MS Risk Blog

South Korea Warns More Provocative Acts by North Korea in mid-October

South Korea last month indicated that it expects more provocative acts by North Korea this month, noting that they are likely to coincide with the anniversary of the founding of the North Korean communist party and China’s all-important Communist Party Congress.

During a meeting with President Moon Jae-in late last month, national security adviser Chung Eui-yong disclosed that he expected Pyongyang to act around October 10 and 18, however he provided no further details. Park Wan-ju, a lawmaker and head spokesman of the ruling Democratic Party, disclosed that the South Korean security adviser’s report also pointed to the risk that a military conflict could be sparked by “accidental incidents.” He added that “the president said the United States speaks of military and diplomatic options, but South Korea can’t go through war again.” He also sated that President Moon told the meeting that Washington and Seoul agreed that pressure needed to be applied to North Korea, with the door to talks still open. Asked if China had a plan to respond to an emergency in North Korea, such as securing nuclear and missile sites, Chinese defense ministry spokesman Wu Qian disclosed, “military means cannot become an option,” as he urged talks to resolve the issue. He added, “the Chinese military will make all necessary preparations to protect the country’s sovereignty and security and regional peace and stability,” without elaborating.

Meanwhile in a separate speech late last month, South Korean president Moon stated that cooperation with the international community to curb the North’s nuclear ambitions was at its highest ever. He further called for the strengthening of South Korea-US defences to rein in the North. South Korean lawmakers have also disclosed that national security adviser Chung had told them that the US and South Korea had agreed on the rotational deployment of US strategic assets to South Korea, possibly as soon as year-end. The nature of the assets however was not specified. The lawmakers further disclosed that President Moon added that it was inappropriate to discuss the deployment of nuclear weapons in South Korea. Moon stated that he had opposed the deployment of US Terminal High Altitude Area Defense (THAAD) system in South Korea, but rapid improvement in North Korea’s missile capabilities prompted the decision. China opposes the deployment of THAAD because it believes that its powerful radar could be used to look inside its territory. South Korea and the US have stated that it is only to curb North Korea’s missile threats.

China has vowed to uphold UN sanctions against North Korea, besides seeking to get stalled talks restarted with Pyongyang. Late last month, China’s commerce ministry disclosed that North Korean firms or joint ventures in China would be close within 120 days of the latest United Nations Security Council sanctions, which were passed on 12 September. The ministry further disclosed in a statement on its website that overseas, Chinese joint ventures with North Korean entities or individuals will also be closed. The statement however did not provide a timeframe. The ministry had issued similar rules after a previous set of UN sanctions in August.   Expulsion of North Korean diplomats has been amongst the measures that countries have taken against the reclusive state since its latest nuclear test. Malaysia has banned citizens from travelling to North Korea, citing the escalating tension on the Korean peninsula.

In recent weeks, tension on the Korean peninsula has risen as North Korea’s leader Kim Jong Un and US President Donald Trump exchanged war-like threats and insults over the North’s nuclear and missile development programme. The North has accused President Trump of declaring war after the US leader warned that Kim’s regime would not last if he persisted in threatening the United States and its allies, having earlier warned North Korea would be totally destroyed in such an event.   Pyongyang conducted its sixth and largest nuclear test on 3 September and has launched dozens of missiles this year as it accelerates a programme aimed at eventually targeting the United States with a nuclear-tipped missile. The United States and South Korea are technically still at war with North Korea as the 1950 – 1953 Korean conflict ended with a truce and not a peace treaty.

France’s President Seeking Joint Defense Force

The French president this month called for a joint European Union (EU) defense force as part of his vision for the future of the bloc.

Setting out a series of reforms for the EU, French President Emmanuel Macron has proposed greater cooperation on security and the fight against terrorism. In a major speech at the Sorbonne University in Paris, President Macron stated that he wanted the EU to boost its common defense systems and have “autonomous capacity for action” through a joint military force. He further called for a shared defense budget and common police, and stated that a European training academy should also be created.

In his other key proposals, President Macron stated that the EU should:

• Strengthen borders and protect the “sovereignty” of member states against uncontrolled migrant flows – speeding up asylum applications and helping countries where immigrants come from to stabilise their economies;
• Set up a single, EU-wide tax on financial transactions;
• Forge a common policy on sustainable development by harmonising subsidies for green technology and introducing a bloc-wide carbon tax;
• Reform the Common Agricultural Policy, by making it more flexible and less bureaucratic;
• Set up a European agency to encourage the emergence of “champions” in digital technology.

President Macron disclosed that “Europe as we know it is too weak, too slow and too inefficient,” noting however that “…only Europe can give us the means to act on the world stage as we tackle the great challenges of the day.”

While President Macron came to power in May promising to strengthen the eurozone and deepen EU integration ahead of Brexit, his plans face new hurdles in the wake of Germany’s election earlier this month, which resulted in a rise of the eurosceptic Alternative for Germany (AfD) party. While Angela Merkel was re-elected for a fourth term as chancellor, amidst falling support, the nationalist AfD party won its first seats in the German parliament.

President Macron is now pressing other EU leaders, including Angela Merkel, to work with him. However, Germany’s election results effectively mean that the Chancellor Merkel will now try to form a government that is likely to include the Free Democratic Party (FDP), whose leader is an outspoken critic of President Macron’s European agenda.

North Korea: Russia Warns of ‘Catastrophic Consequences’ If Conflict Erupts

Russia this month warned of ‘catastrophic consequences’ if a military conflict were to erupt on the Korean peninsula, as tensions escalate further, with China also warning that there will be “no winners” if war breaks out.

The statements come after further escalations between the United States and North Korea. Over the weekend, North Korea announced that Washington had declared “war”, with the country’s Foreign Minister Ri Yong-ho telling reporters on Monday that “the whole world should clearly remember it was the US who first declared war on our country.” His comments were a response to a tweet from US President Donald Trump suggesting that North Korea would not “be around much longer” if its leaders continued their rhetoric. US warplanes also flew close to North Korea’s coast in a show of force over the weekend, which prompted North Korea’s foreign minister to say as he left New York after the UN General Assembly that his country had the right to shoot down US warplanes even if they were not in North Korea’s airspace.

The US however has disclosed that the statement from North Korea accusing Washington of declaring war on it was “absurd,” with the White House further warning Pyongyang to stop provocations after it said it had the right to shoot down US bombers. A US spokesman has disclosed that the fiery talk could lead to fatal misunderstandings. On Monday 25 September, White House spokeswoman Sara Huckabee Sanders stated that the US had “not declared war against North Korea and frankly the suggestion of that is absurd.” Meanwhile Pentagon spokesman Col. Robert Manning reacted by saying that “if North Korea does not stop their provocative actions, you know, we will make sure that we provide options to the president to deal with North Korea.”

As tensions between the US and North Korea continue to rise, regional countries have increased their warnings about the potential of this exploding into a full on war on the Korean peninsula. South Korea has called for a level-headed response, warning that accidental clashes in the region could quickly spiral out of control. The country, which technically has been at war with North Korea since the 1950s, called for “astuteness and steadfastness” in responding to what it describes as continued provocations by Pyongyang. Speaking in New York, South Korea Foreign Minister Kang Kyung-wha called for he prevention of any “further escalation of tensions, or any kind of accidental military clashes in the region, which can quickly spiral out of control.” According to South Korea’s news agency Yonhap, the country’s intelligence service has reported that Pyongyang was readjusting the position of its military aircraft and strengthening its coastal defences.

Russia has also stated that Washington’s approach to North Korea was a dead end, a statement made by the country’s foreign ministry after the US dispatched bomber jets to South Korea last weekend. The ministry’s Mikhail Ulyanov disclosed that the country was working “behind the scenes” to find a political solution, however he admitted that the use of sanctions against North Korea is almost exhausted. China also echoed Russia’s concerns, stating that war on the peninsula would have “no winners.

Latest Brexit Talks:Progress But Not Enough to Open Trade Discussions

The latest round of Brexit talks have ended, with top negotiators disclosing late last month that the European Union (EU) and Britain made progress in the latest round, though not enough in order to move to the next phase of discussions on a transition period after Brexit or a future trade agreement.

Speaking to reporters, chief EU negotiator Michel Barnier disclosed “we have had a constructive week, yes, but we are not yet there in terms of achieving sufficient progress. Further work is needed in the coming weeks and months,” though he praised a “new dynamic” which was created by concessions made last week by British Prime Minister Theresa May. Barnier highlighted two key areas of disagreement. Firstly, on citizen’s rights, he welcomed a confirmation from his British counterpart, Brexit Secretary David Davis, that the withdrawal treaty guaranteeing the rights of 3 million EU citizens in Britain should have “direct effect” in British law – effectively, Britain cannot change them via new legislation. The EU however continues to demand that people also have the right to pursue grievances at the EU’s own court. Secondly, Barnier disclosed that Britain had clarified that an offer by Mrs May that the other 27 states should not lose out financially from Brexit during the current EU budget period concluding at the end of 2020 would cove payments only in 2019 and 2020. That, he said, was not enough. Commitments agreed in the current budget also lead to outward payments in subsequent years. Further on the money issue, which both sides say has become the most intractable, Barnier disclosed that Britain had yet to specify which commitments it would honour after Mrs May stated that it would do so. The EU has estimated that Britain will owe tens of billions of euros to cover outstanding liabilities. Barnier added, “for the EU, the only way to reach sufficient progress is that all commitments undertaken by the 28 are honoured by the 28.” Davis declined to put a figure on what Britain might pay.

Meanwhile Davis disclosed that they had made “considerable progress” in four days of talks in Brussels. He further repeated his eagerness to move on to discuss what happens after Brexit in March 2019.

Mrs May had hoped that a speech she made in Florence, Italy late last month would unblock the three-month-old talks and pave the way for the EU to open discussions on a post-Brexit free trade deal by allowing Barnier to tell EU leaders that there is “sufficient progress” on three key “divorce” issues – rights for expatriate citizens, the northern Irish border and how much Britain owes.

The two sides are due to meet again in just over two weeks, on 9 October. Were Barnier to judge that they have made “sufficient progress” – a deliberately vague term set by the EU 27 – he would be in a position to recommend to leaders at a summit on 19 – 20 October that they let him launch trade talks. However he has already warned that it could be “several months” before talks move on to discussions about trade.

UK Prime Minister Calls for Brexit Transition Period in Speech in Florence

On Friday 22 September, British Prime Minister Theresa May tried to rescue stalled Brexit talks and set out a vision for future ties with the European Union (EU) in a speech in the Italian city of Florence.

Britain is scheduled to leave the EU in March 2019 after a shock referendum result that has triggered more than a year of political turmoil, put business leaders on edge and sent the sterling plummeting. The most complex set of European negotiations to take place since the end of World War Two have effectively pitted London against Brussels over how to unravel over forty years of economic and political integration. However after three months of negotiations, talks have stalled between the UK and EU members, as a number of points have frustrated the two sides. Friday’s speech was aimed at breaking the deadlocks, with talks resuming on Monday. So far, the two sides have not reached an agreement on issues of the rights of EU and UK citizens, the financial settlement or the Irish border issue.

On Friday, Prime Minister May set out proposals for a two-year transition period after Britain leaves the EU. She further disclosed that she wants existing EU market access arrangements to apply during that period and promised that Britain would pay its “fair share” into the EU budget, adding that the UK will be the “strongest friend and partner” of the EU after Brexit. The deal she has proposed could include payments worth 20 billion euros (about 18 billion pounds) over the two years. The PM also proposed a “bold new strategic agreement” on security co-operation. On trade, she stated that the two sides could do “so much better” than adopt existing models and that there was “no need to impose tariffs where there are none now.”

In the wide-ranging speech, the British Prime Minister also stated:

• A “period of implementation” – potentially of two years – should be agreed “as early as possible”
• That the UK was prepared to “honour commitments we have made” – a reference to financial commitments.
• And that it would continue to make “an ongoing contribution” to projects it considers greatly to the EU and UK’s advantage, such as science and security projects
• She wanted a “bold new security relationship” with the EU, which would be “unprecedented in its depth”
• That the UK did not want to “stand in the way” of closer EU integration, as outlined by Jean-Claude Juncker.

While the 20 billion euro offer is meant to ensure that no EU countries are left out of pocket by Britain’s departure, it is not part of the “divorce bill” covering the UK’s outstanding debts and liabilities to the EU, which still have to be agreed with EU negotiations – effectively meaning that the final bill for Brexit could be far higher.

Mrs May’s speech has received mixed reviews, with many stating that they need more clarity from Britain in regards to what they want.

Brexit Secretary David Davis, who is taking part in the fourth round of Brexit talks in Brussels, stated that Mrs May has shown “leadership and flexibility” in her Florence speech and given reassurances on financial issues. However the EU’s Brexit negotiator, Michel Barnier, called for a “moment of clarity” from the UK. Speaking in Brussels, Mr Barnier stated that he was “keen and eager” for the UK to translate the “constructive” sentiments in Mrs May’s speech into firm negotiating positions on issues such as citizens’ rights, the Irish border and financial issues, including the UK’s so-called divorce bill. Remarking that has already been six months since the UK triggered Article 50, he stated that progress on these three fronts was essential to allow talks to move on to the future of the bilateral trade relationship, as the UK would like.