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INTERNATIONAL > East Asia & Pacific

US pushes for toughest sanctions yet on North Korea

  • September 7, 2017
  • , Nikkei Asian Review
  • JMH Summary

SEOUL — In light of North Korea’s latest nuclear test, the U.S. is pushing for fresh international sanctions on the rogue state’s oil supply, overseas workers and apparel exports — measures that will require Chinese cooperation both to pass the United Nations Security Council and to be effective.

 

North Korean exports fell 24% on the year in January-June to $844 million, according to the South’s Industrial Bank of Korea. Coal exports plunged 50%, after the Security Council imposed new restrictions in November and China halted imports from the North in February. The North’s exports are expected to drop even further in the second half of the year, owing to full bans on coal, iron ore, lead and seafood imports from the country issued in August.

 

Apparel and labor are two of the few sources of income Pyongyang has left. Much of the clothing that North Korea exports is made using Chinese textiles and shipped back to China, generating an estimated $50 million to $100 million in net income a year for the North.

 

North Korea is working to grow this trade, as shown by a 56% year-on-year jump in textile imports in the six months ended June. But fresh sanctions could throw a wrench into its plans.

 

Restrictions on its laborers abroad would also deal a blow to the North. The country currently has up to 147,600 workers in foreign countries, according to estimates by the Seoul-based Korea Institute for National Unification. China is home to the largest number — up to 80,000. Workers are each apparently required to remit $7,000 of their annual pay to the state, which would add up more than $1 billion for North Korea each year.

 

The August sanctions resolution banned countries from increasing the number of North Korean citizens working within their borders, but placed no restrictions on existing ones. As with apparel, the UN Security Council shied away from measures that would have hurt Chinese companies, but it is now expected to go further.

 

Turning off the spigot

The biggest debate concerns cutting off North Korea’s oil supply. China is said to pipe about 500,000 tons of crude oil to North Korea every year, while Russian President Vladimir Putin has acknowledged that his country also ships petroleum to the North.

 

The oil is refined mainly to fuel cars, ships and aircraft. North Korean industry relies heavily on coal, so restricting the supply of oil will not significantly impact factory activity, according to Yang Moon-soo, a professor at the University of North Korean Studies in Seoul. But an oil embargo would deal a powerful blow to the North Korean military’s ability to deploy planes and other vehicles. Pyongyang already avoids flying its military jets because of a fuel shortage.

 

China so far has opposed such extreme measures, worried that the resulting unrest could send a wave of North Korean refugees to its border. But Beijing is also trying to avoid a confrontation with the U.S. ahead of the twice-in-a-decade Communist Party congress coming up in October. Many expect Beijing to make some concessions this time around.

 

North Korea conducted its sixth nuclear test on Sunday, in defiance of the August sanctions. “Enough is enough,” U.S. ambassador to the UN Nikki Haley told the Security Council shortly afterward. Washington is pressing Beijing for action with the goal of passing a new resolution on sanctions Monday.

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