Points of View

Rossoff & Company’s Points of View is a forum for industry experts, leading finance professionals and senior Rossoff & Co. professionals to provide insights and commentary on current news stories, financial market themes and industry dynamics.

  • Home
    Home This is where you can find all the blog posts throughout the site.
  • Categories
    Categories Displays a list of categories from this blog.
  • Tags
    Tags Displays a list of tags that have been used in the blog.
  • Bloggers
    Bloggers Search for your favorite blogger from this site.
Posted by on in Points of View
  • Font size: Larger Smaller
  • Hits: 4660
  • Print

Dealing With North Korea

The Trump Administration is scrambling to prepare for a possible meeting between President Trump and the leadership of North Korea, and our foreign policy experts are wringing their hands. After all, everyone knows that Trump is uninformed, undisciplined, unguided and dangerous. I’ll bet General H.R. McMaster, National Security Advisor, is having trouble sleeping. And yet, there is no doubt that this proposed meeting represents a potential foreign policy breakthrough – whether Trump deserves credit or not. Although it is possible that the harsh rhetoric and the ramped-up sanctions may have had some effect on the calculations of the North Korean leadership, many in our foreign policy establishment believe Kim Jong-Un just sees an opportunity to play our President. What could we do and what will we do? Here’s a thought.

When approaching a negotiation, an experienced dealmaker begins with an analysis of what the other side wants. The simple answer is that Kim wants to weaken the sanction alliance that is arrayed against him. He also wants to do all he can to maintain his nuclear program and the psychological pressure he exerts on South Korea and the rest of the world. Kim’s ultimate goal is to maintain his hold on power. If he can lure Trump into an Iran-like negotiation, he will come out on top.

But what if it becomes clear to Kim that Trump will never play that game? Is there a deeper need that resides within the North Korean psyche – one that we could actually exploit? Kim runs a country that is technically still at war – with South Korea and with the United States. In addition, he faces the armed forces of the world’s military superpower on his border. We maintain 35,000 troops at the Demilitarized Zone, another 40,000 in Guam and the mighty 7th Fleet permanently on patrol (50 – 70 ships and submarines, including the aircraft carrier Ronald Reagan), often just outside North Korean territorial waters. Americans – including our foreign policy experts – seem to have no concept of what this threat feels like  for the North Korean leadership and the North Korean people.

What is the purpose of all that might so close to North Korea? The answer is simple: contain North Korea and show China our commitment to defend our allies in the Pacific. But is there a move we can play? Here is what we could offer North Korea, in return for verifiable denuclearization:

  • A Peace Treaty ending the Korean War
  • Diplomatic relations with North Korea
  • Withdrawal of all US troops from South Korea
  • An end to threatening military moves near North Korea, such as joint military exercises with South Korea

Imagine the impact such a deal would have on the psychology of the North Korean leadership and people. A vast, threatening cloud that they have lived under their entire lives would be lifted. Now, our experts will tell you that this is the last thing Kim Jong-Un wants – after all, doesn’t he need the American threat to keep his people frightened and subservient to his dictatorial regime? As of now, that’s probably true – but can this psychology be changed?

The present diplomatic moment has some similarity to the meeting between Ronald Reagan and Mikhail Gorbachev in Reykjavik in 1986. The Reykjavik summit was preceded by three years of Reagan’s harsh rhetoric aimed at the Soviet Union. He stated that the Soviets would lie, cheat and steal, that they represented an “Evil Empire.” Not exactly “fire and fury,” but close. And many of us forget that Reagan was vilified as lazy, uninformed, unguided and dangerous. (We can only shudder to think what he would have done with a Twitter feed). At Reykjavik, Reagan offered to eliminate all of our nuclear weapons if the Soviets would do the same. It was an unthinkable offer, unscripted, diplomatically unprepared and screamingly denounced by the entire American foreign policy establishment. It was also a brilliant move. In his memoirs, Gorbachev claims that the Reagan offer at Reykjavik (and the refusal to give up Star Wars) was the beginning of the end of the Soviet Union.

Unlike in the Middle East, where it is hard to imagine a deal between the Israelis and the Palestinians, there is a quid pro quo that could be achieved between North Korea and the US. You give up your nukes and we make peace and withdraw our troops. If Trump were to make such a proposal, the US foreign policy establishment would become apoplectic. General McMaster would resign (but, like Gary Cohn, he’s looking for an excuse to resign anyway – before he’s fired). Everyone would claim that we had shown weakness – not only to North Korea but to China as well. And yet, nothing would change on the ground. But something would change in the minds of the North Koreans. They could end the stress of living under American military threat. They might even train a few more athletes and take part in the World Cup. A break would open in a dark psychological cloud. It might even be the beginning of the end of the North Korean dictatorship.

Rate this blog entry:


  • No comments made yet. Be the first to submit a comment

Leave your comment

Guest Wednesday, July 17, 2024