Perhaps policymakers should anticipate that the United States will want to make a fundamental, positive change in its relations with North Korea. If this is the case, they will have to think about what that might mean for America’s economic policy towards Pyongyang. I start this readily admitting that I am not an Asia expert, but someone who was a working level official on Poland, Hungary, and Czechoslovakia in the State Department in 1989.
You might think I’m jumping the gun, mainly since the talks are still in-the-air. However, I recently visited the George H. W. Bush Presidential Library and reviewed documents from 1989, when the United States made a similar change in our relationship with the countries of Eastern Europe. In March 1989, the majority voice in Washington was that change would not come to the region. Nevertheless, by the end of the year, Poland, Hungary, Czechoslovakia, East Germany, Bulgaria, and Romania had thrown off their communist regimes.
Today there is an unusual added complication in an American President, Donald Trump, who is much more impulsive than George H. W. Bush was in 1989, and who takes pride in being unpredictable. To me, this argues that America and North Korea need to prepare for multiple challenges and opportunities.
Any improvement of our economic relations with North Korea will initially focus on what the U.S. will do concerning sanctions relief. If America is going to support broader United Nations sanctions relief, then Washington should try to tranche such relief to ensure America’s nonproliferation and other goals are met. The U.S. needs to keep in mind that it put sanctions in place for different purposes and should only be willing relax those when appropriate. At the same time, Washington needs to recognize that U.S. unilateral sanctions will not have sufficient economic effect (though there may be a political one). If the North Korean talks appear successful, America can expect several countries to press for sanctions relief as soon as possible.
Besides, if the change in North Korea turns out to be more fundamental, my readings at the Bush Library reminded me of two fundamental rules I hope the Trump administration would follow. I recognize here that I am – however unlikely – anticipating a miracle on the 1989 level, but here goes. First, for both budgetary and policy reasons, the Bush administration expected Poland’s and Hungary’s neighbors to provide most of the assistance. When Leszek Balcerowicz presented his program for what was called “shock therapy,” President Bush strongly supported the plan but limited our financial support to twenty percent. Given the wealth of North Korea’s neighbors, America should expect its regional allies, particularly Seoul and Tokyo, to provide the vast majority of any assistance.
Second, until the U.S. saw democratic successors to the communist regimes, Washington limited its assistance to making Poland and Hungary eligible for normal economic relations (i.e., most favored nation status, the generalized system of preferences status, eligibility for programs of the Overseas Private Investment Corporation, and eligibility for Export-Import Bank financing). For instance, the assistance programs Washington announced before Poland’s Tadeusz Mazowiecki formed Solidarity’s first government in Poland were designed to support the Polish private sector not, to prop up its communist government. After Mazowiecki formed his government and Balcerowicz presented his economic reform plan, the U.S. approach changed dramatically, as it should have, and America served as the catalyst to support Poland’s International Monetary Fund program and to encourage our friends and allies to contribute to the Polish Stabilization Fund. If a miracle does happen, Washington should limit its economic activity with North Korea in a similar fashion. America needs to recognize that it can’t impose an economic reform program on North Korea that their government or the people don’t support.
I want to be clear. I am not predicting that a miracle will happen on June 12. If the summit does occur, the more likely scenario will be a series of discussions that could lead to an agreement that the U.S. would find acceptable. However, as mentioned above, President Trump prides himself on being unpredictable. Therefore, there may be value in reminding policymakers of these lessons from 29 years ago.
John Cloud is a retired diplomat and a professor at the Naval War College. He served as U.S. Ambassador to Lithuania, Senior Director of International Economics at the NSC and twice in Poland. The views expressed are his own and do not reflect any official position of the U.S. Navy.
Image: North Korean leader Kim Jong Un shakes hands with U.S. Secretary of State Mike Pompeo in this May 9, 2018 photo released on May 10, 2018 by North Korea's Korean Central News Agency (KCNA) in Pyongyang. KCNA/via REUTERS