A nuclear big deal
*The author is a professor of economics at Seoul National University.
The leaders of two Koreas will meet on Friday next week. The main topic no doubt centers on denuclearization. The key would be putting in writing Pyongyang’s pledge to give up nuclear weapons, which it touted as a non-negotiable sanctified weapon of “justice” until the beginning of the year. If North Korean leader Kim Jong-un goes as far as offering to “sell” his nuclear missiles, bargaining on the price could be made in the follow-up summit between Kim and U.S. President Donald Trump slated for May or June. The scope of a big deal could be made depending on how the two sides can agree on the valuation of the North’s nuclear weapons.
The wind has turned unfavorably for North Korea compared to last year when it stunned the world with missiles capable of targeting the entire U.S. mainland. Toward the end of 2017, Pyongyang ascended to the rank of bargaining with Washington as a de facto nuclear weapons state. But tough sanctions and threats of a military strike have halved the value of its weapons program. The worth of nuclear weapons as a bargaining chip is expected to deteriorate further in the latter half of this year.
Kim made a bold gambit against the odds. He sent a delegation led by his younger sister and the technical head of state of North Korea to the PyeongChang Winter Olympics in February and relayed an intention to denuclearize to South Korean presidential envoys who visited Pyongyang in the following month. Then he went to Beijing to meet China’s leader Xi Jinping to help bulk up his diplomatic credentials for his summit with Trump and ease international sanctions. Thanks to the move, Kim’s nukes have regained value up to 60 percent of their peak, which could be bargained for an “incremental and simultaneous resolution” of the issue. Kim may be counting that he may never have to scrap nuclear weapons, given the changes in relationships between the United States and China and between the United States and Russia, if he can buy more time.
Washington has been consistent in its part of the bargain. It seems to have a willingness to pay for 20 percent at best if Pyongyang agrees to dismantle nuclear weapons without any conditions attached. The United States will move on to offer greater aid and strike a diplomatic relationship if North Korea becomes fully nuclear-free. But Washington won’t wait long. As denuclearization must be achieved as fast as possible, the sanctions won’t be relieved until it is done.
There is a huge gap between the 60 percent of compensation that Pyongyang expects for dismantling its nuclear weapons and Washington’s initial offer of 20 percent. How the difference can be ironed out would be the key to a deal. The Seoul government must play mediator. It must ensure Pyongyang of the economic returns and other benefits when it gives up its nukes. Kim would gain confidence in safeguarding his regime if he can normalize ties with the world’s superpower and also advance the economy in exchange for nuclear weapons. Seoul must sell Pyongyang a concrete and groundbreaking vision for fast advances and irreversible denuclearization. It is the only way to help Kim make concessions in the bargaining.
The inter-Korean summit must deliver not just a will to denuclearize in writing, but also an agreement on a complete and rapid denuclearization scheme. If Kim and Moon can reach an agreement on that, the inter-Korean summit will become a true watershed in the decades-old standoff. It will not only insure genuineness from Pyongyang but also lessen the odds of a breakdown in the U.S.-North summit.
Seoul must closely coordinate with Washington to prepare a denuclearization roadmap. Pyongyang’s bargaining power goes up if any discrepancy appears between the two allies. Sanctions must stay in force to ensure that the deal with North Korea does not fall through. The keystones of international sanctions — a ban on North Korean mineral trade, expulsion of North Korean overseas workers and prohibition on business ventures with North Korean enterprises — must remain intact. The first two are designed to block inflows of hard foreign currencies to North Korea and the third to contain any other money-making source through China. If the sanctions are eased, North Korea’s commitment to denuclearization will surely deteriorate.
The international community can offer to incrementally lift some of the other sanctions upon verifying progress in denuclearization such as North Korea’s disclosure of nuclear weapons and materials, compliance with inspections and verification processes. Washington can consider removing North Korea from the blacklist based on the Trading with the Enemy Act and list of state sponsors of terrorism and allow international humanitarian aid. But all these concessions must be accompanied by a snapback provision warning that all the sanctions would go back in place if Pyongyang derails from its denuclearization path.
The nuclear conundrum finally shows signs of breakthrough thanks to public support for unwavering sanctions, the alliance between South Korea and the United States, and proactive actions from the liberal administration. The people and government must stay united because the future of people on both sides of the border hinge on it.
Translation by the Korea JoongAng Daily staff.
JoongAng Ilbo, April 18, Page 31