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Business Last Updated: Jun 15, 2018 - 10:53:19 AM


Approaching a Northeast Asian CSCE
By Garman Foreign Policy, 06/13/2018
Jun 14, 2018 - 9:22:04 AM

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Following yesterday's summit between US President Donald Trump and North Korea's Head of State Kim Jong Un, German politicians are calling on Berlin and the EU to participate in a "process of multilateral dialogue" in Northeast Asia. Berlin should launch a "German-French initiative" to intervene in the upcoming negotiations with Pyongyang, declared Hartmut Koschyk (CSU), who, has been engaged in talks in South and North Korea, for a long time. South Korea's President Moon Jae-in would be quite receptive to intensifying German-European activities on the Korean Peninsula. German business representatives are hoping for profitable deals, particularly because of the recent developments in North Korea. Having acquired the capacity of nuclear deterrence, the North Korean leadership is planning to focus the country's resources on its economic development. Since 2013, Pyongyang has established 22 special economic zones. The German Chambers of Industry and Commerce (DIHK) is demanding that Berlin promote business with North Korea through the German Development Bank (KfW) and with Hermes export credit guarantees.

 

Special Economic Zones

Should the results of yesterday's summit between US President Donald Trump and North Korea's Head of State Kim Jong Un be of duration and not fall victim to a new escalation of the conflict, they will bring the struggle for influence on the Koran Peninsula to a new level. From Pyongyang's perspective, the outcome can be seen as a success, because it will facilitate the implementation of a change of strategy, which has been in planning for years and seen as crucial. Having successfully accomplished its deterrence capability against possible US aggressions, such as those against Iraq and Libya, with nuclear warheads and long range missiles, Kim can now shift from the strategy of the past few years - a strategy of simultaneously developing the military and the economy - to focus government resources primarily on the country's economic development (Economy First policy). This strategy was adopted by the Korean Workers Party on April 20th as reported by Jae-Jung Suh, Professor of Politics and International Affairs at International Christian University (ICU) in Tokyo.[1] Kim has also established 22 "Economic Development Zones" since 2013, and hopes now for foreign investments. As Suh notes, some North Korean experts are already calling Kim Jong Un "North Korea's Deng Xiaoping."

Disarmament Talks

However, the desired investments require an end of the sanctions imposed by the United Nations on North Korea, which now can be seriously considered, with the success of yesterday's summit. The Joint Statement signed by Trump and Kim, does not include the immediate nuclear disarmament as had been demanded until now, and to which Pyongyang would not have agreed. It merely commits North Korea "to work toward complete denuclearization of the Korean Peninsula."[2] From Pyongyang's point of view, the formulation, which does not name North Korea but the Korean Peninsula, would include also the US nuclear umbrella covering South Korea. Both sides also committed themselves to "join their efforts to build a lasting and stable peace regime on the Korean Peninsula." Trump announced a stop to the joint military exercises with South Korea, as a first step and is expecting initial steps toward disarmament from North Korea. "The sanctions will come off when we are sure that the nukes are no longer a factor."[3] His administration will now continue negotiations with Pyongyang. Everything will depend on their success.

With German Participation

Here is where German politicians come in. The Trump administration will not be able to implement all aspects of the agreement reached yesterday in Singapore by itself, says the former CSU parliamentarian Hartmut Koschyk, who has been engaged in talks with both South and North Korea for many years, as Chair of the German-Korean Forum and Honorary President of the German-Korean Society, and who is still engaged in German relations to the Korean Peninsula. To make progress, Washington will "need the Chinese, the Russians, Japan but above all South Korea" observes Koschyk. This is an opportunity for resuming the six-party talks.[4] They could develop "into something like a Northeast Asian version of the Conference on Security and Cooperation in Europe (CSCE), where also others can participate," to transform this newly initiated development "into a permanent process of multilateral dialogue."[5] Berlin had spoken of a Northeast Asian CSCE already years ago. (german-foreign-policy.com reported.[6]) Koschyk is calling for "a German-French initiative" that will immediately take up the issue of how to become "involved in this Northeast Asian process." South Korean President Moon Jae-In "sketched out his policy of rapprochement toward North Korea in a speech held last year in Berlin, shortly before the G20 Summit in Hamburg," recalls Koschyk. "He wants Europe and Germany to become more closely involved in this process." That is "a good opportunity." Yesterday, Foreign Minister Heiko Maas reiterated that Berlin is "ready," to do everything possible "to support" the negotiation process around North Korea's nuclear and missile programs.[7]

In the Starting Blocks

Representatives of Germany's business community are also speaking up. They hope to be able to invest in one of North Korea's 22 special economic zones or be otherwise able to do business with that country. Trump claims he showed Kim a promotional film during their talks in Singapore, where, for example, US car and airplane manufacturers touted their products. "German businesses also hope that, through the peace process and a political rapprochement, there will be an opening of North Korea's markets," declared Volker Treier, head of the foreign trade sector of the German Chambers of Industry and Commerce (DIHK). Many of the nearly 500 German companies doing business in South Korea are, "in principle, in their starting blocks." Even if concrete business possibilities have not yet appeared on the horizon, international credit institutions, such as the World Bank, are already elaborating plans for financing foreign investments in North Korea. Berlin should think about how to energetically support German companies' North Korea businesses, for example with aid from the German Development Bank (KfW) or with Hermes export credit guarantees (ECG).[8]

Doing Business in North Korea

In fact, in a stampede for North Korea's business opportunities, German companies may be able to profit from a special advantage. The FDP-affiliated Friedrich Naumann Foundation has been advising Pyongyang during its preparations for economically opening the country, already since 2002, holding various workshops on "economic modernization" and similar themes for this highly insulated country. These were accompanied by symposiums and other conferences on the theme "Doing Business in North Korea." (german-foreign-policy.com reported.[9]) In the course of their activities in Pyongyang, Naumann Foundation representatives have established contacts within the national economic bureaucracies, which could pay off in many cases, if the country opens up.

 

[1] Jae-Jung Suh: Kim Jong Un's Move from Nuclearization to Denuclearization? Changes and Continuities in North Korea and the Future of Northeast Asia. In: The Asia-Pacific Journal. Volume 16, Issue 10, Number 2. 15.05.2018.

[2] Joint Statement of President Donald J. Trump of the United States of America and Chairman Kim Jong Un of the Democratic People's Republic of Korea at the Singapore Summit. June 12, 2018.

[3] Press Conference by President Trump. whitehouse.gov 12.06.2018.

[4] An den Sechs-Parteien-Gesprächen nahmen Nordkorea, Südkorea, China, Russland, Japan und die Vereinigten Staaten teil.

[5] "Der Erfolg hat viele Väter". deutschlandfunk.de 12.06.2018.

[6] See also Nordostasien-KSZE.

[7] Außenminister Maas zum Gipfeltreffen zwischen Donald Trump und Kim Jong Un. Pressemitteilung des Auswärtigen Amts. Berlin, 12.06.2018.

[8] Deutsche Wirtschaft hofft nach Trump-Gipfel auf Chancen in Nordkorea. trend.at 12.06.2018.

[9] See also Lying in Wait.


Source:Ocnus.net 2018

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