North Korea is one of the most heavily sanctioned countries in the world. It has been subject to US and international sanctions for more than 70 years. Those sanctions have come in three overlapping waves, first as a result of the Korean War, then in response to its development of nuclear weapons, and finally to roll back that nuclear program as well as activities such as counterfeiting and cyberterrorism.

These sanctions have contributed to isolating North Korea from the rest of the world. The country has not entirely welcomed this isolation. Despite longstanding suspicions of outside influences, Pyongyang has shown considerable interest in engaging with the West and with the global economy more generally. Economic sanctions have severely limited this interaction.

It’s Time to Act, Not React, on North Korea

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There is currently little political support in the United States for lifting sanctions against North Korea. Despite claims to the contrary, the Biden administration has settled into the same de facto policy of “strategic patience” adopted by the Obama administration. The new administration has not even reversed the Trump administration’s redesignation of North Korea as a state sponsor of terrorism.

In general, the US views economic sanctions as a tool of leverage to bring North Korea back to the negotiations table around its nuclear weapons program. The experience with Iran, for instance, suggests that if the pain of economic sanctions proves sufficiently high, a country will be more willing to restrict its nuclear program. Sanctions can then be reduced in a phased manner as part of a nuclear deal like the Joint Comprehensive Plan of Action.

But economic sanctions haven’t played that role with North Korea. They didn’t deter Pyongyang from pursuing a nuclear weapons program, nor have they been subsequently responsible for pushing it toward denuclearization. Unlike Iran, North Korea has been under sanctions for nearly its entire existence and it doesn’t have a strong international economic presence that can be penalized. It has been willing to suffer the effects of isolation in order to build what it considers to be a credible deterrence against foreign attack.

US sanctions policy has demonstrably failed. Is a more credible policy possible or likely?

The Range of Sanctions

There is some controversy over whether North Korea is the most sanctioned country in the world or only the fifth on the list. This debate, stimulated by a report by the Foundation for the Defense of Democracies, has revolved around a single point. If North Korea isn’t the most sanctioned country in the world, then there is room to apply even more sanctions against it.

Even if the US and North Korea have practically no interaction — no diplomatic relations, no commerce, few informal ties — some political actors in Washington would still like to pile on additional sanctions against Pyongyang. It’s unclear what purpose these additional sanctions would serve: purely punitive, one more stick to push Pyongyang back to negotiations, or an effort to precipitate some form of regime change.

Before addressing the utility of the current sanctions regime, let’s take a look at the different categories of prohibitions that the US and the United Nations have adopted against North Korea. In addition, South Korea, Japan, Australia and the European Union have imposed their own sanctions against the country.

Economic sanctions against North Korea cover trade, finance, investment and even North Korean workers in foreign countries. The earliest of these were imposed by the United States after the Korean War of 1950-53, when Washington imposed a total trade embargo on North Korea and also froze all North Korean holdings in the United States. In the 1970s, the US tightened these restrictions by prohibiting the import of any agricultural products that contained raw material from North Korea. The United States also prohibits any exports to North Korea if they contain more than 10% of US-sourced inputs. There are some minor humanitarian exemptions to these sanctions.

Between 2004 and 2019, in the wake of the failed Agreed Framework of the Bill Clinton era, Congress passed eight bills that further restricted economic and financial interactions with North Korea. On the financial side, the US has effectively blocked North Korea from participating in the American financial system but more importantly from engaging in any dollar-based transactions. Secondary sanctions target any countries that conduct business with North Korea, which further limits the country’s access to the global economy.

Because North Korea remains on the State Sponsors of Terrorism list, it does not enjoy sovereign immunity from prosecution for certain acts such as torture and extrajudicial killing. The United States is further obligated by the stipulations of this regulation to oppose any effort by North Korea to join the IMF or World Bank.

A rather lengthy list of individuals and entities have been singled out for sanctions, from high-level officials and directors of banks to trading and shipping companies to specific vessels and even non-Korean business people.

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The United States is not alone in imposing sanctions against North Korea. The UN Security Council has passed about a dozen unanimous resolutions that ban trade in arms, luxury goods, electrical equipment, natural gas and other items. Other sanctions impose a freeze on the assets of designated individuals and entities, prohibit joint ventures with these prohibited entities and restrict cargo trade with North Korea.

Japan has also imposed sanctions, largely as a result of North Korea’s missile and nuclear tests. “These measures freeze certain North Korean and Chinese assets, ban bilateral trade with North Korea, restrict the entry of North Korean citizens and ships into Japanese territory, and prohibit remittances worth more than $880,” reports Eleanor Albert.

South Korea, Australia and the EU also maintain their own sanctions against the country.

The Problems With Sanctions

Regardless of whether North Korea is in fact the most heavily sanctioned country in the world or whether there is room to levy even more sanctions against Pyongyang, the obvious conclusion is that sanctions have not worked to change the country’s behavior. If anything, sanctions have achieved the opposite effect.

In the face of a hostile international community, North Korea became ever more convinced of the necessity of building a nuclear weapons program. Once it acquired those weapons, it has decided that they represent the single most important deterrent against foreign intervention. On the economic front, North Korea has forgone the benefits of formal participation in the global economy and has developed various strategies to raise capital through black-market and grey-market activities.

North Korea also routinely evades sanctions. On the energy front alone, according to Arms Control Today’s coverage of a UN assessment, “In the first nine months of 2020, North Korea ‘exceeded by several times’ the annual 500,000-barrel cap on sanctioned imports by receiving at least 121 shipments of refined petroleum products. The panel also found that North Korea exported 2.5 million tons of coal during the same months via at least 400 shipments through Chinese territorial waters.”

The dream of a “perfect sanctions regime” that chokes off all economic interactions with North Korea is illusory as long as there are actors willing to engage the country. China, because it does not want a collapsing nuclear power on its borders, is willing to keep its fraternal ally on life support. Despite this design flaw, sanctions advocates are always coming up with a better mousetrap. They offer “smart sanctions” and “targeted sanctions” to direct punitive measures at those in power. They propose new enforcement mechanisms, like the Proliferation Security Initiative, to ensure more effective implementation of sanctions. These are often very sophisticated initiatives. But still, the mouse avoids the mousetrap.

The expectation that North Korea will eventually surrender its nuclear program or experience some form of regime change also flies in the face of the evidence of 70 years of experience. If North Korea has defied these expectations for seven decades, why should we expect that capitulation is right around the corner?

Not only have sanctions failed to achieve their intended effect — a non-nuclear North Korea, a more law-abiding regime — they have produced the opposite. In addition to acquiring nuclear weapons, North Korea has been forced to rely on obviously illegal means to generate funds — smuggling, counterfeiting, traffic in illegal products. It has further concentrated power in the military. It has been further cut off from international contacts that could potentially expose the country to other ideas and practices. The result has been a much more isolated, parochial, defensive, militaristic country.

Sanctions, in other words, have produced a vicious circle. The tighter the sanctions, the more North Korea becomes a country that requires sanctioning.

The current US approach is transactional. If North Korea promises in negotiations to behave a certain way and then follows through on its promises, the US will reduce sanctions. On several occasions, this approach has produced certain results. The US lifted certain sanctions as part of the Agreed Framework in the 1990s, then as part of the six-party talks in the 2000s. But any progress along these lines was eventually reversed.

It’s not that the logic of this transactional approach is flawed. Rather, there is a deep divide between the United States and North Korea that renders such an approach problematic.

First, there is a profound asymmetry. US sanctions policy is directed by a number of different actors — the president, Congress, the Treasury Department. And some of these sanctions follow from or otherwise contribute to international sanctions, requiring different authority for their suspension.

But North Korea is extremely hierarchical. The leader has unilateral authority to direct policy, even overruling the military if necessary (as was the case, for instance, in the promotion of the Kaesong Industrial Complex over military objections that the territory was strategic in nature and should not be given over to an inter-Korean economic project). The United States must abide by the legal requirements embedded in sanctions policy and legislation; the North Korean leader can, with a simple edict, create the law.

Second, there is a gap of trust between the two countries. Both sides have made promises that the other side argues have not been upheld. This makes any future promises that much more difficult to be believed. North Koreans generally don’t appreciate the disputes that arise between the executive and legislative branches in the United States — as they did over the implementation of the Agreed Framework provisions in the 1990s — and view the breach to be a result of bad faith rather than politics.

Third, there are certain assumptions in the transactional approach that are not shared. Essentially, the US views North Korea as a mule that can be pushed one way or another through a policy of “carrots and sticks.” Sanctions are a big stick; removal of sanctions is a big carrot.

But North Korea views itself as an autonomous, independent actor. Self-determination is one of the most important elements of the country’s ruling philosophy. It does not look kindly upon foreign entities that treat it as an unreasonable animal that must be pushed and pulled. The transactional nature of the negotiations around the country’s nuclear program fails to take into account this fiercely independent approach.

Beyond Sanctions

It is not easy to do away with US sanctions against North Korea. As Jessica Lee points out in an article for The Diplomat, “none of the economic sanctions against North Korea have a sunset clause, so they are difficult to amend or remove.” Presidential waivers are possible, but presidents are generally reluctant to invoke such waivers because of congressional pushback and the generally negative perception of North Korea in US public discourse.

The most immediate task is to consider a range of exemptions to the current sanctions to ensure that the international community can help avert a humanitarian disaster in North Korea. Even the UN special rapporteur on North Korean human rights, Tomas Ojea Quintana, has argued for such a relaxation of the sanctions regime in order to safeguard the livelihoods of ordinary citizens.

Beyond the humanitarian crisis, however, the US should consider more radical approaches to North Korea that go beyond sanctions.

Donald Trump, the former US president, was willing to consider this more radical approach, in part because he was more taken with grand gestures and foreign policy spectacles than with day-to-day political calculations. He attempted the top-down approach of engaging directly with Kim Jong Un, the North Korean leader. But Trump frankly didn’t understand the terms of engagement and, when frustrated by North Korea’s apparent lack of reciprocity, fell back on the default policy of applying even more sanctions. The virtue of Trump’s approach was that it established, at least on the surface, a measure of symmetry between the two sides: two “deciders” sweeping aside the procedural requirements to hammer out a deal. But, in the end, Trump wasn’t willing to abandon the underlying carrot-stick mentality.

No US administration has seriously considered the “Chinese option” of undertaking a break-through agreement with North Korea comparable to the Nixon-Kissinger approach of the 1970s. Such an approach would reduce and eventually eliminate economic sanctions in order to facilitate North Korea’s engagement with the global economy in the expectation that it will become a more responsible global actor, which China has in fact become (certainly in comparison to its Cultural Revolution days). Constrained by the rules of the global economy, nudged away from illegitimate and toward legitimate economic activities, and cognizant of the importance of preserving new trade ties, North Korea would still possess weapons of mass destruction — as well as a considerable conventional military — but would be less likely to consider using them.

The US took such a radical move with China in the 1970s in order to gain a geopolitical edge with the Soviet Union. It could do the same with North Korea today in order to gain some leverage over China.

The major objection, of course, is that the US would unilaterally give up a powerful tool of influence by removing sanctions on North Korea. But, as has been detailed above, sanctions haven’t been effective. Instead of more coercive sticks, perhaps the United States should consider better carrots.

To persuade North Korea to reduce its nuclear weapons program, the US should consider offering something akin to the Agreed Framework but substituting renewable energy for the civilian nuclear power plants of that deal. With Chinese and South Korean cooperation, the US could offer to help North Korea leapfrog to an entirely different economy independent of fossil fuels. It was, after all, the huge jump in energy prices in the late 1980s and early 1990s that helped to precipitate North Korea’s agricultural and industrial collapse, from which it has never really recovered. A new energy grid that eliminates the country’s dependency on imported energy would be of great interest to the leadership in Pyongyang.

The current standoff between North Korea and the rest of the world is based on two fundamental misconceptions. North Korea believes that its nuclear weapons program provides it with long-term security. And the rest of the world believes that economic sanctions will eventually force North Korea to give up that program. The two misconceptions have generated a series of failed agreements and failed negotiations.

The US, in particular, must consider instead a different kind of approach based not on bigger sticks, but better carrots that can give North Korea what it really wants: engagement with the global economy on its own terms based on a stronger and more self-sufficient domestic economy. A more prosperous North Korea that is no longer backed into a corner would be a benefit to its own citizens, to the overall security of the Korean Peninsula and to the international community more generally.

*[This article was originally published by FPIF.]

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.