In May, US-Korea relations were marked by nervousness about a potential crisis with North Korea as telltale signs of activity at Punggye suggested preparations for a third nuclear test.  Though a test did not occur, no one is confident that a crisis has been averted. In US-South Korea relations, differences over imports of Iran oil and US beef calmed down without causing a major hiccup. Meanwhile, a number of difficult bilateral negotiations remain unresolved.  While there are signs of progress on the New Missile Guidelines (NMG), the civil nuclear talks remain deadlocked.  Territorial and historical disputes between Japan and Korea have complicated and frustrated US desires to strengthen trilateral cooperation with South Korea and Japan.

No nuclear test but what’s next?

If the key events in US-DPRK relations in the beginning of 2012 were the Unha rocket launch and the collapse of the Leap Day agreement, the key non-event over the summer was the absence of a nuclear test. Activity around the Punggye nuclear test site led many to believe that Pyongyang might carry out the test, possibly using highly enrichment uranium (HEU).  Gearing up for another crisis, South Korea, the US, and neighboring countries all fell into reflexive provocation-prevention mode, strongly urging Pyongyang to abandon the test.

North Korea surprised all by not going forward with the test.  Instead, it announced that it would continue with its programs, and enshrined its nuclear weapons status in its revised constitution. The latter act suggests that Pyongyang considers itself a permanent nuclear weapon state with no intention to negotiate these capabilities away in the Six-Party Talks or in any other fora.  Rarely do countries give up that which they put into their constitutions.

Then why no nuclear test?  There is no clear answer, but we can offer four possibilities. The first relates to science.  There may have been technical reasons – either related to the prosecution of a test or data-collection – that made it impossible to carry it out at this time.  Political analyses often underestimate the importance of this variable.  A second possibility is that Pyongyang succumbed to pressure, especially coming from Beijing.  When North Korea conducted a nuclear test in 2006 and 2009, Beijing supported UN Security Council Resolutions 1718 and 1874 authorizing sanctions. Pyongyang might have averted from a test to avoid antagonizing its only ally.  A third possible explanation is that Kim Jong Un and the regime could not afford another embarrassment after the failure of its April missile test.  A third nuclear test would have brought more sanctions amid a fragile domestic situation. Flubbing it would have brought the same sanctions and a damaging aura of incompetence to the young leadership. Finally, the regime may have chosen to hold off until new political leadership takes office in the South Korea, China, and possibly the US before it makes its next move.  Whatever the reason, the important development this quarter is North Korea’s constitutional validation of its nuclear weapon status.  This, it is fair to say, constituted a strategic decision to retain its weapons capability, not trade them away.  Any talk by North Korea to the contrary is tactical.

All official dialogue has been shut down. While the Obama administration maintains informal lines of communication through the “New York channel” (this is a State Department dialogue with the DPRK mission to the UN) any prospect for full-scale reengagement with North Korea this year is very slim.  With Obama facing a tough reelection campaign in November, there is no political appetite for wasting political capital on a soon-to-be-broken deal with North Korea.

So what’s next? We are probably in a wait-and-see mode.  A handful of track-two meetings with North Korean Foreign Ministry officials suggest that Pyongyang is ready to get back into talks, but these messages must be taken with a grain of salt.  They know there is little chance of a deal with an election around the corner.  In the interim, they will continue to deepen their ties with China. Pyongyang has even reached out to Japan, but is probably content to wait out elections in Seoul and in Washington before making its next move.

Several shoes have yet to drop, including the likely visit by Kim Jong Un to China to cement his relationship with the political leadership in Beijing. We are also likely to see announcements of new economic deals between the two countries following a recent visit to China by Kim Jong Un’s uncle, Jang Song Taek.  Notice that all of these developments revolve around China while the US and South Korea sit on the sidelines.  As noted in a Dec. 19, 2011 New York Times piece, we are witnessing China’s de facto adoption of North Korea as its newest province.

A North Korean Deng Xiaoping?

The past months have not been without change in the North.  The question is how significant are these signals: high heels and miniskirts for women; amusement parks and (pirated) Walt Disney productions for children.  These are some of the changes that we have seen in North Korea under the leadership of Kim Jong Un.  This not-yet-30 year-old took over for his father Kim Jong Il in December of 2011 in the only communist dynastic succession system left in the world.  Since then, in addition to riding rollercoasters and frolicking with school kids, the most eligible prince of Pyongyang took on a wife, Ri Sol Ju, whom the New York Times dared to equate with Kate Middleton (!).  In a sign of changing times, the new first lady is seen publicly with her husband, sporting a Christian Dior clutch worth more than the annual wage of a North Korean worker.

Such inane details, combined with the young Kim’s years of Swiss schooling where he took courses on “Parties and Elections” while eating pizza and idolizing NBA stars, have caused optimists to declare – once again – that North Korea is ready to  reform.  Rumors of a new economic policy being hatched in Pyongyang fuel speculation that junior Kim is serious about change.   Korea-watchers will remember that similar predictions were made in 1994 when then-52-year-old Kim Jong Il took over after his 82-year-old father died.  We know how that turned out.  Nevertheless, believers in the irresistibility of Disney, Dior, and Coke have short memories and tall hopes of a China-type economic modernization coming to North Korea. The predictions of reform in North Korea have long outnumbered the predictions of collapse. We can’t side with the majority.  The current system under a young and unproven leader faces severe challenges. Mickey Mouse is unlikely to be an agent of reform.

Thus far, we have not had the crisis-precipitating provocation from Pyongyang. Perhaps, the new leader is amusing himself with Disney and his new wife.  Meanwhile, the countryside has been ravaged by flooding from the annual rains.  NGOs report that the food shortage situation is worsening. And the rogue nuclear and missile programs continue to grow unimpeded.  There is presumably a degree of infighting in the system, manifested in the surprise sacking in July of the top military general in the country.  Some interpret the departure of Gen. Ri Yong Ho as evidence of the young reform-minded Kim trying to usurp power from the hardline military.  Maybe.  It appears, however, that Kim Jong Un may not want reform but to reclaim for his own patronage network some of the money the military was making through lucrative business activities.  If so, there are some very unhappy military generals in North Korea today.  This could be a gutsy move by Kim. Or, it could be a stupid one, if it lays the groundwork for disgruntled factions inside the military – never a good scenario in Korean history.

US beef and Iran oil imports

The US-ROK alliance had fairly smooth sailing over the past few months partly because the US beef and Iran oil imports issues calmed down without causing any major hiccup in relations. A massive candlelight rally was held again in Seoul to press the Lee government to halt US beef imports and this made government officials in Seoul and Washington nervous. Yet, the rally did not gain any political momentum in South Korea, precipitating an anti-government movement as occurred in 2008. Although there were lingering concerns about the safety of US beef, the South Korean public remained vigilant about the politicization of the US beef issue again and largely stayed away from the rally.

With the Obama administration’s announcement in June exempting South Korea from US sanctions, Seoul and Washington temporarily resolved the conflict over South Korea’s oil imports from Iran.  South Korea decreased its oil imports from Iran by 30 percent in the first quarter as compared with the same period of last year. In July, imports of Iranian oil were completely suspended in South Korea as a result of the European Union’s ban on providing insurance to oil tankers carrying Iranian oil. There was a new development in August as the Iran government offered to transport oil using its own tankers and South Korea decided to resume oil imports. Although the resumption will not drastically increase South Korea’s oil imports from Iran enough to prevent South Korea from getting an extended sanction wavier from the US after the current one expires at the end of this year, this issue is likely to re-emerge and continue to stand between South Korea and the US for a while.

Missile Guidelines

There are two important and unfinished negotiations in progress between Seoul and Washington.  The first relates to the revision of the US-Korea missile guidelines and the other is the civil nuclear cooperation, also known as the 1-2-3 Agreement.  Both are difficult negotiations and have the potential to become heavily politicized, particularly in Korea as politicians may react to perceived deadlocks as license to play the “sovereignty card,” claiming US heavy-handedness.  Although these negotiations have not drawn much public scrutiny in either country, they began to surface and to make major news headlines in South Korea this summer.

In early 2011, the Obama and Lee administrations entered into negotiations on New Missile Guidelines (NMG).  At the center of the issue are the range and payload size of South Korea’s ballistic missiles.  The current agreement, which was reached in 1979 and revised in 2001, limits missile ranges to less than 300 km and payload size to less than 500 kg. The Lee administration has pushed hard for an extension of missile ranges to between 800-1,000 km and an increase of payload size to one ton.  South Korea has consistently argued that the increased missile ranges would enhance conventional deterrence because it would allow the ROK to strike any part of North Korea from the south of the peninsula.  Washington understands Seoul’s concerns, but does not believe that the mere acquisition of longer-range missiles will enhance deterrence.  Moreover, it is concerned about regional reactions and possible escalation if the ROK starts to produce longer-range ballistic missiles.  The Obama administration has preferred to discuss NMG guidelines within the context of the US-ROK alliance framework and has approached the negotiation as a way to boost alliance defense capabilities. Among other requirements, this has led the US to nudge South Korea in the direction of a regional missile defense network.

South Korean officials pushed for an agreement throughout the summer, and hoped to use the US-ROK “2+2” meeting as an action-forcing event, but with little success. Meanwhile, politicians and experts in the South have started to call on their government to scrap the missile guidelines or set an expiration date, pointing to the fact that the guidelines are not a legally binding treaty between the US and the ROK.  Several framed NMG as a sovereignty issue and insisted on South Korea’s right of self-defense.  While this has not reached a “crisis” in the alliance, it is on track to becoming one.  Rumors have it that the core of the talks is taking place between the two National Security Councils rather than through normal diplomatic channels.  The departure of Blue House Senior Secretary Kim Tae-hyo over the botched intelligence agreement with Japan has not made the NMG talks any easier. Both governments are approaching the end of their presidencies, and are holding firm to hopes that the post-election administrations will take a more accommodating tone.  Stay tuned.

1-2-3 agreement

South Korea and the US remain deadlocked over the civil nuclear cooperation agreement. Since the start of the negotiations in 2010 to revise the old agreement that was signed in 1974 and is set to expire in 2014, the countries have held five rounds of talks. While this is a complex negotiation, the core difference comes down to Seoul’s desire to be a full nuclear fuel cycle country.  On the back end of the fuel cycle, this means Seoul is demanding long-term consent to reprocess spent nuclear fuel.  On the front end, it means the demand to enrich uranium fuel.  Seoul’s arguments for the former generally relate to the absence of storage space for spent fuel.  In the latter, Seoul believes that enrichment will allow it to be a more competitive global player in civilian nuclear energy.  Seoul and Washington have tried to “punt” the reprocessing question with agreement on a 10-year joint study on “pyroprocessing.”  But, in general, the US is reluctant to accede to Korean demands because of proliferation concerns and because it does not find the ROK rationales for reprocessing and enrichment credible. There is also considerable “India hangover” – that is, nonproliferation types in the Obama administration who were opposed to the civil nuclear deal given to India under George W. Bush, and who do not want to see this arrangement become the international norm.  We will say more about this negotiation in the next Comparative Connections.  Suffice it to say for now that this is a slow-motion train wreck.  Both sides are dug in, and the clock is ticking.  Negotiators say that a new agreement must be completed by May 2013, which leaves the next administrations in Seoul and Washington only a couple of months to finish the negotiation.  That is not a lot of time.  Stay tuned on this one, too.

Dokdo and US-ROK-JAPAN trilateral cooperation

In August, Seoul-Tokyo ties came under severe strain over their longstanding history and territorial disputes. Although these politically explosive and emotionally charged issues have sporadically flared in the past, they were taken to the highest political levels in both governments sparking a full-on diplomatic row.

There is a sort of yearly cycle in Korea-Japan relations.  But the recent events seem to have disrupted the equilibrium in a more permanent way. On the Korean side, President Lee’s visit to Dokdo constitutes an attempt to change the historical status quo.   On the Japanese side, the Diet resolution harshly criticizing Lee’s trip also sets a new precedent.  Similarly, recent efforts by Japanese government officials to lobby local US politicians to block the construction of comfort women monuments in US localities sets an entirely new precedent that is bad for Seoul-Tokyo as well as Tokyo-Washington relations.

These actions on both sides are different from previous mis-steps because they are exacerbating historical animosity and escalating the issues in a more permanent way. The damage to relations is clear because these historical disputes now stand in danger of impeding practical cooperation between the two governments. From a US perspective, when historical animosity impedes pragmatic cooperation between its two most important allies in Asia, Washington becomes concerned.

Unfortunately, there is no solution in sight. The primary casualty in this spiral is US-Japan-ROK trilateral coordination, and yet the US is understandably hesitant to intervene. Although there are very limited options for the US when its two most important Asian allies are growling at each other, managing good Korea-Japan relations is the burden that Washington will have to carry. (See PacNet #58, Sept. 11, 2012 for the full argument)