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Jul 11, 2019 | 21:13 GMT

4 mins read

North Korea, U.S.: Is Washington Considering Softening Its Sanctions Strategy?

(Stratfor)
The Big Picture

In its third-quarter forecast, Stratfor noted that U.S. President Donald Trump's personal commitment to striking a deal with North Korean leader Kim Jong Un leaves open the possibility of a shift toward compromise. Recent leaks suggest that the White House may now be considering a mutually acceptable deal in an attempt to rebuild trust between the two countries, after the abrupt ending to their summit in Vietnam.

What Happened

The United States may be considering a 12- to 18-month suspension of U.N. sanctions against North Korean coal and textile exports with an explicit snapback provision and options for renewal, South Korean media reported July 11. The report cites an anonymous source close to the White House and builds on June 30 leaks reported by The New York Times.

In exchange, the United States would ask North Korea to dismantle its Yongbyon nuclear complex and freeze the production of fissile material and warheads. Should North Korea agree to the initial terms of the agreement, Washington would also be willing to establish mutual liaison offices and a potential second office to coordinate the return of U.S. Korean War-era remains, as well as work on a formal declaration ending the Korean War. The source said this freeze model could then be expanded to other facilities in exchange for further sanctions relief, building to the full dismantlement of North Korea's weapons of mass destruction program. 

Why It Matters

Although the leaks remain unconfirmed, they suggest that the United States is mulling a deal that North Korea would find more palatable than Washington's previous approach of demanding full denuclearization before sanctions relief. The more hawkish members of President Donald Trump's administration, such as U.S. national security adviser John Bolton, would almost certainly oppose such an agreement with Pyongyang. Thus, the move may also indicate an internal battle between White House hard-liners and those more open to a phased denuclearization approach built on compromise. 

Freezing the coal and textile bans would still fall short of North Korea's demand for relief from all U.N. sanctions imposed in 2017, which reportedly led to the breakdown of the Trump-Kim summit in February. However, an offer that addresses these sweeping U.N. sanctions instead of the less globally relevant U.S. unilateral sanctions would be a major sweetener for Pyongyang.

Suspending U.N. coal and textile sanctions would help replenish the regime's coffers and spur North Korea's desired low-end manufacturing development. Pyongyang also knows that a Trump presidency is still its best hope for any sanctions relief, and that it risks losing this window of opportunity should the two countries fail to reach a deal before the 2020 U.S. elections.

The Trump administration may be mulling a deal that North Korea would find more palatable than Washington's previous approach of demanding full denuclearization before sanctions relief.

The two sides would need to work out several thorny issues, including defining the scope and precise definition of the Yongbyon facility, as well as the verification and inspection of the freeze and dismantlement. For Washington, such a move would also need to be carefully shaped with solid snapback provisions and monitoring, along with a clear central role for the United States. Otherwise, in the case of a violation, Washington would run the risk of having fellow U.N. Security Council members China and Russia block the reinstallment of sanctions against North Korea, which both Moscow and Beijing have long opposed.

Background

The surprise meeting between Trump and Kim at the Demilitarized Zone on June 30 has seemingly gotten outreach back on track after the abrupt ending to the two leaders' second meeting, which was in Hanoi. U.S. Special Representative for North Korea Stephen Biegun is scheduled to hold working-level talks with his North Korean counterparts in the coming weeks. And there is speculation that if these talks go well, U.S. Secretary of State Mike Pompeo may also meet with North Korean Foreign Minister Ri Yong Ho on the sidelines of the regional forum of the Association of Southeast Asian Nations in Bangkok in late July.

Numerous multilateral U.N. sanctions have been imposed on Pyongyang over the years, before eventually culminating in a near-blanket ban on North Korean trade nearly two years ago. This is in addition to the various unilateral sanctions that countries such as the United States, Japan and South Korea have each placed on Pyongyang. In August 2017, U.N. Security Council resolutions fully banned North Korean coal exports and in September banned textile exports. Coal accounted for 40 percent of North Korea's exports ($1.1 billion) in 2016, with textiles accounting for 22 percent ($589 million). 

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