This is going to be a lot of businesses going under in the next six months if the Japanese trade restrictions are not lifted:
The Korea Federation of Mid-sized and Small Manufacturers said Tuesday that 60 percent of medium and small-sized firms(SME) in South Korea affected by Japan’s export controls will not be able to endure the restrictions after six months.
The federation announced the results of a survey it held on 269 SMEs in the semiconductor sector following Tokyo’s export control announcement last week.
Fifty-nine percent of surveyed firms said they will only be able to withstand the export restrictions for a maximum of six months.
You can read more at the link, but it is pretty clear that the trade restrictions were carefully crafted to put massive pressure on the Moon administration in the short term to abide by past agreements resolving Imperial Japanese era abuses.
President Moon Jae-in speaks at a meeting with senior Cheong Wa Dae aides at his office on July 8, 2019. (Yonhap)
President Moon Jae-in called on Japan on Monday to withdraw its recent export control against South Korean firms, describing it as an attempt to limit trade for a political purpose.
Breaking his strategic reticence on the sensitive issue, Moon said his administration will first make “calm” efforts to resolve it diplomatically.
In case of “actual damages” to South Korean companies, however, the government will be left with no other choice but to take “necessary” measures, he stressed, presiding over a meeting with senior Cheong Wa Dae officials.
He added he hopes to avoid such a vicious cycle of tit for tat.
“(I) call on the Japanese side to retract the measure and call for sincere consultations between the two countries,” he said.
You can read more at the link, but I don’t see the Abe administration bending on this until the Moon administration agrees to uphold the 1965 treaty that normalized relations between the two countries.
You can always count on the Chinese to bust international sanctions:
China has provided rice and fertilizer to North Korea, Chinese data showed Sunday, amid U.N. Security Council (UNSC) sanctions against the North that prohibit any large-scale economic assistance.
According to data from China’s customs office, Beijing provided 1,000 tons of rice, worth about US$1 million, to the impoverished North between May and October of 2018. The data showed Beijing also provided 162,000 tons of fertilizer, worth more than $55 million, to the North.
The shipments of what appears to have been free assistance followed North Korean leader Kim Jong-un’s visit to China in March 2018, when he held his first summit with Chinese President Xi Jinping.
This editorial in the North Korean state controlled newspaper is clearly intended to send a message to the Moon administration to violate international sanctions:
Pyongyang’s state media on Sunday condemned the South for citing humanitarian reasons for its plans to provide food aid to the North, saying Seoul is “playing with empty words” rather than attempting to tackle “fundamental issues” in their relationship.
The editorial from Arirang Meari – a state-run outlet in Pyongyang that mainly covers inter-Korean issues – criticized the South for being “entangled with an external environment” and putting off the implementation of their joint declarations from earlier summits. Calling the South’s references to humanitarianism “empty words” and “showing off,” the piece went on say that making a “big deal out of a few counts of humanitarian cooperation projects” was an “insult to public opinion and an act lacking respect and ethics.
“[The South] must not make a mockery out of the historic inter-Korean joint declaration with a trivial counts of goods trading or human exchanges,” the essay continued. “If [South Korea] is truly interested in improving inter-Korean relations as a primary party to national issues, it must boldly divorce itself from a policy of foreign dependence and fulfill its duty to the people by actively sticking by the inter-Korean declarations.”
You can read more at the link, but the Kim regime is trying to push the Moon administration to unilaterally restart joint projects such as the Kaesong Industrial Park that would violate international sanctions.
Here is why the Kim regime is pushing so hard to have sanctions eased for little to nothing in return:
Kim Jong-un, the North Korean leader, inspecting Samjiyon County in a photo released by the official Korean Central News Agency in October 2018.
For years, the North Korean state has produced coal, iron ore, seafood and textiles for export, mostly to its ally China. Mr. Kim and top officials have used this export revenue, as well as the earnings of North Korean workers abroad, to finance nuclear weapons, large projects like Samjiyon and their own privileged lifestyles.
Previous international sanctions aimed to prevent North Korea from acquiring weapons parts and technology. But the newer ones, imposed in the past few years, ban those lucrative exports, depriving Mr. Kim’s regime of its main source of income. As a result, party officials, soldiers and police officers who make a living off the state are feeling the effects more sharply than ordinary people who have already learned to fend for themselves through hundreds of unofficial markets, according to defectors and economists. “Hardest hit by sanctions are those 20 to 30 percent of the population who stay on the government’s socialist payroll and rations,” said Jiro Ishimaru, a Japanese journalist who monitors North Korea with the help of correspondents there. “Enterprising North Koreans can make as much in a day selling vegetables in the market as many military officers can make a month in official wages.”
You can read more at the link, but Kim Jong-un has stated that negotiations have until the end of the year to make a deal.
I think the North Koreans believe that with the US Presidential election happening next year that President Trump is not going to want a return to missile and nuclear tests in 2020 before the election. The Kim regime is likely betting that the Trump administration signs up for their “pretend denuclearization” deal that eases sanctions, gives the Trump administration a so called foreign policy “win”, and the North Koreans keep a low profile before the election.
This approach has worked with past US administrations, but clearly this is not a typical US presidential administration. It will be interesting to see if the old North Korean playbook works on this administration as well.
President Moon’s goal was to get sanctions relief for North Korea and it appears he got President Trump to at least consider some relief in the future:
President Donald Trump’s meeting with South Korean President Moon Jae-in comes amid uncertainty over whether the leader of North Korea is considering backing out of nuclear negotiations or restarting nuclear and missile tests. Trump, in his first meeting with Moon since the unsuccessful U.S. summit with Kim in Hanoi, said the U.S. wants to keep economic sanctions in place to pressure Kim to denuclearize. But Trump said he retains good relations with Kim and didn’t rule out a third summit or taking steps to ease food or other shortages in the repressive nation. “We want sanctions to remain in place,” Trump said Thursday at the White House. “I think that sanctions right now are at a level that’s a fair level.” Moon, for his part, has called for an easing of sanctions, including those holding back joint economic projects between North and South Korea. But he didn’t speak to the sanctions issue as he and Trump spoke with reporters at the start of their talks.
Trump said he would favor easing those sanctions at the right time but added: “This isn’t the right time.” He said he was open to discussing smaller steps, such as helping to ease North Korea’s humanitarian problems, but that, in general, the U.S. wants sanctions to remain. “There are various smaller deals that maybe could happen,” Trump said.
You can read more at the link, but if the Kim regime can afford a nuclear weapons and ICBM programs then they can afford to buy food for their people. Any humanitarian crisis in North Korea is regime manufactured and not because of the sanctions.
Here is what President Moon’s trial balloon specialist had to say prior to next’s week summit between President Trump and President Moon:
Moon Chung-in
The United States should give South Korea more leverage that it can use in dealing with North Korea, such as leeway in inter-Korean exchanges, if it wants Seoul to play a greater role in facilitating the stalled nuclear talks, a special presidential adviser said Thursday.
Moon Chung-in, a special presidential adviser for unification, foreign and security affairs, made the remark during a conference in Seoul, a week before Moon holds talks with U.S. President Donald Trump in Washington.
The adviser said it will be a “herculean task” for Moon to play such a facilitating role so long as the North sees South Korea and the U.S. as on the same side.
I am being facetious here, but shouldn’t the U.S. and the ROK be on the same side when it comes to the denuclearization talks so the North Koreans cannot play one off against the other?
Any reading this site for long knows that the Moon administration is not really on the same side as the US and Moon Chung-in is just publicly stating what President Moon can’t. The Moon administration has long advocated lifting sanctions on the Kaesong Industrial Park and the Kumgang Tourism Resort. Both projects were once huge cash cows for the Kim regime before they were shut down by prior conservative governments.
North Korea wants to reopen these sanction busing projects for little to nothing in return as part of their “pretend denuclearization” strategy that the Moon administration endorses.
It looks like the Moon administration better come up with a Plan B because their effort for an “ethnic exemption” to sanctions appears to not be getting traction in the US:
The U.S. Congress may pass a bill calling for additional sanctions on North Korea as early as May, according to multiple diplomatic sources Tuesday, a move to pressure Pyongyang to take meaningful denuclearization measures.
Despite analysis by Seoul officials that Washington was unlikely to implement new sanctions on North Korea in the near future, the sources indicated that preparations for new legislation are already finished.
“Following the collapse of the second North-U.S. summit, the Republicans and Democrats are considering introducing legislation to strengthen sanctions on North Korea,” said one diplomatic source in Washington. “Because they have been preparing the bill for a year, there is plenty of possibility it may be introduced in May or June.”
The source said that the push to strengthen sanctions on the North is centered around the Senate’s committees on armed services, finance and foreign relations.
Another overseas source said, “If North Korea doesn’t show steps toward meaningful denuclearization measures by next month, it will be a matter of time that sanctions will be strengthened, rather than eased.”
The source added, “I met with a key U.S. administration official in charge of sanctions following the Hanoi summit who clearly said that they are not considering sanctions relief to allow the resumption of Mount Kumgang tourism or the reopening of the Kaesong Industrial Complex.”
It almost seems like both sides know they will not reach a deal and are each posturing to blame the other side for its failure:
U.S. President Donald Trump said Friday he has ordered the withdrawal of new sanctions on North Korea, possibly signaling an intention to continue denuclearization negotiations with the regime. Trump was initially thought to be referring to sanctions the U.S. Department of the Treasury imposed Thursday on two Chinese shipping companies accused of helping the North evade sanctions.
The Washington Post later reported, citing officials familiar with the matter, that Trump was in fact referring to future sanctions that had been scheduled for the coming days. The confusion lay in Trump’s announcement on Twitter.
“It was announced today by the U.S. Treasury that additional large scale Sanctions would be added to those already existing Sanctions on North Korea,” he wrote, although no new North Korea-related sanctions were announced Friday. “I have today ordered the withdrawal of those additional Sanctions!” he said.
The announcement came as negotiations to dismantle North Korea’s nuclear weapons program have hit an impasse following the collapse of last month’s summit between Trump and the North’s leader, Kim Jong-un. White House press secretary Sarah Sanders said in a message to reporters, “President Trump likes Chairman Kim and he doesn’t think these sanctions will be necessary.”
You can read more at the link, but I think the Trump administration can now say the ball is in the court of the Kim regime to respond to the US not implementing any new sanctions.
In the meantime it appears the Treasury Department will focus on going after Chinese companies.
Whose fault is it that people are starving in North Korea? If they can afford a nuclear and ICBM program the Kim regime can assuredly afford to buy their people food:
A North Korean paediatrician counsels mothers in Jongju City Hospital about care for their children. (UNICEF)
Humanitarian activities for millions of hungry and sick people in North Korea are at risk of being scaled back due to economic sanctions and donor fatigue amid nuclear talks between Washington and Pyongyang that struggle to make tangible progress.
One of the world’s poorest countries, with over 43 percent of the population undernourished, the North’s food production touched its lowest point in 10 years last year.
Tough sanctions slapped on the country by a number of countries and international bodies are believed to be deepening the economic recession as they ban its key exports and imports, including fuel and machinery that could be used for enhancing the communist nation’s nuclear capability.
Such international restrictions adversely affect humanitarian programs, especially the pre-operational procedures as approvals for traveling to North Korea are often delayed. They also hamper the delivery of life-saving assistance as related materials are subject to sanctions waivers that take time to process.
You can read more at the link, but I would not be surprised if the Moon administration tries to get around sanctions on the Kaesong Industrial Complex by claiming it is a “humanitarian” project. That is why I think the Trump administration is really trying to tighten sanctions to stop people from coming up with ways to get around them.
