Lifting Trade Sanctions: A Bad Idea We’ve Already Tried

This seems rather badly timed, somehow. In Forbes, grad student Koen C. Munneke argues that “[i]nstead of following the previously ineffective path of applying pressure and saber-rattling, the international community should switch to ….” Let me guess: the previously ineffective path of trying to use investment to better the lives of ordinary North Koreans and broadening the minds of their overlords, in the hope that they might again promise to disarm? If only someone had thought of that before!

It’s strange how ten years of unrestricted, unconditional Sunshine Policy and two agreed frameworks don’t count as “previously ineffective,” yet two brief experiments with freezing the proceeds of illicit activity somehow do. So let’s just be clear about this: when the proponents of unrestricted appeasement of Kim Jong Il’s regime talk about North Korea already being the most sanctioned country on earth, they’re either ignorant or just being disingenuous. In Munneke’s case, I’ll charitably assume the former.

My first suggestion to those who repeat this cliche is that they should at least bother to read the Treasury Department’s summary of the U.S. government’s North Korea sanctions program. With the exception of counter-proliferation sanctions that keep North Korea from buying weapons and dual-use technology, and the Treasury Department licensing program needed to enforce these focused sanctions, most trade sanctions with North Korea were lifted back during the Clinton Administration as a reward for North Korea’s long-since-broken promise not to test any more ballistic missiles. That was three U.N. Security Council resolutions and at least two presidential statements ago. President Bush lifted most remaining trade sanctions under the Trading With the Enemy Act in 2008. It would not be so if it were my decision, but Americans are free to take overpriced potemkim ad ridiculum tours of Pyongyang and see its creepy ghost dance spectacles. Aside from these sanctions and some vague Treasury Department warnings about potential money laundering risk, the U.S. government has been permissive of trade with North Korea, and with the exception of suspected financing of illicit activity, still is. And I’m saying this like it’s a bad thing, because it is. All of this trade is perpetuating a system that enslaves 23 million people, refuses to provide for their basic needs, resists reform, and richly deserves ignominious extinction — something that will certainly be expensive, but probably less so than the U.S. city we might yet lose to a North Korean-supplied nuke.

Beyond this, the United States has been trying for years, through generous offers of monitored humanitarian aid, to meet a need that ought to trump any commercial interest: keeping the people of North Korea from starving.

Surely Munneke doesn’t expect the Obama Administration to be equally solicitous of illicit trade and money laundering, but he criticizes Treasury’s enforcement action against one crooked bank in Macau, an effort that lasted just 17 months from its inception to its premature abandonment by failed diplomat Christopher Hill. Contrary to the overwhelming weight of the evidence, Munneke claims that the North Korean regime thus proved itself “immune to sanctions.” The evidence actually suggests that the sanctions panicked Kim Jong Il and forced him to make concessions, at least until we lifted the sanctions and he reneged again. It seems more likely, in retrospect, that North Korea, South Korea’s then-leftist government, China, and our own State Department all wanted the BDA sanctions lifted not because they weren’t working, but for the precise reason that they were so much more effective than expected that they’d become a threat to the stability of the regime.

The Obama Administration has since concluded — and commendably so — that the sanctions worked, and should not have been lifted without more concrete progress toward disarmament. Since then, to my disappointment and Munneke’s apparent ignorance, trade with North Korea has been reasonably free, at least until several months after Kim Jong Il ordered the sinking of a South Korean warship. Munneke summarily dismisses this murder of 46 South Korean sailors as something we must “move beyond” in the interest of being “pragmatic.” Yet Treasury has now been loosed, not to halt all North Korean trade, but to hunt down the proceeds of North Korea’s illicit activity. Does Munneke really suggest that we are required, in the interests of endlessly pointless talks, to absorb unilateral warfare, tolerate crime and proliferation, and grant Kim Jong Il a franking privilege over our currency? Apparently so! Some of the assets various foreign governments and banks are now said to be blocking at Treasury’s urging may be co-mingled with assets derived from legal activity, but so what? The essential act of money laundering is co-mingling it to disguise its origins, confuse its legitimacy, and facilitate the superficial arguments of the ill-informed.

It’s not North Korea’s inability to buy helicopter gunships and Escalades from us that’s throttling its trade relations with the world, it’s North Korea awful credit rating, which is a function of the fact that it doesn’t keep its obligations and never allows foreign investment to penetrate so far into its society that ordinary people are exposed to its influence. But then, trade isn’t the only place where the North Korean regime has this same fundamental problem. If ten years of Sunshine Policy didn’t change that, nothing Munneke proposes will, either.