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August 20, 2019

Opinion

Opinion on the latest North Korea issues from analysts, academics and experts worldwide. Views expressed in Opinion articles are exclusively the authors’ own.

How the U.S. can turn maximum pressure into maximum leverage
How the U.S. can turn maximum pressure into maximum leverage
A denuke-first approach is a nonstarter: incremental sanctions relief may be the only way forward
April 18th, 2019

As the U.S. and North Korea have reassessed their negotiating strategies in the weeks following the Hanoi summit, both sides have expressed at least a conditional commitment to engage in further dialogue.

However, neither Washington nor Pyongyang have appeared particularly eager to talk about sanctions relief, the issue that proved a major sticking point at the second Trump-Kim summit.

In recent Senate testimony, Secretary of State Mike Pompeo indicated that he wanted to “leave a little space” to relax sanctions as part of a negotiation process, but reiterated the U.S. position that the core UN sanctions “need to remain in place until the verification of denuclearization has been completed.”

In a press conference with ROK President Moon Jae-in, President Trump expressed his preference for a “big deal” involving complete North Korean denuclearization while acknowledging that “there are various smaller deals that maybe could happen.”

For his part, Kim Jong Un has re-emphasized themes of economic self-reliance and a willingness to dig in to bear the brunt of sanctions pressure.

A denuclearization-first approach is clearly a nonstarter

In a speech to the North Korean Supreme People’s Assembly, Kim said that “both sides should give up their unilateral terms and seek a constructive solution that meets each other’s interests,” but added that “there is no need for me to obsess over the summit talks with the United States out of thirst for the lifting of sanctions.”

Nonetheless, if there is to be any meaningful progress in U.S.-North Korea nuclear negotiations, some form of incremental sanctions relief would almost certainly have to accompany it.

A denuclearization-first approach is clearly a nonstarter: while sanctions are a major roadblock to Kim Jong Un’s avowed goal of economic development, Pyongyang is highly unlikely to bow completely to U.S. demands, even if prolonged pressure leads to an acute crisis in the North Korean economy.

If there is to be any meaningful progress in U.S.-North Korea nuclear negotiations, some form of incremental sanctions relief would almost certainly have to accompany it | Photo: White House

Incremental sanctions relief doesn’t have to mean providing North Korea with unilateral concessions, or exchanging permanent relief from economic pressure for ephemeral action on North Korea’s nuclear program.

Rather, U.S. offers of partial sanctions relief should be structured so that Pyongyang is forced to make hard choices about concessions on its WMD programs, and about the terms of its international economic engagements.

The broad scope of the UN and U.S. sanctions regimes targeting North Korea means that U.S. negotiators would have considerable room to maneuver in applying the leverage that sanctions pressure has engendered, and using it to their maximum advantage.

The details of how a sanctions relief package might be structured would necessarily be determined by the negotiating process. However, a general framework would emphasize confidence-building measures up front; delay sanctions relief on commercial activities until North Korea has begun to roll back its nuclear program, and keep the foundations of the sanctions regime in place until denuclearization is complete.

Such a step-by-step approach could be advanced either through a series of piecemeal “small deal” agreements or through the implementation of a comprehensive “big deal” agreement which proceeds in a phased manner.

As a process advances, UN sanctions would generally be rolled back first, with enforcement of U.S. secondary sanctions adjusted to mirror the UN regime. Any new Security Council resolution lifting or suspending certain sanctions should also come with a credible snapback mechanism allowing them to be readily reimposed if North Korea fails to meet its obligations.

U.S. negotiators should also make it clear to Pyongyang that sanctions which remain in place will continue to be enforced, but should refrain from expanding the existing sanctions framework so long as serious talks are underway.

To rebuild momentum for negotiations, there are plenty of confidence-building measures available.

UN sanctions would generally be rolled back first, with enforcement of U.S. secondary sanctions adjusted to mirror the UN regime

The first, and easiest, steps would involve easing restrictions on humanitarian access to North Korea. The U.S. could also take action to facilitate a greater range of inter-Korean exchanges, or perhaps pare back travel restrictions to allow Americans to travel to North Korea (and vice versa) for professional exchanges or family reunions.

Additionally, in order to help address the threat of serious food shortages later this year, a UN mechanism could be set up to allow the supervised export of certain sanctioned North Korean goods, with earnings from these exports deposited in a UN-controlled escrow account to facilitate commercial food imports.

For its part, Pyongyang could reciprocate with actions such as allowing international inspections at the shuttered Punggye-ri nuclear testing facility, or providing a written commitment not to conduct further nuclear or missile tests or to proliferate WMD abroad.

coal photo

The first, and easiest, steps would involve easing restrictions on humanitarian access to North Korea | Photo by nknews_hq

Beyond these measures, an initial set of steps on North Korea’s nuclear program would likely entail a verifiable freeze and dismantlement of Yongbyon nuclear facilities, possibly paired with a freeze on ballistic missile production and engine tests.

In exchange for these actions, the U.S. could offer the suspension of UN sanctions on certain North Korean imports such as fuel and nonsensitive categories of metals, machinery, and vehicles – relaxation of these sanctions would be valuable to Pyongyang, but would not solve the fundamental problem of a hard currency shortage caused by near-comprehensive sanctions on its exports.

In general, however, any sanctions imposed to deny North Korea access to hard currency should be kept in place

Such an agreement could also facilitate certain inter-Korean economic cooperation projects, given these projects’ importance to Seoul and the political logic of reorienting North Korea’s economic ties away from Beijing.

A resumption of tourism at Mt. Kumgang, or initial work toward relinking and rebuilding the inter-Korean rail and road networks, could be good starting points on this front.

In general, however, any sanctions imposed to deny North Korea access to hard currency should be kept in place until Pyongyang is willing to put its covert uranium enrichment facilities on the table, and to take verifiable action constraining its ability to produce ballistic missiles.

This basic trade-off – a suspension of UN sectoral sanctions on North Korea’s commercial trade in exchange for a verifiable end to North Korean fissile material and ballistic missile production – could form the basis of a stabilizing interim agreement and provide the foundation for a more comprehensive settlement.

An interim agreement could keep in place elements of the sanctions regime – including financial sanctions and prohibitions on investment – that are less amenable to snapback mechanisms than restrictions on commercial trade.

To facilitate North Korean trade, the UN could establish an expanded escrow banking system, helping to ensure that the funds North Korea derives from sanctions relief are used for legitimate purposes.

Once an interim agreement is in place, further sanctions relief could also be tied to credible improvements in North Korea’s labor practices and human rights record.

Operations at Kaesong, or the practice of sending workers overseas, could be exempted from sanctions if North Korea makes a credible commitment to allow its workers to be paid directly and to otherwise work under internationally-recognized labor standards.

Such an agreement could also facilitate certain inter-Korean economic cooperation projects | Photo: Pyeongyang Press Crops

New investments into North Korea could be approved by the UN on a case-by-case basis if they similarly meet certain standards and don’t pose a proliferation risk.

Ultimately, fully lifting UN sanctions resolutions would have to require full North Korean compliance with their requirement for complete denuclearization and the abandonment of its WMD arsenal.

An indefinite suspension of U.S. sanctions would also require, by statute, that Pyongyang make at least some improvements in its human rights record.

Getting to this endpoint of negotiations would require a North Korean decision to make a major strategic shift in how it engages with the world.

It would almost certainly be a long-term process for North Korea’s leadership to conclude that taking such a course of action is in their best interest, and there can be little assurance that taking a step-by-step approach to diplomacy with Pyongyang would lead to this result.

But if done right, trading incremental sanctions relief for concrete actions to roll back North Korea’s WMD programs would nonetheless leave the U.S. and its allies in a better position than they are currently in, and might be the best way to create an environment where such a strategic decision eventually becomes viable.

A longer version of this article was recently published by the Korea Economic Institute. The views expressed in both articles are solely those of the author.

Edited by Oliver Hotham

Featured image: KCNA

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