. troop presence on the peninsula.  Under the current SMA, Korea’s annual payment (in won) increases by the rate of inflation.

Just as in all negotiations, one side offers its most parsimonious offer and the other side counters with its proposal to bolster its own self-interest.  Over time, the two sides come together to reach an agreement.  Marine Corps General James Mattis, Trump’s nominee for Secretary of Defense, earlier criticized President Barack Obama for “saying that our allies are freeloaders.”  Not only does the ROK already share half of the burden of the stationing costs of the U.S. military on the peninsula, but this staunch U.S. ally also has a military draft with 625,000 active duty military personnel confronting North Korea; spends 2.6 percent of its GDP on its own defense (highest among any major European or Asian ally of the U.S); and 80 percent of South Korea’s imports of military equipment over the past five years have come from the United States.  South Korea is leagues above European members of NATO in terms of alleviating the defense burden of the United States.

SMA negotiations will be tough with the Trump administration, as they have been at times in the past.  However, these talks will not undermine the alliance.  The U.S. national interest will continue to inform policymakers that no U.S. troops should be withdrawn from the ROK until the threat from North Korea is resolved.

Will RCEP Be Finalized in 2017?

The failure of TPP has turned attention to the remaining mega free trade agreement in Asia: the Regional Comprehensive Economic Partnership (RCEP). Negotiations were due to have finished by the end of 2015, but have been bogged down by disagreements over a range of issues. However, the breakdown of TPP may prove to be the necessary push to conclude negotiations in 2017. China, the largest member economy and key driver of the deal, has vowed to accelerate talks and is already looking ahead to lead the Free Trade Area of the Asia Pacific (FTAAP), the next progression in the regional architecture.

RCEP members and even non-signatories, such as the U.S., stand to benefit from an Asia with fewer barriers to trade. Still, the deal’s avoidance of non-tariff barriers, while making consensus easier among sixteen diverse economies including Korea, offers limited gains from liberalization. If RCEP is concluded it may provide the foundation for slower and less ambitious regional integration

With RCEP in place, an emboldened Beijing could seek to displace Washington from its leadership role in the region on economic issues. However, the longer RCEP talks continue to drag on, the greater the opportunity for the U.S. to bolster its standing in Asia through bilateral agreements preferred by President-elect Donald Trump.

Will the Korean Wave Continue?

Last year was nothing if not a roller coaster for Korean cultural exports. The bombshell soap opera “Descendants of the Sun” broke records at home and abroad, raking in billions in direct and indirect profits. However, the second half of the year was marred by reports of a Chinese ban on Korean entertainment content because of Korea’s decision to deploy THAAD.

While there have been some instances that could raise suspicion, other events have proceeded as planned, indicating that this is not a blanket ban. It’s far more likely that some local organizers, skittish about the Chinese government’s harsh language on THAAD, decided not to risk a controversy. With THAAD set to be deployed later this year, this will deserve further attention as the deployment takes place.

Yet, interest in everything Korea continues to grow, and shows no sign of stopping. Cosmetics giant Amore Pacific saw a 26.7% year-on-year jump in overseas sales in Q3. And Korea already broke tourism records as of mid-November, with more than 15 million people visiting the country by that point.

It’s worth remembering that the word “hallyu” itself was originally a derogatory term created in China in the 1990s to push back against the influx of Korean media content. People have been predicting the downfall of the Korean Wave since then, yet it is stronger than ever. Expect this to continue in 2017.

Relations Between South Korea and Japan

Relations between South Korea and Japan remain as complicated as ever and 2017 could see uncertainty in the relationship. Despite the implementation of the 2015 Seoul-Tokyo agreement regarding the compensation of comfort women earlier this year, controversy and protests in South Korea have continued to overshadow the deal. In light of President Park Geun-hye’s recent impeachment, leading members of the South Korean opposition parties have increased calls for the government to reconsider the agreement. Potential presidential candidates Moon Jae-in and Ahn Cheol-soo have criticized the deal and may try to restructure the deal or scrap it entirely if elected.

Despite controversy over the comfort women agreement, South Korea and Japan have continued to strengthen their defense ties. Both countries participated in regular joint military exercises with the U.S. this year and started implementation of an intelligence sharing deal earlier this month. The deal allows for intelligence sharing between the two countries regarding North Korea’s nuclear and weapons programs. Controversy over historical issues between the two countries is unlikely to subside in the near future, but the shared North Korean threat provides avenues for greater security cooperation for South Korea and Japan. Needless to say, the next South Korean president will play an instrumental role in determining the future of the relationship.

Mark Tokola is the Vice President of the Korea Economic Institute of America, Phil Eskeland is the Executive Director of Operations and Policy,  Troy Stangarone is the Senior Director for Congressional Affairs and Trade, Jenna Gibson is the Director of Communications, Kyle Ferrier is the Director of Academic Affairs and Research, and Juni Kim is the Program Manager and Executive Assistant. The views expressed here are the authors’ alone.

Image designed by Jenna Gibson of the Korea Economic Institute of America with photos from the photostreams of Gage Skidmore, Stefan Krasowski, Herman Van Rompuy, Byoung Wook, and Korea.net on flickr Creative Commons.

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The Year of the Unexpected: A Look Back At the Korean Peninsula in 2016

By Troy Stangarone

In the Chinese zodiac, 2016 is the year of the Fire Monkey. Fire Monkeys are said to be ambitious and adventurous, as well as irritable. Despite Donald Trump’s not having been born in the year of the Monkey, looking back, his victory in the U.S. presidential election that year may yet seem fitting. However, rather than being a year reflective of the characteristics of the Fire Monkey, 2016 might be better known as the year of unexpected events around the world and on the Korean peninsula. Whether it was the British vote to leave the European Union in June or the impeachment of the South Korean President Park Geun-hye in December, 2016 will be remembered for a series of unexpected events and the questions they have raised about how they may shape the future.

As we take our annual look back at the events that helped to shape the Korean peninsula during the past year, it is also an opportunity to review the events we highlighted on The Peninsula in our annual 10 Issues to Watch For on The Korean Peninsula in 2016 blog. For a year that was dominated by such a large number of unexpected events, our annual look ahead to the events of the coming year holds up surpassingly well. However, while our look ahead was correct on the importance of many events in 2016, those same events also often played out in surprising ways that will have significance beyond what we expected earlier this year. One example of this is the U.S. presidential elections. While U.S. elections always hold significance for the Korean peninsula, few foresaw the election of Donald Trump and the implications his presidency could have for the peninsula early in 2016.

With that said, here’s a brief look back at the 10 issues we highlighted and what happened:

  1. No Significant Progress with North Korea – After North Korea began 2016 with a nuclear test, the international community moved towards placing greater pressure on Pyongyang. This included sanctions at the UN, which would later be strengthened, to cut off North Korea’s trade in minerals such as coal, and bilateral sanctions by the United States to cut North Korea off from the global financial system. As was expected at the time little progress was made with North Korea on resolving the nuclear issue, but the one surprising element was that rather than try to find a way to engage North Korea after a new round of sanctions, South Korea went all in on pressuring the North with the closure of the Kaesong Industrial Complex and lobbying countries to cut their ties with Pyongyang. While we were right on the broader element of there being little progress with North Korea and how structural issues such as the U.S. elections and sanctions would inhibit progress, the strength of South Korea’s stance was one of the unexpected turns of 2016.
  2. If There Will Be Another Round of Family Reunions – If there was going to be progress in relations between North and South Korea it was going to require both countries to separate the nuclear issue from other issues in their relationship. Neither side was able to do so in 2016, which is regrettable for both the humanitarian burden that it places on the divided families and for the reality that family bonds will be one of the important ingredients for unification if it takes place at some point in the future. The longer that families remain divided the further apart the two Koreas are likely to drift.
  3. Could a China-North Korea Summit Still Happen? – This is one issue that was fairly straight forward. While there had been suggestions in late 2015 that Chinese President Xi Jinping might finally meet Kim Jong-un thanks to improving relations, the nuclear test in January ended what little chance there may have been for a China-North Korea summit.
  4. Korea-Japan Relations – When looking at Korea-Japan relations heading into 2016, clearly there had been prior progress. At the same time, it seemed unlikely that there would be the type of progress that the U.S. might have liked and the prospect for backsliding existed. While Japan did approve money for the comfort women fund, the agreement itself remains controversial in South Korea and may face pressure under the next administration. As for the comfort woman statue near the Japanese Embassy, it remains an issue for the local government of Seoul. While progress was made in relations, unsurprisingly, much work remains.
  5. How the U.S. Elections Could Impact Policy – Here we were right about how the political parties viewed the situation in Korea, but wrong about the overall impact of the elections. While we foresaw the critiques of the Obama administration’s policy and the push back on issues such as the Trans-Pacific Partnership (TPP), the degree to which then candidate Donald Trump would shift the debate with his repeated push on the question of South Korea’s contributions to U.S. troops on the peninsula, and suggestions that the U.S. might withdraw those troops and allow South Korea to develop its own nuclear weapons, and that a candidate with these views would win the presidency, were clearly unforeseen. The ultimate result of the election is potentially much more significant for the peninsula than anyone might have imagined at the beginning of the year.
  6. South Korean National Assembly Elections – Here we saw the fairly divided electorate give the opposition Minjoo Party a slim majority and a display of surprising strength by Ahn Cheol-soo’s new People’s Party. However, the impeachment of Park Geun-hye likely means that any signals the National Assembly elections may have had for the presidential election in 2017 no longer matter.
  7. Cooperation Between Korea and China in the G20 – At the G20 in China, South Korea worked with China as expected to help advance the agenda, but IMF quota reform and global safety nets played less of a role than expected during 2016.
  8. K-Pop’s Next U.S. Breakthrough – While K-Pop and Hallyu more generally remained popular in much of the world, especially with the release of Descendants of the Sun, K-Pop continued to have difficulty breaking into the U.S. market. The English language debut of CL, Lifted, was expected to give K-Pop its first breakout in the U.S. since Psy, but the album has yet to produce a chart single in the United States.
  9. South Korea’s Trade Policy – Events on the trade front have played out largely as expected. While TPP, should it be revived, will be an issue for the next Korean administration, there has been significant progress on the Regional Comprehensive Economic Partnership (RCEP) talks that include the ASEAN, China, India, Australia, New Zealand, Japan, and South Korea.
  10. Has Samsung Turned the Corner? – After two difficult years Samsung had turned the corner in 2016 with the successful launch of the Galaxy 7 and the new Edge. However, all of Samsung’s progress melted down with the battery issues of the Galaxy Note 7. As a result, next year will again be a key year for Samsung as it once more looks to turn another corner and rebuild consumer confidence after the issues with the Note 7.

Beyond the events that we expected, here is a look at some of the unexpected events that helped to shape 2016:

  1. Multiple Nuclear Tests and the Advancement of North Korea’s Nuclear Program – Before we even published our look ahead to 2016, North Korea had conducted its first nuclear test of the year. It would go on to break with its pattern of only conducting a single test in a year by conducting a second nuclear test in September. While much attention has focused on the significant increase in North Korean missile launches and tests in 2016, the most significant step may have been in the advances the program took in developing a second strike capability. Though initial tests of a submarine launched ballistic missile failed, North Korea had made progress before the year’s end.
  2. The Closure of the Kaesong Industrial Complex – South Korea took the unexpected step of closing the Kaesong Industrial Complex in response to North Korea’s first nuclear test in 2016. The closure was significant for several reasons. Not that long beforehand South Korea had been pushing to internationalize the complex to avoid the prospect of the complex being shut down after North Korea had withdrawn its workers in 2013 for political purposes. Kaesong also held symbolic importance as the last remaining connection between North and South Korea, as well as the last vestige of the prior sunshine policy. While closing Kaesong was a significant step it may have played a role in encouraging the international community to take stronger steps against North Korea.
  3. International Sanctions on North Korea – While there is nothing necessarily surprising about the international community sanctioning North Korea over its nuclear test, what is significant about the current round of sanctions are the steps that they take to try and limit North Korea’s ability to continue its nuclear program. There are now requirements to inspect North Korean cargo, even that of North Korean diplomats, and caps have been placed on North Korean exports of coal while bans have been placed on other mineral exports. The United States has moved to cut North Korea off from the international financial system and has set in place steps to use secondary sanctions to go after those who enable North Korea. While sanctions are unlikely to resolve the North Korean nuclear issue on their own, they were significantly strengthened in 2016.
  4. The Political Crisis in South Korea – The corruption and influence peddling scandal surround Choi Soon-sil, a longtime confidant of President Park Geun-hye, engulfed South Korea is a political scandal that has seen millions of South Koreans protest in the streets and the impeachment of Park Geun-hye by the National Assembly. As a result of the scandal, South Korea faces an uncertain political future in 2017. Even before the new year begins, there has already been a split within the conservative Saenuri Party with 29 members leaving to form the New Conservative Party for Reform.
  5. THAAD and Dispute with China – Beyond sanctions, one of the steps being taken by the United States and South Korea to deter aggression by North Korea is the deployment of the Thermal High Altitude Arial Defense, or THAAD. This is a step that has been strongly opposed by China which sees it as undermining Beijing’s own interests in the region. While the evidence seems thin to date that China has actually done anything more than complain, there have been concerns that China will retaliate economically against South Korea by restricting its exports of Hallyu to the China and Chinese tourism in South Korea.  Taking such steps would harm Chinese as well as South Korean interests.

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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Tightening the Noose on North Korea: Do the New UN Sanctions Finally Get It Right?

By Troy Stangarone

The United Nations (UN) sanctions on North Korea’s fourth nuclear test were flawed. The March sanctions were intended to limit North Korea’s ability to export coal, the most significant licit source of the hard currency that the regime has to fund its nuclear weapons and missile programs, while also not precipitating a humanitarian crisis that could cause instability on the peninsula and worsen the lives of an already deprived North Korean population. However, the livelihood exception proved too loose an exception to limit North Korean coal exports and an unexpected flaw also allowed North Korea to benefit from its coal trade. The new UN sanctions are designed to correct the flaws in the earlier sanctions this year and address other questionable money earning activities by North Korea. Do they succeed?

A shortage of coal for power and steel production in China has led to an unforeseen flaw in the sanctions from March. The failure to account for the influence of market forces that have increased the revenue North Korea generates from exporting coal. With Chinese coal inventories below 20 days’ supply as a result of Chinese efforts to close unsafe mines, there has been a surge of coal imports into China that have also driven up prices.  As a result, imports of North Korean coal are up 13 percent by volume over last year’s high and prices in recent months for North Korean coal may be up 68 percent to $90 per ton.

In 2015, North Korea earned a little over $1 billion on exports of 19.6 million metric tons for an average price of $53.47 per metric ton. At those prices over a full year, North Korea could have seen its earnings in coal trade from China remain the same as in 2015 even if the volume of trade fell by close to 40 percent. To preclude this possibility in the future, the new resolution caps both the volume and value of North Korean coal exports at 7.5 million metric tons and $400.1 million per year, respectively, based on whichever cap is reached first.

What is unique about the decision to place a hard cap on North Korean coal exports is that since, in essence, China imports all of North Korea’s coal, China has agreed to restrain its own imports of coal from North Korea. While China has not gone as far towards sanctioning North Korea as many would have hoped in the past, they do share a concern about North Korea’s nuclear weapons. Clearly Beijing has made a calculation that the cap is stringent enough to send a strong message to North Korea about its nuclear program, but not so stringent as to precipitate a collapse of the regime and undermine China’s own strategic interests on the Korean peninsula.

DPRK Coal Exports Table

As with any resolution, enforcement is the key. Under the new resolution states will be required to send details of their purchases of North Korean coal to the United Nations for monitoring. Once global imports reach 95 percent of the cap, states are required to cease their purchases of North Korean coal. While there will be incentives for smuggling from the cap, it should be effective in limiting the licit trade in North Korean coal.

The sanctions also address North Korea’s other mineral resources. While UN Security Council Resolution 2270 had already placed prohibitions on exports of iron and iron ore, the new resolution expands those prohibitions to include copper, nickel, silver, and zinc. Exports of minerals such as lead and zinc had returned to normal levels in 2016 after a downturn in 2015 and represented perhaps a way for North Korea to mitigate some of its losses from the trade in coal. That avenue should now be closing as well.

Beyond its efforts to limit North Korea’s trade in coal, the resolution is interesting in its level of specificity on some of North Korea’s money making activities and it begins to lay markers for future areas to sanction. North Korea has been known to use its Embassy’s for money making ventures and use diplomatic privileges to move goods and cash. The resolution makes clear that Embassy purposes should not be used for commercial ventures and that the luggage of diplomats should be considered cargo – specifically pointing out the tendency to transmit money in large bags – and cracks down on the number of bank accounts Embassy and Embassy officials can hold by limiting them to one each.

Two areas where markers are put down for future actions by the Security Council include North Korea’s overseas laborers and technical cooperation with other states. In regards to North Korea’s use of overseas laborers to earn hard currency, the sanctions resolution expresses concern over this practice and calls on “States to exercise vigilance over this practice.” Despite early expectations that North Korea’s use of labors overseas would be banned in the current resolution, its inclusion in the current resolution signals that this is one future area of action for the Security Council should North Korea engage in additional provocations.

The new sanctions also take an important step towards ending North Korea’s weapons development cooperation with states such as Syria and Iran. North Korea is known to have worked with Iran on missile development and is suspected to have cooperated on the development of its nuclear weapons program as well. The new resolution calls for the suspension of all scientific and technical cooperation, other than medical, and for states notify the UN in advance of any technical cooperation that is deemed not related to the nuclear program. It will be interesting to see if future resolutions take more direct aim at these practices.

No sanctions resolution is perfect, but the current resolution takes significant steps towards limiting North Korea’s ability to earn hard currency to finance its weapons programs and reiterates the obligations of states to ensure that all North Korean cargo is inspected so that sanctions are properly enforced. At the same time, we should also keep in mind that sanctions are not a short-term solution to the North Korea problem, but rather a tool to slow North Korea’s progress and provide the pressure needed to convince Pyongyang to return to talks over its weapons programs. If North Korea has not returned to talk in six months, that does not necessarily mean that the sanctions have failed. However, at the same time, the international community needs to also consider being more pro-active when unintended loopholes are discovered.

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 photostream on flickr Creative Commons.

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About The Peninsula

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.