{"id":113228,"date":"2017-09-20T09:54:26","date_gmt":"2017-09-20T13:54:26","guid":{"rendered":"http:\/\/countingpips.com\/?p=113228"},"modified":"2017-09-20T10:00:03","modified_gmt":"2017-09-20T14:00:03","slug":"how-to-resolve-the-korean-conundrum","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2017\/09\/how-to-resolve-the-korean-conundrum\/","title":{"rendered":"How To Resolve the Korean Conundrum"},"content":{"rendered":"
September 20, 2017<\/div>
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By Dan Steinbock \u00a0\u00a0<\/strong><\/p>\n

As the US policy has failed in the Korean Peninsula, dark scenarios cast a shadow over the region \u2013 but could also pave way for peace.<\/strong><\/p>\n

Recently, US President Donald Trump, in a historically bellicose debut speech to the UN General Assembly, threatened the \u201ctotal destruction\u201d of North Korea if it does not abandon its drive toward nuclear weapons.<\/p>\n

\u201cRocket man is on a suicide mission for himself and his regime,\u201d Trump said about the North Korean leader. He added: \u201cIf [the United States] is forced to defend itself or its allies, we will have no choice but to totally destroy North Korea.\u201d<\/p>\n

The menacing threats reverberated across Asia. If Trump truly threatens to resort to conventional weapons or a limited nuclear strike to annihilate more than 25 million North Koreans, he is endangering the lives of millions of South Koreans and Chinese. Pyongyang is more than 11,000 kilometers away from Washington DC but only 200 kilometers from Seoul and 800 kilometers from Beijing \u2013 not that different from Washington DC to Atlantic City or Atlanta, respectively.<\/p>\n

President Donald Trump and his Chinese counterpart President Xi Jinping have jointly denounced North Korea\u2019s recent nuclear test as \u201cdangerous to the world.\u201d<\/p>

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Recently, U.S. UN Ambassador Nikki Haley called for \u201cthe strongest sanctions\u201d to pressure North Korea into giving up its nuclear arsenal \u201cbefore it’s too late.\u201d Now President Trump\u2019s rhetoric is taking the conflict with North Korea to an entirely new level \u2013 assuming that the White House will walk the talk.<\/p>\n

And yet, in a sense, it is already too late. Decades of U.S. policies have strengthened Pyongyang\u2019s determination to exploit the deterrent value of its nuclear arsenals \u2013 as evidenced by its intermediate range ballistic missile on September 15; the second time that Japan has come in North Korean missile’s targeting range within a month.<\/p>\n

That is not to say that the game is over; only that it is time to play a different game. Dealing with the \u201cRocket man\u201d is not rocket science.<\/p>\n

Decades of policy failures<\/strong><\/p>\n

Ever since the 1953 Armistice Agreement, Washington has seen North Korea as a \u201crogue state.\u201d Even with the Soviet Union, Washington supported \u201cpeaceful coexistence\u201d; with North Korea, only a \u201ctemporary ceasefire\u201d – which has nurtured fears of imminent intrusion in Pyongyang.<\/p>\n

In the postwar era, both China and North Korea opted for socialism. But when Deng Xiaoping opted for economic reforms and opening-up policies, Kim Il-sung (1972-94) chose precisely the reverse; a self-reliance (Juche) doctrine that translated to political consolidation and international insulation.<\/p>\n

When Kim Jong-il (1997-2011) succeeded his father, he chose not to reform the economy and kept the country closed. While the West celebrated the \u201cend of history,\u201d Pyongyang was obsessed with the U.S.-led \u201cbig bang democracy\u201d in Russia and the consequent Great Depression. It served as a compelling negative demonstration effect.<\/p>\n

For years, Beijinghad encouraged Pyongyang to emulate Chinese lessons in economic reforms. Kim Jong-il listened, but initiated few reforms. Kim Jong-un (2012-) is a different story. In a televised 2013 New Year\u2019s address, he advocated “a radical turn in the building of an economic giant on the strength of science and technology by fanning the flames of the industrial revolution in the new century.\u201d These economic efforts should \u201cbe manifested in the people\u2019s standard of living.\u201d In the Obama White House, it was seen as just another ploy.<\/p>\n

Instead of rapprochement, Washington pushed for a Terminal High Altitude Area Defense (THAAD) anti-ballistic missile system in South Korea. THAAD would kill two birds with one stone: it would subdue Pyongyang and it would contain China. The stance was predicated on President Park (who would soon be impeached), a \u201crealistic\u201d Kim Jong-il (who has not given in), accommodating Beijing (not President Xi Jinping\u2019s firm leadership) – and an imperial White House that would \u201cspeak softly but carry a big stick\u201d (until the failure of the Clinton campaign).<\/p>\n

In a year, all these assumptions collapsed. In the Korean Peninsula, the new status quo offers potentially disastrous scenarios but also a way out.<\/p>\n

South Korea\u2019s strategic U-turn \u00a0\u00a0<\/strong><\/p>\n

As Seoul is trying to cope with North Korea\u2019s nuclear blackmail, it is amid a great domestic shift. In March, Park Geun-hye, the conservative daughter of South Korea\u2019s former strongman Park Chung-hee was impeached for corruption. In turn, Moon Jae-in, the incumbent president began his career as student activist against Park\u2019s dictatorship and his presidency could result in a new geopolitical momentum for peace. He worked closely with President Roh Moo-hyun (2003-8), who pursued rapprochement with North Korea.<\/p>\n

In his first months, President Moon has been promoting income-led domestic policies to reduce social inequality, tax hikes for large companies and the wealthy and trying to cool the overheated property market. While public debt has expanded, his approval ratings remain very high at around 80 percent.<\/p>\n

In foreign relations, Moon seeks stability with China and the U.S., even if he and most Koreans have great doubts about Trump. In fall 2013, South Korea approached the Pentagon about the anti-missile system, which it opted for toward the end of the Park era. Obviously, Beijing’s concern is that the real target of the THAAD is China. Moon has sought to slow THAAD’s deployment.<\/p>\n

But the balancing act between Washington and Beijing is challenging, especially as Trump insists on renegotiating a bilateral free trade agreement with Korea, which remains on watchlist for \u201cunfair currency practices.\u201d<\/p>\n

Moreover, President Park\u2019s conservatives were able to postpone the repeal of the Operation Control agreement (OPCON), which allows the Pentagon – not Seoul – to control its military fate. The mission statement of the South Korea\/US Combined Forces Command (CFC) is to \u201cdeter hostile acts of external aggression\u201d South Korea by a \u201ccombined military effort.\u201d The CFC is commanded by a U.S. General and it has has operational control (OPCON) over more than 600,000 active duty military personnel both countries.<\/p>\n

As President Rho failed to implement transfer, the latter was delayed; in turn, President Park managed to defer it to 2022. In the event of war, U.S. interests will thus override the interests of South Koreans – in their own country.<\/p>\n

Washington\u2019s ominous tone<\/strong><\/p>\n

The talks over North Korea\u2019s nuclear weapons have been lingering since they were initiated by the Clinton Administration in the 1990s. After the George W. Bush presidency and the first term of the Obama Administration, the negotiations shifted from mainly bilateral to the multilateral Six-Party Talks among the US, China, South and North Korea, Japan and Russia.<\/p>\n

The expansion reflected progressive shifts in the world economy. Just as the G7 nations – the US, Europe and Japan – could not resolve the global crisis without support by large emerging economies, regional conflicts that have global implications cannot be resolved by the \u201cWest\u201d anymore. In the Six-Party Talks, some key agreements were reached for North Korea’s aid and recognition in exchange for denuclearization. But since 2009, the talks have been suspended, while concern about nuclear proliferation to other strategic actors has increased.<\/p>\n

Following false starts in talks and aborted policy postures, the White House has opted for new sanctions and building alliances against Pyongyang. Meanwhile, President Trump and Pyongyang have engaged in the kind of rhetoric that has not been heard since the Cuban Missile Crisis. Recently, President Vladimir Putin stated that the U.S. strategy under Trump, Obama, Bush – forcing North Korea to give up its nuclear program – has conclusively failed.<\/p>\n

Since Pyongyang believes that its nuclear arsenal is the best deterrent against U.S. invasion, which President Trump\u2019s \u201cfire and fury\u201d threats have only reaffirmed, it is now less likely to reconsider its nuclear stance.<\/p>\n

From Pyongyang\u2019s perspective, U.S. threat is existential, extending from regime plans that would top the Kim Jong-un leadership to a limited nuclear strike that threatens the entire nation – as precipitated by the THAAD system.<\/p>\n

From Pyongyang\u2019s perspective, U.S. threat is existential, extending from regime plans that would top the Kim Jong-un leadership to a limited nuclear strike that threatens the entire nation – as precipitated by the THAAD system. Undeniably, the timeline of North Korea\u2019s intensified nuclear and missile tests correlates with efforts to sustain THAAD and joint US-South Korean war games in the region.<\/p>\n

On September 17, the Pentagon\u2019s 14 bombers and fighters over the Korean Peninsula \u2013 which included South Korean and Japanese aircraft and a drop of live bombs in a massive show of force \u2013 merely confirmed the severity of existential threat among North Koreans.<\/p>\n

Chinese unease \u00a0\u00a0<\/strong><\/p>\n

While Washington has never had diplomatic relations with Pyongyang, China has been North Korea\u2019s close, though increasingly ambivalent ally. The conditions that once gave rise to the partnership have progressively diminished. Nevertheless, both Koreas are located in close proximity to the mainland, which remains vital to Beijing.<\/p>\n

In Washington, Beijing\u2019s role is regarded as invaluable to contain Pyongyang\u2019s nuclear weapons and ballistic missiles, to prevent nuclear proliferation, to enforce economic sanctions, and to support North Korean refugees that cross into China. But Beijing does not see itself as the enforcer of U.S. foreign policy, particularly one that\u2019s considered misguided.<\/p>\n

Moreover, Beijing opposes Trump\u2019s attempt to couple sanctions against North Korea with sanctions against Chinese companies and against North Korean people. If Trump persists in the current approach, he will risk alienating China.<\/p>\n

Washington\u2019s stated interest is denuclearization and human rights, but in Beijing’s view U.S. actions have escalated nuclearization and weakened human rights in the region. Neither Kim Jong-un’s disruptive actions nor Trump’s aggressive rhetoric serve China\u2019s interest in peace and stability in the region.<\/p>\n

On September 3, after North Korea claimed that it has successfully tested a hydrogen bomb designed to fit into an intercontinental ballistic missile (ICBM), the U.S. Geological Service and the China Earthquake Administration recorded a 6.3 magnitude earthquake as a result of the detonation. It was followed by a 4.1 magnitude quake, due to a suspected cave collapse resulting from the explosion. Chinese scientists warn that North Korea\u2019s nuclear test site is at risk of imploding, which has a potential for a massive environmental disaster.<\/p>\n

Neither Chinese nor South Korean policymakers want another Fukushima and a massive humanitarian crisis within their borders.<\/p>\n

Only one viable scenario<\/strong><\/p>\n

So what can be done and what is likely to happen next? There are a few potential scenarios, fewer probable ones – but only one that\u2019s sustainable.<\/p>\n

Walk the war talk.<\/strong> Recently, US Secretary of Defense Jim Mattis threatened North Korea with an \u201ceffective and overwhelming military response.\u201d But in the Korean Peninsula, hostilities cannot be limited to a conventional conflict. Under threat, Pyongyang will opt for a nuclear strike, even if that would result in massive devastation. It would be a Pyrrhic victory.<\/p>\n

Hollow rhetoric\/\u201dTotal destruction\u201d threats.<\/strong>\u00a0If the Trump administration will continue to promise shock and awe but won’t deliver any, it will risk being perceived as a paper tiger. Moreover, as Pyongyang is likely to continue its tests and target provocative destinations vital to South Korea, Japan and the U.S., the THAAD would be perceived as an expensive but useless deterrent. Unless, of course, the administration will choose to execute Trump\u2019s \u201ctotal destruction\u201d threat, but that would have even darker consequences across the world.<\/p>\n

Broader sanctions.<\/strong> As Washington resorts to sanctions, it is now also trying to corner China by extending sanctions to Chinese companies. While China accounts for 90 percent of trade with North Korea, much of the remaining 10 percent can be attributed to India, the Philippines, Taiwan and France. If they are not included within the sanctions, the latter will be seen as containment against China. If they are included, the White House will frustrate it’s allies.<\/p>\n

Peace agreement.<\/strong> While there are all kind of short-term scenarios, there is only one longer-term option. As the stakes are mounting for regional devastation, so are the chances for a peace agreement. It would be the most effective way to subdue North Korea\u2019s nuclear stance over time. As long as it remains threatened, Pyongyang will rely on its nuclear strategy. But if that threat is defused, nuclear scenarios will be undermined.<\/p>\n

A peace treaty would mean reduced U.S. presence in the region, which has been highly objectionable to Washington. However, despite its hawkishness, the Trump administration does not see itself as bound by previous defense arrangements. In Beijing\u2019s view, peace agreement would pave way for pacification and stability; delimit nuclear threat in the region, while North Korea\u2019s sovereignty would prevail.<\/p>\n

Bilateral peace in denuclearized Korean Peninsula<\/strong><\/p>\n

In August, former U.S. President Jimmy Carter, who has negotiated with several North Korean leaders, noted that, for a long time, Pyongyang has sought a \u201cpeace treaty to replace the [1953] ceasefire.\u201d In his experience, North Koreans want peaceful relations with the U.S. and regional neighbors but are convinced that Washington is planning a preemptive military strike against their country. In view of U.S. record of regime changes, that’s not a futile concern.<\/p>\n

A true peace agreement would have to be a bilateral agreement with two sovereign Koreas – not one imposed by Washington, or by nuclear blackmail.<\/p>\n

A true peace agreement would have to be a bilateral agreement with two sovereign Koreas and the acceptance of Pyongyang as a nuclear power. Since North Korea accounts for only 0.6% of global nuclear forces, that translates to affirming realities.<\/p>\n

Figure <\/b><\/strong> World nuclear forces: The Role of North Korea <\/b><\/strong><\/p>\n

(% of world total by country, 2016 (SIPRI)<\/i><\/em><\/p>\n

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The old nuclear regime that prevailed in the Cold War and the post-Cold War era is history. In addition to current nuclear powers \u2013 US, Russia, India, Pakistan, China, France, UK, Israel, North Korea – proliferation is likely to increase in the multipolar era.<\/p>\n

In the 21st\u00a0century, sustained peace is not ensured by restricting nuclear capability to one, two or half a dozen nations, but by collectively- monitored certainty that nuclear proliferation will be limited for peaceful purposes only.<\/p>\n

About the Author:<\/strong><\/p>\n

Dr. Steinbock is Guest Fellow of Shanghai Institutes for International Studies (SIIS), see http:\/\/en.siis.org.cn\/\u00a0. The commentary is part of his SIIS project “China in the Era of Economic Uncertainty and Geopolitical Risk.” For his global advisory activities and other affiliations in the US and Europe, see http:\/\/www.differencegroup.net\/<\/a><\/p>\n

The original, shorter commentary was released by China-US Focus on Sept 18, 2017.<\/p>\n

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By Dan Steinbock \u00a0\u00a0 As the US policy has failed in the Korean Peninsula, dark scenarios cast a shadow over the region \u2013 but could also pave way for peace. Recently, US President Donald Trump, in a historically bellicose debut speech to the UN General Assembly, threatened the \u201ctotal destruction\u201d of North Korea if it […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-113228","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/113228","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=113228"}],"version-history":[{"count":3,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/113228\/revisions"}],"predecessor-version":[{"id":113234,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/113228\/revisions\/113234"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=113228"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=113228"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=113228"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}