Make or Break Time for Korean Peace

Mahathir's moment; Morrison's Australian foreign policy; Vostok 2018

The Big One.

Make or break time on the Korean Peninsula.

Airplanes forming the number 70 fly in formation and fire flares during the parade.September is a huge month on the Korean Peninsula this year. Next week, South Korean President Moon Jae-in will head to Pyongyang to meet North Korean leader Kim Jong Un for the fifth-ever inter-Korean summit—the third inter-Korean summit meeting this year. Chinese President Xi Jinping’s special representative and Politburo Standing Committee member Li Zhanshu, meanwhile, spent three days in Pyongyang, appearing alongside Kim on the dais at Kim Il Sung Square to celebrate the 70th anniversary of North Korea’s founding. Finally, momentum is building now toward a second summit between U.S. President Donald J. Trump and Kim.

The coming weeks will be decisive about the course of events on the Korean Peninsula in the next few months. In particular, the entirely predictable logjam between Pyongyang and Washington on the issue of denuclearization is unlikely to break without a second summit meeting between Trump and Kim. From North Korea’s perspective, it has been the sole party to make major concessions; it points to its cessation of long-range missile tests and nuclear tests. Meanwhile, Pyongyang continues to play the confidence-building game with Trump. While many experts had anticipated a typical show of nuclear might in Kim Il Sung Square during the foundation day parade, Kim withheld nuclear assets entirely. As I explained at The Diplomat, the move is evidence of the regime’s strategic shift, but, more significantly, an indicator that nuclear weapons will play a less prominent role in North Korea’s external signaling:

With Kim having declared the completion of his deterrent and shifted focus to the economy, North Korea’s nuclear forces are likely to become less prominent overall in the country’s external signaling now. As the January 1 speech made clear, North Korea is now fleshing out its nuclear forces with mass production. As it deploys a more robust and growing nuclear force, it’ll seek to avoid the limelight. Indeed, part of the reason the ICBMs are unlikely to be called out to Pyongyang is because they may already be deployed in the northern part of the country, where North Korea maintains its so-called “ballistic missile operating areas.”

In many ways, this is North Korea operating more like regular nuclear powers do. While it may not pursue the total opacity that a nuclear power like Israel adopted — especially given the long history of prominent and overt signaling of its nuclear capability — Pyongyang may treat the public presentation of its nuclear weapons capability more in the way that India or Pakistan do.

The big sticking issue in the coming weeks will be whether the United States can agree to a declaration to end the Korean War—something Trump had allegedly promised Kim in Singapore. Moon and Kim are both itching to reach this goal by the end of 2018; they won’t get there without Trump signing on.

Bottom Line: For now, keep your eyes on the upcoming inter-Korean summit. Moon and Kim will take stock of the implementation of their April 27 Panmunjom declaration.

Northeast Asia. 

We’re more than two months into the U.S.-China trade war—if dated by the July 5 entry into force of the first $34 billion batch of U.S. tariffs on Chinese goods. The late-August U.S.-China talks left both sides frustrated; Trump’s trade representative, Robert Lighthizer, has yet to find Beijing willing to concede. Meanwhile, we have reports that the White House is preparing another salvo of tariffs, this time aiming at a whopping set of $267 billion in tariffs. Trump, too, isn’t getting any happier about the state of U.S.-China economic ties:

Donald J. Trump@realDonaldTrump

If the U.S. sells a car into China, there is a tax of 25%. If China sells a car into the U.S., there is a tax of 2%. Does anybody think that is FAIR? The days of the U.S. being ripped-off by other nations is OVER!

September 9, 2018
An interesting emerging dynamic as the U.S.-China trade war plays out is the role of the other major economies—chiefly, the European Union and Japan. Both have seen the pointy end of Trump’s tariff stick. In 2017, simultaneous U.S. attacks against these allies took the edge off for Beijing, which found itself able to side with Brussels and Tokyo as supportive of free trade broadly. But now, things might be changing. The EU and Japan, for instance, continue to work with the United States to take aim at China at the World Trade Organization.

In May, for instance, Lighthizer, along with the top trade officials of the EU and Japan, issued a joint statement noting that “No country should require or pressure technology transfer from foreign companies to domestic companies through the use of joint venture requirements, foreign equity limitations, administrative review and licensing processes.”

All this helps explain at least part of the dynamic helping to drive Tokyo and Beijing together on economic issues, including overseas infrastructure investment. Japanese Prime Minister Shinzo Abe declared, at the start of this month, that bilateral ties were back on a “normal track.” While irreconcilable differences separate the two countries, Beijing has greater incentives to keep Tokyo happy—especially given Japan’s own impulse to hedge the unpredictability of its ally, the United States.

Bottom Line: The U.S.-China trade war continues and China will do all it can to avoid being boxed in by the world’s major developed economies on trade.

Don’t Miss It: In a surprising move even by the standards of the Trump administration, the U.S. State Department recalled its envoys to the Dominican Republic, El Salvador, and Panama over their recent decisions to break diplomatic ties with Taiwan and recognize China instead. Charlotte Gao has more over at The Diplomat.

South Asia.

The hotly anticipated U.S.-India “2+2” meeting took place in the first week of September and resulted in the conclusion of a long-awaited foundational agreement on defense cooperation, a Communications, Compatibility and Security Agreement (COMCASA). The agreement between the United States and India has been under consideration for years and allows for the transfer of secure communications and data equipment to India. COMCASA came alongside further agreements as well, including the establishment of a hotline between the U.S. secretary of state and India’s external affairs minister. As Jeff Smith notes at The Diplomat:

These agreements complement earlier moves by the Trump administration to strengthen Indo-U.S. ties. Prior to the 2+2, the administration had eased restrictions on high-end defense exports to New Delhi by granting India Strategic Trade Authorization-1 authority. It also had entered an agreement governing Helicopter Operations from Ships other Than Aircraft Carriers,authorized a $1.8 billion arms deal to sell India 24 Sikorsky helicopters, and approved the joint production of F-16 fighter jet wings in India. The Trump administration has also brought the U.S. and India further into alignment by adopting a firmer approach toward Islamabad and repeatedly criticizing China’s Belt and Road Initiative.

Above all, the “2+2” meeting underlined the continuity in the United States’ India policy. In 2016, the Obama administration dubbed India a ‘Major Defense Partner’ of the United States, conferring a bespoke status on New Delhi that was intended to give India a sense that it was every bit as important to Washington as its major non-NATO allies. The Trump administration has kept on adding to that momentum.

Bottom Line: COMCASA is a major step for the United States and India and will enable considerably greater military interoperability.

Don’t Miss It: It’s September and that means the United Nations General Assembly’s generate debate is around the corner. Zuha Siddiqui takes a look at how likely Imran Khan’s new administration is to take up the issue of Kashmir on the world stage and how India might react.

Southeast Asia.

September 2018 marks the five-year anniversary of the initial announcement of what would become China’s Belt and Road Initiative (BRI). Five years ago, in September 2013, Chinese President Xi Jinping announced the “belt”—the Silk Road Economic Belt, to be precise—in a speech in Astana, Kazakhstan. (Don’t miss Nadege Rolland’s cover story in our magazine on the BRI in Europe at five.) Today, countries are slowly but surely turning against what the BRI represents. Malaysia, as previous issues of this newsletter noted, is now at the vanguard of that change in sentiment toward the BRI and Chinese investment.

In May’s election, Mahathir Mohamad pulled off a shock win and returned as the country’s prime minister, promising, among other things, to review former Prime Minister Najib Razak’s financing deals with China. The Malaysian government suspended China-backed projects and now, after a review period, has chosen to cancel three China-financed pipeline projects, worth approximately $4 billion. Malaysian Finance Minister Lim Guan Eng confirmed the cancellation to the Financial Times, which had the first report. The costs of the cancellation—financial, political, and diplomatic—are yet to become apparent, but soon will no doubt.

Bottom Line: The rubber is hitting the road finally on Mahathir’s skepticism of China-backed projects in Malaysia.

Don’t Miss It: September shed light on an often ignored, but growing defense relationship: that between the Philippines and Israel. Philippine President Rodrigo Duterte paid the first-ever visit by a Philippine leader to Israel, pledging to increase the country’s purchase of defense equipment.

Central Asia.

A top Chinese military official made an interesting cross-country trip across multiple Central Asian states. Vice Chairman of the Central Military Commission Xu Qiliang visited Kazakhstan, Tajikistan and Kyrgyzstan in early September, looking to implement parts of Chinese President Xi Jinping’s agreed agenda with Central Asian leaders. The Diplomat’s Catherine Putz explains further, zeroing in on the significance of Xu’s visit to Tajikistan:

…the fact that Xu is spending three days in Tajikistan is meaningful. In Tajikistan, China’s interests are heavily influenced by the country’s long borders with not only Afghanistan but Xinjiang. In late August, the South China Morning Post reported that a source claimed that Beijing was building a training camp in Afghanistan’s Wakhan Corridor, which borders Tajikistan. The corridor gives Afghanistan a very small and very mountainous border with China. As I wrote last week with regard to the talk of a “training camp” in the area, “Tajikistan serves as vital link in the chain between China and Afghanistan.” Given the terrain, sparse infrastructure, and difficult-to-control borders, China’s concerns about the overall region necessitate deepening defense relations with Tajikistan in addition to similar strengthening of security relations with Pakistan and Afghanistan.

China’s eye on security to its southwest frontiers is certainly growing. Recently, Janan Mosazai, Afghanistan’s envoy in China, confirmed that Afghan National Army troops would be receiving military training on Chinese soil.

Bottom Line: Chinese security interests in Central Asia persist and Tajikistan and Afghanistan are being drawn into to an increasingly securitized relationship with Beijing.

Oceania.

It’s been a couple weeks now since the dramatic leadership spill within the governing Australian Liberal Party. What can be said about Prime Minister Scott Morrison’s direction on foreign policy? For one, as Grant Wyeth explores, Canberra might not find itself on a sustainable trajectory in its relations with Pacific Island states. One especially sharp point of divergence under Morrison will be the issue of climate change, which is hardly a priority for the Australian government and, in the case of many Pacific Island countries, literally an existential issue. As Grant writes:

This is very apparent to Pacific Island leaders, whose own primary foreign policy objectives now seem to be convincing recalcitrant Australian politicians that climate change is real and Australia’s response to this reality is of vital importance. A week prior to PIF, Samoan Prime Minister Tuilaepa Sailele sent a signal to Australia’s political leadership at an event at the Lowy Institute in Sydney, frankly stating that “any leader of any country who believes that there is no climate change, I think he ought to be taken to mental confinement. He is utterly stupid.”

Secondly, on China, expect to see more continuity than change in Australia’s policy. There’s been a lively debate, to be sure, in Canberra about the right away to manage relations with China amid an undeniable shift toward Beijing in Asia’s center of geopolitical gravity.

Bottom Line: The new Australian government’s foreign policy might not be so unfamiliar, but expect greater friction with the Pacific Island states.

Asian Defense. 

The big defense buzz in East Asia is in the Russian far east. The Russian military has started its largest post-Cold War military exercise, Vostok 2018, with Chinese and Mongolian troops in tow. Franz-Stefan Gady reports for The Diplomat, setting aside some of the exaggerated Russian reports:

In size, it will be the largest Russian military exercise since Zapad (Western) 1981, held in 1981 in the Soviet Union’s Belarusian, Kiev and Baltic Military Districts and in the Baltic Sea amid growing tensions with the United States following the inauguration of U.S. President Ronald Reagan. There is good reason to believe, however, that the numbers of troops and military equipment involved in this week’s exercise are exaggerated for domestic political reasons.

Given that 300,000 military personnel would constitute one third of the entire Russian military, the number is likely much lower around 50,000 to 100,000 at at the most. The financial cost for moving around 30 percent of the entire Russian military establishment would not only be exorbitant given the shrinking Russian defense budget and Russian military commitments elsewhere in the world, but it would also paralyze the Russian military’s logistical support infrastructure.

The exercise is an interesting data point on growing Sino-Russian defense cooperation. For instance, China’s participation in this exercise represents the most significant foreign armed force participation in a Russian exercise since the end of the Cold War by a non-former Soviet Union state. The two countries’ relationship is complex and often overstated as an alliance; it is anything but. There are a non-insignificant number of competitive dynamics at play between Moscow and Beijing, even though the two might share a common understanding about the nature of the international system and the United States’ role in it. As Franz added, aptly, on Twitter:

Franz-Stefan Gady@HoansSolo

Should #China, #Russia ever become allies, it is useful to think of it in terms of the Austria-Hungary-Germany alliance of 1890s (weaker status-quo and stronger revisionist power w. weak coordination mechanisms at operational/strategic levels) than #NATO-like interoperability. pic.twitter.com/vvgfrbCTW2

September 11, 2018
Bear in mind too that Chinese President Xi Jinping is in Russia this week. “Both nations have to oppose unilateralism and trade protectionism, and build a new type of international relations and shared human destiny,” Xi reportedly told Putin.

Bottom Line: The China-Russia military relationship is growing closer than ever, but the two countries remain far from allies.

In Case You Missed It: China launched its first domestically built icebreaker, the Xuelong 2. The ship will enter service under the civilian Polar Research Institute of China (PRIC).

Bonus: Prashanth Parameswaran and I spent the last podcast discussing the interplay between China’s increasingly expeditionary military ambitions and the Belt and Road Initiative. Listen here.

Extras.

If you were disappointed by the muted North Korean parade this month, consider that they used to be a much more jovial affair in the past. Here’s some footage from the September 9, 1988, parade, commemorating the 40th anniversary of North Korea’s founding:

Ankit Panda@nktpnd

Some footage from #NorthKorea's 40th anniversary parade in 1988. They used to do things a little differently back then. We're expecting a big 70th anniversary parade on September 9. pic.twitter.com/KnXAO9tId0

August 30, 2018
Please do feel free to reach out with comments, tips, and feedback at either ankit@thediplomat.com and follow me on Twitter at @nktpnd and The Diplomat at @Diplomat_APAC.