Moon Jae-In arrives for a meeting in Pyongyang

The leaders of North and South Korea are meeting in the North Korean capital Pyongyang for talks centred on the stalled denuclearisation negotiations.

Moon becomes only the third South Korean leader ever to visit North Korea.

Background

Since January 2018, Pyongyang appeared to have softened its stance, initiating diplomatic meetings. On April 27th, North and South Korean leaders Kim Jong-Un and Moon Jae-In held a historic summit, the first in over a decade. The two nations announced that they had agreed to end the 60-year Korean War and signed the Panmunjom Declaration which agreed to denuclearise North Korea. A meeting was also arranged between the North Korean leader and the US President, the first of its kind.

However, North Korea reverted to a more aggressive stance by cancelling a meeting with South Korean officials. National Security Advisor John Bolton said that the United States was looking at a 2004 “Libya model” to denuclearise North Korea. Pyongyang responded that they would “no longer be interested” in dialogue if the US was trying to push for “unilateral nuclear abandonment.” It threatened a "nuclear-to-nuclear showdown". US President Trump cancelled the summit on May 24th, due to Pyongyang’s “tremendous anger and open hostility”. However, the historic Singapore Summit was held on June 12^th and it signified a new era of diplomatic negotiations between North Korea and the US.

Analysis

Since the beginning of the year North Korea has embarked on an unprecedented path of meetings with both the South and the US. Yet talks with Washington have reached deadlock, with both sides so far agreeing only to very general goals.

South Korea has taken on a key mediating role. South Korean President Moon Jae-in and his wife Kim Jung-sook arrived in Pyongyang on Tuesday morning for the three-day visit.

They were warmly welcomed from the plane by Mr Kim and his wife, Ri Sol-ju. It's the first trip to the North Korean capital by a leader from the South in a decade.

It is Mr Moon's third meeting with the North's Kim Jong-un since their historic summit at the border in April this year. The Korean War ended in 1953 with an armistice - but no formal peace treaty was signed.

The two leaders are expected to talk about "practical measures to denuclearise" the Korean peninsula, but the specifics are not known.

When the two Korean leaders met for the first time back in April, the simple fact that they were meeting was itself a major step. This time, Mr Moon has to make real progress in persuading the North Koreans to take concrete steps in their denuclearisation pledge. The April meeting had resulted in a joint declaration to improve ties and scale down the nuclear threat.

Meanwhile, North and South Korea have held a reunion of families separated by Korea's division, and last week set up a liaison office at the border to allow direct communication 24/7.

This meeting, it is likely that they will look at steps towards further co-operation. Developing the economic relationship is expected to be a key theme, but one concrete outcome could also be a scaling-down of the military presence at their border, the heavily guarded Demilitarised Zone (DMZ).

Given the tight international sanctions on North Korea, any new economic co-operation between North and South will depend on an easing of sanctions on the North. This in turn will depend on the progress Pyongyang and Washington will make in their talks.

The US and North Korea held their own historic meeting in June when US President Donald Trump and North Korea's Kim Jong-un agreed in broad terms to work towards denuclearisation.

Counterpoint

Any future economic cooperation between North and South Korea will not be possible as the US and the UN have imposed strict sanctions on Pyongyang. President Moon will be violating the sanctions if he proposes new infrastructure or investment plans.

More importantly, Washington will not allow the lifting of the sanctions without North Korea acting on its promise of denuclearisation. A major hurdle for the next summit is that North Korea will not dismantle its nuclear facilities without the sanctions being lifted.

Assessment

Our assessment is that President Moon hopes to break an impasse in talks with the US over North’s denuclearisation and push for a reversable and permanent peace between the two countries. We also believe that President Moon will encourage business tycoons, including Samsung, to expand cross-border business projects.