Month: May 2018

Key Points:
· The Trump administration has canceled the June 12th summit with North Korea
· China’s invitation to participate in the RIMPAC naval exercises has been revoked
· North Korea has nukes… but that may not be our biggest national security challenge

Background:
In the last month, apparent improvements in diplomatic relations between the U.S. and North Korea have been staggering. With China’s influence, North Korea appeared ready to cooperate at the negotiating table. China is essential to any resolution with North Korea; something the U.S. and international community acknowledge; however, as the Trump administration focuses on the Pacific, the threat of Chinese competition may hold primacy over various opportunities to cooperate with China.

What Has Happened:
Following critical statements out of Pyongyang regarding Vice President Pence and the announced U.S.‐South Korean military exercises, the Trump administration canceled the planned summit with North Korea. President Trump left the door open for future engagement. Simultaneously, the Trump administration informed China that they would not be permitted to participate in the international naval exercise RIMPAC. RIMPAC , established in 1971, is designed to ensure the safety of sea lanes and security on the world’s oceans. The U.S. hosts this exercise biennially.

Why it Matters:
North Korea has always been a national security concern and given its antagonistic behavior, one that has amplified in the last year. North Korea’s nuclear capacity has raised the stakes and enabled its relevancy as an international player. The Kim regime knows this. The summit had the potential to begin the process of stabilization in the region but also to ensure that North Korea matters less on the world stage. The summit had an intended outcome to decrease both the risks of a nuclear North Korea and Kim’s longevity. Kim’s the dog that caught the truck…what now? Despite the optimistic outlook these past few weeks, a resolution remained tenuous. Kim Jung‐Un is unlikely to denuclearize, a non‐negotiable for the Trump administration. While tensions with North Korea have monopolized much of the media attention, Chinese competition/cooperation has remained the more insidious threat to U.S. interests and national security.

The decision to uninvite China from participating in RIMPAC is in response to continued Chinese militarization of the South China Sea and the Spratly Islands. China has participated in the last two exercises, and China’s top diplomat responded to the news with disappointment stating, “We find that a very unconstructive move, nonconstructive move, we hope the U.S. will change such a negative mindset.” The challenge with China is finding opportunities to cooperate while still maintaining a competitive edge. China’s involvement in RIMPAC was an opportunity to cooperate in a controlled and measured environment. The Trump administration has taken a hard stance against China on economic factors and is now showing a willingness to respond to Chinese aggression in the South China Sea. Issues on trade have the potential to be resolved as we near the mid‐term elections but addressing Chinese military and diplomatic expansion in the region (and globally) is a much more complicated and potentially existential issue. China’s growth is the result of a messianic focus on its strategic and long‐term objectives. The U.S. has possibly lost sight of its own.

The following commentary is provided by Peter Thcir, Head of Macro Strategy at Academy Securities:
While stock markets reacted poorly to the announcement that the summit was off, that should not have a long‐term impact on markets. As General Marks has pointed out in the past, a deal with North Korea will take time, and tensions are unlikely to escalate beyond rhetoric, which markets have dealt with for over a year now. Without escalation, which still seems highly unlikely given the General’s insights, North Korea can remain on the back burner. The actions we have taken clearly up the ante with China and will likely become part and parcel of a trade deal with China. The harder we push, in my opinion, the more likely it is we get a comprehensive deal; including real protection on Intellectual Property and reciprocal access to markets. That is what markets, and the economy, really need to flourish. My backstop view remains that China offers us some big headline number concerning deficit reduction, which will sound great in the near term but won’t protect our long‐term interests. We all need to remember President Trump’s negotiating style. Upping the ante to cave later is well within his playbook. As General Marks points out, we are moving further apart, but if that is a temporary strategy as part of a broader negotiation, it can be resolved.

 

Original Post 05/24/2018

Key Points:
• After a few weeks of euphoria between Washington and Pyongyang, something went sideways.
• Secretary of State Mike Pompeo has taken two trips over the past month to meet with North Korean leader Kim Jung-Un. The summit is set for June 12th, in Singapore…or is it?
• The summit will happen as planned.

Background:
Kim Jung-Un announced yesterday that he would abandon the summit with President Trump. Although it can be difficult to ever truly understand the motivation for North Korean statements or actions, Kim appears to be threatened by the routine and ongoing U.S.-South Korea defensive military exercise, Foal Eagle. Kim also indicated that North Korea takes issue with the U.S. position that the North denuclearize.

Situation:
Foal Eagle is part of a series of military exercises that the U.S. and South Korean military coalition routinely conduct. Talk about “showing your hand”… these exercises are never a surprise. In fact, North Korea increases its intelligence collection during these exercises to better understand the coalition’s capabilities. There is no reason to believe Kim was surprised or concerned about the objective of this exercise. He has been through this before.
The U.S. position is that North Korea must denuclearize; however, there has never been a prescribed timeline. In the recent visit Secretary Pompeo had with Kim, the U.S. agreed to provide Kim (and his regime) security guarantees. Kim must have assumed that this “guarantee” would inevitably require him to give up his nuclear leverage.

Why it Matters:
As long as South Korea asks the United Sates to remain on the Peninsula, the readiness level of our military partnership is non-negotiable. The only way to ensure readiness is through aggressive and thorough military exercises. In fact, even Kim has said he understands why the U.S. military is on the Peninsula and that exercises are a necessary part of their presence. Maybe his outburst is simply diplomatic recidivism. He has appeared positively reasonable lately and perhaps felt he must remind the world of his whimsy and unpredictability. Only he knows.
The Kim regime now has a seat at the table. Kim has a nuclear capability, is just shy of weaponizing it (if not already there), and has delivery means that extend his threatening reach beyond Northeast Asia. Without nukes, Kim reverts to a peninsular annoyance. Kim can agree to a nuclear freeze and the requisite inspection protocols necessary to ensure compliance. However, he will never give up his nukes. President Trump will be gone in two or six years. Not Kim. He will not allow his regime to be at risk. He will play nice now but retain flexibility. Our national election cycle is not on his timeline. For Kim, this is a long game.

 

Original Post 05/17/2018

Key Points:

• A review of possible outcomes of the Korean Summit
• Major General (Ret.) James “Spider” Marks and Major General (Ret.) Mastin Robeson, analyze possible scenarios and bargaining chips
• While an official end to the Korean War is a real possibility, a denuclearized North Korea is less so

Background:

After a year of turbulent exchanges and destabilizing missile and nuclear tests, President Trump and Kim Jong-Un are set to meet face to face. While President Trump is not the first U.S. president to receive an invitation to meet with a North Korean Leader, he is the first to accept.

Possible Scenarios:

Denuclearization:  Not likely. The Democratic People’s Republic of Korea (D.P.R.K.) got to this point by building a nuclear capability with regional and intercontinental delivery means.  North Korea’s viable and deployable, albeit nascent, nuclear and missile capabilities are the primary reason President Trump has agreed to meet with Kim. Without nukes, Kim remains bark without bite. This Kim can bite.

Freeze nuclear and missile development: Likely.  The Summit must establish a baseline for both nukes and missiles. Currently, the intelligence community does not know, nor can it verify the inventory of North Korean nukes and missiles. A pre-condition for an agreement would have to be a complete verification protocol from the U.S. and the International Atomic Energy Agency (I.A.E.A.). In this case, verify before trusting…and then keep verifying.

Cessation of the Korean War: Likely. The war can “end” and the armistice can be replaced by a peace treaty, ending hostilities.  The signed armistice established the Korean Demilitarized Zone (DMZ) and, in fact, recognized the political division the geographic separation put in place between North and South Korea (R.O.K.). A peace treaty is eminently achievable and timely.

A weakening of the six-party talks: Not likely. The six-parties (China, Russia, U.S., Japan, R.O.K., D.P.R.K.) remain intact, relevant, and a compelling voice (not necessarily a vote) in a future U.S.-N.K. agreement. The six-parties will want their independent national security concerns addressed.

Diplomatic recognition: Likely. The U.S. and North Korea will establish diplomatic recognition following a peace treaty.

Modify U.S.-Republic of Korea coalition: Not likely.  U.S. forces will remain on the peninsula. Ironically, Kim Jung-Un has agreed to accept the U.S. military presence, while our President has inferred that there is a real opportunity to modify the U.S. military posture (or completely withdraw U.S. forces). Military exercises will continue and are essential to maintaining military readiness.  If Seoul “requests” that the United States physically depart the peninsula and modify the U.S.-R.O.K. coalition, U.S. leadership would embark on a diplomatic offensive to convince Seoul to reconsider.

Remove economic sanctions against North Korea: Likely. The U.S. will agree to lift sanctions. It will not, however, agree to compensate North Korea for economic gains that North Korea might have realized if sanctions over the years had never been in place.

Reunification: Not going to happen…ever. Over 70 years and a deeply costly war, the separation between the North and South has become intractable. Reunification should remain politically aspirational to Seoul, Pyongyang, and the global community. However, it remains in both political and practical terms, unlikely. The scars and the political alliances are too deep.

Will the U.S. withdrawal from the JCPOA impact the June 12^th talks between President Trump and Kim Jung-Un: Not likely. There is little causality between the situation in North Korea and Iran, especially as it pertains to the international community. Unlike the JCPOA stipulation, the U.S. will not be delivering pallets of money to Pyongyang. Sanctions against North Korea have not included “frozen funds,” as the D.P.R.K. essentially has no capital structure. North Korea has been isolated internationally for seven decades. To survive, it must open up. Although the U.S. will negotiate from strength, the Kim regime’s unpredictable behavior has always given Pyongyang an advantage. Don’t expect it but the U.S.-N.K. summit could be a bust.

“The U.S. position remains that nuclear weapons in the hands of Iran or North Korea is unacceptable, but it is a delicate road to walk.  Our hope is that President Trump’s decision to pull our support of JCPOA sends the signal of a tougher stance.  The ongoing hostilities in the Levant and the threat of hostilities on the Pacific Rim are concerning, and may be indicators that a tougher stance by the world leader is necessary.  It is always better to negotiate from a position of strength.  The timing of North Korea’s stated decision to seek a new path is heartening, and I do not see the decision to pull out of the JCPOA negatively impacting the on-going discussions on the Peninsula.”

Major General (Ret.) Mastin Robeson 

 

Original Post 05/11/2018

Key Points:

The US should remain in the JCPOA. The President should choose to continue to certify the deal for six months as the current deal is modified.

 

Background:

President Trump campaigned on a promise to fully review the Joint Comprehensive Plan of Action (JCPOA), also known as the Iran nuclear deal, describing it as “one of the worst and most one-sided transactions the United States has ever entered into.” Last October, the administration completed its review of the JCPOA. By law, the President must certify every 90 days that Iran is technically compliant with the terms of the JCPOA. Additionally, this quarterly certification by the White House must acknowledge that the suspension of economic sanctions against Iran remains “appropriate and proportionate to the specific and verifiable measures taken by Iran with respect to terminating its illicit nuclear program.” Tomorrow, May 8th, the President will make his decision on the status of the JCPOA.

 

What has happened:

In the past two weeks, the President hosted both President Macron of France and Chancellor Merkel of Germany. Both leaders separately tried to persuade President Trump not to torpedo the deal. Not surprisingly, Iranian Foreign Minister, Mohammad Javad Zarif, declared that Iran would abandon the deal if the US pulled out. Prime Minister Netanyahu of Israel stated that Iran did not disclose a covert nuclear site to the International Atomic Energy Agency (IAEA), the international inspection body promoting the “safe, secure, and peaceful use of nuclear technology.”

 

Why it matters:

The US should remain in the JCPOA. The President should choose to continue to certify the deal for six months as the current deal is modified. A new and better deal would incorporate two provisions: unannounced inspections (to include both nuclear facilities and military bases housing the missiles that are required to deliver nuclear weapons) and the elimination of the decade-long sunshine clause that affords Iran a pathway to nuclear weapons after 2025.

This clearly would set the agenda for our new Secretary of State, Mike Pompeo. It would be his primary job to modify, not scuttle, the deal. It can be done and there is every reason to believe he can successfully lead the effort.

If this can’t be accomplished, then the deal deserves to be killed. At least by extending the deadline by six months, the 5+1 signatories (the UN permanent security council members China, Russia, France, UK, and the US + Germany) will have time to get it right or better prepare if it goes wrong.

Right now, an inadequate JCPOA is better than no JCPOA, which would unleash Iran to race or buy its way to a nuclear capability. Better to be in the mix, as messy, chaotic, and ambiguous as it is than to walk away. Iranian nuclear ambition may only be tempered by international cooperation and condemnation…but when has Iran ever cared about that?

Original Post 05/7/2018