Is Korean Unification Possible?

The outset of 2015 has seen a spate of new developments on and around the Korean peninsula. However, the interests of Washington and Seoul are subtly out of synch. The Sony hacking was a major watershed in the history of cyberwarfare: a highly-destructive attack on an iconic Japanese company operating on US soil. The Obama administration felt compelled to respond with new sanctions.

By contrast, the administration South Korean President Park Guen-hye has been struggling since her inauguration to get Trustpolitik off the ground, with only marginal success to date. Following Kim Jong Un’s New Year’s speech—which dangled the prospect of a North-South summit—the mood in Seoul turned more conciliatory.

Given this divergence—and the fact that the president is entering the final stages of his term—it is highly unlikely that the Obama administration is in a position to take any new initiatives with respect to the North Korean question. As a result, if anything is likely to happen over the next two years, the initiative will need to come from Seoul.

A useful place to start would be to take a bolder move: to openly lift the sanctions imposed after a North Korean submarine sank the Choenan, a South Korean patrol corvette with the loss of more than 40 lives. However, President Park’s initiative will need to forge a path back to a consideration of the larger security environment, including nuclear weapons. As always, the success of such an effort will depend on the response of the Kim Jong-un regime. But at this juncture South Korea is the only party capable of taking risks. Kim Jong-un’s last two New Year’s speeches have both held out an olive branch to the South while accusing the United States of continuing to divide the peninsula. This year, however, there were a few departures in the speech that appeared hopeful. First, there were veiled references to reform, particularly in the state-owned enterprise sector.

But more importantly, the speech showed open concern for the renewed discussion of unification following President Park’s March 2014 Dresden speech, in which she said a reunited Germany could serve as a model for the Koreas. In essence, Kim’s speech made an open plea for détente—and arguably from a position of weakness–backed by one of the most explicit proposals to date: that suspended high-level contacts should resume, that sectoral talks could take place, and—most striking—that “there is no reason why we should not hold a summit meeting if the atmosphere and environment for it are created.”

Although American commentary on the speech was generally negative, the reaction in Seoul—and from both sides of the political aisle—was positive. The question as always was how to move forward. President Park has argued for a strategy of starting small. While holding out the promise of larger projects down the road, trust requires initial mutual steps.

But which concessions to make at the outset is not obvious. Expanding the Kaesong industrial park seems unwise in the wake of last year’s shutdown. Opening Mt. Kumgang to tourism leaves dangling the question of security at the site, not to mention the fact that the South Korean investment has effectively been expropriated. Even giving aid raises questions; humanitarian assistance should be given as needed, not as part of a political bargain.

The most obvious place to take a bold step is to lift the May 24 sanctions. These sanctions on commercial trade sent a strong signal to the North, but they had the perverse effect of shutting down the only truly commercial relations between the two Koreas. Following the imposition of these sanctions all trade and investment ran through the artificial enclave of Kaesong. Lifting the sanctions returns to an important concept introduced by the late President Kim Dae Jung: “the separation of politics and economics.” The idea behind this concept is that if private actors see opportunities to trade and invest, they should do so without the government either blocking or supporting their efforts.

The separation of economics and politics reduces the opportunity for Pyongyang to play its standard game of blackmail. If the North wants to cut off trade and investment for political reasons—as it did in Kaesong in 2013—the costs fall entirely on the firms involved and on the North, not on the South Korean government and taxpayers. Second, an expansion of the so-called general trade and processing-on-commission activities outside of Kaesong would have wider spillover effects on the North Korean economy than Kaesong.

In particular, it would create opportunities for South Korean firms to interact directly with North Korean ones, even if state-owned. Finally, lifting of sanctions would allow the Park administration to make progress in its broader Eurasian strategy of opening transportation corridors through the North, particularly by allowing initiatives through Rason.

Washington’s current strategy is more narrow: to offer a modest increase in aid for progress on family reunions. The focus on family reunions is indeed warranted; it is an outrage that North Korea continues to hold these relations hostage. But lifting the March 24 sanctions would be a bigger and more obvious step, particularly given the emphasis that the Kim Jong Un regime has placed on sanctions as a barrier to political progress.

The challenge, however, is to maintain a focus not only on North-South exchanges but on the broader security environment. If high-level talks can in fact be resumed, they should include military-to-military and defense ministers’ talks that would address concrete confidence-building measures, particularly along the Northern Limit Line.

Unfortunately, North Korea has responded to the current opportunity in its tried-and-true fashion: by making further progress on North-South relations conditional on a cessation of joint US-ROK exercises, and offering nothing in return. It is a very bad idea to subject US-South Korea defense policy to a North Korean veto, and this invitation was rightly rejected. It is also highly possible that Kim Jong Un is either unwilling or unable to deliver on his own promises, holding the exercise issue as his excuse to say no.

But for the political reasons outlined—as well as the change in control of Congress—the US is not in a position to make any offer to North Korea beyond what is currently on the table: a return to the Six Party Talks in exchange for some demonstration from Pyongyang of seriousness of intent. President Park, by contrast, has already promised talks without conditions, asking only for attention to the family reunions. At this juncture, a bolder move by South Korea is likely to be the only route forward on the peninsula.

Stephan Haggard is a political science professor at the University of California, San Diego. This is published with permission of the East Asia Foundation