China's exports thwart N. Korea sanctions

By Nicholas Kralev (Contact) | Friday, December 19, 2008

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U.N. sanctions on North Korea, imposed after it tested a nuclear device in 2006, have produced no impact, largely because China has failed to implement the measures and has increased exports of banned luxury goods to the North, according to a new report.

"Chinese exports of luxury goods to North Korea did not fall to zero in 2007" as required by U.N. Security Council Resolution 1718, which Beijing supported, said Marcus Noland, the author of the report and an expert on the North Korean economy at the Peterson Institute for International Economics. "Indeed, such exports increased between 2006 and 2007."

Mr. Noland said China, the North's largest trading partner, has avoided accountability in part because the United Nations never published an official definition or list of "luxury goods."

The resolution passed relatively quickly by U.N. standards Oct. 14, 2006, five days after Pyongyang's underground test, under Chapter 7 of the U.N. charter, which means that it relates to a threat to international peace and security and is supposed to be mandatory on all U.N. members. Besides luxury goods, weapons exports also were banned.

Implementation of the sanctions, however, was left up to individual countries. In a letter to the council a year ago, Marcello Spatafora, chairman of the U.N. sanctions committee, said 71 countries and the European Union had submitted reports on the penalties they had imposed. China's report was said to be lacking in detail and Beijing requested that it not be published, Mr. Noland said.

Using trade statistics reported by China, Mr. Noland concluded that its exports of luxury goods increased from under $50 million in 2006 to as much as $120 million in 2007.

"Before North Korea conducted an underground nuclear test, it was widely believed that such an event would have cataclysmic diplomatic ramifications," he said. "However ... no evidence is found to support the notion that these events have had any effect on North Korea's trade with its two principal partners."

The Chinese Embassy in Washington did not respond to questions seeking comment on Mr. Noland's report.

State Department officials said they had not seen the report but indicated that they would not pursue the issue. Six-nation nuclear negotiations broke down last week after the North refused to commit in writing to procedures to verify a declaration of its nuclear history it submitted in June.

Mr. Noland worked on President Clinton's Council of Economic Advisers at the White House in 1993-94. The Peterson Institute is a nonpartisan research organization.

Analysts were intrigued by Mr. Noland's report but expressed little surprise at his findings.

"I never thought that Resolution 1718 had much teeth beyond being passed unanimously," said Jack Pritchard, former U.S. special envoy for talks with North Korea. "The real question is: Why hasn't the Security Council created a mechanism to enforce a requirement for a definition of luxury goods?"

A ban on such goods is "an inconvenience for the regime," but it cannot be expected to affect North Korea's economy, Mr. Pritchard added.

North Korean leader Kim Jong-il is known for his fondness for French cognac and fine wines.

John R. Bolton, former ambassador to the United Nations and a vocal critic of the organization and negotiations with the North, said: "Nothing ever surprises me about the ineffectiveness of U.N. sanctions."

He said, however, "For a permanent member [of the Security Council] not to comply is serious," adding that China "is the only country that has leverage over North Korea."

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