Author: Joseph M DeThomas, Pennsylvania State University
After a turbulent couple of weeks filled with rhetorical excess, it is clear that US policy towards North Korea’s nuclear weapons and increasingly capable ballistic missile delivery force has shifted only marginally from that of the Obama administration. But a major shift may come soon.
The Obama policy focused primarily on sanctions with periodic offers of negotiations preconditioned on Pyongyang’s acceptance of denuclearisation. In the last year of the previous administration, it began to make increasingly visible military deployments to reinforce deterrence in East Asia. Despite the now all-too-familiar bombastic presidential threats via media interviews and social media, the policy outlined by the Trump administration appears to have accepted a similar foundation.
Subsequent statements by US Secretary of State Rex Tillerson and Secretary of Defense James Mattis have clarified that the United States is still giving primacy to sanctions combined with the possibility of a negotiated end to the nuclear and missile dispute. Indeed, Tillerson’s comments on negotiations with North Korea contain far less stringent pre-conditions largely limited to some nebulously defined halt to nuclear and missile tests.
The two secretaries’ comments on possible US military responses are more robust than those of the previous administration but they also seek to move the discussion away from preventive war towards a more traditional deterrence posture. Most importantly, Mattis has made it clear he wants this matter handled with sanctions and diplomacy.
What this means is that we are still relying on sanctions to get to an acceptable outcome with North Korea. If that is the case, sanctions have to be effective and credible. The key achievement so far of the Trump sanctions effort is the unanimous passage of UN Security Council Resolution 2371 on 5 August. While US diplomats and the President have oversold the resolution as a ‘gut punch’ to North Korea’s economy, it is in fact primarily a continuation of the sanctions passed in the last year of the Obama administration in UNSCR 2270.
Resolution 2270 was a great departure from past sanctions on North Korea in that it targeted the general North Korean economy, seeking to deny it foreign exchange from normal (that is, non-WMD related) trade. UNSCR 2371 is important because it closes a large loophole in its predecessor involving coal trade and adds new sectors of North Korea’s economy — notably the export of North Korean labour and joint investment ventures — to the sanctions list. Supporters of the resolution claim that it will cut North Korean foreign exchange earnings by one-third.
By itself, it seems unlikely UNSCR 2371 could inflict such economic pain. First, the largest legal foreign exchange earner for the DPRK is coal. Coal trade had already been shut down for 2017 by Chinese authorities. The resolution is useful in that it closes the door for China to reopen its use of the ‘people’s livelihood’ exemption in previous resolutions, but the damage had already been done this year for coal.
Second, the sanctions on exporting labour and joint ventures were caps rather than bans. It does not take a genius to see how those caps can be evaded. Migrant labour is always subject to creative bookkeeping. And joint ventures in North Korea are dominated by a few Chinese entities that spin off a myriad of fronts to permit them to conduct both legal trade and reap large risk premiums for sanctions evasion via sham companies.
It seems unlikely that Pyongyang is under crushing sanctions pressure. But even if the Trump administration had managed to ram through a truly draconian sanctions resolution, it is no more likely that Kim Jong-un would capitulate in short order than it was that Saddam Hussein would in the face of a total trade embargo. Highly repressive, personalist regimes shift the pain of sanctions to the general population, reserving whatever resources remain for the narrow political elite and the security services. The last dollar available in North Korea will go to Kim Jong-un, the next-to-last to his bodyguards, and the third-last to the ICBM and nuclear weapons program.
And as discussed above, North Korea is likely to be able to evade some of the pain. It may lose a fraction of the US$1 billion that supporters of UNSCR 2371 talked about. It won’t lose it all. By itself, the ‘gut punch’ of UNSCR 2371 is not going to double over the Kim regime.
The US administration is doing some sensible things to reinforce its sanctions case. On 22 August, the US Department of Treasury announced sanctions against Chinese and Russian entities and individuals involved with North Korea. While the sanctions were not huge headline makers, they demonstrated a sound strategic logic, seeking to reinforce the recently passed UN sanctions by targeting nodes in the Chinese network of joint venture partners, labour exporting entities, and individuals and entities that allowed North Korea access to the US banking system and the dollar. It is trying to cast a chill over those who want to earn a premium from sanctions evasion.
We may see a much more fundamental shift in the near future, however. The Trump administration is considering using unilateral sanctions power to force all countries either to embargo all trade with Pyongyang, or to lose all trade with the United States. This would be a major sanctions test for Pyongyang and US–Chinese relations, and would shift things a great deal from where they are today.
Presidential theatre aside, the Trump administration has basically developed a slightly tougher iteration of its predecessor’s policy with the same slim chance that sanctions will succeed. The danger is that with the current US president this might lead to something more than fiery rhetoric in the case that frustration and perhaps personal pique set in.
Ambassador Joseph M DeThomas is a Professor of International Affairs at the Pennsylvania State University. He previously served as US Deputy Assistant Secretary of State for Non-Proliferation from 1999–2001 and as an advisor for sanctions in the US Department of State from 2010–2013.