Wednesday, 7 March 2018

A Korean diplomatic breakthrough is followed by American sanctions

One abiding principle of the American empire is that peace never be given a chance to break out.

US Imposes More Sanctions On North Korea Despite Diplomatic "Breakthrough"

Zero Hedge
6 March, 2018

Barely 12 hours after a "breakthrough" report that North Korean leaders might be willing to shut down their nuclear program and surrender their existing nukes in exchange for assurances that the regime's safety would be guaranteed, the State Department announced that it would impose yet another round of economic sanctions on the North - its second batch of sanctions within the span of two weeks, per Reuters.

MORE: State Department says it imposes additional sanctions on North Korea over assassination

The sanctions are being levied because the US has obtained solid evidence that North Korean leader Kim Jong Un ordered the assassination of his older half-brother, Kim Jong Nam, who was murdered in 2017 at an airport in Kuala Lampur when two young female assassins exposed him to a nerve agent, the US has determined.

View image on Twitter

JUST IN: U.S. State Department says U.S. has determined that North Korean government used chemical warfare agent VX to assassinate half-brother of Kim Jong Un in Malaysia in 2017

MORE: State Department says it imposes additional sanctions on North Korea over assassination

State Department spokesperson Healther Nauert made the announcement in a press release.
"The United States determined under the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991 (CBW Act) that the Government of North Korea used the chemical warfare agent VX to assassinate Kim Jong Nam, in the Kuala Lumpur airport," Nauert said on Tuesday. These sanctions are in addition to the existing sanctions against targeting unlawful North Korean activities. The sanctions took effect upon this determination in the federal register on March 5, 2018. The United State sstrongly condemns the use of chemical weapons in carrying out assassinations. This public display of contempt against universal norms of chemical weapons use further demonstrates the reckless nature of North Korea and underscores that we cannot tolerate a North Korean WMD program."

Pyongyang has repeatedly denied allegations that it was involved in the murder. Two of the assassins were caught by Malaysian police and convicted. When asked about the reports of a possible breakthrough in US-North Korea relations, President Trump sounded noncommital, repeatedly responding '"we'll see what happens."

Meanwhile, Vice President Mike Pence released a statement saying the US wouldn't back down from its demands that the Korean peninsula be denuclearized.
Whichever direction talks with North Korea go, we will be firm in our resolve. The United States and our allies remain committed to applying maximum pressure on the Kim regime to end their nuclear program. All options are on the table and our posture toward the regime will not change until we see credible, verifiable, and concrete steps toward denuclearization.
From earlier

Breakthrough: North Korea Ready To Denuclearize "If Regime Safety Is Guaranteed"

6 March, 2018

Score another diplomatic victory for Trump, whose hard line negotiating tactic appears to have generated a dramatic - and favorable for market - outcome. Moments ago futures spiked, 10Y yields jumped and the USDJPY bounced about 106 on what the FT dubbed a "diplomatic breakthrough" that North and South Korea have agreed to hold direct talks between their leaders with North Korea signalling it is willing to abandon its nuclear program "if regime security can be guaranteed."

The headlines come from South Korean National Security Office special envoy Chung Eui-yong, who is speaking to reporters in Seoul after returning from Pyongyang. Remember he and another envoy, National Intelligence Service chief Suh Hoon met North Korean leader Kim Jong Un in Pyongyang on Monday. Chung confirms that North Korea is indeed ready to stop the jawboning and negotiate:
  • Kim Jong Un open to frank talks with U.S. for denuclearization: Chung
  • North Korea to suspend provocations during talks: Chung
  • Promises not to use any weapons against South Korea: Chung
Next step: a summit in April between the two neighbors where details will be ironed out: "North Korea, South Korea agree to hold summit in April", Chung says. Pyongyang vowed not to test any ballistic missiles or make further provocations during talks, according Chung clarified.

The easing of tensions between the two Koreas and this clearly positive geopolitical development has triggered a broad based risk-on move. Fixed income is selling off sharply here, with Bunds flying. As the spot KRW market is closed, the NDF space is in focus. The 1m NDF has traded from 1076.0 to 1070.8 at time of print. USDJPY is spiking higher at 106.10 at print. This move may have legs especially as early NY begins to come in

I personally think the line that this is a foreign policy ‘win’ for Trump (he never wanted diplomacy) is a load of bollocks. I would put it down to an agreement between the North and the South.

BREAKING: North and South Korea to hold summit, talks of ‘denuclearization’ on the table

The summit between the two Korea’s will take place in the village of Panmunjom in April, just south of the border between the two Koreas, according to the Yonhap news agency.

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