How the new U.N. and U.S. sanctions on N. Korea can complement each other

It would be futile to post a detailed analysis of the U.N. Security Council’s draft North Korea sanctions resolution before the Security Council approves it. For now, it should suffice to say that the text falls short of some of my expectations, but exceeds far more of them.

American liberals often default to the view that unilateral U.S. sanctions are useless or counterproductive, and that only the U.N. can give sanctions global reach and legitimacy. American conservatives often default to the view that the U.S. should act regardless of the U.N., which lacks the political will and means to enforce its writs. Both views are about half right and half wrong. U.N. and U.S. sanctions are both essential elements of an effective sanctions regime; neither can be effective without the other.

The U.S. levied nominally strong sanctions against Cuba, but without the cooperation of Latin America, Europe, and Canada, Cuba was able to limp along and resist major reforms. Plenty of European banks were willing to cheat by stripping any data out of their wire transfer records, helping Cuba to use the dollar system to a limited degree. Others were content to handle Cuban transactions in other convertible currencies, including the Euro, the Canadian Dollar, and the Swiss Franc.

Until now, North Korea sanctions have been an example of the opposite. U.N. sanctions were reasonably strong, but many countries — particularly China and Russia — were willing to violate them flagrantly. Governments like China, Russia, Syria, and Angola don’t care about the U.N.’s writs until violating those writs comes with a cost. That’s where America’s stewardship of the global financial system becomes essential.

With the enactment of the North Korea Sanctions and Policy Enhancement Act (NKSPEA), the Treasury Department becomes an effective enforcer of the U.N.’s resolutions. With the approval of the U.N.’s new resolution, Treasury will gain new partners among the financial regulators of Europe, Japan, and other responsible nations that issue convertible currencies.

Without even reading the new resolution, it would be easy to say that it still won’t work; after all, most things that haven’t worked in the past won’t work in the future. So will it work? The New York Times is characteristically skeptical, and stacks the deck in that direction by surveying “analysts in South Korea and China,” two countries whose interests have sharply diverged. One criticism the Times cites is that the resolution does not shut down all cross-border trade with China, but this would be a terrible mistake. It would empty the markets that ordinary North Koreans depend on for their livelihoods, and would cripple the jangmadang market economy — the only independent institution in North Korea that’s capable of resisting the state’s power.

It also criticized the text’s failure to cut off all supplies of petroleum products, something I strongly opposed here for similar, humanitarian-based reasons.

More on point is the criticism of this Wall Street Journal column, that the new U.N. resolution’s “livelihood” loopholes will be easy to exploit and abuse. Keeping the intent of those exceptions as narrow as they were meant to be will require aggressive Treasury Department enforcement.

Why did China agree? My obvious bias is to say that the sanctions law I helped draft is at least one reason for this. There is some evidence to support that, but other reasons probably played important roles, too. THAAD was probably one of them. For some reason, China feels that an anti-missile defensive system is a dire threat to its interests (the interest being blackmail and hegemony). 

The North’s missile launch also embarrassed Beijing, discredited its strategies, and shifted its policy calculus:

The Wall Street Journal cited the unidentified American official as saying that the North’s Feb. 7 rocket launch was a “turning point in the U.S.-China negotiations” over how strongly to punish the provocative regime for the Jan. 6 nuclear test. [Yonhap]

One American official said that a turning point in the U.S.-China negotiations was when North Korea test-launched a ballistic missile in early February, disregarding international concern over its earlier test Jan. 6 of what it said was a hydrogen bomb. The U.S. and other countries said the blast wasn’t powerful enough to have been a hydrogen bomb. [WSJ]

“The problem is, Pyongyang made a mistake in its first step in developing nuclear weapons. Now the nuclear issue has been pulling China deeper into the mire,” the state-run Global Times newspaper said in an editorial.

“We must determine which scenario hurts China more – either North Korea successfully develops nuclear weapons and prompts a strong reaction from the U.S., Japan and South Korea, or China has a showdown with North Korea by agreeing to the strictest sanctions, but that may lead to other geopolitical consequences,” the editorial reads. [Yonhap]

On January 28th, as Beijing was weighing the costs and benefits of supporting new sanctions, the Senate Foreign Relations Committee cleared the last major legislative hurdle to a tough new U.S. sanctions law by agreeing on a compromise version of the NKSPEA. By early February, columns and editorials in America’s major newspapers were making it clear that this version would impose secondary sanctions on Chinese banks and businesses. A government as sensitive to its economy as China’s must have realized how much it stood to lose. In the end, China values its economic relationships with the U.S. more than it values its political relationship with North Korea.

This time, then, we will have something that we never had before — alignment and synergy between a tough U.S. statute and a tough U.N. Security Council resolution. If the U.S., Japan, and South Korea maintain the political will to enforce these sanctions, the sanctions will be sufficient to put Pyongyang under pressure equal to, or greater than, the pressure that forced Iran to make a deal.