Elephants in the Room
Give ‘Maximum Pressure’ a Chance
Too much engagement with North Korea could derail the White House’s promising approach.
Where does U.S. policy toward North Korea stand after Vice President Mike Pence’s visit to the Pyeongchang Olympics opening ceremony in South Korea last week?
Essentially, it remains where it stood before: a policy of “maximum pressure” with room for conditional engagement. The Donald Trump administration decided upon this approach early on and has deviated little, despite outside commentators’ warnings of the possibility of war.
Let’s start from the beginning of the Trump administration in January 2017. The president and his team inherited a policy mess at minimum. For over two decades, the United States made idle threats that it would never accept a nuclear North Korea, and it made various private promises of the same kind to Japan and South Korea. To this end, the United States implemented scattershot sanctions and other punishments, then proceeded to overturn many of them during periods in which Pyongyang and Washington were engaged in negotiations. Indeed, the United States transferred substantial money and aid to the North Korean regime and engaged in “strategic patience” — tantamount to a policy of negligence. As if to punctuate this mess, the United States also implemented its fastest and deepest round of defense cuts since the end of the Korean War from 2010 to 2015.
Meanwhile, over that same period, the Kim regime tested nuclear weapons and ballistic missiles on several occasions, transferred a nuclear reactor to Syria, and apparently accelerated its strategic cooperation with Iran. It also killed South Koreans in cold blood. None of these provocations have been met with a response from the United States.
As past administrations well know, the Kim regime constantly threatens to proliferate more nuclear weapons unless the United States recognizes the North as a nuclear state and withdraws its troops from the Korean Peninsula. By the time President Donald Trump took office, North Korean leader Kim Jong Un and his clique had learned that they could proliferate nukes and develop their arsenal with impunity, and count on China and others for financial bailouts when necessary.
This was what the new administration inherited. Even though the United States has often deployed its most automatic tool of statecraft — sanctions — the approach toward coercive diplomacy with North Korea has certainly not been maximalist. According to Foundation for Defense of Democracies fellow Anthony Ruggiero, North Korea is less sanctioned than Iran or Syria.
Given this history, there is a growing danger that North Korea will be able to deliver nuclear weapons to the United States on an intercontinental ballistic missile. With Kim’s strategic goal of reunifying the Korean Peninsula and the decline of U.S. military power, the Trump administration has chosen the only realistic course to minimize the threat from North Korea.
The first component of such a policy is targeting the Kim regime’s financial sources. As former President George W. Bush recognized during his first term, North Korea is susceptible to economic pressure. During the 26-year crisis, the Kim regime received nearly a billion dollars from the United States and more than $4 billion from South Korea. From its Chinese patron, North Korea has been the beneficiary of at least $12 billion in trade (not including aid). Furthermore, the Kim regime has set up an extraordinary criminal enterprise that uses its embassies and diplomats to help sell weapons and military assistance to a host of terrorist groups and rogue regimes, as well as engage in currency counterfeiting, drug trade, and direct theft through cybercrime. This makes North Korea vulnerable to an international effort to shut down its legal and illegal trades. Despite its ideological pronouncements, North Korea is far from the “self-reliance” it claims.
Maximum pressure is designed to shut down all sources of revenue to the Kim regime. This will require secondary sanctions on China, which have hardly been enacted as of yet. The idea behind this policy is not that China will suddenly see the error of its ways and help the United States constrain North Korea. Rather, through a campaign of financial pressure against China, Beijing may see that the status quo is untenable. The United States would then supplement these economic tools with more frequent U.S.-Japan-Korea military exercises, increased sales of offensive weapons to northeast Asian allies, and building a layered missile defense system for a comprehensive maximum pressure campaign.
This brings us to the matter that has become the latest obsession of the media and many pundits: war with North Korea. The United States has the difficult job of generating credible military options to remove North Korean threats to the United States and its Asian allies, while also changing China’s risk calculations and reassuring a very progressive South Korean government. The fact is, while implementing maximum pressure is the main goal of the Trump administration, it must also create and debate military options for a number of contingencies that all parties are hoping to avoid. The White House is doing this because, as Gen. Joseph Dunford, the chairman of the Joint Chiefs of Staff, said at the 2017 Aspen Security Forum, “it is not unimaginable to have military options to respond to North Korean nuclear capability. What’s unimaginable to me is allowing a capability that would allow a nuclear weapon to land in Denver, Colorado. That’s unimaginable to me. So my job will be to develop military options to make sure that doesn’t happen.” Yet formulating military options and engaging in military pressure is a far cry from preparing for a preventative nuclear attack.
The Pence trip
Pence had the unenviable task of pushing back against a concerted campaign by the Kim regime to split the alliance between the United States and South Korea. Kim started pursuing this campaign just as he has began to feel the bite of real sanctions. Unfortunately, Kim is dealing with a South Korean government that is open to engagement with the North and ideologically committed to the myth of unification through peaceful dialogue with Kim. To keep the South Koreans on board with the allied approach of maximum pressure and conditional engagement, Pence had to suggest entering into dialogue with the North. But careful scrutiny of his words reveals that engagement will be highly circumscribed. For example, engagement does not mean that the United States will lessen its maximum pressure campaign, which has just begun. The Trump administration has carefully studied and learned from the results of past engagements, during which the Kim regime gained one-sided concessions from the United States and its allies, bought time, decreased international pressure, and secured financial bailouts just as North Korea began to suffer from the weight of sanctions. The costs of engaging with North Korea at this time thus deserves much more consideration and debate among experts and commentators.
In the past year, the United States and the United Nations greatly strengthened the international sanctions regime against North Korea. For example, at the end of 2017 the U.N. Security Council expanded the scope of sanctions against Pyongyang to hold back its military-industrial complex. The new sanctions ban all industrial imports, cut energy exports, and require the seizure, inspection, and suspension of North Korean vessels that violate these restrictions. Washington also expanded the scope of U.S. sanctions against Pyongyang to allow U.S. officials to impose them against any individual or entity engaging in trade with North Korea, including, of course, Chinese and Russian businesses and citizens. Under these regulations, individuals and entities could be severely penalized by fines, have their assets seized or forfeited, be blocked from conducting commerce in or with the United States, or lose access to the worldwide clearing system of dollar-based financial settlements. These sanctions, largely implemented toward the end of 2017, have just begun to take effect.
The Trump administration also designated North Korea a state sponsor of terrorism, which provides the United States the ballast to pressure foreign governments to shut down North Korean embassies, trade missions, and other related centers of illicit activity to roll back Pyongyang’s illicit criminal enterprise system. The United States had an effort like this during the early years of the George W. Bush presidency called the Illicit Activities Initiative, which at the time led to some real success. The United States is now in a good position to begin pressuring the international community to do the same once again and roll back North Korean criminal and terror-sponsoring activities. This will take time and a sustained diplomatic effort.
In addition to financial tactics, the United States has also increased its military response and shows of force in the region as part of its maximum pressure policy. In 2017 alone, the United States has engaged in more than six joint military exercises with its Asian allies, designed to directly counter specific North Korean capabilities, including drills on precision strikes against potential North Korean targets, enemy infiltration of South Korea, and interceptions of shipments of nuclear material to and from North Korea. The United States has also shown an increased willingness to use flyovers in response to specific North Korean provocations such as the intercontinental ballistic missile test in July 2017 and U.S. college student Otto Warmbier’s death in June 2017. Furthermore, the presence of three U.S. Nimitz-class carriers in the Seventh Fleet’s area of operations between October and November 2017 — while Trump visited South Korea — was a demonstration of the kind of coercive diplomacy that the United States is willing to practice. The United States has also proved willing to support the more offensively minded posture of its allies. In June 2017, the United States deployed 10 long-range air-to-ground missiles in South Korea, soon after agreeing to scrap warhead limitations on South Korea’s own ballistic missiles. In October 2017, the United States further agreed to sell more than 50 advanced cruise missiles to Japan. Such actions have increased U.S. military responses on the Korean Peninsula and opened the door to further pressure tactics.
How to maintain maximum pressure
While these are all crucial mechanisms of the maximum pressure campaign, the United States has other tools available to use on North Korea. This includes forcefully cracking down on North Korean laborers abroad, confronting third-party states that are directly engaging with the Kim regime (namely China and Russia), and improving intelligence.
First, Washington should take the lead in publicly lobbying foreign governments to crack down on North Korean workers in their own countries. The latest round of U.N. Security Council sanctions in December 2017 required countries to revoke North Korean workers’ visas within 24 months. The United States can and should punish countries that do not comply. Both Chinese and Russian businesses employ North Korean laborers in large numbers, so public U.S. pressure on Beijing and Moscow should be a priority. While the U.S. Treasury Department has investigated and sanctioned certain Chinese and Russian individuals and businesses that were transporting North Korean laborers, the United States has yet to implement sanctions against specific Chinese and Russian companies that employ these workers.
Second, the Trump administration should also engage in larger pressure campaigns against Chinese and Russian businesses that are indirectly helping the Kim regime. The United States has not yet targeted big Chinese oil and mineral companies that are granted the same Chinese Communist Party largesse as their smaller, sectorial counterparts, even though they may not benefit from direct business with North Korea. As such, U.S. secondary sanctions should also target big Chinese companies with close party ties. And, of course, the United States has not used its most powerful tool: the dollar as reserve currency. The United States has the power to stop entities doing business with North Korea from engaging in dollar-denominated financial transactions.
Lastly, as American Enterprise Institute scholar Nick Eberstadt says, the intelligence community could do a better job of tracking other sources of North Korean revenue. In particular, there seems to have been increased cooperation between Iran and North Korea since former President Barack Obama’s implementation of the Iran nuclear deal. There are surely many more ties between Kim and the world’s greatest rogue states, terrorists, and criminals that the U.S. intelligence community could pinpoint.
With better intelligence, more international coordination, an enhanced maximum economic pressure policy, and the global rollback of North Korean proliferation and other criminal activity, Eberstadt estimates the United States can send the North Korean economy into shock.
However, like any U.S. foreign policy, there remains the potential for unintended consequences to arise. One involves the North Korean elites that keep the Kim regime alive and the North Korean nuclear arsenal in good stead. With these enhanced maximum pressure techniques, elites may lose their status and wealth, and Kim could well be the target of their ire. In this case, regime change or internally led upheaval may not be entirely out of the question. While such a scenario is unlikely, the United States and South Korea must be prepared for either a full-on collapse of North Korea or a replacement regime that is serious about ridding itself of weapons of mass destruction and alleviating the dire humanitarian situation. Additionally, if China feels the bite of sanctions itself and wants to forestall a full-blown, offensively minded trilateral alliance, it might take matters into its own hands. Therefore, the United States and South Korea must accelerate planning for these contingencies as they increase maximum pressure techniques.
Trump’s maximum pressure campaign has much to commend if it is carried out to its logical conclusion. But the policy may invoke serious strategic tradeoffs and the potential for damaging countermoves by both North Korea and China. The most dangerous unintended consequence right now, however, is the success the Kim regime has had in inducing South Korea into talks. The maximum pressure campaign has just begun to take effect, and it would be disastrous if it were stalled by more promises of engagement.