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Trump exit prompts calls for arms control offer to Kim Jong Un

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Joe Biden has been urged by foreign policy experts to secure an arms control agreement with Kim Jong Un, a potentially radical change after decades of unsuccessful US diplomacy.

Successive administrations, from Bill Clinton to Donald Trump, have failed to stop North Korean developing nuclear and missile technology. Washington has tried everything from sweeteners such as US aid and allowing economic engagement with South Korea, to crippling economic sanctions — but all of those strategies have failed to convince the Kim regime to abandon its weapons.

North Korea now boasts between 20 and 40 nuclear warheads, stoking calls for Washington to shift its focus to arms control. This would mean tacitly accepting Pyongyang’s status as a nuclear-armed state and focusing on curbing nuclear development and avoiding use of existing weapons, rather than demanding compete denuclearisation.

Van Jackson, a former Pentagon official who advised several Democratic presidential campaigns, said Washington’s pursuit of absolute security had become an “increasingly ambitious end state” as North Korea’s weapons capability had progressed rapidly.

“North Korea is not going to give up nukes. The goal is quixotic, it is unreliable, it is unrealistic . . . How long can we do the same thing and expect a different result?” he asked.

Victor Cha, a North Korea expert who served on the National Security Council during the administration of George W Bush, has said that arms control talks should in the short-term seek to “cap and contain the most dangerous elements of North Korea’s weapons programmes”.

“Such an approach has no precedent in US negotiations with North Korea, but it does have antecedents in arms control talks during the cold war,” Mr Cha wrote in Foreign Policy last month.

To avoid accusations that Mr Biden was softening the US stance against Mr Kim, the president-elect would have to “frame” the process as interim measures toward the goal of denuclearisation.

Jessica Lee, a researcher with the Quincy Institute, a US think-tank, noted that several of Mr Biden’s picks for national security roles had already “hinted at a more strategic approach” in dealings with Pyongyang, including Michèle Flournoy, the former Pentagon official and leading candidate to become the first female secretary of defence.

“From a disarmament perspective, [it is] hard to see this leader in this regime, completely accepting nuclear disarmament — because it is their survival card,” Ms Flournoy said in a September interview with Defense News, referring to North Korea.

She added: “It’s more of a risk management challenge, in my view, realistically, even though we should keep disarmament out there as the ultimate long-term goal.”

Antony Blinken, who was named as Mr Biden’s secretary of state last week, has also touted a process similar to Barack Obama’s Iran nuclear deal — given “the fantasy that Mr Kim will hand over the keys to his nuclear kingdom”.

“The administration may find merit in an interim agreement that requires North Korea to disclose all of its programmes, freeze its enrichment and reprocessing infrastructure under international monitoring and destroy some warheads and missiles in return for limited economic relief,” Mr Blinken wrote in a New York Times op-ed days before the Trump-Kim summit in Singapore in 2018.

However, experts conceded there were stark difficulties with offering North Korea concessions. Any such policy would face hurdles in winning the support of the US Congress, which has long held a hard line on the Kim regime’s weapons of mass destruction. Verifying claims of adherence to a deal by North Korea has been impossible, given a lack of international access to the secretive state.

Soo Kim, a former North Korea analyst with the CIA, said incentives offered to North Korea should be grounded “on a set of feasible, rational expectations”, noting that Pyongyang had refused to comply with international weapons inspectors.

“Given North Korea’s past precedent in negotiations, its historical record in dealing with the US and of course its long-term strategy, I am doubtful that these short-term measures will add much value,” said Ms Kim, now an analyst at Rand Corporation, a think-tank.

Mr Biden has already signalled an end to the theatrical summits favoured by Mr Trump, who met the North Korean dictator three times over the past two years. The president-elect has also said he would only meet Mr Kim if he agreed to draw down his nuclear capability.

Still, John Delury, an Asia expert at Yonsei University in Seoul, has warned the incoming Biden administration of drifting back to the Obama era policy of “strategic patience”, during which there was little engagement between Washington and Pyongyang.

Mr Delury believes the Trump administration should be recognised for shattering the taboo of US presidents never dealing directly with the Kim regime.

“When history judges Donald Trump on North Korea he will get credit for making it possible to talk directly with the supreme leader,” he said.

“Given how the North Korean system works, if you want to make some major changes it has to be ‘top-down’, from the North Korean side.”

The rocky road of US-North Korea diplomacy

1985

North Korea joins international non-proliferation regime

1991

US removes nuclear weapons from South Korea

1992

Pyongyang and Seoul agree to denuclearise peninsula

1993

The CIA estimates that North Korea has separated enough plutonium for one or two nuclear weapons

1994

IAEA inspectors arrive in North Korea, former president Jimmy Carter visits North Korea, US and North Korea sign Agreed Framework, committing Pyongyang to freeze nuclear programme in exchange for aid

1995

US, Japan, South Korea establish KEDO, committing to build light-water nuclear reactors in North Korea

1999

North Korea agrees to missile moratorium in exchange for the easing of US sanctions

2000

Following the first inter-Korean summit, US secretary of state Madeleine Albright meets North Korea’s leader, Kim Jong Il, in Pyongyang

2001

George W Bush questions the Kim regime’s commitment to compliance and later labels North Korea as part of “axis of evil” with Iraq and Iran and introduces new sanctions

2002-2003

Pyongyang admits to running a secret uranium-enrichment programme for nuclear weapons and exits the nuclear non-proliferation treaty

2003-2009

Six Party talks, involving the US, North Korea, South Korea, Japan, China and Russia. In 2006, North Korea shocks the world with first nuclear test but in 2007 agrees to shut down nuclear facilities in exchange for aid. Talks end in 2009 after another missile launch

2009-2017

North Korea reveals its new centrifuge for uranium enrichment in 2010. Since Kim Jong Un assumed power in 2011, the country rapidly advances weapons, including three nuclear tests and 40 ballistic-missile launches in 2016 and 2017

2018-2020

After threats of “fire and fury” against North Korea, President Donald Trump meets Mr Kim in Singapore, Hanoi and the Korean Demilitarised Zone. Mr Kim adheres to self-imposed moratorium on intercontinental ballistic missile tests but continues to develop North Korea’s weapons programme. US and UN members maintain tough sanctions despite the coronavirus pandemic

Sources: Council on Foreign Relations; US Department of State; FT



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Toyota faces Thai bribery probe over tax dispute

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Toyota is under investigation in Thailand over allegations that consultants hired by the world’s largest carmaker tried to bribe local officials in a tax dispute, according to Thai authorities, court documents and a person with knowledge of the matter.

The probe followed a filing last month in which Toyota revealed that it had reported “possible anti-bribery violations” related to its Thai subsidiary to the US Department of Justice and Securities Exchange Commission.

Toyota is one of the biggest foreign investors in Thailand, where it makes a large range of cars, vans and pick-up trucks for the local market and for export. The country is Toyota’s biggest manufacturing hub in south-east Asia. Prior to the Covid-19 pandemic, car sales had been strong in a market, where it has a 31 per cent share.

This month, Thailand’s Court of Justice said in a statement that it would take action against any of its judges found to have taken bribes. The statement, which the court described as a move to “clarify facts” in a news report on a foreign website, directly referenced a tax dispute involving Toyota.

“If the Court of Justice has received information or explicitly found that any judge committed an act of corruption to their duty, whether it is about bribery or not, the Court of Justice will resolutely investigate and punish any action which dishonours judges, undermines the neutrality of the court, or causes society [to] lose faith in the Thai justice system,” it said.

According to the court, the case involved a tax dispute worth Bt10bn ($320m) between Toyota Motor Thailand and tax authorities over imports of parts for its Prius hybrid model. 

The affair dates back to 2015, when Toyota’s Thai subsidiary was accused by local customs authorities of understating taxes by claiming that the imported Prius vehicles were assembled from completely knocked down kits, or imported parts that were later assembled in Thailand.

CKDs would have been subject to a discounted tax rate under a Japanese-Thai free trade agreement, but if the cars were fully assembled before being imported they would have attracted a much higher rate. 

Toyota appealed against a decision by customs authorities to impose a higher duty in 2015, but lost. 

Thailand’s Court of Justice has said that it had accepted a petition to review the case, but had not yet begun hearing it.

In its regulatory filing last month, Toyota warned that the US investigations regarding its Thai subsidiary could result in civil or criminal penalties, but the company has not disclosed any detail on the allegations.

In a statement, Toyota said it was co-operating with the investigations and declined to comment on the tax dispute in Thailand. “We take any allegations of wrongdoing seriously and are committed to ensuring that our business practices comply with all applicable government regulations,” it said.

The SEC and the DOJ declined to comment.



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Boris Johnson cancels India trip after Covid cases surge in country

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UK prime minister Boris Johnson’s trip to India this month has been cancelled as the country battles a new variant and a surge in coronavirus cases that is overwhelming hospitals.

A joint statement by the British and Indian governments said the decision to scrap the visit scheduled for next week was prompted by the “current coronavirus situation”.

The trip, during which Johnson had hoped to discuss the prospects of a closer trading partnership with India, was initially planned to run for four days but had been scaled back. The two leaders will speak remotely instead, with plans to meet in person later this year.

The cancellation came as India’s capital city region has been put under lockdown and authorities have prohibited the use of oxygen except for essential services, as the country battles a surge in coronavirus cases that is overwhelming hospitals.

India continues to set single-day records of coronavirus cases, reporting more than 273,000 new infections and 1,619 deaths on Monday, with the number of new cases growing by an average of 7 per cent a day, one of the fastest rates in any big country.

The surge is believed to be linked to a new B.1.617 variant that was first discovered in the country.

British health officials are investigating whether the variant should be reclassified from a “variant under investigation” to a “variant of concern” following the discovery of 77 cases in the UK.

“To escalate it up the ranking we need to know that it’s increased transmissibility, increased severity, or vaccine-evading, and we just don’t have that yet, but we’re looking at the data on a daily basis”, Dr Susan Hopkins, a senior medical adviser at Public Health England, said on Sunday.

Officials in Delhi announced it would impose a strict lockdown for a week, following Mumbai and other cities that have already placed curbs on movement.

States are running short of beds, drugs and oxygen, leading the central government to restrict use of the gas. “The supply of oxygen for industrial purposes by manufacturers and suppliers is prohibited forthwith from 22/04/2021 till further orders,” the central government said.

Arvind Kejriwal, chief minister of Delhi, said “oxygen has become an emergency” in the region because its quota had been diverted to other states. He warned there were “less than 100 ICU beds” available.

The new restrictions have been imposed even as Prime Minister Narendra Modi and his ruling Bharatiya Janata party have hosted huge political rallies and allowed religious festivals attended by tens of thousands of maskless people in recent weeks.

Amit Shah, India’s home minister, told the Indian Express newspaper that he was “concerned” about the variant and the “surge is mainly because of the new mutants of the virus”. But he was “confident we will win” over the disease and said there was not yet a need to impose a national lockdown.

Bed shortages in India have forced authorities to re-establish emergency coronavirus hospitals in banquet halls, train stations and hotels that had been shut down following the previous peak in September. Crematoriums in the state of Gujarat and Delhi are running 24 hours a day, while cemeteries are running out of burial spaces.

Coronavirus patients have also been struggling to access medicines. More than 800 injections of remdesivir, an antiviral drug commonly used in India as part of Covid-19 treatment, were stolen from a hospital in Bhopal, Madhya Pradesh, at the weekend.

India is also facing a vaccine supply crunch and has frozen international exports of jabs to meet domestic demand. New Delhi pledged on Friday to increase monthly production of Covaxin, a vaccine made by Indian manufacturer Bharat Biotech, to 100m from 10m by September. The government also said last week that it would fast-track the approval of foreign vaccines in an attempt to boost supply and cleared Russia’s Sputnik V for use in the country.

The majority of the more than 120m Indians that have been vaccinated have received the Oxford/AstraZeneca jab manufactured by Serum Institute of India, the world’s largest manufacturer. The Serum Institute has struggled to increase its monthly capacity of more than 60m doses a month due to a fire at its plant earlier in the year and equipment supply shortages from the US.

Additional reporting by John Burn-Murdoch in London





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The limits of China’s taming of tech

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The record fine handed out this month to Alibaba, the Chinese ecommerce giant, was a welcome step toward combating anti-competitive behaviour. The $2.8bn penalty put Alibaba and other tech companies on notice that creating siloed fiefdoms designed to trap customers and merchants within their ecosystems will not be tolerated.

It was addressing a longstanding problem. Many of China’s ecommerce companies operate “walled gardens” that prevent interactions with rival platforms. For example, Alibaba’s Taobao ecommerce app keeps users from paying for goods using the payment app of rival Tencent. Tencent’s social media app, WeChat, prevents clips from being shared directly from ByteDance’s video-sharing app. 

Last week China’s internet and market regulators signalled the seriousness of their intent. They gave tech companies one month to fix anti-competitive practices, telling them to conduct “comprehensive self-inspections” and “completely rectify” problems, following which they would need to publicly promise to abide by the rules. The aim is create a commercially open and competitive internet.

It is tempting to argue that regulators in the west could take a leaf out of China’s book. But to hold China up as an example of competitive best practice would be to ignore the elephant in the room. Although Beijing is giving its monopolistically-minded internet companies — which are almost all private enterprises — a rap on the knuckles, it shows no sign of applying the same standards to vast swaths of the economy that have been dominated by state-owned giants for decades. 

The market dominance of these behemoths of state capitalism is an issue that affects not only domestic competitors but also foreign multinationals that operate in China. A trenchant joint paper last week from the European Council on Foreign Relations, a think-tank, and the Rhodium Group, a consultancy, took aim at the increasingly unfair advantages that this system gives China.

While it is true that China has opened up sectors such as financial services to foreign capital in recent years and allowed foreign brands to win market share in luxury goods and pharmaceuticals, broad sectors of the economy remain fully or partially closed or to overseas investors. 

Often the barriers erected to block or stymie competition are informal. Authorities can deliberately favour domestic companies in public procurement, are more ready to grant approval for licenses, subject foreign firms to arbitrary inspections or require them to re-engineer products to meet idiosyncratic domestic standards.

Such drawbacks are not new. But they are taking on an extra urgency as Chinese companies become leaders in an increasing number of industries and the country’s technological prowess draws level with the US and Europe in a list of industries. The key problem now, says the ECFR/Rhodium report, is that Chinese multinationals are using the advantage of a protected home market to build up resources that they then deploy in competition with western counterparts abroad.

This sets the scene for friction. China should extend its anti-monopolistic scrutiny from its own privately owned internet companies to several state-dominated sectors of its economy, taking care to open to foreign multinationals as much as domestic competitors. If it decides against doing this — as is likely — it will be furnishing Europeans and Americans with ammunition to argue against extending access to Chinese corporations in their own markets.



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