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Seoul pushes to unbind N.K.’s dual economic, nuclear policies

China’s cooperation seen as crucial in toughening anti-Pyongyang sanctions

In the wake of Pyongyang’s fourth nuclear test last week, Seoul is raising pressure on the communist regime to abandon its policy of simultaneously developing its economy and nuclear arms, by toughening both bilateral and multilateral sanctions. 

Seoul has long argued that Pyongyang’s two-pronged policy would never be successful as its dual objectives of economic development and nuclear armament are “incompatible” -- a view shared by its security ally, Washington.
President Park Geun-hye speaks during a meeting with educational circles on Friday. (Yonhap)
President Park Geun-hye speaks during a meeting with educational circles on Friday. (Yonhap)

During their telephone talks last Thursday, the day after the North’s self-proclaimed hydrogen bomb tests, President Park Geun-hye and U.S. President Barack Obama agreed to cooperate on pushing for “strong and comprehensive” sanctions against the North.

“Comprehensive” sanctions underscored the allies’ resolve to adopt stronger punitive measures against the North, considering that the international community has recently been favoring “smart sanctions” that target specific entities or individuals of a country, rather than applying comprehensive sanctions that could also have an impact on the general populace of the country.

In line with their agreement to toughen anti-Pyongyang sanctions, the allies were seen stepping up diplomatic efforts to ensure that the U.N. Security Council adopts a fresh resolution of tougher sanctions.  

The new resolution is expected to strengthen the existing sanctions such as arms embargoes, interdiction of North Korea-related cargo, financial sanctions and sanctions on particular individuals or entities including North Korean enterprises.

Given that the UNSC sanctions require the endorsement of 15 council member nations, possibilities remain that some members including a veto-wielding China, the North’s traditional ally, could oppose an application of what they may regard as excessive sanctions.

Seoul is thus expected to seek an application of tougher bilateral sanctions as well, in tandem with the U.S. 

One of the bilateral sanctions the U.S. could impose is the so-called “secondary boycott,” which would sanction any businesses or financial institution of a third country that engages in financial transactions with the North.  

The U.S. had applied the secondary boycott to Iran to bring the Islamic Republic out for negotiations over its controversial nuclear program.

The U.S. could also seek to relist the North as state sponsor of terrorism, subjecting it to a set of economic sanctions, observers noted.

Expectations have also been raised that Seoul and Washington could push for the so-called BDA-type sanctions that the U.S. slapped on the North in 2005. Washington sanctioned the Macau-based Banco Delta Asia bank, which managed some $25 million for Pyongyang, for purportedly helping the North launder illegally earned money.

Some observers, however, said the BDA sanctions might not work this time, as the North has altered the way it manages its leader’s overseas funds to neutralize the effect of any such financial sanctions.

Above all, the most crucial player for anti-Pyongyang sanctions is China, as it wields the greatest influence over the North that is heavily dependent on it for trade and various forms of aid including the supply of oil. 

The trade volume between China and the North has accounted for more than 90 percent of the North’s overseas trade. The North is also known to secure 99 percent of oil from China through a pipeline linking Dandong in northeastern China and the North’s border city of Sinuiju.

China has so far opposed the North’s latest nuclear test. But it has so far maintained that the nuclear issue should be settled through “dialogue,” particularly via the six-party talks involving the two Koreas, the U.S., China, Japan and Russia, which have been dormant since late 2008.

After the North’s second and third nuclear tests in 2009 and 2013, China reportedly reduced its oil supply to the North. Following the second atomic test, China also suspended its trade with the North for four months from August 2009. 

However, it remains to be seen whether China will take harsh steps that would potentially trigger a collapse of the North Korean regime. Beijing has long preferred to maintain stability in the North as any instability could undermine its own security interests and complicate efforts to address China’s internal issues.

By Song Sang-ho (sshluck@heraldcorp.com)
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