US Senate has Unanimously Adopted the Taiwan Travel Act

In early February US Senate unanimously adopted the H.R.535-Taiwan Travel Act (TTA), without any omissions or reservations, which was approved a month earlier by the House of Representatives in a similar fashion. The unanimity shown by the Congress has predetermined the decision of Donald Trump to sign the act into a law, which occurred on March 16.

A few days after adoption the act by the US House of Representatives, NEO would examine its main provisions, along with the way that this act is going to affect bilateral relations between the two leading world powers.

As for conclusions, it was pointed out that the consequences of TTA adoption will have grave consequences for the political situation around the globe, but there was still a chance that the US Senate could block the initiative, which didn’t come to fruition.

One can remember an article released by the Pacific Forum, a branch of the leading American think tank in the field of military strategic evaluations – the CSIS (Center for Strategic and International Studies) that was penned by Dennis Hickey, a professor of the Missouri State University under the tittle: “Taiwan Travel Act: Bad Idea?”

Despite the fact that the author was not inclined to dramatize the situation in connection with the act that was yet to be discussed in the Senate, he advised lawmakers to block the act because of its clearly provocative nature.

It’s too bad that political insanity has recently been epidemic in the world politics, while reaching its heights on the Capitol Hill. For those who occupy it the prospect of resolving extremely difficult and dangerous issues in discussions with their geopolitical opponents lately hasn’t been an option at all. Especially those issues that cannot be properly described in the language of the existing international law that at times can be extremely deceiving.

It is enough to see how much panic the resumption of the inter-Korean dialogue has provoked in Washington, since the Korean crisis has already left the formal framework of UN Security Council resolutions in the field of nuclear nonproliferation and Pyongyang’s violations of those resolutions.

The recent adoption of the TTA will mark a remarkable increase in tensions between the US and China over the issue of Taiwan, that occupies center stage in the ongoing face-off between the two leading world powers. This confrontation can be observed anywhere from the Korean peninsula to the South China Sea in the immediate vicinity of China’s shores but some 6-8 thousand miles off the coast of the US.

The TTA is not just about changing the form of contacts between US and Taiwanese officials, that didn’t exist formally prior to the adoption of the controversial act, it’s a game changer in the global political game. By the way, those unofficial contacts that Washington enjoyed with Taipei were violating the spirit of one of the three conditions that Beijing put forward before establishing diplomatic relations with the United States back in the 1970s. This condition was the disruption of diplomatic relations between Washington and Taipei, implying the termination of contacts between official representatives of the two parties.

Now with the adoption of the TTA there would be no need to keep negotiations held between the representatives of the United States and Taiwan a secret. It’s curious that all official contacts must have with certain results that are to be formally reported on the websites of the agencies involved, containing names and positions of the negotiators. At the end of the day, foreign trips of official figures are being payed with taxpayers’ money who have the right to know where their hard-earned pay goes.

Thus, the process of “normalization” of Taiwan’s foreign policy status is now triggered that is going to be supported by Washington’s allies sooner or later. In principle, this process can result in the recognition of Taiwan as an independent state, that is, making it a subject of the international law.

But the situation is going to be shaped by the state of relations between the two geopolitical titans, yet there’s little room for optimism left against the backdrop of the bitter economic and political rivalry between the US and China, while both players have been able to evade direct confrontation so far. And, of course, the TTA opens new tool for Washington to influence Beijing’s policies.

However, one should not downplay he extreme danger of Washington’s approach to the problem of Taiwan. For, unlike Korea, Taiwan is viewed in Beijing as an “inalienable” part of its territory.

It is very likely that among the first components of the official relations between the US and Taiwan will be the establishment of military ties. This can not be avoided, as there’s a section in the Pentagon’s budget for 2018 that implies there’s going to be military cooperation between Washington and Taipei. This section identifies a variety of areas of US-Taiwan military cooperation, including the “resumption” of joint exercises.

Curiously enough, these steps will be a direct violation of the second condition put forward by Beijing in the late 1970s, which demanded the withdrawal of all American troops from Taiwan.

The assessment of the whole of what is happening in the United States around the TTA in China, as always, can be glimpsed from a cartoon picture presented by the Global Times. In the picture, someone curious (with the American flag on the sleeve of his jacket) is pocking a hornet’s nest with a stick. Washington clearly resembles a young boy who has just found a box of matches and is trying to have fun with them.

Vladimir Terekhov, expert on the issues of the Asia-Pacific region, exclusively for the online magazine “New Eastern Outlook.”

The Unproved Involvement of the DPRK in the Killing of Kim Jong-Nam is Now “the DPRK’s Use of Chemical Weapons”

On March 5, 2018 a sensational headline appeared in several Western newspapers: North Korea has used chemical weapons against its own citizens! Having reached that conclusion, the USA imposed new sanctions on the DPRK in accordance with the Chemical and Biological Weapons Control and Warfare Elimination Act, passed in 1991. Sanctions prohibit the USA from exporting technology and materials connected with security, selling weapons, and providing financial or other aid to the DPRK.

“The use of deadly chemical weapons against its own citizens” is a very dramatic sounding phrase- it suggests to readers, at the very least, a large scale chemical attack such as those Assad’s regime is accused of carrying out, or Saddam Hussein’s attack on the rebellious Kurds. In fact, as the US State Department made clear, “the use of chemical weapons” refers to the killing of Kim Jong-nam, the half-brother of the North Korean leader Kim Jong-un using the toxic substance VX. Despite the fact that Pyongyang’s involvement has not been proved by any court, the USA has already used this incident to put the DPRK back on the list of countries sponsoring terrorism.

Readers will remember that Kim Jong-nam was killed in February last year in Kuala-Lumpur airport after two young women, Siti Aisyah and Đoàn Thị Hương smeared his face with a gel that is believed to have contained VX (the deceased, before his death, managed to say that something had been sprayed in his face). The two women, who had previously worked in an escort service, believed that they were taking part in a reality television show. They now face the death penalty, and their counsel have chosen a completely understandable defense: “our clients were tricked by secret DPRK agents, who are entirely to blame for what happened.”

It is now known that Kim Jong-nam was poisoned with VX, an organophosphorus compound. That could be seen from the victim’s appearance (for example, his pupils were constricted) and from the results of analysis, which have been made public. However, the toxic substance was only definitely identified a long time after the South Korean intelligence services and media had made arbitrary claims without having access to investigatory documents about its nature. Of course, it could have just been a lucky guess, but, if desired, other explanations for such coincidence could be found. Especially if it is remembered that the initial autopsy and chemical analysis have failed to establish the cause of death, and that reports of unidentified persons attempting to gain access to the morgue afterwards, appeared on the Internet. Those enjoying conspiracy theories may suggest that the body was tampered with after death to ensure a convenient diagnosis.

But this is still not anything like a mass chemical attack. Two weeks later, the authorities checked Kuala Lumpur airport, where Kim Jong-nam was attacked, but no traces of any toxic substances were found.  

One more very interesting fact is worth mentioning: the dead man was found to have been carrying 12 vials of atropine, which is known to be an antidote to exactly the type of toxic substance that caused his death. However, the deceased did not lose consciousness immediately but spoke for some time first to his security guard and then to medical personnel. It is strange that he did not tell them about the antidote in his luggage, and, according to one theory, first aid was deliberately withheld, as it was in someone’s interest that he should die on the way to hospital, whether or not there was any antidote in his bag.

Meanwhile, the investigations into the killing are still in full swing and so far no definite proof of the DPRK’s involvement has been produced. However, many interesting facts have come to light, which could, if so wished, form the basis for a very curious story.

First of all it is has been shown that the women accused of attacking Mr. Kim had, believing that this was part of a talent competition, already carried out similar attacks on other people and been paid a reward. Siti Aisyah, one of the two accused, received 400 rupees from a man called James (who was, it is claimed, actually a North Korean named Ri Ji-U) to perform three pranks in the Bukit Bintang department store. That was done as early as January 5, 2017, and a video of the pranks was made, which, according to ‘James’, would be put on YouTube. It is true that the investigators did not find any confirmation of the time and place of the show, but if that is true then it appears that the ‘training’ of the future assassins took place a long time before Mr. Kim’s arrival in Malaysia.

Siti Aisyah had also used baby oil several days before. On February 3,7, and 11 she performed similar pranks in the airport and was paid $550 from a person calling himself “Chang”. “Chang” was the name used by one of the suspects, the North Korean Hong Song-hac, who “James” introduced to her on January 21, 2017 in Phnom Penh airport. On February 7, after another prank, she uploaded a post onto Facebook: “Last day shooting, hopefully given the trust, contract extended, even though tired but energized”.

According to Siti Aisyah, “James” then asked her to smear the next victim with lotion from behind and then immediately run away. However, no traces of Siti Asiyah’s DNA were found on the body or clothes of the deceased.

Secondly, it is known that the accused did not make any deliberate attempt to remove traces of the toxic substance or destroy any clues, nor did they try to leave Malaysia immediately. That is particularly true for Đoàn Thị Hương, who got a lot of media attention thanks to her t-shirt with the slogan “LOL”. The police officers who arrested her said that she had not tried to get rid of that evidence (for example by straightaway throwing it away in a bin) and in her first interview with law enforcement personnel she admitted she had entered the country to shoot a prank video. 

There is one other event which may turn out to be one of the missing pieces in the puzzle. On March 4 Austrian media reported that the Austrian Public Prosecutor’s Office for Combatting Economic Crimes and Corruption had launched an investigation into agents of the domestic counter-intelligence service in connection with the secret handover of North Korean passports to the South Korean authorities. It appears that in 2015 the Austrian state printing company received an order from the DPRK for the production of 200 000 biometric passports. In 2016, the South Korean special services, using the Austrian counter-intelligence service as an intermediary, secretly obtained possession of some of these documents. It is unclear whether or not these operations were carried out with the consent of the government of the DPRK or whether Pyongyang was informed of them at all.

Naturally, South Korean agents would be unlikely to be able to enter North Korea using those passports. But stolen passports can also be used to carry out false flag operations in a third country! So there are already facts to support a range of very different theories, and it is, to say the least, too early to claim that North Korea’s involvement has been proved.

And, to return to the subject of the new sanctions, then their demonstrative, made up and demonising character is clear: given the pressure being directed against that country from all directions it is unlikely that they could have more than a symbolic effect, as in reality the USA and the DPRK do not have any trade or other links. However, as South Korean media have pointed out, they do “once again demonstrate the fairness of actions against North Korea, and draw attention to the fact that a serious crime against humanity has been committed.” It does not even worth commenting on the fact that this issue has arisen at a time when North and South Korea have been actively working together. No, it is no coincidence, but it is one more step in the demonization of the DPRK, because few people will remember the details but the vast majority will be left with a mental picture that has no basis in fact- the use of chemical weapons against citizens.

Konstantin Asmolov, PhD in History, Leading Research Fellow at the Center for Korean Studies of the Institute of Far Eastern Studies of the Russian Academy of Sciences, exclusively for the online magazine “New Eastern Outlook.”

Is There a Chance of Trump Meeting Kim Jong Un?

Last week, North Korea was visited by a high-profile South Korean delegation headed by National Security Office head Chung Eui-yong. During their two day stay in Pyongyang, members of the delegation had a number of talks with local political elites resulting in Chung Eui-yong making unexpected statements upon his arrival to Seoul, that proved to be sensational for the US media, when members of the delegation repeated them in Washington.

According to Chung Eui-yong, North Korean ruling elites have clearly expressed their readiness to renounce nuclear weapons should the security of their country be guaranteed by the elimination of the military threat that is looming on North Korea’s borders. However, those guarantees must be particularly sound since Pyongyang has stated time and time again that it never planned to use nuclear weapons offensively, as the main goal of their development was an attempt to restrain foreign players threatening North Korea with invasion. In addition, the North expressed its readiness to engage Washington in an open dialogue in order to establish bilateral relations and discuss the nuclear problem, while emphasizing that there would be neither test launches of ballistic missiles, nor new nuclear detonations conducted until the negotiations are over. Additionally, according to the South Korean National Security Office head Kim Jong-Un has unofficially expressed his desire to meet with US President Donald Trump to negotiate with him.

Initially, Trump would announce that he would accept the invitation, while revealing all further details about the meeting would be worked out at a later date. It’s no wonder that Western media sources have immediately gone haywire in anticipation of this historic meeting. However, it’s way too early for celebrations, as there’s a number of concerns that are clearly standing in the way of peaceful negotiations.

Firstly, we should recognize that the position occupied by Chung Eui-yong is rather shifty, as upon his arrival to South Korea his description of the position that Pyongyang matched all previous positions, however, as soon as he reached Washington, he hinted that the North was now prepared to surrender its nuclear power altogether. Perhaps Chung has said what he was expected to say in Washington, in order to spur the US-North Korean rapprochement that Seoul seeks. Moon Jae-in is well aware of the fact that inter-Korean progress is only possible by constantly appeasing the ego of the sitting US President.

Further more, although Trump has predictably described possible talks in his Twitter with a great deal of optimism, days later the White House Press Secretary Sarah Sanders officially stated that Trump would not be meeting Kim Jong-Un unless the DPRK begins surrendering its nuclear weapons. She added that Washington was not going to take any friendly steps until the moment Pyongyang’s actions match its rhetoric. Generally speaking, this has been the typical reaction to any peaceful initiative that the DPRK has ever taken, summurized by the notion that Washington is going to consider all options only when North Korea has already capitulated to its demands.

Thirdly, Donald Trump can only meet with Kim Jong-Un in May, and there’s going to be a number of potentially volatile events that can affect decisions of all parties involved. First of all, Washington is planning to hold joint military exercises with South Korean armed forces on the Korean Peninsula, but apart from that, we can confidently expect additional unilateral measures aimed at pressuring the DPRK. Pressure is in response to accusations Kim Jong-Un poisoned his half-brother in Kuala Lumpur (we recall that the investigation is under way and that the DPRK’s guilt has not been officially confirmed at the moment). It is the reason for a new round of sanctions against North Korea on the pretext of Pyongyang supposedly using chemical weapons against its own citizens.

It should be understood that nobody really knows how America’s position on North Korea is formed and what American think-tanks are going to say, as there’s no small chance that Pyongyang’s gesture of good will may be interpreted as a gesture of desperation. If so then Washington is going to introduce all sorts of new sanctions against North Korea in an attempt for it to force its complete surrender at the negotiating table, yet it is unlikely that this approach will assist the parties involved in reaching a deeper understanding of each other.

Now, should the meeting between Donald Trump and Kim Jong-Un actually take place, Trump will become the first American president to ever talk to a Kim, which in itself would be no small achievement. But talks are not the ultimate goal, as they should lead to some agreements being signed. As in the case of the inter-Korean summit, the negotiations should end with something meaningful. As Reuters announced, while citing an anonymous source within the Trump administration, Washington will not accept anything less than the complete surrender of North Korea’s nuclear stockpiles.

It’s clear that a meeting without any deals being signed will be a political disaster for Trump, but if you’re familiar with Trump’s books on business strategy, Trump is only capable of a “dialogue” when he’s shoved his competitor in a corner to discuss his terms of surrender. So, what we can really expect is the two states presenting ultimatums to each other.

Under these circumstances there’s only one logical question: what can these parties possibly agree on? Let’s start with the alleged “concessions” that North Korea is willing to make. Since the task of creating strategic nuclear forces has been accomplished, it can easily give up both nuclear and missile tests, while presenting it as a gesture of good will.

One can recall the repeated proposals put forward by Russian scientists, including Alexander Zhebin, that put forward the idea of separating the North Korean nuclear program from its missile program. It’s most likely that North Korea will never surrender its nuclear devices as they are now mentioned in its constitution, but Pyongyang may be willing to freeze its missile programs, while guaranteeing non-proliferation of missile and nuclear technologies that it has already developed.

You can try to revive the idea of direct negotiations via various hotlines or communication channels that would allow states to solve challenges of a humanitarian nature, like the one that cost Otto Warmbier his life. Finally, North Korea can agree to decrease the level of its anti-American rhetoric.

However, one shouldn’t forget that “tango is a dance for two”, so one can’t help but wonder what kind of concessions Washington can actually make. For most Americans listening to anti-Korean propaganda for years, the very fact negotiations are even happening seems to be a concession, but, theoretically, should also include some things Americans can also sacrifice without losing face. It is possible to reduce the scale of joint exercises conducted with South Korea. There could also be a reduction of the level of so-called democratization attempts conducted in the DPRK by reducing the funding enjoyed by all sorts of NGOs. It is possible, while the moratorium is in force, to refrain from similar military demonstrations such as American bombers capable of carrying nuclear weapons patrolling the border between the Koreas.

The US can even try to downplay the problem associated with the lack of documents that would formalize the end of the Korean War. Sure, Washington would sign no peace treaty with North Korea but, as it’s been noted by South Korea, the fact that Kim Jong-Un addressed the sitting US President can be regarded as the establishment of diplomatic relations.

If Kim promises to freeze the DPRK’s missile program, he will take a step away from the so-called red line that Washington has repeatedly pointed out. This red line is associated with the likelihood of a North Korean attack on the continental US, which, if brought to zero, can be presented as Trump’s diplomatic victory. But will it satisfy those who, perhaps, were taken by surprise by the announcement that North Korea was prepared to surrender its nuclear arsenal? Perhaps even the minor concessions described above will be perceived by the US public as totally unacceptable. And then, sooner or later, it would become clear that Chung Eui-yong failed to mention that Pyongyang has put forward a condition, not a plea for mercy. It is hard to imagine that Washington will somehow abandon its conviction that the DPRK is a tyrannical regime that needs to be eliminated in the name of world freedom and democracy. Until this moment comes, North Korea’s nuclear weapons are here to stay.

So if one is demanded to present his opinion on the possible Kim-Trump meeting, it would resemble the attitude towards the meeting between the leaders of North and South Korea: the idea itself is good; the theoretical probability of an event is above zero, but even if such a meeting can reduce tensions for a brief moment, one cannot help but doubt the possibility of achieving any long-term result through it.

Konstantin Asmolov, PhD in History, Leading Research Fellow at the Center for Korean Studies of the Institute of Far Eastern Studies of the Russian Academy of Sciences, exclusively for the online magazine “New Eastern Outlook.”

Summits Between North and South Korea – Past and Present

Kim Jong-un’s proposal for a summit between the two Koreas, which the DPRK’s delegation handed to the South Korean president during the Winter Olympics in Pyeongchang, has been described as the ”most significant moment” in the Olympic thaw, and not surprisingly, it has generated a lot of discussion, generally positive in tone. Optimistic experts are talking about the summit as if it is imminent, and (according to a poll of 1026 people, conducted by the Korean Public Opinion Institute on 12and 13 February), of 77.4% of South Koreans consider that it is likely to take place. A special envoy has been sent to Pyongyang, and this is interpreted as a first step towards the summit.

In theory, the new summit is to be a continuation of the summits held in 2000 and 2007, and so it may be worth reminding readers about what happened on those occasions.

Kim Dae-jung’s “Sunshine Policy” was also an attempt to incorporate North Korea- but this strategy was based on soft power: the name of the policy came from Aesop’s fable about the contest between the North Wind and the Sun to make a man take off his cloak. However hard the wind blew, the man just wrapped his cloak tighter, but, in the heat of the sun, the man his own cloak off himself. It was hoped that, little by little, dialogue and involving North Korea in bilateral talks would achieve three things: the North Korean regime would become more open, its people would start to see the outside world in a more positive light and as a result would seek changes and a new relationship with South Korea, and North Korea would start planning for a gradual reunification. Pragmatic observers were left in little doubt about who that reunification was intended to benefit.

On June 13, 2000, the South Korean president flew to Pyongyang and met Kim Jong-il.

The summit’s main achievement was the North–South Joint Declaration, which had five points:

1. An agreement by the two Koreas to work towards reunification independently and through peaceful means.

2. A recognition that North and South Korea’s proposal for a confederation shares a common element with the two countries’ intention to move towards reunification gradually and without one country absorbing the other into itself.

3. An agreement to arrange visits between members of families divided by the border, and to address other humanitarian problems.

4. An agreement to develop economic cooperation, links and contacts in the fields of culture, sport, environmental protection etc.

5. An agreement to hold a dialogue between the authorities of the two countries in order to put the terms of the agreement into practical effect.

In reality, the summit’s main achievement was probably the fact that the two leaders met each other at all, thereby demonstrating to the world that the two Koreas were really ready for dialogue and could talk to each other directly without any external assistance or the need for any other country to act as an intermediary.. At last that summit appeared to officially recognize the actual situation: the existence of two separate states on the Korean peninsula, and relations between North and South Korea started improving noticeably, a process that only stopped with the second stage of the nuclear crisis in autumn 2002. 

On 13 October 2000 awarded Kim Dae-jung the Nobel Peace Prize for his “for his work throughout his life for democracy and human rights, and for peace and reconciliation between the DPRK and the Republic of Korea in particular”. That was the first time the Nobel Peace Prize had been awarded to a Korean. The prize was not awarded to Kim Jong-il, however, although on previous occasions, when comparable international agreements had been signed, the prize had been shared by both parties.

Kim Jong-un planned to make a return visit to Seoul, but it never took place. That was not just because of serious opposition from the opposition and in conservative circles, but also because, strictly speaking, under South Korea’s Law on National Security the North Korean leader would be subject to immediate arrest as a state criminal as soon as he crossed the border.

On 4 October 2007, Kim Jong-il and Roh Moo-hyun signed a Declaration on the Advancement of South-North Korean Relations, Peace and Prosperity, which, in its fifth article, declared that the parties intended to create a “peace and cooperation zone” in the Yellow Sea, which would be similar to the DMZ, or a shared commercial fishing zone. As later developments demonstrated, the attempt to prevent armed clashes in the area of the North Limit Line might have been a much more important result of the visit.

Besides, the two countries also planned to continue onto the second stage of the Kaesong Industrial Zone, arrange the passage of freight trains between Munsan and Pondong (the line between these stations was opened on 11 December 2007), to create a shipbuilding facility in Nampho and Anbyon, reconstruct the railway between Kaesong and Sinuiju and the highway between Kaesong and Pyongyang, to be used by both countries.  In the long term the economic effect from the implementation of these joint economic projects could have reached 150 billion dollars.

Despite the declaration, the second summit between the two countries was just a shadow of the first one. While the final protocol statement contained plenty of reasonable-sounding statements on cooperation, it was clear that the implementation was at risk, as the summit had been arranged at relatively short notice, just two months before the Korean presidential elections , and was therefore more of a ceremonial event intended to boost its initiators’ political ratings within South Korea. Roh’s successor, Lee Myung-bak, would have to have put the agreement into effect, but at the first opportunity he first suspended it and then, following the scandal related to the death of a South Korean tourist in 2008 and then the sinking of the Cheonan corvette in 2010, he disavowed the agreement entirely.

So- let us now look at the prospects of the 2018 summit. First, in order for it to take place, the internal and external political situation has to be right. In a rather difficult internal political situation, President Moon’s visit to Pyongyang met with fierce resistance from the opposition, and it is unlikely that the initiative will be fully supported by the United States. At the very least, the visit must not be seen as a step backwards in the policy of putting “maximum pressure” on the DPRK that Washington is calling for. It is true that the US also talks about dialogue with Pyongyang, but it either understood as ‘agreement to capitulate and being ready to discuss the details’, or it wants North Korea to disarm before any talks take place.

Secondly, if the summit does take place, then it will be important to come back with some kind of agreement- something more substantial than a statement of intentions. In the meantime, the current state of the sanctions against North Korea is an obstacle to any economic cooperation between the two countries, let alone major infrastructure projects. Now, in order to prevent the delivery of ‘dual use’ items, even the delivery of humanitarian aid to North Korea is subject to a mass of restrictions. Readers will remember that, during the Winter Olympics, it was not possible to present the North Korean delegation with hockey sticks, for example, as these are on the list of sanctioned items.

As for agreements on cultural exchanges or meetings between members of divided families, in reality neither Pyongyang nor Seoul are particularly interested in these issues, and, crucially, they are no more than a first step towards something more important, and are not in themselves enough to justify a summit.

Thirdly, it is important to address the  painful subject of “denuclearising the DPRK” – when President Trump and President Moon talked by telephone on March 1, they reached an agreement that South Korea and the USA would continue in their efforts to denuclearize the Korean peninsula, and that any dialogue with Pyongyang should focus on that goal.

President Moon will thus have to, at the very least, mention the issue of North Korea’s nuclear disarmament in the summit. But a mere attempt by South Korea to talk about this subject during January’s talks met with such a harsh reaction from North Korea that the subject was quickly brushed under the carpet. Pyongyang firmly stated that nuclear disarmament would not be discussed. At all. Ever.

So, if President Moon does raise that issue, there is a risk of the talks collapsing or not resulting in any agreement, while if he fails to raise it then both his foreign allies and internal political opponents will see him as capitulating to the North.

Fourthly, the third summit to take place in Pyongyang will make it all too clear which party initiated the dialogue. It will be remembered that, because of the number of Olympic concessions, a lot of South Koreans – and not just political conservatives- jokingly called the PyeongChang Olympics the “Pyongyang” Olympics.

Certain analysts write that the Winter Olympics, and the visits that they served as a pretext for, have helped to stabilize relations between the two Koreas. Nevertheless, the situation can change just as rapidly, as no firm foundation for cooperation between the two countries has been established. Actually, at the moment everything depends on the good will of Kim Jong-un, who initiated the current thaw in relations. It remains to be seen how long his patience will last, and what will happen if he is frustrated in his attempts to improve relations with Seoul and Washington.

(By the way,  in the author’s view, Moscow could have proposed its territory as a venue for the summit. A meeting between the two leaders in a neutral territory would free Seoul from the need to ignore the Law on National Security if summit was to be held on its territory or remove any ground for accusations that the South Korean leadership is making third “kowtowing” trip to the North.)

Of course, the South Korean president will try to extend the current thaw: in part, this was the reason for the visit of a special envoy to Pyongyang, but even a representative delegation of that sort is very far from the level of a summit. We will therefore hope for a closer rapprochement, and that the “necessary conditions” will, after all, sooner or later come into being.

However, in recent days it was reported that as a result of negotiations in Pyongyang held on March 5-6, the summit was scheduled for the end of April. This is not bad news as this fact is prolonging the recent Olympic warming in bilateral ties, but the questions about what will be discussed at the summit and what fruits it will bringing, aside from friendly handshakes, still remains.

Konstantin Asmolov, PhD in History, Leading Research Fellow at the Center for Korean Studies of the Institute of Far Eastern Studies of the Russian Academy of Sciences, exclusively for the online magazine “New Eastern Outlook.”

US Central Intelligence Agency and North Korean Problem

On January 6, 2018, The New York Times published an article citing the latest interviews of the current and former employees of the American intelligence service, which stated that the US intelligence services believed the rapid development of the nuclear and missile program of North Korea to be “one of the most significant failures”.

The newspaper does not specify when and where they announced it, but it stresses that after Donald Trump’s accession to the presidency, the US intelligence agencies told the new administration that Washington would have at least four years before Pyongyang produced a hydrogen bomb. During this period, the USA should have found a way to retard the DPRK nuclear and missile program, but, as we know, it developed much faster.

According to the newspaper, the senior officials of the intelligence agency recognized that they were mistaken in two “key suppositions” about Pyongyang. First, they considered that the DPRK would need the same time period for the hydrogen bomb production as other countries did during the Cold War period, and they underestimated the access of North Korea to the advanced computer modelling and the use of the third countries’ experience. 

They also did not fully take into account the fact that the development of the nuclear program was carried out according to the “catch-up” type and with certain external assistance, at least at the level of expert consultations. The topic of the Russian intrusion was evaded. According to expert estimates cited by the newspaper, “representatives of the former Soviet Union (a bunch, not necessarily and not only Russia) almost certainly work with North Korea. However, they are freelance workers. It is known that the Russian government has not supported the DPRK in this matter.

Second, they underestimated Kim Jong-un who had made the country’s armament program “of higher priority” than his father and grandfather. If the seniors of the Kim family considered the nuclear problem as an element of the political bargaining, the new leader of the country made the nuclear program his “Manhattan project.”

The newspaper does not cover Obama’s policy and experts’ statements during his administration. In addition, the fact that seven out of eight North Korean missiles exploded at the start or broke down during the launch in 2016 “may be a consequence of the successful cyber vulnerabilities program approved by the ex-President Obama.” Thus, one of the leading newspapers in the USA unobtrusively confessed that the US government had practiced so much criticized cyberterrorism.

New York Times associates this with the inconsistency of the White House policy on this issue. If we read the entire text instead of retelling the first abstracts like many other commentators, the situation looks like this. Since 2000, the intelligence officers wrote a lot that a nuclear missile that might hit the American cities was likely to appear in the DPRK in 2015. Four years later, this prediction was corrected amid the war in Iran, and the possible North Korean crisis was postponed till 2019.

The alarmism began to subside after 2008, and the author asks himself what influenced the trend change – whether it was the policy of “strategic patience” or the change of power in the Republic of Korea, after which the South Korean intelligence services began to “feed” their colleagues with fables of the imminent collapse of the regime and a total economic collapse. As a result, the American intelligence services succeeded in forecasting the direction and the general terms of the program but repeatedly “missed the critical turns.”

Thus, “the problems that taught the USA a rough lesson” had begun not with Trump; the author repeatedly pointed at these problems – the limited capacities of electronic and satellite intelligence service and the dependence on the sources of information not mentioned there.

At the same time, according to the CIA Director Mike Pompeo, the statements about the American intelligence service failure are wrong. In an interview to CBS channel, he honestly noted, “I am one of those who tell directly about the failures of the intelligence services when we miss something out. This is not the case.”

In general, Pompeo constantly repeats a thesis that the DPRK will have an opportunity to attack the continental territory of the USA in several months, and the country should form a strategy based on this.

He made the loudest statement of this kind on October 20, 2017 at the event of the Foundation for Defence of Democracies stating that the USA should be ready for a missile strike by the DPRK and take decisions and act as if the Koreans already had such an opportunity. “The likelihood of such a development has increased and will continue to grow because of the lack of a global effort to push back Pyongyang…Whether it happens on Tuesday or on Tuesday next month, we are at a time where the president has concluded that we need a global effort to ensure that Kim Jong-un doesn’t have that capacity.” Every time he is reminded that he has made the same forecasts several months ago, he answers “This is true. I hope I will be able to say it in a year…The US government is working hard to ensure that this moment comes as late as possible.” I should note that this statement is rather reasonable – by recognizing the limitations of the CIA’s ability to clarify the real situation, he suggests proceeding from the most pessimistic option.

At the same event, Pompeo frankly admitted that the USA continued the collection of intelligence information on the nuclear program of Pyongyang but this information was “far from perfect.” It should be noted that since Pompeo became the head of the CIA (appointed by Trump on November 18, 2016, finally approved on January 23, 2017), the US took a number of steps to raise its awareness. Thus, Pompeo created a special centre in the US CIA for the maximum efficient counteraction to nuclear and missile threats of the DPRK engaged in gathering information on the condition of the nuclear weapon and long-range missiles. According to Pompeo, the decision has been taken “to mobilize and use all the resources, opportunities, and powers” in order to react to the threat of Pyongyang and the new centre will act in close cooperation with the intelligence community and the American security services. 

In addition, the American military officers in the Republic of Korea planned to establish Department 524 on the issues of human intelligence HUMINT in October 2017 to increase capacities for the collection of information about the DPRK. It will work as a part of the 501st intelligence brigade of the Eighth US Army and it will collect information on the nuclear and missile potential of Pyongyang and predict possible sudden changes in the North. Such an approach is related to the fact that the technical intelligence has reached the limit of opportunities. It is assumed that the high-ranking North Korean refugees and foreigners who have private contacts with the North will be the source of information for this department. 

As a result, on October 4, 2017, the Deputy Director of the Korean CIA Department Lee Yeon Seok noted that Kim Jong-un was a very well-minded player that did not wish a military conflict on the Korean Peninsula. “Kim Jong-un wants the same as all authoritarian leaders: to rule for a long time and die in his own bed,” and his goal is to gain recognition as a nuclear power and reach an agreement on the withdrawal of US troops from the Korean Peninsula.

In fact, Mike Pompeo is more right-wing than his subordinates in this issue. As for the DPRK issue, he belongs to the group of hawks, but the smart ones. During his visit to the Republic of Korea from April 30 to May 2, Mike Pompeo met with the Director of the National Intelligence Service of South Korea Lee Byung-ho and deliberately visited the South Korean Yeonpyeongdo Island, which faced the North Korean artillery attack on November 23, 2010.

In an interview to Washington Free Beacon, an online media of conservative nature, Mike Pompeo called the terrorism and the DPRK the main threats for the USA, though the North created threats that could not be implemented but raised concerns. Therefore, the North is the most serious threat in the short-term.

Speaking in the American Enterprise Institute on January 23, Mike Pompeo noted that Pyongyang expanded its capabilities in testing missiles and nuclear weapon, and suggested that the North Korean leader would not stop after one successful test. According to Pompeo, the next step will be the development of the weapon arsenal in order to provide opportunities to hit the USA. According to the South Korean media, the CIA head also noted that Kim Jong-un aimed to unite the Korean Peninsula under his authority. At the same time, Pompeo expressed doubts that Kim got reliable information from his military leaders.

As for the action plan, South China Morning Post newspaper reported that Mike Pompeo made one very interesting statement on October 20, 2017, “If Kim Jong-un suddenly disappears, I will not tell about it taking into account the history of the CIA.” “Somebody may think that a coincidence has taken place. “You know, there has been an accident.” In addition, the CIA head added, “We are going to become a much more malicious agency.” This statement cannot be called a joke given the fact that the Northerners accused the CIA and the South Korean Intelligence Service of preparing an assassination of Kim Jong-un in May 2017 using «biological weapon».

Let us summarize the result – the US CIA works, and we should not underestimate the US intelligence service capabilities and the level of their analysts. Pompeo’s strategy is rather reasonable. The speculations about a tremendous fiasco of the CIA by the intra-American critics of Trump should be regarded as a sign of the internal political struggle.

Konstantin Asmolov, PhD in History, Leading Research Fellow at the Centre for Korean Studies of the Institute of Far Eastern Studies of the Russian Academy of Sciences, exclusively for the online magazine “New Eastern Outlook.”

USA-DPRK: Will Informal Negotiations Have Official Continuation?

Many articles of the author concern the confrontation of the DPRK and the USA. However, we should not forget that there plenty supporters of a dialogue with the DPRK in USA, and, though stealthily, some measures have been taken in this respect.

Perhaps, the readers remember that the first informal meeting of the USA and DPRK representatives took place on October 21-22, 2016 in Kuala Lumpur. Its result is still unknown. However, the next meeting took place in Geneva on November 17, 2016. The North Korean party was represented by the Deputy Permanent Representative of the DPRK to the UN Jang Il-hun and the Deputy Director of North America Department of the Foreign Affairs Ministry Choi Seung-hee. Professor Joel Wit of the Johns Hopkins University responsible for the operation of the Internet portal 38 North and the former Assistant Secretary of State for Nonproliferation and Arms Control Robert Einhorn of Brookings University represented the USA.

Unlike the classic “second track” diplomacy when experts or retirees meet on both sides, this model can be called “one and a half” – the North was represented by officials, the United States – by retired diplomats and officials yet capable to convey the content of the consultations to the leadership. Meanwhile, official Washington may honestly declare that it “does not conduct any official negotiations with Pyongyang”.

Answering the question of the journalist concerning the aim of the visit, Jang Il-hun said that he could not give any commentaries. On March 13, 2017, Bloomberg referring to an interview with Joseph DiTrani, the US special envoy to the six-party talks, reported that the parties conducted such negotiations every six months.

On February 25, 2017, Radio Free Asia reported a possible meeting of the former US officials and the DPRK diplomatic officials in New York on March 1-2. However, the Department of State refused to issue an entry visa to the head of the delegation, Director of North America Department of the DPRK Foreign Affairs Ministry Choi Seung-hee.

The next informal negotiations took place on May 9, 2017 in Oslo. The North Korean delegation was led by Choi Seung-hee, the American – by Suzanne di Maggio, researcher and head of the brain trust of New America, an expert on Iran. Earlier, this woman participated in various backroom negotiations in order to create informal communication channels for the USA and some “troubled” countries, including Iran. The full list of the delegation participants was not disclosed officially. A source from Mengnews said that the above mentioned Robert Einhorn, ex-Ambassador Thomas Pickering, and other representatives of brain trusts participated in the meeting on behalf of the USA.

The dialogue was conducted as a top-secret, and according to the US Department of State, official Washington did not pay any special attention to these negotiations. The Ministry of Unification of the Republic of Korea also noted that did not consider such contacts as a part of the North Korean policy to establish relations with the USA in circumvention of the Republic of Korea.

However, these contacts are supposed to have become a platform to discuss the problem solving of the detained US citizens, including Otto Warmbier, conditions and opportunities to improve relations between Washington and Pyongyang, as well as the resumption of negotiations on the North Korean nuclear problem.

The media also reported that North Korea informed the USA that it would stop all the nuclear tests and missiles testing if Washington abolished the sanctions policy against North Korea and signed a bilateral peace treaty that would officially end the Korean War. This fact is confirmed by a statement of Choi Seung-hee on May 13: Pyongyang is ready to conduct a dialogue with the American party if the “required conditions” for it are former.

On August 12, 2017, Associated Press reported that Washington and Pyongyang had conducted secret negotiations on the fate of the arrested US citizens in the North. The contacts were brought about by the US Special Representative for North Korea Policy Joseph Yun and an official of the DPRK Permanent Mission to the United Nations Park Song, while the entire channel was called “New York channel”. As a result of these contacts, the American student Otto Warmbier was released on June 13, 2017. As he was transferred to the United States already in a state of coma, and died a few days later, “contacts did not help relieve tension in the relations between Washington and Pyongyang.”

In September 2017, representatives of the DPRK Foreign Affairs Ministry participated in an informal conference on security in Zermatt (Switzerland) that took place on September 11-13 with the participation of the state agencies and NGOs representatives. It was organized by Geneva Centre for Security Policy (GCSP) and the Foreign Affairs Ministry of Switzerland. Experts from the Republic of Korea, the DPRK, the USA, China, Japan, and Russia attended it. The Deputy Director of North America Department of the DPRK Foreign Affairs Ministry Choi Gan-yl represented the DPRK. Commenting on the result of the communication, a representative of the Republic of Korea Foreign Affairs Ministry noted that nothing special had happened as the North repeated its previous position: the DPRK would not return to the negotiations table until the USA stopped its hostile policy.

September 30, 2017 was a more important date. During a visit to China, the US Secretary of State Rex Tillerson admitted that the USA had “a very limited contact with the DPRK and recommended to “stay tuned.”

However, the next negotiations with the participation of Choi Seung-hee took place in Moscow on October 20-21, as a part of the Moscow Nonproliferation Conference – 2017. This is one of the major forums on the problems of weapons of mass destruction, arms control, and development of nuclear energy. The USA was represented by an impressive delegation: the former Deputy Secretary of State Wendy Sherman, Robert Einhorn, a nuclear expert Siegfried Hecker, and others.

As usual, the content of the dialogue was kept secret, and officially Choi Seung-hee announced that the format of the six-party talks on the North Korean nuclear issue was no longer valid. She underlined that the DPRK would not return to these talks until the disagreements with the USA were settled, and that the elimination of mutual opposition was possible if “the USA made the right choice”.

On October 22, 2017, in an interview to The New York Times, the ex-President of the USA Jimmy Carter told about an attempt to become an envoy to the DPRK to “help diffuse the growing tension”: in mid- 1990sCarter visited Pyongyang as an envoy of the President Bill Clinton and signed an agreement with the DPRK head Kim Il Sung on the recovery from the “first” nuclear crisis. According to Carter, he discussed a possible visit with Trump’s National Security Advisor Herbert McMaster, but it was denied.

On October 26, the Japanese television channel TBS citing informed sources, reported that the DPRK suddenly canceled the meeting of Choi Seung-hee with Joseph Yun, which was to be held in late October in Oslo. According to the TV channel, Pyongyang thus voiced its protest against the American military exercises on the Korean Peninsula area.

Nonetheless, on October 31, 2017, Reuters agency citing a source in the Department of State reported that Joseph Yun had contacts with the North Korean officials in the UNO using the above mentioned New York channel, while Donald Trump and Kim Jong-un exchanged harsh statements and threats.

On November 10, 2017, Rex Tillerson repeated that the USA kept three communication channels with the DPRK in the face of the appropriate time for negotiations. However, the Secretary of State immediately refuted the words of Joseph Yun on the possible restoration of contacts if the DPRK did not conduct provocative actions for at least 60 days. Tillerson noted that this matter had no certain terms, and this was perhaps the personal opinion of Joseph Yun. 

On December 22, 2017, it was reported that a special representative of Sweden on the Korean Peninsula issues Kent Hashtet visited the DPRK. He met with the Deputy Chairman of the Workers’ Party of Korea Lee Soo-yeon, reported the Korean Central News Agency. Earlier, he conducted negotiations with the head of China’s delegation at the six-party talks Kuhn Xuanwu.

It should be noted that Sweden constantly renders humanitarian assistance to the North, conducts a number of joint projects in education and economy, while the Swedish Institute of Security Policy and Development conducted an informal forum in Stockholm with the participation of experts and representatives of the Republic of Korea, the USA, China, and the DPRK, which was represented by the staff of the Institute for Peace and Disarmament under the Foreign Affairs Ministry. In addition, its embassy in Pyongyang represents the US interests.

Backroom talks were expected at the Olympic Games in PyeongChang, but both the parties refuted the preparation to a dialogue. Though the meaning of such contacts should not be overestimated (let us discuss it when the “one and a half track” will become the “first”), this means that Washington is not cunning when saying that it has all the variants both the military and negotiation scenario.

However, while the “dialogue with Pyongyang” is understood as a recognition of Washington’s capitulating demands by the DPRK, the probability of turning the talks into something greater is not high.

Konstantin Asmolov, PhD in History, Leading Research Fellow at the Centre for Korean Studies of the Institute of Far Eastern Studies of the Russian Academy of Sciences, exclusively for the online magazine “New Eastern Outlook.”

Sum of all American Fears in Korea: Peace

North Korea has been depicted by the Western media as a dangerous rogue state, plotting the nuclear holocaust of America and holding global peace and stability hostage with its irrational aggression. It is the supposed threat North Korea poses to the world that the United States uses to justify its enduring decades-long military presence on the Korean Peninsula. 

In the recently released 2018 US Department of Defense Nation Defense Strategy, it claims:

North Korea seeks to guarantee regime survival and increased leverage by seeking a mixture of nuclear, biological, chemical, conventional, and unconventional weapons and a growing ballistic missile capability to gain coercive influence over South Korea, Japan, and the United States.

Yet North Korea’s immediate neighbor – South Korea – felt comfortable enough with this “rogue regime” that it not only invited high level diplomats to the PyeongChang 2018 Winter Olympic Games, it had its own athletes compete side-by-side with their North Korean counterparts as a unified team. 

The opening ceremony included a unified parade, song, and chorus group. North Korean leader Kim Jong Un’s sister publicly greeted South Korean President Moon Jae-in. Other senior North Korean leaders and diplomats were present and interacted with their South Korean counterparts.

ABC News would report in their article, “Kim Jong Un’s sister shakes hands with South Korea’s president at Olympics opening ceremony,” that:

After arriving in South Korea with a high-level delegation, the sister of North Korean leader Kim Jong Un publicly shook hands with the neighboring nation’s president during tonight’s opening ceremony of the 2018 Winter Olympics.

CNN would report that North Korean leader Kim Jong Un would go as far as inviting South Korean President Moon Jae-in to the North Korean capital, Pyongyang. 

Evident is the absurdity of Western political and media claims about the danger North Korea presents to the world, when the very nation it is allegedly still technically at war with – South Korea – invites its leadership to a sporting event their athletes compete as a team together in and whose leaders watch, sitting side-by-side. 

However, CNN’s article, “Kim Jong Un invites South Korean President Moon to Pyongyang,” would reveal:    

Moon responded to the invitation by suggesting the two countries “should accomplish this by creating the right conditions,” adding that talks between North Korea and the United States were also needed, and requested that North Korea be more active in talking with the US, according to Kim Eui-kyeom.

In essence, the president of South Korea requires US permission to conduct what should be South Korea’s own bilateral talks with its immediate neighbor to the north. And here is revealed both the root of tensions on the Korean Peninsula – America’s involvement – and the sum of all American fears – peace between North and South – especially on their own terms.

For the United States, North Korea has been a convenient pretext to remain deeply embedded on the Korean Peninsula, admittedly part of Washington’s strategy – not to deal with a rogue state – but to further encircle and contain China’s rise in Asia. The US maintains a significant military presence in Japan for similar purposes and has attempted to reestablish a significant military presence in the Philippines toward this end as well.

Pretext For Permanent US Occupation

It has been the United States pressuring South Korea to maintain a heavily militarized and belligerent posture versus North Korea, conducting annual military exercises with the United States aimed at provoking North Korea’s leadership.

The Telegraph in its article, “US Navy Seals tasked with North Korea ‘decapitation’ strike could be part of exercises,” would report:

A unit of US special forces tasked with carrying out “decapitation” operations may be aboard a nuclear-powered submarine docked in the South Korean port of Busan, the nation’s newswire reported on Monday, citing a defence source.



The USS Michigan, an 18,000-metric ton submarine, arrived in Busan on Friday, ahead of a ten day joint US-South Korean drill led by the USS Ronald Reagan aircraft carrier.

The report was part of widespread psychological warfare carried out in concert by Western and South Korean media aimed at provoking North Korea’s senior leadership. The Foal Eagle exercises the US special forces were allegedly taking part in included thousands of US troops and simulated airstrikes on North Korean targets.  

The US has penned entire policy papers discussing plans to invade, overthrow, and subjugate North Korea, usually with South Korea playing a supporting role. The influential corporate-funded US policy think tank – the Council on Foreign Relations – in its 2009 “Preparing for Sudden Change in North Korea,” paper would claim the need for a US occupation of North Korea should its leadership for whatever reason collapse. It would claim:

How large a force would be required to bring security and stability to North Korea would depend on the level of acquiescence to foreign intervention. Based on previous experiences elsewhere, the rule of thumb for the number of troops required for successful stability operations in a permissive environment is somewhere between five and ten per thousand people. Because North Korea has a population of approximately twenty-three million, a successful operation could require between 115,000 to 230,000 military personal. In addition, tens of thousands of police might also be needed to support these forces in more basic tasks. Those requirements would place a significant strain on South Korea, particularly in view of the current plan to reduce its army by some 30 percent over the next decade.

Again, even in this 2009 report, South Korea is said to have been preparing to reduce its military by up to 30%, exposing again the perceived threat the US claims North Korea is to the world, and North Korea’s immediate neighbor to the south preparing to stand down over a quarter of its military because it knows otherwise. 

South Korea has existed as a subordinate in terms of its own defense since the effective end of the Korean War. The US still maintains wartime operation control, has tens of thousands of troops stationed on the Korean Peninsula and requires South Korea to pay a percentage of the money required to keep them stationed there. The US openly and repeatedly refers to the “US-ROK alliance” that “defends South Korea.”

The Straits Times would report in an article titled, “South Korea pays more than ‘peanuts’ to host US troops: The Korea Herald,” that:

South Korea pays about half of the costs for maintaining the 28,000 American troops, which reached 944.1 billion won (S$1.1 billion) in 2016. The payment has gone up steadily – from 488.2 billion won in 2001 to 680.4 billion won in 2005 and 790.4 billion in 2010.

The article would also add:

One more thing to note when one counts “defence surplus and deficit” is the fact that South Korea is a major purchaser of US arms, having spent 36.4 trillion won on weapons and military equipment over the past 10 years.

The article finishes by citing China’s rise – not the threat of North Korea – as the actual purpose of US troops in both South Korea and Japan. 

It is clear that to remain in Korea and to sell an immense amount of US weapons, the US must manufacturer a threat sufficient to justify both. Containing China’s so-far peaceful economic rise is not a sufficient justification – though that is the true purpose for America’s presence on the Korean Peninsula. 

In the end, it turns out it was the US itself – through concerted lies and a history of provocations and threats – that has intentionally perpetuated tensions on the Korean Peninsula, not North Korea. It was US Vice President Mike Pence who turned a cold shoulder as leaders from North and South Korea exchanged greetings at this year’s Winter Olympic Games. And it will be the United States that intentionally foils any attempt by North and South Korea to build upon the historic meetings that took place during the sporting event. 

The US does not fear a nuclear holocaust on US soil brought about by North Korean intercontinental ballistic missiles, it fears peace on the Korean Peninsula on North and South Korea’s own terms and another corner of Asia that shows it to the door.

Tony Cartalucci, Bangkok-based geopolitical researcher and writer, especially for the online magazine “New Eastern Outlook”.

Yuan-priced Futures Can Be the End of the Petrodollar Age

The diminished reliance on the US dollars is one of the major trends of international geopolitics. A lot of media attention has been paid to steps taken by the BRICS states, namely Brazil, Russia, India, China and South Africa to decrease their dependence on American currency. Both the BRICS states and a number of other international players have repeatedly voiced their concern over the design of the modern global economic architecture that was imposed on the rest of the world by the United States. The whole structure of this global economy simply ignores the growing influence of new emerging markets. Because of Washington’s relentless desire to remain a global hegemon, imposing its will on other countries, the US dollar remains an instrument of economic suppression. The creation of the Euro, the rapid rise of the Chinese economy, and the intentions of a number of countries of the former USSR,  the Middle East and Asia to switch to regional currency settlements have transformed the US dollar in a measuring instrument, thus undermining its status as a mandatory transaction currency.

Russia’s and China’s gold reserves against the dollar domination

The traditional transaction scheme, in which all financial operations are processed by London and a number of Swiss banks is losing its relevance these days as new centers of gold trade are emerging, primarily in India, China and South Africa. Suffice to say that Moscow and Beijing have already signed a memorandum on the development of mutual trade in gold. According Singapore -backed financial expert Ronan Manly, the gold reserves accumulated by China and Russia are a part of their strategy to move away from international trade denominated in US dollars. Manly is convinced that should those states show that they are holding more gold combined than the US, this would deal an enormous blow to the US dollar and to the position of the US within the global economy.

While all these initiatives can not immediately render the US dollar obsolete, one has to remember that China has been building its financial system for years and shows no signs of stopping.

The existing Western sanctions along with threats of new sanctions are forcing China and Russia t o cooperate more strategically in what is becoming the seed o f a genuine alternative to the  dollar system. Since the 1998 sovereign default triggered by the West, Russia has been extremely cautious in all of its financial dealings, which allowed it to withstand the sanctions imposed on in by Washington in 2014, and forced the country to search elsewhere for the means of ensuring financial stability. That “elsewhere” is increasingly called the Peoples’ Republic of China.

Yuan-denominated bonds they are

Now the Treasury of Russia is planning to launch the sale of Russian debt in the form of bonds denominated in Chinese yuan. The size of the first offering, a sort of a test of the market, will barely reach 1 billion US dollars, which amounts to 6 billion yuan. The move is being accelerated by reports that the US Treasury is examining the potential consequences of extending its economic pressure on Russia. It’s curious that Turkey’s Deputy Prime Minister Mehmet Şimşek has recently announced that Ankara is going to issue bonds in rubles and yuan in 2018, as it’s been reported by the Gercek Gundem recently.

These events are unravelling against the backdrop of the undeclared economic war between the US and China, which is moving into its active phase. The United States has already formally notified the World Trade Organization (WTO) that they refuse to recognize China as a market economy and are preparing another portion of anti-dumping duties. Washington has been constantly engaged in all sorts of investigations of China’s market policies, while relying on the rules that are most commonly applied to states with non-market economies. In turn, China’s authorities are seeking ways to achieve a “market” status, in a bid to get rid of the protective duties that are hampering its goods.

Gold for oil

But China has its own ways of turning the tables back on Washington, and while those ways are not quite as straightforward, their effects can potentially be much more devastating. China keeps pushing the US dollar off the global exchange market. Earlier, Beijing achieved the inclusion of the yuan in the SDR basket and is now about to challenge the dollar as a universal means of settling for oil futures. The twist is that the futures priced in yuans are going to be convertible into gold. It should be noted that gold-backed-oil-yuan-futures can prove to be extremely attractive for investors and oil-producing countries, particularly those that possess conflicting interests with the sole remaining “superpower”. Those are, among others, Russia, Venezuela, and Iran.

The sale of yuan priced futures is aimed at decreasing the dependency of the global financial markets on the US dollar, but this process can take a while. Since the 1970s, OPEC states have been selling oil in petrodollars, which has made the transformation of petrodollars into US treasury bonds an integral component of the US economy. But from now on, oil producers will be able to sidestep dollar priced futures by choosing those futures that they can freely convert into gold. In addition, China is going to give a greater share of the market to those countries that will agree to trade oil futures in yuan, thus the biggest trading partners of Beijing are going to be forced to invest in those futures in a bid to preserve their market share. The possibility of trading oil futures for yuan, no doubt, will be very in high demand across the Eurasian economic space, as well as in several countries of Africa and Latin America. Yet, this will be enough to increase China’s influence along the path chosen for the implementation of the One Belt, One Road massive infrastructure project.

Given the great strategic importance of oil and energy resources in general, the political aspect of yuan priced futures outweighs even the economic component of this shift. Even if initially they will occupy a small margin of the market, this will mean that China is capable of undermining the global reliance on the US dollar, which lays at the very foundation of Washington’s geopolitical power. As a result, we should expect a gradual, but nonetheless imminent reduction in the global dependence on petrodollars

Martin Berger is a freelance journalist and geopolitical analyst, exclusively for the online magazine “New Eastern Outlook.”  

Political Breakthrough Possible on the Korean Peninsula

On February 10 of the current year, the reception of the delegation of DPRK (the most representative one since the Korean War) by the South Korean President, as well as the subsequent negotiations of the parties became one of the most significant events of regional and world policy of the last few years.

Future historians will only marginally report the cause for it to be a certain event from the sphere of show business entitled “The Olympic Games”. For the process launched in Seoul may well lead to (under favorable circumstances) the healing of one of the oldest and dangerous wounds on the body of modern global politics.

This process definitely far outweighs the professional sports show, which is today taking on the role of gladiatorial combats during the declining period of the Roman Empire.

However, the positive developments on the Korean Peninsula can only be expected if the main external participants remain “sidelined” until the North and South Koreans reach some sort of resolution on various issues, which together form one common “Korean problem”.

It is obvious that such a (hypothetical) resolution should more or less satisfy the above mentioned “external participants”. These include the United States, China, Russia, and Japan, which together with both the Korean countries constitute the format of “Six-Party Talks” that were interrupted in 2008.

This seems to be an ideal continuation of the process started on February 10 in Seoul, which certainly will not be implemented as some of the “external participants” are very much interested in their own vision of the situation on the Korean Peninsula and precisely “will not step aside”.

First of all, this holds true for the United States and Japan, for whom (and it is the most important moment), not the “Korean problem” but the North Korean missile and nuclear program is relevant. It should be noted that for such an approach to the situation on the Korean Peninsula, they have formal grounds in the form of the UN Security Council resolutions, which are undoubtedly violated by the DPRK.

At the same time, Washington and Tokyo do not take account of the fact that North Korean missile and nuclear program itself is a consequence of the unsettled “Korean problem”. The initial joint position of the US and Japan is as follows: firstly, it is necessary to start the process of solving the issue of missile and nuclear program and only then will it be possible to talk “about everything else” (lifting the sanctions against the DPRK, establishing trade and economic, diplomatic relations with it and etc.).

Such a position has not led to positive results. It should be noted that for Washington, the situation on the Korean Peninsula can only be considered “positive” if it allows the US to continue maintaining its military presence there.

Significantly, the first reports about the agreements between Pyongyang and Seoul to resume bilateral contacts have caused a noticeable stir both in Washington and Tokyo.

On February 3, a telephone conversation was held between Prime Minister Shinzo Abe and President Donald Trump. On February 7, Vice President Michael Pence made a stopover in Tokyo on the way to Seoul. In the course of these contacts, the allies seem to have conducted a final “synchronization of watches” regarding both the current situation on the Korean Peninsula and the negotiation strategy of each of them with the South Korean President Moon Jae-in.

The outcome of US-Japan talks consisted of two memos, one of which -addressed to the DPRK- consists in the traditional “increase of pressure” on Pyongyang until it renounces its nuclear program.

However, the second one reflects the entirely new realities that have emerged on the Korean Peninsula with the resumption of inter-Korean dialogue. There were heard the words “about the need to prevent a split” in the “USA-Japan-South Korea” configuration. It should be emphasized that the only reason for its existence is “counteracting North Korean threat”.

Then a blunder occurred that was both obvious and difficult to explain. In spite of being in a difficult (euphemistically speaking) relationship with South Korea, for some reason, the Prime Minister of Japan took the responsibility to convey the US-Japanese position to the South Korean president.

During negotiations with President Moon Jae-in, Prime Minister Shinzo Abe touched upon the topic which does not concern Japan, from a formal point of view. In particular Prime Minister Shinzo Abe interceded in favor of the resumption of the planned US-South Korean military exercises, which had been postponed for a month in connection with the holding of the Winter Olympic Games in the territory of South Korea. The answer to this initiative came in the expected form of “mind your own business“.

In the interpretation of S. Abe, the main outcome of the Japan-South Korean talks in Seoul was the confirmation of the “pressure policy” on the DPRK. However, this thesis was not reflected in the public statements of the South Korean President. Therefore, there is a certain intrigue in the matters of both the said “pressure” and the resumption of the US-South Korean military exercises.

At the same time, two important circumstances, which significantly restrict the freedom of action of the South Korean leadership towards the DPRK, should not be overlooked. Firstly, Seoul is interested (for the moment) in maintaining a military-political alliance with the United States and therefore cannot completely ignore certain planned joint activities. Secondly, let us reiterate that the DPRK is a violator of the UN Security Council resolutions, the provisions of which must be implemented by all members of this organization.

Generally speaking, the denuclearization of the DPRK can be achieved by applying various schemes. But from the standpoint of the United States and Japan, no “options” exist, but there do exist resolutions of the “world community” that have to be strictly implemented. This approach, to be recalled, has not led to any positive development as yet.

Apparently, the inter-Korean talks in Seoul seem to have initiated an alternative approach when the problem of the North Korean missile and nuclear program is plunged into the context of a more general “Korean problem”. The preference for this “succession of actions” can hardly raise doubts.

But what can happen in reality, after the phase of “Olympic diplomacy” ended with the departure of the North Korean delegation to Pyongyang on February 11? This is roughly the question asked by the Chinese newspaper Global Times.

It is important to note here that perhaps the main outcome of the negotiations was President Moon Jae-in’s acceptance of the invitation extended to him by the North Korean leader to visit the DPRK. For that, as the South Korean president puts it, “appropriate conditions must be created”.

However, it is unlikely that at present he himself has a clear answer to the question what precisely these conditions consist in. But one thing is clear for sure: in search for an answer, he will be actively assisted by “Elder Brothers” represented not only by Washington, but also by Beijing.

The illustrator for the above-mentioned article in Global Times depicted the American position in the form of “Uncle Sam” with a cudgel in his hand, viciously looking at the flying dove of peace with an olive branch in its beak.

It is possible, however, that the public “irreconcilable” rhetoric of Washington is intended to cover up a much more subtle game of American diplomacy. Pressure and sanctions against Pyongyang have also played a role in drastically changing its position.

Earlier, President Donald Trump repeatedly hinted at the possibility of Washington taking into account the interests of the DPRK in the process of solving the problem of missile and nuclear program. A somewhat similar statement was given by US State Secretary Rex Tillerson on January 17 at the Hoover Institute of Stanford University.

The process of shaping the vector of the situation on the Korean Peninsula will not take place without participation of Beijing. More precisely, the positive direction of this vector can only be achieved by harmonizing the positions of the USA and China. And it is noteworthy that only one of the many components of the problems of US-China relationship is related to the Korean Peninsula.

The complex set of these relationships was once again discussed during a visit to Washington on February 6 by Yang Jiechi – a significant member of the current Chinese power hierarchy. During his talks with R. Tillerson, a wide range of issues was discussed. But, as reported by Reuters, special attention was paid to the problem of North Korean missile and nuclear program.

“Uncertainty” is the most commonly used word while commenting on the situation prevailing on the Korean Peninsula after the resumption of the inter-Korean dialogue. Let us just hope that this time there won’t be another “blank shot” in a series of attempts to resolve the “Korean problem”.

Vladimir Terekhov, expert on the issues of the Asia-Pacific region, exclusively for the online magazine “New Eastern Outlook.”

Are America’s Hawks Any Good Against China’s Dragons?

The recent publication of the notorious “Kremlin list” that is to become the basis of yet another round of anti-Russian punitive measures planned by the White House, was empowered by the Countering America’s Adversaries Through Sanctions Act. This law proclaims Russia to be an official enemy of Washington, along with North Korea and Iran.

However, various political figures in Washington are declaring China yet another “enemy” of the United States, in addition to the above mentioned three states. Additionally, this notion can be found in the latest revision of the National Security Strategy (NSS) that was signed by President Donald Trump at the end of the last year. In this paper, China is accused of using allegedly predatory economic practices and bellicose actions in the South China Sea designed as a means of intimidation of its neighbors. Curiously enough, Washington is convinced or at least pretends to be convinced that Russia and China are “revisionist” states seeking to challenge the existing status quo that suits American interests, as stated in the NSS.

Similar notions were voiced by Trump during his annual State of the Union Address, in which he would describe both Russia and China as rivals who “challenge” the interests and values of the United States.

The Director of the CIA, Mike Pompeo was even more straightforward in his assessments, highlighting the fact that the People’s Republic of China is the principal threat to the US within the international arena. Perhaps Pompeo’s straightforwardness was prompted by the recent detention of a Chinese American, Jerry Chun Shing Lee who was employed by the CIA until 2007. The CIA believes that Lee could be responsible for numerous disappearances and murders of US agents in China in 2010-2012 and could expose the entire American intelligence networks in China and Russia to their respective governments.

Therefore, the ongoing investigation by the US Congress and the FBI has a clear goal of representing China’s posture in the world as dangerous, as this country can be characterized by its constantly growing wealth and power, as it’s been noted by The Washington Post. It’s been noted that a joint group of US intelligence agencies are studying China’s activities in the world in a bid to establish its actions beyond traditional espionage and can be described as unconventional secret operations aimed at spreading Beijing’s influence in the world.

It’s clear that the Chinese boogeyman is now an integral part of Trump’s policies he’s planning to abuse in clear hopes of staying in office until the very end of his term, and, quite possibly to try to prepare voters for his future re-election in 2020.

Today, the confrontation between Washington and Beijing can be observed across all continents. Even in Latin America, the US president will find it difficult to persuade states to align with Washigton instead of Beijing if he doesn’t stop describing local states as “shit holes”.

China’s influence in Latin America, which US Secretary of State Rex Tillerson and a number of his colleagues describe as pivotal for the United States is growing steadily. In 2000, the share of US imports to Latin American was reaching 50% out of all the good imported, now it barely reaches 33%. According to a study conducted by the Inter-American Development Bank, China’s share in Latin American imports rose from 3% to 18% over the same period of time.

In his recent speech on Washington’s policies in Latin America, Rex Tillerson tried to accuse China of attempts to drag the region into the orbit of its influence, adding that Latin America was in no need of new imperial powers. What Tillerson failed to mention was the fact that Trump was responsible for the deterioration of US-Latin American relations. According to a recent poll conducted by Latinobarómetro, Trump’s popularity rating in the region on a scale of 0 to 10 reached a record low of 2.7 points.

As La Nacion Argentina notes, while Trump insults Latin America, China is seeking ways to please local political forces. Over the past four years, President Xi Jinping has visited the continent three times, while Trump is yet to pay his first visit to Latin America. China’s Foreign Minister Wang Yi has made tours across South America twice in the last 15 months, and Rex Tillerson was to arrive to the region for the first time as State Secretary in early February. So if the US really wants to establish relations with Latin America, it needs to start promoting a positive agenda, instead of insulting its population. Against this backdrop, it’s hardly surprising that Latin American countries are willingly accepting the prospect of cooperation with the constantly smiling Chinese.

After officially declaring Beijing a threat to its interests, the White House has started preparations aimed at countering China’s influence around the world. Clearly, sanctions are on the cards, as Washington is going to try to use the scenario it has been using against Russia. It’s no secret that Washington releases reports on the observance of human rights in certain countries annually, in which China is constantly criticized. However, Beijing publishes its own reports on human rights challenges in the US, in which human rights violations are carefully observed and listed. Such criticism, as well as condemnation of China’s actions in the South China Sea, can already serve as a basis for personalized American sanctions against certain members of the Chinese establishment, along with sanctions against those Chinese companies that are interested in investing in the American market.

In fact, those have been in place already, even though they haven’t been officially announced. Washington has repeatedly criticized Chinese telecommunications companies such as Huawei and China Mobile, which were interested in expanding into the US market. Washington has simply prohibited US-based companies from cooperating with their Chinese counterparts. There’s been propositions to punish Chinese investors for their attempts to invest in port infrastructure across the United States voiced in Washington.

America’s ties with China are too tight to be broken overnight, as the trade turnout between the two states reaches 600 billion dollars. But it’s unlikely that this little fact will stop the Trump administration, as it prefers to take a triggerhappy approach over the tactics of discussions and negotiation.

Martin Berger is a freelance journalist and geopolitical analyst, exclusively for the online magazine “New Eastern Outlook.”