Moon Jae-in, Putin & Kaesong 2.0: Why the state of the U.S.-Korea alliance is not strong

Of the many reasons why the U.S. and South Korea failed to prevent North Korea from acquiring nuclear weapons, one of the most important is that, despite their nominal alliance, Washington and Seoul have been fundamentally misaligned on North Korea policy since Bill Clinton and Kim Young-Sam led their respective nations. The most important of these differences was their mutually canceling economic policies toward Pyongyang. As the U.S. moved (however slowly and haltingly) toward isolating Pyongyang economically to slow and reverse its nuclear weapons development, Seoul opted to catapult billions of dollars over the DMZ, no strings attached. The most financially significant subsidy came through the Kaesong Industrial Complex, where Seoul subsidized South Korean companies that paid “wages” to North Korean workers (wages that Pyongyang mostly confiscated). Seoul’s policy, in tandem with Beijing’s trade and aid, filled Pyongyang’s coffers with billions of dollars in regime-sustaining hard currency – currency that, as far as anyone can tell, went directly to the development of nuclear weapons and ballistic missiles.

Together, the policies of Seoul and Washington amounted to the incoherent approach of sanctioning and subsidizing the same target at the same time. The clearest illustration of that incoherence is U.N. Security Council Resolution 1718, drafted and passed under John Bolton’s leadership in 2006, which required member states to “ensure” that their money wasn’t paying for Pyongyang’s nuclear weapons.

(d) all Member States shall, in accordance with their respective legal processes, freeze immediately the funds, other financial assets and economic resources which are on their territories at the date of the adoption of this resolution or at any time thereafter, that are owned or controlled, directly or indirectly, by the persons or entities designated by the Committee or by the Security Council as being engaged in or providing support for, including through other illicit means, DPRK’s nuclear-related, other weapons of mass destruction-related and ballistic missile-related programmes, or by persons or entities acting on their behalf or at their direction, and ensure that any funds, financial assets or economic resources are prevented from being made available by their nationals or by any persons or entities within their territories, to or for the benefit of such persons or entities; [UNSCR 1718]

In reality, Pyongyang has the most opaque finances of any government in the world, and Seoul hadn’t the slightest idea where its $100 million-a-year Kaesong subsidy went. Instead, it has willfully misread the resolution and reversed its burden of proof, denying that it has evidence that Pyongyang is providing this cash to, say, its General Bureau of Atomic Energy. If pressed, senior U.S. officials would admit that they were “concerned” about this.

“Precisely what North Koreans do with earnings from Kaesong, I think, is something that we are concerned about,” said Cohen. “All of the hard currency earnings of North Korea are something I would say that we should be concerned about. There are a number of thousands of workers at Kaesong who get paid for their services, so I think it is a complicated situation.” [VOA]

Whatever former President Park Geun-Hye’s other sins, in her last year in office, she managed to achieve an alignment of U.S. and South Korean policies that the two nominal allies had lacked for a quarter of a century. The legacy of that year was the termination of South Korea’s subsidies to the North through the Kaesong Industrial Complex, significant diplomatic pressure on Pyongyang’s trading partners, and U.N. Security Council resolutions that now present a high bar to resuming operations there.

“32. Decides that all Member States shall prohibit public and private financial support from within their territories or by persons or entities subject to their jurisdiction for trade with the DPRK (including the granting of export credits, guarantees or insurance to their nationals or entities involved in such trade), except as approved in advance by the Committee on a case-by-case basis; [UNSCR 2321]

That is to say, any government’s support for trade with North Korea requires the approval of a U.N. committee that operates by consensus, and where the U.S. holds an effective veto. That puts Moon Jae-in’s campaign promises of reviving the Sunshine Policy on a direct collision course with the U.S., which now sees itself as under an increasingly direct North Korean threat for having been Seoul’s security guarantor.

Before Donald Trump was inaugurated or Moon Jae-In was elected, I predicted that behind the diplomatic pleasantries and joint press releases, the two presidents would (like their predecessors) be fundamentally misaligned on North Korea policy, and that each capital and cabinet would deeply distrust the leader of the other. More than two years before the election of Donald Trump, empirical evidence showed that the American news media leaned much further to the left than the voting public. One may safely say that the news media dislike this president with an intensity that goes far beyond their antipathy toward “ordinary” Republican presidents, even if one harbors sympathy for some of that criticism. Critics who pounced on Trump’s election-eve demand that Seoul pay for THAAD, and his more recent threats to terminate the U.S.-Korea free-trade agreement – even as Seoul resists China’s unilateral sanctions over THAAD – were right to view those statements as erratic and harmful to the relationship, although the South Korean public’s support for the U.S. and Korea’s alliance with it has proven remarkably resilient.*

I don’t live in Seoul or mix within the policy circles favored by Moon Jae-in’s administration, so I can only imagine how deeply Seoul distrusts Washington and Trump. I do live in Washington, however, and it’s apparent to me from my conversations with well-placed people here that Washington’s distrust of Moon runs very deep. In contrast to the media’s tendency to amplify every misstep by Trump on Korea, they have largely embargoed the very real reasons for Washington’s distrust of Moon. These include a career spent inside the brain trusts of South Korea’s most anti-American and anti-anti-North Korean movements and his appointment of (sometimes violent) pro-North Korean and anti-American characters into key positions in his administration. It should give Americans pause, for example, that President Roh’s Chief of Staff once spent years in prison for organizing Lim Soo-kyung’s propaganda tour of Pyongyang, and once led a student group that tried to firebomb the U.S. embassy. A man who, if he were to immigrate here, couldn’t pass a U.S. government background check to deliver your mail now has access to some of our most secret operational plans. If that doesn’t concern you, it should.

When Moon Jae-in came to visit Trump at the White House three months ago, there was reason to fear that the meeting would be a fiasco. Presidential advisor Moon Chung-in’s pre-summit tour of the Washington think tank circuit mostly horrified conservatives who are in power in Washington today and was an especially inauspicious sign. Thankfully, the two presidents did not feud publicly, but it was almost immediately apparent that their visit bridged none of the allies’ fundamental differences. Trump is now revealing that privately, the two leaders disagreed on the most contentious of them — how to deal with Kim Jong-un.

South Korea is finding, as I have told them, that their talk of appeasement with North Korea will not work, they only understand one thing!

– Donald J. Trump (@realDonaldTrump) September 3, 2017

As if to affirm the accuracy of Trump’s assessment, Moon has just returned from a cozy summit with Vladimir Putin, where the two leaders agreed to build what sounds a lot like Kaesong 2.0 near North Korea’s border with Russia.

South Korea’s unification ministry said Friday it plans to seek trilateral economic cooperation involving the two Koreas and Russia after taking into account international sanctions and public sentiment.

President Moon Jae-in has unveiled the so-called new Northern Policy designed to expand economic cooperation with northern states including North Korea.

The Ministry of Unification said that the initiative involving the two Koreas and Russia will help implement Moon’s another vision to build a new economic belt with North Korea. [Yonhap]

See also. So far, details of this scheme are scarce, but if it involves the use of North Korean labor outside North Korea, it faces an additional obstacle from the UN’s newest resolution.

11. Expresses concern that DPRK nationals frequently work in other States for the purpose of generating foreign export earnings that the DPRK uses to support its prohibited nuclear and ballistic missile programs, decides that all Member States shall not exceed on any date after the date of adoption of this resolution the total number of work authorizations for DPRK nationals provided in their jurisdictions at the time of the adoption of this resolution unless the Committee approves on a case-by-case basis in advance that employment of additional DPRK nationals beyond the number of work authorizations provided in a member state’s jurisdiction at the time of the adoption of this resolution is required for the delivery of humanitarian assistance, denuclearization or any other purpose consistent with the objectives of resolutions 1718 (2006), 1874 (2009), 2087 (2013), 2094 (2013), 2270 (2016), 2321 (2016), 2356 (2017), or this resolution; [UNSCR 2371]

To amplify the absurdity of this, the Joongang Ilbo reports that Moon “failed to sway” Putin on enforcing sanctions against Pyongyang. But that report and the Moon administration’s new proposal can’t both be true. Reread the resolutions I quoted above and tell me how, even arguably, one can interpret such a proposal as (a) consistent with the resolutions, or (b) doing anything other than undermining the economic pressure Washington is trying to exert on Pyongyang right now. The most generous interpretations of Moon’s misreading of U.N. sanctions would attribute it ignorance, illiteracy, or incompetence. But coming less than a week after North Korea’s sixth nuclear test, while rumors of a long-range missile test swirled through Twitter, this latest proposal seems too spectacularly ill-timed to be inadvertent. Moon is showing Kim and Putin his outreached hand, even as he shows America his middle finger.

Give Trump credit where it’s due. His policy instincts about Moon and the South Korean left hew closer to reality than those of the last several American presidents. A good president doesn’t always need a mastery of fine detail; he simply needs to have good enough policy instincts to select advisors who do (and then, stay off Twitter and let them do their jobs).

Now the question that confronts Washington is how to mitigate the damage that Moon is willing to do to core U.S. national security interests. Moon knows the weakness of his position – his people like him personally, and wanted a change after ten years of conservative rule, but are deeply uneasy with his North Korea policies. No doubt, the signs of decoupling of the U.S.-South Korea alliance are cause for celebration in Pyongyang and Beijing. But if Moon means to finlandize South Korea and undermine sanctions yet again, why should Washington let him do so on his own terms? A strong demonstration that this will cause a breach in the alliance will undermine Moon’s political support, and may discourage him from undermining sanctions that Seoul’s representatives have supported at the U.N. Perhaps having a president with a Twitter account and a reputation for spontaneity isn’t all bad.

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* Analysts tend to underestimate the appeal of a confident, “strong”-looking leader to voters. This appeal transcends culture.