New US sanctions on North Korea

Updated August 31, 2010 20:08:58

US president Barack Obama has ordered new financial sanctions on North Korea despite the North's recent release of an American man who had been held captive for seven months for crossing into North Korea from China. The move broadens the scope of current sanctions, targeting eight North Korean 'entities', aimed at the trade in arms, counterfeit currency, drugs, other 'illicit economic activity', and luxury products.

Presenter: Sen Lam
Speaker: Scott Bruce, director, US operations, Nautilus Institute, San Francisco

BRUCE: Well, these are elite sanctions. They target high ranking scientists and institutions that worked with the North's nuclear programme and small arm sales and countries that are part of North Korea's narco-criminal trade network. The goal here is to reduce the North Koreans' ability to collect rent from the sale of weapons, drugs, endangered animal parts, counterfeit cigarettes, etc., make it harder for the country to sell small arms missiles, nuclear technology internationally, and deprive the elite of the luxury goods and items to reduce their standard of living, and thus hopefully reduce their loyalty to the government. The goal is to have sanctions that hit the elite of North Korea where they can feel it, instead of doing something that's going to just trickle down and impact the already impoverished and deprived North Korean public.

LAM: So, is that part of the reason that luxury products are being targeted, the elite are the ones who can afford to buy them?

BRUCE: Absolutely, the goal here is to soften up North Korea, however, it is going to be very difficult to do this. This is a country under severe sanctions for its rogue nuclear programme. It's not particularly likely to be brought to heel because you curtail the supply of iPods and Courvoisier. If anyone has ever been to Beijing and seen an Air Korea flight returning to North Korea from China, they've seen the North Koreans leaving China laden with luxury items to take back to their country. This is not likely to dry up those channels, even if we're able to keep a yacht or two every once in a while from making its way to North Korea.

LAM: And, Scott, despite the broadened sanctions, there are reports that the state department is at the same time debating whether or not to take a new approach. What options are open to Washington in dealing with Pyongyang?

BRUCE: Well, sanctions are a tool of policy, they cannot substitute for policy themselves. And what we've seen recently has been increasing pressure from the United States on North Korea. Now that pressure is good, but it's not going to work without some sort of enticement. You need to have something that you can offer North Korea. Without a combination of sanctions and benefits, nothing's likely to happen. Now, China has proposed a new framework for the six party talks. That will start with bilateral US-North Korea talks and then build to a reconvened six party talks. It remains to be seen, however, if anyone's going to take China up on this offer, and if so, if they will go with any real room for compromise in development. North Korea may go demanding to be recognised as a nuclear power, the United States and South Korea may go demanding an apology for the Cheonan incident [the sinking of a South Korean ship in March 2010 for which the North has been blamed]. If so we're not likely to see any form of progress.

LAM: Indeed, the North Korean leader Kim Jong-il was reportedly in Beijing on the weekend. Do you think China might have offered him some incentives to come back to the negotiating table?

BRUCE: Well, China's role in North Korea has always been to try and steer it towards a path favourable to Chinese interests. So in that sense, yes, they are likely to try and be moving in that direction. However, I feel that in the west, we often over estimate the guiding role China will play. China is not going to bring North Korea to heel on behalf of the United States and the west. Indeed, they're going to simply try and encourage it to shift in this direction. And given what may be a succession process going on in North Korea, China's ability to shift that as opposed to just building bridges to what they may see as the future of North Korea may be quite limited right now.

LAM: Is that partly because China's leverage with North Korea is limited, that it's not as huge as the world thinks it is?

BRUCE: Well, it's not as huge as the world thinks it is. It also is the only country that has any ties with North Korea. China believes that the North Korean nuclear programme is a threat to the economic stability of Northeast Asia and the security of Northeast Asia. However, they're acutely aware of how weak the North Korean state is to some degree and they're greatly concerned that increased pressure will result in the only thing worse than the North Korean nuclear programme - a collapsed North Korea with nukes at an unknown location, flooding refugees across the border, severely destabilising China.