Time for a reset

Kim Byung-yeon
The author is an economics professor at Seoul National University.

The tumultuous Donald Trump presidency is coming to an end. History will tell where and how he erred and succeeded. On North Korea, his contribution is undeniable. He should be credited for the Chinese signature on the strongest-yet United Nations resolution on North Korea. The UN resolution adopted in March 2016 was of no use as it excluded coal for residential use. I repeatedly called for a specific — and objective — cap on the sanctions so that China had no other choice but to follow the guidelines. I proposed a 70 percent cut on coal shipments from North Korea based on a survey on Chinese companies trading with North Korea. The UN Security Council in November unanimously approved a new sanctions resolution that packaged a similar coal ban. Beijing reportedly had to approve it, albeit reluctantly, at the expense of convincing deal-making expert Trump, then president-elect. International sanctions finally started to work on North Korea — effectively.

A Joe Biden presidency would pose both opportunities and challenges for the peace process for the Korean Peninsula. The challenges are twofold. First, North Korean denuclearization could be pushed down on a new U.S. administration’s policy priority list. Americans believe defeating China is more urgent than denuclearizing North Korea. A survey by Pew Research Center over the summer found 73 percent of Americans held negative views on China. Negative opinions on Chinese President Xi Jinping went up to 77 percent in 2020 from 50 percent a year before. Americans dislike China as much as they did not like North Korea three years ago. Most U.S. experts believe the momentum to change China must not be lost. Given the mood, an anti-China agenda would engage the Biden administration most in the early stage.

Second, American and North Korean clocks work differently. For the United States, the clock goes slowly. Washington believes the effect of sanctions must be allowed to build because denuclearization cannot be solved in a short period. Therefore, a Biden administration will likely push the work aside. It also prefers to work on areas where immediate results can be made. But the clock is ticking fast for North Korea. Pyongyang has achieved nuclear development after staking everything, but has earned nothing so far from it. Under such circumstances, sanctions hurt a lot, and the effect worsens every second.

There are new opportunities for sure. Biden comes to the presidency with knowledge and experience in foreign affairs thanks to his devotion during his 30-year career as a senator. In 1979, he was amongthe senators who met Soviet Prime Minister Alexei Kosygin to discuss nuclear issues. If he deals with North Korea, he won’t be as showy as Trump and instead could be more focused on details. Unlike Trump, he also would likely package a denuclearization process with the backing of his administration and allies. Reliability and predictability under Biden’s leadership can be a strong comfort to us.

Seoul and Washington must work together to achieve denuclearization of North Korean while reducing the risks involved. First of all, a new Biden administration needs to name a special envoy during the transition to prepare for negotiations with North Korea. If the diplomatic stalemate continues, North Korea could try to provoke the world in a big way due to its worsening economy. North Korea managed to earn hard cash through tourism and overseas employment of its people in China, but even those revenues were cut off due to the coronavirus. China can provide some food and fertilizer, but cannot outright help North Korea for fear of massive damages such an act would inflict on China.

There are already signs of abnormalities in the North Korea exchange rate. According to multiple sources, the North Korean won has sharply gained against the U.S. dollar and the Chinese yuan. A dollar that traded at 8,000 North Korean won ($8.90) slipped to 6,000 won. The yuan fell from 1,200 won to 800 won. The North Korean currency should depreciate if it is short in foreign currency. But the opposite is taking place, which raises suspicions of hanky panky by the Kim regime. Authorities may have banned the use of U.S. and Chinese currencies in the market to mark up the value of the local won. Such an extreme measure suggests how desperate the regime has become.

We must make the Biden era a new turning point for denuclearization. Seoul must try to solve the issue by sharing its geopolitical concerns with Washington based on their common values of democracy and a market economy. But if the Moon Jae-in administration sticks to allowing individual tours to North Korea or declaring an end to the Korean War, it could further push Washington’s attention away from North Korea. The Biden leadership calls for a reset in Seoul’s North Korea policy. The Moon administration’s approaches driven by ideology and inertia cannot bring about peace on the peninsula.