Tag Archives: Sanctions

South Korea says sanctions shrank North Korean economy at sharpest rate in 20 years

FILE PHOTO: A North Korean man is photographed from the Chinese side of the border near the town of Changbai, China as he rides a bicycle along the Yalu River in the North Korean town of Hyesan, November 23, 2017. REUTERS/Damir Sagolj/File Photo

By Cynthia Kim and Hayoung Choi

SEOUL (Reuters) – North Korea’s economy contracted at the sharpest rate in two decades in 2017, South Korea’s central bank estimated on Friday, as international sanctions and drought hit growth hard, with signs living conditions were beginning to deteriorate.

Gross domestic product (GDP) in North Korea last year shrank 3.5 percent from the previous year, marking the biggest decline since a 6.5 percent drop in 1997 when the isolated nation was hit by a devastating famine, the Bank of Korea said.

North Korea does not publish economic data, and comprehensive public figures on social conditions are nonexistent.

However, analysts believe wider sanctions last year are likely to make the economic deterioration in 2018 worse than 2017, which could add to humanitarian need in the politically isolated state.

“The sanctions were stronger in 2017 than they were in 2016,” Shin Seung-cheol, head of the BOK’s National Accounts Coordination Team said.

“External trade volume fell significantly with the exports ban on coal, steel, fisheries and textile products. It’s difficult to put exact numbers on those but (export bans) crashed industrial production,” Shin said.

Both Seoul and Washington argue that increasingly strict international sanctions imposed over North Korea’s nuclear weapon and ballistic missile program have been instrumental in leader Kim Jong Un’s decision to impose a ban on weapons testing and to negotiate with international leaders.

North Korea has called the sanctions “vicious” but rejects suggestions that the pressure led them to pursue diplomatic talks.

The situation also worsened last year with international experts fearing North Korea was facing the worst drought in 16 years, though late summer rains helped avoid acute food shortages.

North Korean leader Kim Jong Un in April vowed to switch the country’s strategic focus from the development of its nuclear arsenal jump starting his economy, but analysts say that will be difficult while sanctions remain in place.

“As long as exports of minerals are part of the sanctions, by far the most profitable item of its exports, Pyongyang will have no choice but to continue with its current negotiations with the U.S.,” said Kim Byeong-yeon, an economics professor at the Seoul National University who specializes in the North Korean economy.

U.S. President Donald Trump has said that sanctions won’t be lifted until Kim moves to give up his nuclear and missile arsenal.

INDUSTRY TAKES A HIT

North Korea’s coal-intensive industries and manufacturing sectors have suffered as the UN Security Council ratcheted up the sanctions in response to years of nuclear tests by Pyongyang.

Industrial production, which accounts for about a third of the nation’s total output, fell 8.5 percent. That marked the steepest decline since 1997 as factory production collapsed on restrictions of flows of oil and other energy resources into the country. Output from agriculture, construction industries fell by 1.3 percent and 4.4 percent, respectively.

China, its biggest trading partner, suspended coal purchases last year which cut North Korea’s main export revenue source while its suspended fuel sales into to country sparked a surge in gasoline and diesel prices, data reviewed by Reuters showed earlier.

Since then, however, fuel prices have stabilized and even dropped in recent weeks, according to a report published last week on the North Korean Economy Watch website.

“My best guess is that it’s a combination of increased smuggling, perhaps aided by China’s declining vigilance in enforcing sanctions and restrictions against illicit trade across the border,” analyst Benjamin Katzeff Silberstein wrote in the report.

North Korea’s black market, or Jangmadang, has grown to account for about 60 percent of the economy, according to the Institute for Korean Integration of Society.

“Shrinking trade first hits the Kim regime and top officials, and then later affects unofficial markets,” said Kim at Seoul National University, noting the squeeze would also be felt in household income and private consumption.

China’s total trade with North Korea dropped 59.2 percent in the first half of 2018 from a year earlier, China’s customs data showed last week.

The BOK uses figures compiled by the government and spy agencies to make its economic estimates. The bank’s survey includes monitoring of the size of rice paddy crops in border areas, traffic surveillance, and interviews with defectors.

HUMAN TOLL

Prices for food staples like rice and corn have remained stable under changing sanctions, and there are signs that a growing number of North Koreans have access to electronic appliances, often powered by solar panels, according to data gathered by the DailyNK website.

North Korean defectors in the South, however, say they hear reports of increased suffering.

“The economic status in Hamgyong area was very bad, according to my sources within North Korea,” said Kim Seung-cheol, a defector who heads the NK Reform Radio station in Seoul, referencing an area near the border with China.

“In South Hamgyong, some people died of hunger. Since trade with China fell significantly, foreign traders in the border area are suffering from poverty.”

The United Nations’ top aid official visited the country last week and said there was “clear evidence of humanitarian need.”

Other U.N. officials warn that aid groups face difficulties accessing international banking channels, transporting goods into the North Korea, while rising fuel prices hinder aid delivery.

North Korea’s Gross National Income per capita stands at 1.46 million won ($1,283.52), making it about 4.4 percent the size of South Korea’s, the BOK said.

Overall exports from North Korea dropped 37.2 percent in 2017, marking the biggest fall since a 38.5 percent decline in 1998, the BOK said on Friday, citing data from the Korea Trade-Investment Promotion Agency.

($1 = 1,137.5000 won)

(Additional reporting by Cynthia Kim,; Editing by Sam Holmes)

Trump expects ‘big results,’ including North Korea, after Putin summit

U.S. President Donald Trump speaks about his summit meeting in Finland with Russia's President Vladimir Putin at the start of a meeting with members of the U.S. Congress at the White House in Washington, July 17, 2018. REUTERS/Leah Millis

(Reuters) – President Donald Trump said on Wednesday his meeting with Vladimir Putin would lead to “big results,” in a continuing bid to calm a storm over his failure to criticize the Russian leader for Moscow’s actions to undermine the 2016 U.S. election.

In a tweet Trump said he elicited a promise from Putin to help negotiate with North Korea but did not say how. “Russia has agreed to help with North Korea, where relationships with us are very good and the process is moving along,” he said. “There is no rush, the sanctions remain! Big benefits and exciting future for North Korea at end of process!”

Russia’s RIA news agency, citing Moscow’s envoy to Pyongyang, reported on Wednesday that a summit between the leaders of Russia and North Korea is “on the agenda” and that it would be “logical” to raise the idea of lifting sanctions.

Trump met North Korea’s Kim Jong Un last month in the first meeting between leaders of the two countries, and recently received a letter from Kim expressed hope for “practical actions” in the future.

Trump had said he and Putin discussed reducing nuclear weapons worldwide.

“So many people at the higher ends of intelligence loved my press conference performance in Helsinki,” Trump said in a series of early-morning tweets about their Monday summit. “Putin and I discussed many important subjects at our earlier meeting. We got along well which truly bothered many haters who wanted to see a boxing match. Big results will come!”

Republicans and Democrats both accused him of siding with an adversary rather than his own country after he shied away from criticizing the Russian leader for what U.S. intelligence agencies say were Moscow’s efforts to undermine the 2016 election.

Instead, standing next to Putin Trump cast doubt on the agencies. On Tuesday Trump said he had misspoken and that he had complete faith in U.S. intelligence agencies and accepted their conclusions.

Trump also tweeted on Wednesday that his NATO meeting in Brussels last week was an “acknowledged triumph,” adding that his one-on-one with Putin “may prove to be, in the long run, an even greater success. Many positive things will come out of that meeting.”

(Additional reporting by Denis Pinchuk in Moscow and Alison Williams in London; Editing by Jon Boyle and Jeffrey Benkoe)

The issues on the table when Trump and Putin meet

FILE PHOTO: Russia's President Vladimir Putin talks to U.S. President Donald Trump during their bilateral meeting at the G20 summit in Hamburg, Germany, July 7, 2017. REUTERS/Carlos Barria//File Photo

MOSCOW/WASHINGTON (Reuters) – Donald Trump and Vladimir Putin will sit down in a room together in the Finnish capital on July 16 for their first summit meeting.

The U.S. president’s spontaneous approach to negotiations, and the inscrutable style of the Kremlin leader, make predicting the outcome of the summit with any accuracy close to impossible.

We do however, have a reasonable idea of the issues the two leaders and their aides will have mapped out before the meeting: the areas where they each want something from their counterpart, and the places they are willing to give ground.

Below are the issues likely to figure:

ARMS RACE RHETORIC

Both Trump and Putin have been using bellicose rhetoric about their nuclear arsenals, drawing their countries closer to a new arms race. Trump has said the U.S. nuclear capability needs renewing. He told Reuters last year, “if countries are going to have nukes, we’re going to be at the top of the pack.” Putin in March this year unveiled an array of new nuclear weapons, and warned Western governments “now they need to take account of a new reality.” An arms race would be dangerous and expensive for both sides. An agreement to scale back the rhetoric would be a win for both Putin and Trump. Progress towards extending the New Start arms treaty, which expires in 2021, would give substance to that agreement.

SANCTIONS RELIEF

Putin would like Trump to soften sanctions that Washington imposed over the annexation of Ukraine’s Crimea region and backing for separatists in eastern Ukraine, involvement in the Syrian civil war and allegations of Russian meddling in the U.S. elections in 2016. While a 2017 law bars Trump from easing many sanctions without Congress’ approval, he can offer some relief without a nod from Congress. The Republican president, who did not want to sign the law and has missed several deadlines for imposing sanctions included in it, could send a signal that the administration does not plan to expand the list of Russian firms and individuals subject to economic and travel restrictions. That would unfreeze much-needed investment and lending from international investors who, at the moment, are reluctant to commit to Russia for fear of the sanctions’ impact.

SYRIAN DEAL

Washington ally Israel is anxious that, with the conflict in Syria entering its end game, Iranian and Iran-backed forces will be left gathered around Israel’s borders. At the summit, Trump may ask Putin, the most powerful outside player in Syria since Russia’s military intervention there, to use his influence with Tehran to curb Iran’s military presence. This would be tough to deliver for Putin: it would risk a rupture with his allies in Tehran, and could leave Russian forces having to do the lion’s share of the remaining fighting in Syria, a burden that Moscow does not want to shoulder.

DIPLOMATIC TIT-FOR-TAT

Russia’s diplomatic presence in the United States, and the U.S. missions in Russia, are depleted after two rounds of tit-for-tat diplomatic expulsions in the past two years. The first was over alleged Russian meddling in the U.S. election, and the second, this year, was in response to the poisoning in England of former Russian spy Sergei Skripal and his daughter. Putin and Trump could agree in Helsinki to restore the full complement of diplomatic staff. That would not change the substance of the U.S.-Russia relationship, but it would be a symbol of a new start.

RUSSIA’S BACKYARD

Since Russia’s annexation of Crimea in 2014, the NATO alliance has stepped up military exercises in eastern Europe. The aim, according to NATO leaders, is to reassure alliance members who fear a Russian incursion. That has angered Russia. It says NATO is bearing down on its backyard. The Kremlin has likened it to Russia stationing missiles in Mexico. If Trump scaled back the exercises, that would be a big win for Putin. Two senior NATO diplomats told Reuters they are prepared for a worst-case scenario that Trump would announce a freeze on U.S. military exercises or withdraw troops from the Baltics in a gesture to Putin. At the NATO summit in Brussels that precedes Helsinki, NATO states will seek Trump’s assurances that he will stand firm on the exercises.

UKRAINIAN ALLY

Washington has stood by Ukraine’s pro-Western leaders in their stand-off with Russia. That has included the United States providing Kiev with hundreds of millions of dollars worth of military aid. Helsinki would be a triumph for Putin if he persuaded Trump to drop that military aid. Ukrainian officials say they have assurances from Trump aides he won’t do this, but acknowledge anything can happen when Trump and Putin are in a room together. In return, the Russian leader could make concessions over eastern Ukraine, where pro-Moscow separatists control swathes of territory. Diplomats say there is a deal to be done allowing armed international peacekeepers to patrol the area. However, Putin will not contemplate any concessions over Crimea.

(Writing by Christian Lowe and Mary Milliken; Editing by Gareth Jones)

Iran’s rulers face discontent as U.S. pressure mounts

FILE PHOTO: Iranian President Hassan Rouhani attends a meeting with Muslim leaders and scholars in Hyderabad, India, February 15, 2018. REUTERS/Danish Siddiqui/File Photo

By Parisa Hafezi

ANKARA (Reuters) – Mounting pressure from the Trump administration combined with discontent among many Iranians at the state of the economy are rattling the Islamic Republic, with little sign that its leaders have the answers, officials and analysts say.

Three days of protests broke out on Sunday in Tehran’s Grand Bazaar, with hundreds of angry shopkeepers denouncing a sharp fall in the value of the Iranian currency.

The disturbances are a major challenge, but analysts expect the leadership will survive despite factional infighting and growing economic problems.

However, the weekend protests quickly acquired a political edge, with people shouting slogans against Iran’s ultimate authority, Supreme leader Ayatollah Ali Khamenei, and other top officials, calling them thieves who should step down.

Bazaar merchants, mostly loyal to the leadership since the 1979 Islamic Revolution, are angry at what they see as the government’s muddled response to the crisis, which they said had sent prices soaring and made trading almost impossible.

The rial has lost 40 per cent of its value since last month, when President Donald Trump pulled out of Iran’s 2015 nuclear accord and announced draconian sanctions on Tehran.

These include an attempt to shut down the international sale of Iranian oil, Tehran’s main source of revenue, a threat that has cast a chill over the economy.

“The country is under pressure from inside and outside. But it seems there is no crisis management plan to control the situation,” said an official close to Khamenei’s camp.

The full impact of Trump’s withdrawal from the nuclear deal and Washington’s move to stop foreign countries from doing business with Iran, may not be clear for months.

European signatories are hoping to salvage the deal – under which most sanctions were lifted and Iran curbed its nuclear program – but there are doubts they can keep it alive.

Already French companies Total and Peugeot, for example, have said they will pull out of Iran rather than risk being shut out of the U.S. financial system, as Washington threatens to use the dollar’s reserve currency status to punish anyone who gets in the way of its ramped-up Iran policy.

Iran has blamed U.S. sanctions for the fall in the rial, saying the measures amount to a “political, psychological and economic” war on Tehran – although some officials recognize that the threat has exposed serious failings at home.

“Sanctions cannot be blamed for all the internal problems. They have yet to be implemented,” said a second official, familiar with Iran’s decision-making process.

To pile on the pain, Washington says all countries must end crude imports from Iran by Nov. 4, hitting the oil sales that generate 60 percent of the country’s income. Iran says this level of cuts will never happen.

 

“DEATH TO THE DICTATOR”

Tehran’s Grand bazaar is traditionally the biggest financial ally of the establishment, and it helped bankroll the 1979 Revolution.

But while cries of “Death to the Dictator” resembled chants of “Death to the Shah” four decades ago in the bazaar, analysts and insiders ruled out any chance that Iran is once more on the brink of a seismic shift in its political landscape.

“With severe economic pressure ahead of us, the protests will not die easily,” said an Iranian diplomat in Europe. “But the chance of a regime change is zero because Iranians do not want another revolution and are skeptical it would be for the better.”

Police and security forces maintained a heavy presence in the area after days of clashes with protesters. Though officials say the bazaar has resumed normal business, the rial crisis and its political reverberations are surely far from over.

Video on social media showed protests continuing in several towns and cities, with some participants demanding regime change.

While pragmatist President Hassan Rouhani’s government has tried to stop the currency slide with a combination of threats and persuasion, many Iranians remain unconvinced.

“The rial’s fall is disrupting my business. The cost of imports has skyrocketed. If it continues, I will not be able to continue my business,” said Reza, a shopkeeper in the bazaar who refused to give his full name.

Despite calls for unity by Khamenei, divisions have emerged among Iran’s ruling elite, with some hardliners calling for a snap presidential election, and criticizing Rouhani for economic mismanagement.

Factional power struggles are endemic in Iran, where hardliners around the Supreme Leader, such as the Revolutionary Guards and the judiciary, face off against the president, and pragmatists and reformists in elected institutions such as parliament.

“Both sides will try to use the combination of external and internal pressure to advance their causes,” said Sanam Vakil, an adjunct professor teaching Middle East politics at SAIS Europe.

“If the government fails to find an immediate solution to the crisis … a snap presidential election will be inevitable in the coming months,” said Tehran-based analyst Saeed Leylaz.

AN OUTSIDE CHANCE

Some analysts see an outside chance that Iran’s hardline leaders might seek an accommodation with the United States, with the prospect of sanctions bringing Iran’s economy to its knees.

But Trump may be in no hurry to embark on negotiations that might bolster Iranian clerical leaders.

The leadership “might lean toward a compromise with America to preserve the establishment”, said one official involved in Iran’s nuclear talks with foreign powers. “But of course America should show flexibility as well.”

While more pragmatic elements in Iran have indicated an interest in dialogue with America and a diplomatic solution to the standoff, Khamenei has resisted direct negotiations, partly because of internal power politics.

“Despite their radical public approach, hardliners want a compromise with America, but they don’t want to give Rouhani the upper hand at home by championing talks,” said a source, familiar with Iranian thinking.

(Writing by Parisa Hafezi; Editing by Samia Nakhoul and Giles Elgood)

Iran’s top leader says harm to economy must be punished

FILE PHOTO: Iran's Supreme Leader Ayatollah Ali Khamenei speaks in Tehran June 12, 2009. REUTERS/Caren Firouz/File Photo

By Babak Dehghanpisheh

BEIRUT (Reuters) – Iran’s Supreme Leader demanded the judiciary punish those “who disrupt economic security” on Wednesday, following protests over the rial’s collapse and a tightening of U.S. sanctions pressure that has set the arch-foes further on a course of confrontation.

Resolutely opposed to Iran’s nuclear program and its role in Syria’s war, Washington is to reimpose economic penalties on Tehran in coming months after quitting an accord in which sanctions were lifted in return for curbs on its atomic work.

This may cut Iran’s hard currency earnings from oil exports, and the prospect has provoked a flight of Iranians’ savings from the rial into dollars.

In the latest U.S. push against Tehran, a senior U.S. official said on Tuesday that countries buying oil from Iran should prepare to halt all imports of it starting in November or face punishment.

At Tehran’s Grand Bazaar on Wednesday, business was back to normal after a two-day strike had closed most shops. On Monday traders had massed outside parliament to complain about the plunge to record lows of Iran’s currency.

Reuters was unable to verify footage showing police clashing with protesters. Public demonstrations are rare in Iran but in recent months there have been several over the state of the economy.

“The atmosphere for the work, life and livelihood of the people must be secure,” Ayatollah Ali Khamenei said in a meeting with judiciary officials, according to his official website.

“And the judiciary must confront those who disrupt economic security.”

Following Washington’s withdrawal from a 2015 nuclear deal between world powers and Iran, some U.S. sanctions are due to be reimposed in August and some in November.

IMPORT COSTS RISE

This has caused the rial to collapse, threatening business by driving up the cost of imports. The rial traded at 78,500 against the dollar in the unofficial market on Wednesday, according to foreign exchange website Bonbast.com. This compares to around 43,000 at the end of last year.

U.S. Secretary of State Mike Pompeo has warned Iran it would face the “wrath of the entire world” if it pursued nuclear weapons, but added that he hoped it would never be necessary for the United States to take military action against the country.

On Wednesday, Pompeo accused Iran’s leaders of wasting the country’s resources on its proxies in the Middle East.

“It should surprise no one #IranProtests continue. People are tired of the corruption, injustice & incompetence of their leaders. The world hears their voice,” he tweeted.

Reacting to the U.S. announcement on Tuesday, an Iranian oil official said the United States’ efforts against Iran’s oil industry will fail.

“Iran exports a total amount of 2.5 million barrel per day of crude and condensate and eliminating it easily and in a period of a few months is impossible,” the oil official told the semi-official Tasnim news agency.

Trump’s attempts to deprive Iran of oil revenues raises the stakes for President Hassan Rouhani, who has attempted to appease anger over his government’s handling of the economy.

The Iranian parliament ramped up pressure on Rouhani on Wednesday by issuing a letter, signed by 187 representatives — more than half of the total– asking that the president change the economic team within his administration.

A ban on imports of over 1,300 products announced by Iran on Monday in order to prepare its economy for looming U.S. sanctions presented a big opportunity for Iranian companies, Rouhani said.

“The government’s decision to ban the import of some goods to the country with the goal of protecting Iranian goods is a very big opportunity for domestic producers,” he was quoted as saying on state media.

A senior commander of the powerful Revolutionary Guards said all Iranians were obliged to help the government cope with any financial crisis, according to Fars News.

“It is all of our duty to work together to help the respected government and other governmental branches in solving the economic problems,” General Yahya Rahim-Safavi, who is also a senior advisor to Iran’s Supreme Leader, said on Wednesday.

“We must neutralize the plans of the enemy for an economic war and psychological operations.”

(Reporting by Babak DehghanpishehWriting by Michael Georgy, Editing by Raissa Kasolowsky, William Maclean)

Vice President Pence to visit Guatemala volcano victims: White House

Rescue workers continue to search for human remains, after the eruption of the Fuego volcano, in San Miguel Los Lotes in Escuintla, Guatemala June 14, 2018. REUTERS/Luis Echeverria

By Roberta Rampton

WASHINGTON (Reuters) – U.S. Vice President Mike Pence plans to visit volcano victims in Guatemala as part of a three-nation trip at the end of the month aimed at building Latin American ties and pressuring Venezuela, a White House official said on Thursday.

Pence is scheduled to head to Brasilia during the last week of June, followed by a stop in the northern Amazonian city of Manaus, which is grappling with refugees who have fled Venezuela’s economic crisis, the official said.

Rescue workers continue to search for human remains, after the eruption of the Fuego volcano, in San Miguel Los Lotes in Escuintla, Guatemala June 14, 2018. REUTERS/Luis Echeverria

Rescue workers continue to search for human remains, after the eruption of the Fuego volcano, in San Miguel Los Lotes in Escuintla, Guatemala June 14, 2018. REUTERS/Luis Echeverria

Pence has led the U.S. diplomatic push to pressure Venezuelan President Nicolas Maduro, the socialist leader who the Trump administration blames for the deep recession and hyperinflation that have caused shortages of food and medicine in the once oil-rich

nation.

Washington has stepped up economic sanctions against individuals connected to Maduro and refused to recognize his re-election in a May 20 vote. Both countries have expelled each others’ diplomats.

Trump has considered more sanctions on services related to oil shipments from the OPEC member nation, but so far has not opted to act on those.

U.S. Vice President Mike Pence speaks before President Donald Trump during a rally with supporters at North Side middle school in Elkhart, Indiana, U.S., May 10, 2018. REUTERS/Leah Millis

U.S. Vice President Mike Pence speaks before President Donald Trump during a rally with supporters at North Side middle school in Elkhart, Indiana, U.S., May 10, 2018. REUTERS/Leah Millis

During the past year, Pence has visited leaders in Colombia, Argentina, Chile, Panama and Peru. At the end of June, he will also visit Quito, Ecuador, before stopping in Guatemala.

At least 109 people were killed by a massive eruption of Guatemala’s Fuego volcano on June 3 that buried villagers in scalding ash and left nearly 200 missing.

(Reporting by Roberta Rampton; Writing by Eric Walsh; Editing by Doina Chiacu and Bill Berkrot)

Trump, Kim agree on denuclearization, U.S. promises security guarantees

U.S. President Donald Trump shakes hands with North Korean leader Kim Jong Un at the Capella Hotel on Sentosa island in Singapore June 12, 2018. REUTERS/Jonathan Ernst

By Steve Holland, Soyoung Kim and Jack Kim

SINGAPORE (Reuters) – U.S. President Donald Trump said North Korean leader Kim Jong Un pledged at a historic summit on Tuesday to move toward complete denuclearization, while the United States promised its old foe security guarantees.

The start of negotiations aimed at banishing what Trump described as North Korea’s “very substantial” nuclear arsenal could have far-reaching ramifications for the region, and in one of the biggest surprises of the day, Trump said he would stop military exercises with old ally South Korea.

But Trump and Kim gave few other specifics in a joint statement signed at the end of their summit in Singapore, and several analysts cast doubt on how effective the agreement would prove to be in the long run at getting North Korea to give up its cherished nuclear weapons.

“President Trump committed to provide security guarantees to the DPRK and Chairman Kim Jong Un reaffirmed his firm and unwavering commitment to complete denuclearization of the Korean Peninsula,” the statement said, referring to North Korea by the initials of its official name, the Democratic People’s Republic of Korea.

The two leaders had appeared cautious and serious when they arrived for the summit at the Capella hotel on Singapore’s Sentosa, a resort island with luxury hotels, a casino and a Universal Studios theme park.

Body language expert said they both tried to project command as they met, but also displayed signs of nerves.

After a handshake, they were soon smiling and holding each other by the arm, before Trump guided Kim to a library where they met with only their interpreters. Trump had said on Saturday he would know within a minute of meeting Kim whether he would reach a deal.

Trump later told a news conference he expected the denuclearization process to start “very, very quickly” and it would be verified by “having a lot of people in North Korea”.

U.S. Secretary of State Mike Pompeo and North Korean officials would hold follow-up negotiations “at the earliest possible date”, the statement said.

Despite Kim announcing that North Korea was destroying a major missile engine-testing site, Trump said sanctions on North Korea would stay in place for now.

John Hopkins University’s North Korea monitoring project 38 North said last week North Korea had razed a facility for testing canister-based ballistic missiles.

U.S. President Donald Trump shows North Korean leader Kim Jong Un his car, nicknamed "The Beast", during their walk around Capella hotel after a working lunch at a summit in Singapore, June 12, 2018, in this still image taken from video. Host Broadcaster/via REUTERS ATTENTION EDITORS - THIS IMAGE WAS PROVIDED BY A THIRD PARTY. NO RESALES. NO ARCHIVES. BROADCASTERS: NO USE AFTER 72 HOURS; DIGITAL: NO USE AFTER 30 DAYS.

U.S. President Donald Trump shows North Korean leader Kim Jong Un his car, nicknamed “The Beast”, during their walk around Capella hotel after a working lunch at a summit in Singapore, June 12, 2018, in this still image taken from video. Host Broadcaster/via REUTERS ATTENTION EDITORS – THIS IMAGE WAS PROVIDED BY A THIRD PARTY. NO RESALES. NO ARCHIVES. BROADCASTERS: NO USE AFTER 72 HOURS; DIGITAL: NO USE AFTER 30 DAYS.

Trump said the regular military exercises the United States holds with South Korea were expensive and provocative. His halting of the drills could rattle South Korea and Japan, which rely on a U.S. security umbrella.

Trump said the exercises would not be revived “unless and until we see the future negotiation is not going along like it should”.

Earlier, Kim said he and Trump had “decided to leave the past behind. The world will see a major change”.

However, several experts said the summit failed to secure any concrete commitments by Pyongyang for dismantling its nuclear arsenal. They also noted the statement did not refer to human rights in one of the world’s most repressive nations.

TRADING FOR A PROMISE

Anthony Ruggiero, senior fellow at Washington’s Foundation for Defense of Democracies think-tank, said it was unclear if negotiations would lead to denuclearization, or end with broken promises, as had happened in the past.

“This looks like a restatement of where we left negotiations more than 10 years ago and not a major step forward,” he said.

Daniel Russel, formerly the State Department’s top Asia diplomat, said the absence of any reference to the North’s ballistic missiles was “glaring”.

“Trading our defense of South Korea for a promise is a lopsided deal that past presidents could have made but passed on,” he said.

North Korea has long rejected unilateral nuclear disarmament, instead referring to the denuclearization of the peninsula. That has always been interpreted as a call for the United States to remove its “nuclear umbrella” protecting South Korea and Japan.

People watch a TV broadcasting a news report on summit between the U.S. and North Korea, in Seoul, South Korea, June 12, 2018. REUTERS/Kim Hong-Ji

People watch a TV broadcasting a news report on summit between the U.S. and North Korea, in Seoul, South Korea, June 12, 2018. REUTERS/Kim Hong-Ji

The document made no mention of the sanctions on North Korea and nor was there any reference to a peace treaty formally ending the 1950-53 Korean War, which killed millions of people and ended in a truce.

But the joint statement did say the two sides had agreed to recover the remains of prisoners of war and soldiers missing in action, so they could be repatriated.

Trump said China, North Korea’s main ally, would welcome the progress he and Kim had had made.

“Making a deal is great thing for the world. It’s also a great thing for China,” he said.

China, which has opposed North Korea’s nuclear ambitions, said it hoped North Korea and the United States could reach a basic consensus on denuclearization.

“At the same time, there needs to be a peace mechanism for the peninsula to resolve North Korea’s reasonable security concerns,” China’s top diplomat, state councillor Wang Yi, told reporters in Beijing.

Russia’s Deputy Foreign Minister Sergei Ryabkov said the Kremlin had a positive assessment of the summit but “the devil is in the details”, the TASS news agency reported.

If the summit does lead to a lasting detente, it could fundamentally change the security landscape of Northeast Asia, just as former U.S. President Richard Nixon’s visit to China in 1972 led to the transformation of China.

But Li Nan, senior researcher at Pangoal, a Beijing-based Chinese public policy think-tank, said the meeting had only symbolic significance.

“There is no concrete detail on the denuclearization of the Korean peninsula and the provision of security guarantees by the United States,” Li said. “It is too early to call it a turning point in North Korea-U.S. relations.”

The dollar retreated after jumping to a 3-week high but global shares crept higher on news of the agreement.

Graphic: https://tmsnrt.rs/2l2UwW7

HARD NEGOTIATOR

Trump said he had formed a “very special bond” with Kim and relations with North Korea would be very different in future. He called Kim “very smart” and a “very worthy, very hard negotiator”.

Just a few months ago, Kim was an international pariah accused of ordering the killing of his uncle, a half-brother and hundreds of officials suspected of disloyalty. Tens of thousands of North Koreans are imprisoned in labor camps.

Trump said he raised the issue of human rights with Kim, and he believed the North Korean leader wanted to “do the right thing”.

Trump also said U.S. college student Otto Warmbier did not die in vain days after he was released from North Korean custody in 2017, as his death helped initiate the process that led to the summit.

“I believe it’s a rough situation over there, there’s no question about it, and we did discuss it today pretty strongly … at pretty good length, and we’ll be doing something on it,” Trump said.

During a post-lunch stroll through the gardens of the hotel where the summit was held, Trump said the meeting had gone “better than anybody could have expected”.

Kim stood silently alongside, but he had earlier described the summit as a “a good prelude to peace”.

Trump also rolled out what amounted to a promotional video starring the two leaders before the talks, which was watched by the North Korean officials on an iPad.

As the two leaders met, Singapore navy vessels, and air force Apache helicopters patrolled, while fighter jets and a Gulfstream 550 early warning aircraft circled high overhead.

Within North Korea, the summit is likely to go down well.

“Signing the joint statement would show North Korean citizens that Kim Jong Un is not a leader just within North Korea but also in international society, especially with his position equivalent to Trump,” said Ahn Chan-il, a defector from North Korea who lives in the South.

(Additional reporting by Dewey Sim, Aradhana Aravindan, Himani Sarkar, Miral Fahmy, John Geddie, Joyce Lee, Grace Lee, Matt Spetalnick and David Brunnstrom in Singapore and Christine Kim in Seoul; Editing by Raju Gopalakrishnan, Robert Birsel)

North Korea’s three new military leaders are loyal to Kim, not policies

FILE PHOTO North Korean leader Kim Jong Un inspects the construction site of the Wonsan-Kalma coastal tourist area as Kim Su-gil (3rd L), newly appointed director of the General Political Bureau of the Korean People's Army, looks on, in this undated photo released by North Korea's Korean Central News Agency (KCNA) in Pyongyang. KCNA/via REUTERS/Files

By Hyonhee Shin and Josh Smith

SEOUL (Reuters) – North Korea’s new top three military officers are known for their unquestioning support of leader Kim Jong Un and are flexible enough to accept the massive changes that may come from any deal with U.S. President Donald Trump, people who follow the secretive country say.

They replaced older, more conservative officers who have been recently sacked, according to a senior U.S. official and North Korea leadership analysts in Seoul.

As Washington pursues a negotiated end to Pyongyang’s nuclear program, U.S. officials believe there was some dissent in the military about Kim’s negotiations with South Korea and the United States, a complete reversal of the North’s pursuit of nuclear weapons and historic hostility. It was not clear if the sacked officers were responsible.

Citing an unidentified intelligence official, South Korea’s Yonhap news agency said No Kwang Chol, first vice minister in the defense ministry, had replaced Pak Yong Sik as the defense chief, while Ri Yong Gil had returned as the army’s chief of general staff in place of Ri Myong Su.

The appointments could not be immediately confirmed.

North Korean media had earlier reported that Army General Kim Su Gil had succeeded Kim Jong Gak as director of the army’s powerful General Political Bureau, one of the most senior positions in the country.

The changes are a shock because they take place so close to each other and come just ahead of the scheduled June 12 summit between Trump and Kim in Singapore.

Some analysts said Kim was replacing older officers who were wedded to the country’s nuclear doctrine with loyalists who would follow any changes he may make following the summit.

“There would be a denuclearization roadmap coming out of the summit with Trump, and it would be burdensome for Kim to have hawks who could be agitated by any desertion of the nuclear program,” said Cheong Seong-Chang, a senior fellow at South Korea’s Sejong Institute.

INSURANCE WHILE AWAY

Trump wants North Korea to “denuclearize” in return for relief from economic sanctions. Pyongyang sees its nuclear weapons as vital to its survival but Kim has said he plans to focus on economic development.

The moves are also in line with Kim’s years-long efforts to consolidate power by purging senior officers and promoting trusted younger advisers to the politburo and other core positions.

The new officers could also provide some insurance against any attempt to seize power while Kim is away at the summit, experts say.

“All these guys are Kim Jong Un people,” said Michael Madden, a North Korea leadership expert at Johns Hopkins University’s 38 North website. “Kim Jong Un is going to put people in place he can trust, who are loyal to him.”

In addition to being hardcore loyalists, Madden said the three officers were experienced in dealing with foreigners, which was seen as a plus point. But it was not immediately clear whether any of them would accompany Kim to Singapore.

Kim Su Gil, 68, is a four-star Army general who is one of Kim Jong Un’s most trusted aides, accompanying him on various military inspections and public events.

He was among those involved in the purge and execution of Kim Jong Un’s powerful uncle, Jang Song Thaek, in December 2013. Then he was tapped to lead the party’s Pyongyang chamber in early 2014, a job which Madden said was meant for “housecleaning” the administration of Jang’s confidants.

Kim’s appointment to the General Political Bureau is part of Kim Jong Un’s drive to expand the party’s control over the military, said Ken Gause, director of the International Affairs Group at CNA, a non-profit research and analysis organization based in Arlington, Virginia.

PARTY CREDENTIALS

All of the newly promoted officials are younger than their predecessors, even though they are all in their 60s.

The three were also named in May 2016 as alternate members of the ruling Workers’ Party politburo – the opaque, all-powerful governing body where top state affairs are decided.

Ri Yong Gil served as chief of staff from 2013 to 2016 until he reportedly fell from grace for a brief period, the analysts said.

In the early 2000s, Ri was commander of an Army unit that defends the perimeter around Pyongyang, a sensitive position that Gause said is traditionally “personally selected” by the leader of the country.

In March 2013, he was seen attending a late night meeting convened by Kim to order missile units on “standby” to strike U.S. and South Korean military installations after a U.S. strategic bomber flew over South Korea.

In February 2016, he was briefly demoted to deputy chief and three stars from four for an unspecified reason. South Korean intelligence officials said he had been executed for corruption and abuse of power, only to see him appear at a major party assembly as a politburo candidate three months later.

No Kwang Chol, the 62-year-old relatively less known new defense chief, previously headed the Second Economic Committee, which oversees defense production including the nuclear and missile programs.

“This is where you would send someone you could trust,” said Hong Min, head of North Korea research at the state-run Korea Institute for National Unification in Seoul.

“No is a person who has come to the fore in the Kim Jong Un era, as a up-and-coming and trusted aide. It is not strange at all if he becomes defense minister.”

(Reporting by Hyonhee Shin and Josh Smith; Additional reporting by Jeongmin Kim; Editing by Raju Gopalakrishnan)

Khamenei says curbing Iran’s missile program a ‘dream that will never come true’

FILE PHOTO: Iran's Supreme Leader Ayatollah Ali Khamenei speaks during Friday prayers in Tehran September 14, 2007. REUTERS/Morteza Nikoubazl/File Photo

ANKARA (Reuters) – Iran’s top leader said on Monday it would respond harshly to any attack and that Western demands for limits on its ballistic missile program are a “dream that will never come true”.

Tensions between Iran and the West have resurged since President Donald Trump pulled the United States out of world powers’ 2015 nuclear deal with Tehran, calling it deeply flawed.

European signatories are scrambling to save the accord, which they see as crucial to forestalling an Iranian nuclear weapons, by protecting trade with Iran against the reimposition of U.S. sanctions to dissuade Tehran from quitting the deal.

Under the deal, the Islamic Republic curbed its disputed nuclear energy program and in return won a lifting of most international sanctions that had hobbled its economy.

One of Trump’s demands – which European allies back in principle – is negotiations to rein in Iran’s ballistic missile program, which was not covered by the nuclear deal.

Iranian Supreme Leader Ayatollah Ali Khamenei again said this was non-negotiable. “Some Europeans are talking about limiting our defensive missile program. I am telling the Europeans, ‘Limiting our missile work is a dream that will never come true,” he said in a televised speech.

Trump also objected that the 2015 deal did not address Iran’s nuclear work beyond 2025 or its role in conflicts in Yemen and Syria. Though committed to the deal, European powers share Trump’s concerns and want broader talks with Iran to address the issues.

“Our enemies have staged economic and psychological … warfare against us and new American sanctions are part of it,” Khamenei told a gathering to mark the 29th anniversary of the death of Iranian revolutionary leader Ayatollah Ruhollah Khomeini.

“Tehran will attack 10 times more if attacked by enemies … The enemies don’t want an independent Iran in the region … We will continue our support for oppressed nations,” he said.

Khamenei said Iran had no intention of curbing its influence in the Middle East and urged Arab youth to stand up to U.S. pressure.

“Young Arabs, you should take action and the initiative to control your own future … Some regional countries act like their own people’s enemies,” he said in an allusion to U.S.-allied Gulf Arab states who have supported rebels fighting to topple Syrian President Bashar al-Assad, a close ally of Tehran.

(Writing by Parisa Hafezi; Editing by Mark Heinrich)

Putin signs Russian ‘counter-sanctions’ into law

Russian President Vladimir Putin answers questions from journalists during a joint news conference with Bulgarian Prime Minister Boyko Borissov following their talks at the Kremlin in Moscow, Russia May 30, 2018. Pavel Golovkin/Pool via REUTERS

MOSCOW (Reuters) – Russian President Vladimir Putin on Monday signed into law counter-sanctions legislation that was drawn up by lawmakers in response to U.S. sanctions imposed on Russia in April.

The legislation gives the president, among other things, the power to sever ties with unfriendly countries, and to ban trade of goods with those countries.

However, it has been watered down since it was first conceived by lawmakers in response to the new round of U.S. sanctions on Russian businesses.

Lawmakers initially proposed large-scale restrictions on U.S. goods and services, ranging from food and alcohol to medicine and consulting services.

The law was one of two items of legislation. In the second, lawmakers debated making it a crime punishable by jail for a Russian citizen to comply with the U.S. sanctions.

Russian and foreign business lobbies had said any such law would effectively force firms to choose between doing business with Russia and having dealings with the rest of the world.

Last month Putin said any retaliation against western sanctions must not hurt the Russian economy or partners that do business in Russia.

(Reporting by Andrey Ostroukh; Writing by Tom Balmforth; Editing by Toby Chopra and David Stamp)