Southeast Asia & Pacific

The U.N. Security Council has delayed its vote on the proposed sanctions against North Korea until Wednesday, at the request of Russia.

Last week, the United States and China proposed expanded sanctions against North Korea, which include mandatory inspection of cargo leaving or entering North Korea, by sea or air. The United States and China had spent seven weeks negotiating the new sanctions in response to North Korea’s nuclear tests.

The U.N. Security Council, composed of 15 member nations, will vote on the resolutions on Wednesday. The vote was delayed after Russia invoked a procedural 24-hour review of the resolutions.  Russia has requested more time to review the lengthy text of the resolutions and consider the changes to the current sanctions.

Copyright: hypermania2 / 123RF Stock Photo
Copyright: hypermania2 / 123RF Stock Photo

The United States and China agreed on draft resolutions, which, if accepted by the United Nations Security Council, would result in increased sanctions against North Korea. The United Nations has enforced sanctions against North Korea since 2006 because of its multiple nuclear tests and rocket launches. Currently there is a U.N. embargo on arms exports to and imports from North Korea, and Pyongyang (North Korea’s capital) is banned from importing and exporting nuclear and missile technology and is not allowed to import luxury goods.

The United Nations Security Council has adopted four major resolutions since 2006 that impose and strengthen sanctions on North Korea. These resolutions are aimed at preventing North Korea from continuing to develop its nuclear weapons program, and they also call on Pyongyang to dismantle its nuclear program and refrain from ballistic missile tests.

In response to the claim in January of this year that North Korea tested a nuclear weapon, the United States and China began intense negotiations to once again strengthen sanctions against North Korea. The United States and China have reached an agreement, but to-date the text of the resolution proposed by the two countries has not been supplied to the public.  Diplomats believe that the resolutions should come before the United Nations Security Council within the coming days.

Skepticism exists as to whether the proposed new sanctions would actually curb North Korea’s nuclear program, and whether other countries would enforce the sanctions. However, if adopted, the resolutions would be legally binding.

The proposed sanctions would require countries to inspect all North Korean cargo entering or leaving a country. Additionally, 31 ships that have been identified as trafficking in illegal nuclear goods will be banned from docking in any port.  The resolutions are expected to call for the blacklisting of certain individuals and entities.  The resolutions would also prohibit countries from sending any item to North Korea that could be used by the North Korean army, like trucks that could be repurposed for military use.

Despite the new sanctions, North Korea would still be able to buy oil and sell coal and iron ore, provided that such materials are not being used to fund its nuclear weapons program, something which would be difficult to prove.

 

The Story

Asia-Pacific Region
Copyright: kgtoh / 123RF Stock Photo

After many years of negotiations, the 12 countries making up the Trans-Pacific Partnership (TPP) (Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States, and Vietnam) finally reached a trade agreement on October 4, 2015.  Note that the deal still needs to be approved by Congress (after the President gives Congress a 90 day advance notice that he intends to sign it).

Why Does it Matter?

The deal opens up trade and promotes regional integration among 12 countries that collectively produce almost half of the world’s products and services. This can have a huge impact on the global economy.

The goals of the deal are to promote economic growth; support the creation and retention of jobs; enhance innovation, productivity and competitiveness; raise living standards; reduce poverty; and promote transparency, good governance, and enhanced labor and environmental protections.  Geopolitical reasons of establishing a strong partnership in Asia to challenge China’s stronghold in the region is also certainly a motivating factor.

Key Features Of The Deal

  1. Comprehensive market access. The TPP eliminates or reduces tariff and non-tariff barriers across substantially all trade in goods and services, to create new opportunities and benefits for businesses, workers, and consumers.
  2. Regional approach to commitments. The TPP facilitates the development of production and supply chains, and seamless trade, enhancing efficiency and supporting the goal of creating and supporting jobs, raising living standards, enhancing conservation efforts, and facilitating cross-border integration, as well as opening domestic markets.
  3. Addressing new trade challenges. The TPP promotes innovation, productivity, and competitiveness by addressing new issues, including the development of the digital economy, and the role of state-owned enterprises in the global economy.
  4. Inclusive trade. The TPP includes commitments to help small- and medium-sized businesses understand the Agreement and take advantage of its opportunities.  It also includes commitments on trade capacity building, to ensure that all Parties are able to meet the commitments in the Agreement and take full advantage of its benefits.
  5. Platform for regional integration. The TPP is intended as a platform for regional economic integration and designed to include additional economies across the Asia-Pacific region.

What Does the Deal Mean for US Businesses?

  1. The deal reduces tariffs for American products traded in the TPP region and, therefore, opens up the TPP region for American products. It also makes it cheaper for American companies to purchase products from the TPP region.
  2. Expedited customs procedures for TPP members will ensure faster and easier shipment.
  3. More transparent, non-discriminatory rules for technical regulations will mean easier compliance with trade regulations for US companies.
  4. Investment in TPP countries will become easier and more transparent.
  5. E-commerce companies doing business in the TPP region will encounter fewer restrictions.