- The Washington Times - Monday, January 28, 2019

The Trump administration is quietly preparing a special “economic package” designed to entice North Korean leader Kim Jong-un into taking specific steps toward dismantling his nuclear weapons program when he and President Trump meet for their highly anticipated second summit.

The initiative, spearheaded by Special Representative for North Korea Stephen Biegun, has already been touted in private working-level talks with the North Koreans and involves creating a kind of escrow account to prove to Mr. Kim that the U.S. and its allies are truly committed to rewarding Pyongyang economically if it comes through on denuclearization, The Washington Times has learned.

While the State Department has not commented publicly, sources familiar with the plan say it centers on securing guarantees for billions of dollars worth of cash contributions from Japan, South Korea, the European Union and others that would go toward North Korean infrastructure and development projects.

“These are guarantees that can be waved under Kim’s nose to assure him of the pot of gold waiting for him on the other side of the rainbow,” said one of the sources, who spoke on condition of anonymity.

The efforts by Mr. Biegun, a former top Ford Motor Co. executive tapped by Mr. Trump in August to get working-level talks moving with the North Koreans, are being watched closely by regional analysts.

Several said there is a consensus within the administration about the need to “incentivize” Mr. Kim, following a lack of concrete progress on the reducing the North’s nuclear and missile arsenals after the first Trump-Kim summit last June in Singapore.

The administration has weighed the establishment of a pure cash escrow account filled with assets seized through the enforcement of international sanctions against North Korea, but there’s a catch.

Analysts say the North Korean state is so poor that such assets don’t amount to the kind of money seized in past sanctions campaigns against other rogue nations — most notably Iran.

While U.S.-led sanctions against Iran resulted in more than $1 billion of seized cash assets that were used to lure the Iranian regime into concluding a nuclear deal during the Obama administration, such assets don’t exist when it comes to North Korea.

Because of this, the “logical move for the U.S. to follow toward incentivizing Mr. Kim is to say, ‘Our allies and friends are willing to put money in a global bank account in escrow with your name on it, Chairman Kim, to be released in exchange for meaningful denuclearization steps,’” said Patrick Cronin, the head of Asia-Pacific Security at the Hudson Institute in Washington.

“What those steps ultimately are, along with how much money is actually there,” said Mr. Cronin, “are things that can then be negotiated.”

His comments underscore the uncertainty surrounding the upcoming second Trump-Kim summit, expected by the end of February but still without an announced date or venue. Critics, including some conservatives in Washington, lamented a lack of progress since the Singapore summit.

Concerns are swirling that Mr. Trump may seek some form of ad-hoc, interim deal with Mr. Kim that could involve limited sanctions relief in exchange for limited movement by Pyongyang toward abandoning its nuclear arsenal or intercontinental ballistic missiles — far short of the complete, verifiable denuclearization Mr. Trump and Mr. Pompeo set as their goal.

Incentivizing Kim

While the White House has denied that any sanctions relief will occur ahead of full and verifiable denuclearization, some in the administration have suggested Mr. Trump is eager to find ways of encouraging Mr. Kim to make a deal.

“What we need from North Korea is a significant sign of a strategic decision to give up nuclear weapons, and it is when we get that denuclearization that the President can begin to take the sanctions off,” National Security Advisor John Bolton said in an interview published by The Washington Times on Friday.

“It’s the sort of thing where the negotiation really is between the president and Kim Jong-un,” Mr. Bolton said. Mr. Trump “is prepared to engage in this negotiation.”

Enter the behind-the-scenes push by Mr. Biegun for U.S. allies to guarantee cash contributions for North Korea.

“By setting up an ability to give a substantive promise to the North Koreans in return for action, we are able to stop the problem of giving something to them for nothing,” said David Maxwell, a retired U.S. Army Special Forces colonel and North Korea expert with the Foundation for Defense of Democracies in Washington.

“It makes sense that we’re setting up a promise to provide them with what is apparently a huge amount of money and resources, but they have to take substantive action to benefit from that,” Mr. Maxwell said.

Michael Pillsbury, a long-time regional expert also at the Hudson Institute, praised Mr. Biegun’s approach at a moment when Mr. Kim himself may be facing challenges from within the regime who fear he is being “tricked by Trump.”

“Biegun is a man of action and he’s showing bold creative initiative to fill a vacuum,” Mr. Pillsbury said in an interview. “To me, it sounds like he is seeking ways to present incentives that Kim and his entourage will be persuaded by, and that’s a very creative way to seek leverage over the very black box that is Kim and his advisers.”

Tapping an old strategy

The pursuit of guaranteed contributions for North Korea from U.S. allies fits with a strategy used back in the early-1990s, when Washington and Pyongyang inked the much-derided “Agreed Framework,” under which the Kim regime vowed to freeze its nuclear program and allow international inspections.

In exchange, the Clinton administration said it would provide substantial oil shipments to Pyongyang and would back the construction of two light-water nuclear power plants in North Korea — electricity generating facilities that couldn’t be used for weapons production — to be paid for primarily by Japan, South Korea and the European Union.

“There is historical precedent for asking the Japanese, South Koreans and Europeans to contribute,” said Mr. Maxwell, although he noted the 1994 deal ultimately failed when North Korea was found to have cheated before it was fully implemented.

One source familiar with the negotiations said the largest guarantee being sought this time around is from Japan and could value several billion dollars for reconstruction and economic development investments in North Korea.

“Japan is being specifically pushed to commit what would be otherwise considered reparation money for North Korea, similar to the way that Japan paid South Korea when those two nations restored diplomatic relations,” the source said.

The Japanese reparation funds, which amounted to roughly $500 million given to South Korea in 1964, were designed to foster economic development and compensate for the brutality that marked Japan’s occupation and attempted colonization of the Korean peninsula between 1910 and the end of World War II.

If Tokyo were to now promise a similar package for North Korea, it would amount to more than $3 billion when adjusted for inflation.

Getting Japan on board

It’s still unclear whether Japan will agree to that kind of money, particularly in light of potential political hangups over the emotional, unresolved issue of Japanese citizens abducted by the North Korean regime.

“There are still a handful of these abductees known to be in North Korea — people the regime has captured and used to train North Korean intelligence services in Japanese language and culture to prepare to go spy in Japan,” Mr. Maxwell said. “This is a very sensitive issue for Tokyo. If it gets resolved, then I believe Japan would be more willing to pay reparations to North Korea.”

There are signs Japan is eager for a resolution: Japanese Prime Minister Shinzo Abe called Monday for “break[ing] the shell of mutual mistrust in order to resolve the North Korean nuclear and missile issue, and the most important issue of abduction.”

“The goal is to settle the unfortunate history with North Korea and normalize diplomatic relations,” Mr. Abe said in a speech to Parliament, according to South Korea’s Yonhap News Agency.

According to Mr. Cronin, Japan and others can be expected to offer substantial cash guarantees for North Korea if they see “serious steps” being taken by the Kim regime. If Pyongyang were, for instance, to dismantle specific missile systems that threaten the Japanese mainland, he said, “then I think Japan would be willing to promise some sizeable money.”

But Mr. Cronin stressed that talks on a specific deal are still at a very early and limited stage.

“Detailed discussions with North Korea right now have been exceedingly difficult,” he said. “I’m concerned that if the Trump administration goes into a second summit without meaningful denuclearization steps already in hand, it will be giving North Korea the advantage.”

“In the first summit, in Singapore, the president could get away with breaking the ice,” he added. “With the second summit, you don’t get that pass. If you don’t come away with something really tangible, you really look like you’re being taken for a ride by the Kim family playbook — and I think the administration knows that.”

• Guy Taylor can be reached at gtaylor@washingtontimes.com.

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