Synopsis of the CSIS/Asan Seminar: “Iran Nuclear Deal and its Implications for North Korea,” December 11, 2013, Washington, DC, CSIS

The seminar, co-organized by the CSIS and the Asan Institute, brought together prominent experts from the United States and South Korea for a timely discussion about the implications of the Iranian nuclear deal for North Korea. As the introduction by Hahm Chaibong, the president of the Asan Institute, made clear, despite the fragility of the Iranian deal it still represents significant progress in achieving denuclearization in contrast to North Korea. As he noted, the Iranian deal caused some envy in South Korea and induced reflection about the differences between these two cases. This seminar delved into these differences in some detail, focusing on both the effectiveness of current sanctions in halting the DPRK nuclear program and the prospects for reaching a deal with it.

The discussion about North Korea and Iran was not all framed around the dichotomy of failure versus success. Some speakers cautioned against high optimism about Iran, arguing that it is premature to claim success, while the representative from the United Nations argued that despite the negative international perceptions, sanctions against North Korea did work to some extent in slowing down its nuclear programs. He noted, for instance, that financial sanctions on North Korea are now comparable to those on Iran and have had some influence on the regime. Overall, however, the participants concurred that while the comparison is not entirely black and white, it is important to analyze why sanctions appeared to work better in the case of Iran than for North Korea.

Comparing Iran and North Korea

The first point of comparison that featured in the discussion concerned the nature of sanctions themselves. Unlike North Korea, the sanctions against Iran were commensurate with the nature of the threat. The participants noted that Iranian sanctions were more binding and more comprehensive. In contrast to North Korea, where sanctions mainly target the industries related to the military establishment, in the case of Iran they target key civilian sectors of the economy, including oil and gas industries. Military equipment only constitutes 15-20 percent of North Korea’s exports, whereas the export of cigarettes, drugs, and contraband, which make up a significant proportion of its revenue, are not effectively targeted by the sanctions regime. The UN representative responded to this apparent discrepancy by noting that direct proof of the presence of links between the export of these items and the DPRK’s development of nuclear weapons would need to be presented in order to alter the sanctions regime. On the whole, the presenters agreed that the sanctions against North Korea have been insufficient, with some speakers even arguing that they showcased the regime’s immunity against sanctions rather than served to halt its nuclear ambitions. At the same time, it was mentioned at the seminar that countries are not required to report on how well the sanctions are working, which makes it challenging to estimate their effectiveness. This issue, common to both North Korea and Iran, is something to be cautious about as we continue to analyze sanctions in comparative perspective.

Beyond the apparent difference between the sanctions imposed on Iran and North Korea and the immediate technical explanations behind them, most of the discussions centered on the comparability of the two cases. The important differences that emerged from the discussion concern their economic and political characteristics, as well as the nature of their nuclear programs, and the external factors at play, namely the presence of an external threat and the detrimental influence of China in the case of North Korea.

As for economic differences, Iran’s larger, more diversified, and globally interconnected economy makes it an easier target for economic sanctions. Its dependence on oil sales, which are traded on international markets, makes it more sensitive to sanctions. In contrast to Iran, North Korea’s economy is small, closed, and difficult to target. Some speakers did point out, however, that this might change if the DPRK leadership took its calls for reforming the economy seriously. Economic development would require some diversification of the economy and more international linkages.

The two political systems also, while both highly repressive, significantly differ from one another. Iran’s regime, which allows for national elections, is more pluralistic, and thereby more sensitive to public opinion than that of North Korea. Iran’s regime is wearier of a potential domestic uprising as a result of sanctions. As noted during the Q&A session, Iran’s political system also has more international linkages. Young Iranians have access to diverse news sources and are more aware of how their domestic conditions compare to international standards. Most North Korean citizens, in contrast, continue to live in the most closed political system, largely unaware of the relative incompetency of their regime.

The presenters and discussants also carefully pointed out that it is important to contrast the aims of their nuclear programs, as well as the international legal norms under which the two programs are being developed, and their relative transparency. As argued by one of the presenters, Iran’s ultimate goal is to develop the capability to produce nuclear weapons when it would need them, whereas North Korea’s goal is that of immediate nuclear armament. This makes Iran better positioned to make some concessions, at least in the short-term. Another participant linked these different perceptions of nuclear programs to the larger strategic visions of the two regimes. Whereas Iran’s greater hegemonic ambition in the Middle East and in the Gulf means that it needs to mainly project its capacity to obtain nuclear weapons to exert influence, North Korea’s lack of larger strategic vision translates into its absolute dependence on nuclear weapons for survival, making the latter a more dangerous case with which to deal.

The international legal norms with regard to nuclear programs also facilitate Iran’s compliance. As noted by one of the speakers, Iran can persist in developing its nuclear arsenal so long as it does so in accordance with international regulations. In the case of North Korea, however, the international regulations in place call for its complete abandonment of nuclear programs, including those claimed to be developed for peaceful purposes. The legal norms, therefore, make it easier for Iran to make concessions on what it already has, whereas the stakes for North Korea in doing so are much higher.

Moreover, the more transparent nuclear programs in Iran make it easier for the international community to reach a deal. As one of the presenters argued, whereas in the case of Iran there is some confidence about the effective implementation of a nuclear freeze, in the case of North Korea relieving sanctions in exchange for a freeze on nuclear facilities would be meaningless, as undeclared nuclear activities are likely to continue to operate. North Korea, therefore, would need to declare its nuclear programs more openly in order for an effective deal to be reached. Given the scarce information any outside analysts have about domestic developments in North Korea, it is difficult to make any solid predictions about its regime, not to mention its nuclear programs.

Finally, two external factors influence the effectiveness of sanctions in the two cases. First, the degree of military threat facing Iran or North Korea should it cross a red line differs between the two. Iran faces such a threat from an Israeli preemptive attack if not from one by the United States. North Korea does not face a military threat except as a defensive response. With South Korea vulnerable to enormous destruction and North Korea already in possession of nuclear weapons, there is a sharp contrast in the military pressure applied in the two cases.

Second, North Korea has significant support from a major power, China, which compromises the effectiveness of the international sanctions. The China factor featured either directly or indirectly throughout the discussion. Unlike Iran, which became isolated from outside economic assistance, North Korea continues to receive aid from China. As one of the presenters noted at the start of the session, the theory on economic sanctions states clearly that sanctions are ineffective if the target country can get alternative sources of funding, which is the case with North Korea. China’s importance as a market and a transit point for North Korea’s exports of contraband items, like cigarettes and fake currency, further signifies that any international efforts are dependent on China’s involvement. Some speakers also expressed a degree of mistrust about Beijing’s intentions vis-a-vis North Korea, noting that while China exudes a cooperative stance, its interactions with North Korea are ambiguous. Following North Korea’s latest testing of nuclear weapons, for instance, the flights between Beijing and Pyongyang significantly increased. As we discussed in our synopsis of the Asan Beijing Forum, Beijing’s continuous emphasis on North Korea’s stability alongside its denuclearization limits the potential for international sanctions to influence the DPRK regime. One of the presenters noted that the international message to the DPRK thus far appears to be that “we would be grateful if you would denuclearize, but don’t worry about your stability if you don’t.” China’s involvement, according to another presenter, has made the UN resolutions against North Korea “harmless and toothless.” Little progress can be made, therefore, if China does not step up its pressure on the DPRK.

Looking Ahead

As for steps ahead, some presenters called the Iran deal a “wake up call” in dealing with North Korea. Raising the “insurance premium” for North Korea was stressed as a vital step in shifting its strategic calculus in developing nuclear programs. The DPRK should face a choice of regime survival versus nuclearization rather than continue to believe it can combine the two objectives in the future. In putting more resolute pressure on North Korea, China’s role remains key. During the Q&A session there was a clear divergence between the perspectives of the Chinese government and that of the US and ROK allies. A Chinese embassy representative stressed that the importance of dialogue is one of the key lessons learned from the Iran deal. She argued that resolving differences could be an objective for the Six-Party Talks, rather than a precondition for them taking place. This comment incited strong reactions from the American and South Korean participants, who argued that while dialogue is important there has been nothing but dialogue in dealing with the DPRK and that its the tougher measures that would scare the regime into taking the international pressure more seriously. The recent execution of Jang Song-Thaek, who maintained good ties with China, might sway China towards a harsher stance against North Korea, some at the seminar cautiously hoped.

Suggestions were put forward for stepping beyond the UN sanctions and Six-Party Talks and making agreements amongst Japan, South Korea, and the United States before going to the United Nations, as well as for individual countries concerned to take separate measures and not wait for the consensus building required there. There was also a sense of discouragement about restarting Six-Party Talks if all they would produce are watered down sanctions against the North Korean regime. Some presenters particularly emphasized that the United States can do more than just blame China, such as present new legislation modeled after the Iran sanctions and incorporate sanctions on shipping and new punishments on entities that do business with North Korea. A suggestion was also put forward, however, for the United States to engage more with the DPRK, as the recent purge might signal the regime’s attempt at distancing itself from China and of seeking alternative negotiation channels. The United States for now does not appear ready for such engagement.

The seminar also pointed to an important and yet often neglected concern about the linkages between the development of nuclear programs in Iran and in North Korea. While the two cases were largely considered as separate from one another, some participants pointed to the potential exports of weapons and technology from the DPRK to Tehran, possibly via Syria, which could compromise the success of the recent nuclear deal with Iran, not to mention the potential for achieving one with North Korea. One of the participants pointed to the high volume of air cargo between Tehran and Pyongyang, as well as between Tehran and Beijing, uncovered by Wikileaks. At present, the UN resolution’s references about air traffic are not nearly as detailed as those with regard to sea traffic. A proposition for the ROK and United States to propose specific references about Tehran-Pyongyang air traffic to be included in the UN resolution gained some traction among the participants. Beyond learning from the Iran example, therefore, one of the steps forward might be to better monitor and restrict the exchanges between Tehran and Pyongyang.

Looking back at the one-day seminar, we can point to further comparisons to be carried out in the future. Specifically, the presence of a comprehensive plan for strategic action in Iran, but not in North Korea deserves further analysis. Here, the China factor plays a crucial role. While various discussions pointed to the importance of China, more analysis on China’s intensions vis-a-vis North Korea is needed in order to understand whether and how China could be persuaded to put more pressure on Pyongyang. We need more analysis of central level policies and motivations, but also of those at the local level. China’s regional authorities, for instance, might play a role in supporting the North Korean regime, by condoning border trade of drugs and fake currency. We also need further analysis on alternative solutions to the North Korean crisis in case China does not cooperate. The idea of coordinating tougher sanctions among Washington, Seoul, and Tokyo could be teased out in more depth. The discussion did not explain how this would work if China is determined to thwart an approach bypassing it and the Security Council. Finally, the role of Russia, another key participant in the Six-Party Talks, was not addressed at the seminar. A comparative analysis on Russia’s policies vis-a-vis Iran and North Korea, but also on how its approach to North Korea plays into its larger regional objectives, especially in relation to China, is important to consider in future discussions.