N. Korea Nuclear Test Poses Sanctions Dilemma for Major Powers

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North Korea says it has successfully conducted a test of a miniaturized hydrogen nuclear device. REUTERS/Bobby Yip

By David Brunnstrom and Joel Schectman

WASHINGTON, Jan 7 – U.S. presidential candidates and members of the U.S. Congress demanded more sanctions on North Korea on Wednesday after its latest nuclear test, but major powers will likely be reluctant to take the tough steps necessary to force Pyongyang to abandon its weapons program, former U.S. officials and analysts said.

North Korea is already under a wide array of international sanctions, and diplomats said U.N. Security Council members were expected to discuss the possibility of adding to these in coming days. But steps taken so far stop short of the all-out economic offensive that forced Iran to the nuclear negotiating table.

Asia analysts said China would likely support more U.N. sanctions, even though it is North Korea’s neighbor and main ally, but within limits, for fear of destabilizing what has long been a physical buffer between it and U.S.-backed South Korea.

Washington, too, has been cautious. While U.S. sanctions have aggressively targeted Pyongyang’s military and weapons program, the United States has not imposed crippling economic sanctions, in part because these would hit Chinese firms and banks that do the vast bulk of business with North Korea, former U.S. officials said.

“We are deeply interlinked and if you hold an economic gun to China’s head, you are holding it to your own head,” said Joseph DeThomas, a former U.S. diplomat who worked on sanctions on North Korea and Iran, referring to the close economic relations between the world’s two largest economies.

Republican front-runner Donald Trump urged China to rein in its ally or face trade repercussions, while his main Democratic rival, Hillary Clinton, said the United States should tighten sanctions on North Korea and called on Beijing to be more assertive in deterring Pyongyang’s “irresponsible actions.”

U.S. State Department spokesman John Kirby said Washington would work with the international community on an “appropriate response” to Pyongyang. He said this would be “measured, deliberate, tough, clear and concise.”

An adviser to Japanese Prime Minister Shinzo Abe said Tokyo had begun discussing a new U.N. sanctions resolution with Washington.

Katsuyuki Kawai told Reuters one option for Japan itself could be to reimpose bilateral sanctions it eased in 2014 in return for North Korea’s reopening of a probe into the status of abducted Japanese citizens.

DeThomas, the former diplomat, said China could exert more pressure on North Korea by restricting energy supplies and investment in areas such as minerals and mining. It could also restrict informal border trade, or even take a different approach to North Korean refugees— allowing them in rather than shutting them out.

In 2013 China cut crude oil exports to North Korea as an apparent punishment for an earlier nuclear test.

But DeThomas said any discussions on sanctions at the United Nations would go nowhere close to the steps necessary to effect change in North Korea.

“From China’s perspective, North Korean nuclear weapons are a bad thing, but the collapse of the North Korean regime would be a worse thing,” DeThomas said.

Zhang Liangui, an expert on North Korea at the Central Party School in Beijing, which trains rising Chinese officials, said it was hard to see how effective any new sanctions would be on a country already all but isolated from the rest of the world.

“The North Korean nuclear issue has been going on for two decades now, and even with the repeated condemnation of the international community North Korea has continued to make progress on its nuclearization,” Zhang said.

NORTH KOREA SANCTIONS BILL

Republican leaders of the U.S. House of Representatives are considering a vote as soon as next week on long-delayed legislation to impose stiffer punishments on foreign companies doing business with Pyongyang, U.S. congressional sources said on Wednesday.

The bill would target banks facilitating North Korea’s nuclear program and authorize freezing of U.S. assets of those directly linked to illicit North Korean activities. It would also penalize those involved in business providing North Korea with hard currency.

A Republican congressional aide said U.S. sanctions could go even further by freezing the assets of North Korean leaders as they had targeted leaders in Belarus, Zimbabwe and Russia, or focus on money laundering as they had done in Myanmar and Iran.

Jeff Bader, Obama’s top Asia adviser during his first term, said the Obama administration had in the past discussed going after the assets of North Korean leaders. But tracking down their finances would be no easy task, said Bader, now a senior fellow at the Brookings Institution think tank.

Peter Harrell, a former U.S. deputy assistant secretary of state for counter-threat finance and sanctions, said blockading major sectors of North Korea’s economy, like textiles, could have an impact and convince Chinese firms to back away from North Korea trade. But he said the policy could backfire if it alienated Beijing or made North Korea more aggressive.

Unlike in the case of Iran, the United States has not sought to strangle regular trade between North Korea and the international community with threats to blacklist any company that does business in the country.

Washington used so-called “secondary sanctions” on Tehran that threatened to expel from the financial system any company, anywhere in the world, that bought oil from Iran. Secondary sanctions against Pyongyang have so far remained off the table.

Adam Smith, a former senior adviser at the U.S. Treasury Department Office of Foreign Assets Control, which enforces U.S. sanctions, said even the toughest steps might not change North Korea’s behavior, given its small, isolated economy.

“It’s not clear to me that if they maxed out sanctions and made it like Iran that it would make any policy difference,” he said.

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