Explainer: What will it cost for complete denuclearization of North Korea?

U.S. President Donald Trump shakes hands with North Korean leader Kim Jong Un at the Capella Hotel on Sentosa island in Singapore in this picture released on June 12, 2018 by North Korea's Korean Central News Agency. KCNA via REUTERS/File Phot

VIENNA (Reuters) – At a summit in Singapore in early June with U.S. President Donald Trump, North Korean leader Kim Jong-Un pledged to “work toward complete denuclearization of the Korean Peninsula”.

Follow-up talks between U.S. Secretary of State Mike Pompeo and North Korean officials are due to be held, and Trump said last week, “It will be a total denuclearization, which has already started taking place.”

Assuming denuclearization of North Korea does take place, what would it look like and how much would it cost?

WHAT DOES DENUCLEARIZATION MEAN?

That is far from clear and may have different meanings for each side.

The exact form denuclearization takes will depend on negotiations. North Korea may seek to continue some nuclear activities with possible civilian uses like uranium enrichment, as Iran is able to do under its deal with major powers.

For Washington, however, denuclearization means at least eliminating the threat posed by North Korea’s nuclear weapons. That requires removing or dismantling existing weapons, shutting down the program that makes them, and limiting or eliminating Pyongyang’s ability to enrich uranium and produce plutonium, another key ingredient in atomic bombs.

It would also most likely require restricting or eliminating North Korea’s ballistic missile programs.

KNOWN AND UNKNOWN UNKNOWNS

To complicate matters further, much remains unknown about North Korea’s nuclear activities, its weapons program and its ballistic missile capabilities. These are among the most secret activities in a highly secretive state that foreign intelligence services have struggled to penetrate.

North Korea has carried out six increasingly powerful nuclear tests since 2006 and surprised foreign governments with a series of missile tests showing rapidly improving technology and increasing range.

Pyongyang tested an intercontinental ballistic missile in December that governments and experts said appeared to bring all of the continental United States within range, though many believe it has yet to fully develop the re-entry vehicle in which the warhead returns to the Earth’s atmosphere as it approaches its target.

BEATING HEART

Historically the Yongbyon complex north of Pyongyang has been at the heart of North Korea’s nuclear program. It houses a reactor that produces spent fuel from which plutonium is reprocessed, and an experimental reactor that analysts observing satellite imagery say is close to being completed.

Yongbyon is also widely thought to house a uranium enrichment plant, though many experts say one or more larger enrichment sites are likely to exist outside Yongbyon.

By pursuing plutonium reprocessing and uranium enrichment, North Korea has developed the two tracks to obtaining the fissile material for nuclear weapons.

While Yongbyon is closely watched by satellites and was monitored by International Atomic Energy Agency (IAEA) inspectors before they were expelled in 2009, far less is known about facilities elsewhere in the country.

Nuclear analyst David Albright of the Institute for Science and International Security has quoted an anonymous “official source” as saying that about half of North Korea’s nuclear facilities are outside Yongbyon and the site where it has carried out nuclear tests.

FEW PRECEDENTS

There are few cases in which a country has voluntarily given up nuclear weapons. Those that have did so in particular circumstances, and provide imperfect analogies.

South Africa shut down its nuclear weapons program and dismantled its weapons shortly before the 1994 end of apartheid. Several former Soviet republics gave up their weapons after the 1991 break-up of the Soviet Union. Of those, Ukraine had the most, roughly 5,000, and it held onto them the longest.

South Africa kept its nuclear weapons program secret until after it had dismantled its six atom bombs and destroyed many of the documents relating to them, meaning the cost is not known. The weapons were dismantled in just months.

In Ukraine, which had ground-based strategic weapons with roughly 1,250 nuclear warheads, a Defence Ministry official said the United States paid around $350 million to dismantle the silos from which those missiles would have been launched.

At its peak Ukraine’s nuclear arsenal was the third biggest in the world. North Korea’s is much smaller – its exact size is not known but several analysts estimate it has around 30 weapons.

SO, HOW MUCH?

Given the uncertainties involved, most analysts are reluctant to be more specific than to predict costs for denuclearization running into billions of dollars.

“I think it would be fair to say that dismantling and cleanup of a substantial part of the North Korean nuclear complex (not even considering the missile complex) would cost many billions and take 10 years or so,” said Siegfried Hecker, a nuclear scientist and Stanford University professor who visited Yongbyon in 2010.

The U.S. Congressional Budget Office in 2008 estimated at $575 million the cost of dismantling the reactor at Yongbyon and two nearby plants that made fuel rods and separated plutonium from spent fuel, plus shipping its spent fuel out of the country and reprocessing it. It said that should take four years.

North Korea’s nuclear activities and stockpiles have increased significantly since 2008. There is now a second reactor at least near completion at Yongbyon, and the CBO estimate did not cover uranium enrichment, weapons facilities, missile technology or sites like uranium mines.

VERIFICATION

For the whole process to work, Washington will need to be convinced North Korea has declared all its relevant sites and activities. Verification is likely to play an important role.

Any doubt over whether North Korea has declared all its activities could lead to a dispute like the one over whether Iraq had stockpiles of weapons of mass destruction before the U.S.-led invasion of that country in 2003. A balance will have to be struck between transparency and intrusiveness.

The cost of IAEA safeguards activities for Iran, where the agency is policing the country’s 2015 nuclear deal, was 15.8 million euros ($18.42 million) last year, according to a confidential IAEA report obtained by Reuters.

But the IAEA was already inspecting Iran’s declared nuclear facilities before the deal was reached. Starting essentially from scratch in North Korea will be much more expensive.

“If you take the annual cost of IAEA verification and monitoring in Iran and multiply it by roughly three or more, you might get a rough estimate for the annual cost for North Korea after any denuclearization deal,” Mark Fitzpatrick of the International Institute for Strategic Studies said.

“North Korea’s nuclear program is more secretive than Iran’s and, in terms of nuclear weapons, far more advanced.”

(Reporting by Francois Murphy in Vienna, Pavel Polityuk in Kiev, Anthony Deutsch in Amsterdam, Ed Cropley in Johannesburg, Joyce Lee, Joori Roh and Heekyong Yang in Seoul; Writing by Francois Murphy; Editing by Mark Heinrich)

Trump, Pompeo positive ahead of North Korean summit; officials meet to close differences

U.S. President Donald Trump flanked by Secretary of State Mike Pompeo and White House Chief of Staff John Kelly attend a lunch with Singapore's Prime Minister Lee Hsien Loong and officials at the Istana in Singapore June 11, 2018. REUTERS/Jonathan Ernst

By Jack Kim and Steve Holland

SINGAPORE (Reuters) – U.S. President Donald Trump said on Monday his historic summit with North Korean leader Kim Jong Un in Singapore could “work out very nicely” as officials from both countries sought to narrow differences on how to end a nuclear stand-off on the Korean peninsula.

But U.S. Secretary of State Mike Pompeo injected a note of caution ahead of the first-ever meeting of U.S. and North Korean leaders on Tuesday, saying that it remained to be seen whether Kim was sincere about his willingness to denuclearize.

Last-minute talks between the two sides were held in the tropical city-state aimed at laying the groundwork for the summit between Trump and Kim, a meeting almost unthinkable just months ago when the two were exchanging insults and threats that raised fears of war.

U.S. President Donald Trump and Singapore's Prime Minister Lee Hsien Loong shake hands during a meeting at the Istana in Singapore June 11, 2018. REUTERS/Jonathan Ernst

U.S. President Donald Trump and Singapore’s Prime Minister Lee Hsien Loong shake hands during a meeting at the Istana in Singapore June 11, 2018. REUTERS/Jonathan Ernst

But after a flurry of diplomatic overtures eased tension in recent months, the two leaders are now headed for a history-making handshake that U.S. officials hope could eventually lead to dismantling of a North Korean nuclear program that threatens the United States.

Offering a preview to reporters on the eve of the summit, Pompeo said it could provide “an unprecedented opportunity to change the trajectory of our relationship and bring peace and prosperity” to North Korea.

However, he played down the possibility of a quick breakthrough and said the summit should set the framework for “the hard work that will follow”, insisting that North Korea had to move toward complete, verifiable and irreversible denuclearization.

Pyongyang, though, has shown little appetite for surrendering nuclear weapons its considers vital to the survival of Kim’s dynastic rule.

Sanctions on North Korea would remain in place until that had happened, Pompeo said. “If diplomacy does not move in the right direction … those measures will increase.”

“North Korea has previously confirmed to us its willingness to denuclearize and we are eager to see if those words prove sincere,” he said.

The White House later said discussions with North Korea had moved “more quickly than expected” and Trump would leave Singapore on Tuesday night, after the summit. He had earlier been scheduled to leave on Wednesday.

Kim is due to leave on Tuesday afternoon.

Trump arrived in Singapore on Sunday after a blow-up over trade with other members of the Group of Seven major industrialized nations in Canada,

The escalating economic clash between Washington and some of its closest global partners cast a cloud over Trump’s efforts to score a major foreign policy win in nuclear talks with North Korea, long one of America’s bitterest foes.

People gather outside the Istana in Singapore June 11, 2018. REUTERS/Edgar Su

People gather outside the Istana in Singapore June 11, 2018. REUTERS/Edgar Su

Although gaps remain over what denuclearization would entail, Trump sounded a positive note in a lunch meeting with Singapore’s Prime Minister Lee Hsien Loong.

“We’ve got a very interesting meeting … tomorrow, and I just think it’s going to work out very nicely,” Trump said.

It was a far cry from last year when Trump threatened North Korea with “fire and fury” and mocked Kim as “little rocket man,” Kim denounced the U.S. president as the “mentally deranged U.S. dotard.”

Kim, who also arrived on Sunday, remained ensconced in the heavily guarded St Regis Hotel, where he is staying. There was also no sign of his sister, Kim Yo Jong, who has accompanied him to Singapore.

Some people were grumbling in the wealthy city-state because of traffic jams caused by the summit and the cost of hosting two leaders with massive security needs. Lee has said the summit would cost Singapore about S$20 million ($15 million), more than half of which would go on security.

“Thanks PM Lee for spending $20 million of taxpayers’ money, which can … help a lot of needy families in Singapore to survive,” posted one Facebook user. Others complained about the traffic jams downtown.

Lee said the cost was worthwhile.

“It is our contribution to an international endeavor which is in our profound interest,” he told reporters on Sunday.

‘NEW ERA’

Trump and Kim are staying in separate hotels in the famous Orchard Road area of Singapore, dotted with high-rise luxury apartment blocks, offices and glittering shopping malls. Traffic was held up in the steamy midday sun and scores of bystanders were penned in by police when Trump went to meet Lee.

Similar scenes were seen on Sunday when Kim and Trump arrived in the city, and when Kim went to meet Lee. Their hotels are cordoned off with heavy security.

Commenting for the first time on the summit, North Korea’s state-run KCNA news agency said the two sides would exchange “wide-ranging and profound views” to re-set relations. It heralded the summit as part of a “changed era”.

Discussions would focus on “the issue of building a permanent and durable peace-keeping mechanism on the Korean peninsula, the issue of realizing the denuclearization of the Korean peninsula and other issues of mutual concern”, KCNA said.

In the lead up to the summit, North Korea rejected any unilateral nuclear disarmament, and KCNA’s reference to denuclearization of the peninsula has historically meant that Pyongyang wants the United States to remove its “nuclear umbrella” protecting South Korea and Japan.

Many experts on North Korea, one of the most insular and unpredictable countries in the world, remain skeptical Kim will ever completely abandon nuclear weapons. They believe Kim’s latest engagement is aimed at getting the United States to ease the crippling sanctions that have squeezed the impoverished country.

A Trump administration official, speaking on condition of anonymity, said the U.S. side was entering the talks with a sense of optimism and an equal dose of scepticism given North Korea’s long history of developing nuclear weapons.

“We will not be surprised by any scenario,” said the official.

The official said Trump and Kim would hold a one-on-one meeting on Tuesday that could last up to two hours. He described it as a “get to know you plus” meeting.

Later, they would be joined by their respective negotiating teams for discussions that could last another hour.

The summit’s venue is the Capella hotel on Sentosa, a resort island off Singapore’s port with luxury hotels, a Universal Studios theme park and man-made beaches.

Trump initially touted the potential for a grand bargain with North Korea to rid itself of a nuclear missile program that has advanced rapidly to threaten the United States.

But he has since lowered expectations, backing away from an original demand for North Korea’s swift denuclearization.

He has said the talks would be more about starting a relationship with Kim for a negotiating process that would take more than one summit.

(Additional reporting by Steve Holland, Soyoung Kim, Dewey Sim, Aradhana Aravindan, Himani Sarkar, Kim Coghill, Robert Birsel, Miral Fahmy, Joyce Lee, Grace Lee, Matt Spetalnick, David Brunnstrom; Christine Kim in SEOUL; Writing by Matt Spetalnick; and Editing by Raju Gopalakrishnan and Neil Fullick)

White House optimistic North Korea summit will take place

FILE PHOTO: A combination photo shows U.S. President Donald Trump and North Korean leader Kim Jong Un (R) in Washignton, DC, U.S. May 17, 2018 and in Panmunjom, South Korea, April 27, 2018 respectively. REUTERS/Kevin Lamarque and Korea Summit Press Pool/File Photos

WASHINGTON (Reuters) – The White House said on Wednesday that negotiations at the demilitarized zone along the border between North and South Korea for a potential summit between President Donald Trump and North Korean leader Kim Jong Un are going well and it expects the historic meeting to take place on June 12.

“The U.S. delegation led by Ambassador Sung Kim met with North Korean officials today as well and their talks will continue. So far the readouts from these meetings have been positive and we’ll continue to move forward in them,” White House press secretary Sarah Sanders said at a regularly scheduled briefing.

“We’re going to continue to shoot for the June 12th and expect to do that,” she said, referring to the original date scheduled for the summit.

(Reporting by Steve Holland; Writing by Lisa Lambert; Editing by Leslie Adler)

Closing North Korea nuclear test site an important step, U.N. chief says

U.N. Secretary-General Antonio Guterres arrives for a news conference in Vienna, Austria, May 14, 2018. REUTERS/Leonhard Foeger

VIENNA (Reuters) – Irreversibly closing North Korea’s nuclear test site is an important step that could pave the way for progress at talks between U.S. President Donald Trump and North Korean leader Kim Jong Un, U.N. Secretary-General Antonio Guterres said on Monday.

North Korea gave details on Saturday on the planned dismantling of the Punggye-ri site where it is believed to have carried out all six of its nuclear tests.

The official Korean Central New Agency said it would take place between May 23 and 25 and involve collapsing all the site’s tunnels with explosions, blocking its entrances, and removing all observation facilities, research buildings and security posts.

“I would like to welcome that and to say that the irreversible closure of the site will be an important confidence-building measure that will contribute to further efforts towards sustainable peace and verifiable denuclearization of the Korean peninsula,” Guterres said in a statement after meeting Austria’s chancellor in Vienna.

“And I look forward to this positive momentum being consolidated at the summit between the leaders of the United States and North Korea,” he said in the remarks to reporters after his meeting with Chancellor Sebastian Kurz.

Trump and Kim are due to hold talks in Singapore on June 12, the first-ever meeting between a sitting U.S. president and a North Korean leader.

After North Korea’s announcement on Saturday, Trump said on Twitter: “Thank you, a very smart and gracious gesture!”

(Reporting by Francois Murphy; Editing by Toby Chopra)

United States official says commitment of Taiwan has never been stronger

Alex Wong, U.S. deputy assistant secretary at the Bureau of East Asian and Pacific Affairs, speaks at American Chamber of Commerce (AmCham)’s yearly dinner event, in Taipei, Taiwan March 21, 2018. REUTERS/Tyrone Siu

By Twinnie Siu and Fabian Hamacher

TAIPEI (Reuters) – The United States’ commitment to Taiwan has never been stronger and the island is an inspiration to the rest of the Indo-Pacific region, U.S. Deputy Assistant Secretary of State Alex Wong said on Wednesday, in comments certain to anger Beijing.

Wong was speaking during a visit to Taipei at a time of increased hostility between the self-ruled island and Beijing and just a day after Chinese President Xi Jinping issued his strongest warning against Taiwan separatism to date.

China claims Taiwan as its own and considers the self-ruled island a wayward province, which Xi said on Tuesday would face the “punishment of history” for any attempt at separatism.

The island is one of China’s most sensitive issues and a potential military flashpoint. Underlining that threat, Taiwan sent ships and aircraft earlier on Wednesday to shadow a Chinese aircraft carrier group through the narrow Taiwan Strait, its defense ministry said.

“Taiwan can no longer be excluded unjustly from international fora. Taiwan has much to share with the world,” Wong said at a reception attended by Taiwan President Tsai Ing-wen, a member of the pro-independence Democratic Progressive Party.

“I can assure you, the United States government and the United States private sector will do their part to ensure Taiwan’s stellar international example shines brightly.”

Beijing is already furious over a law signed last week by U.S. President Donald Trump that encourages the United States to send senior officials to Taiwan to meet Taiwanese counterparts and vice versa.

President Tsai welcomed the new law on Wednesday.

“We were pleased President Trump signed the Taiwan travel act into law. We are grateful to the Trump administration and to members of the congress for supporting this bill,” she said.

Taiwan’s defense ministry said earlier that the Chinese carrier group, led by the mainland’s sole operational aircraft carrier the Liaoning, entered the Taiwan Strait late on Tuesday, but kept on its western side.

By midday on Wednesday it had left Taiwan’s air defense identification zone heading southwest, the ministry said, adding that it looked like China was conducting drills.

Taiwan’s military sent ships and aircraft to shadow the carrier group the entire way but spotted nothing out of the ordinary and people in Taiwan should not be concerned, it added.

China’s Defence Ministry did not immediately respond to a request for comment.

Taiwan says China has ramped up military exercises around the island in the past year or so.

China suspects Taiwan’s Tsai wants to push for formal independence for the island, which would cross a red line for Communist Party leaders in Beijing. Tsai has said she wants to maintain the status quo and is committed to ensuring peace.

Separately on Wednesday, China announced that a former ambassador to the United Nations, Liu Jieyi, has been appointed head of China’s Taiwan Affairs Office. Veteran diplomat Liu has been deputy head of the office since October last year.

(Reporting by Fabian Hamacher and Twinnie Siu; Writing by Ben Blanchard and Anne Marie Roantree; Editing by Himani Sarkar)

A decade after recession, a jump in U.S. states with wage gains for American workers

Newly hired employees take a break from training to pose for a group photo at the chain’s soon-to-open 54th outlet in Oakland, California ,U.S., January 24, 2018.

By Ann Saphir, Jonathan Spicer and Howard Schneider

OAKLAND, Calif./CANTON, N.Y./WASHINGTON (Reuters) – The kind of pay raises for which American workers have waited years are now here for a broadening swath of the country, according to a Reuters analysis of state-by-state data that suggests falling unemployment has finally begun boosting wages.

Average pay rose by more than 3 percent in at least half of U.S. states last year, up sharply from previous years. The data also shows a jump in 2017 in the number of states where the jobless rate zeroed in on record lows, 10 years after the financial crisis knocked the economy into a historic recession.

The state-level data could signal an inflection point muffled by national statistics.

Over the past four years, the U.S. economy added 10 million jobs and the overall unemployment rate fell to its lowest level since 2000. Yet wages have disappointed.

The disconnect has puzzled economists at the Federal Reserve, frustrated politicians concerned about rising inequality, and held regular Americans back, even as businesses have benefited and stock markets have surged, particularly in the first year of U.S. President Donald Trump’s presidency.

Trump says his tax cuts and regulation rollbacks are lifting business sentiment, and in an upbeat address to Congress on Tuesday, he said Americans “are finally seeing rising wages” after “years and years” of stagnation.

Indeed, average hourly earnings were up 2.9 percent in January year-on-year, the biggest rise in more than 8-1/2 years but still less than the 3.5 percent to 4 percent economists say would be a sign of a healthy economy.

The Reuters analysis and interviews with businesses across the country do show wage increases in industries ranging from manufacturing to technology and retail. Executives are mixed, however, on how much to credit Trump after several years of job growth that has chopped nearly six percentage points from the unemployment rate since its peak of 10 percent at the height of the 2007-2009 recession.

“Everyone in the building knows that they can leave and make more money,” said Michael Frazer, president of Frazer Computing, which provides software to U.S. used-car dealers from its offices in northern New York state. In response he raised wages by 6.1 percent at the end of 2017, up from 3.7 percent the previous year.

In Portland, Oregon, software provider Zapproved now hires coding school graduates and spends up to three months training them because the experienced software developers it used to hire have become too expensive. And still, CEO Monica Enand says she gives her developers twice-yearly raises “to make sure we are in the market for pay.”

JOBLESS RATES AT RECORD LOWS

The Reuters analysis of the most recent data available found that in half of the 50 states, average hourly pay rose by more than 3 percent last year. That’s up from 17 states in 2016, 12 in 2015, and 3 in 2014. Average weekly pay rose in 30 states, also up sharply from prior years, the analysis showed.

Unemployment rates are near or at record lows in 17 states, including New York, up from just five in 2016, the Reuters analysis shows.

“Wage growth tends to accelerate when the unemployment rate gets really strong,” said Bart Hobijn, an economics professor at Arizona State University.

California, Arkansas, and Oregon were among those both notching 3-percent-plus wage gains and plumbing record-low unemployment rates. This broadening of benefits to U.S. workers comes as robust global growth pushes up wages from Germany to Japan.

New York Fed President William Dudley said last month that firmer wage gains in states with lower unemployment rates gave him confidence that U.S. inflation, long stubbornly low, would soon rise.

In California, home of Noah’s New York Bagels, more than half of its 53 stores now pay their new hires more than the legal minimum wage, twice as many as in mid-2017.

“It’s very challenging to find enough people” in low-unemployment areas like the San Francisco Bay Area, said Noah’s president Tyler Ricks, who expects to hike pay further this year even as he opens five new stores.

To be sure, some states like Idaho with very low unemployment continue to have slow wage growth, while some like Delaware with very strong wage growth still have jobless rates well above their record lows.

And the share of gross domestic product that feeds back to labor as compensation has only edged slightly higher this decade, after generally declining since the 1970s, suggesting workers have a long way to make up ground.

Yet the state-level data hints at a first step.

Galley Support, a Sherwood, Arkansas-based manufacturer of latches for airplane kitchens and toilets, gave unskilled workers as much as a 20 percent pay hike last year. CEO Gina Radke said it will sap profit but with the Trump administration’s business-friendly policies set to benefit aircraft companies like Boeing, she added, “We feel confident that we will see an increase in sales to cover the increase in wages.”

Work-site managers at Gray, a company that oversees the building of factories and other projects from its headquarters in Lexington, Kentucky, also got a 20 percent raise since 2016. Yet a paycheck of up to $200,000 a year, plus bonuses, often isn’t enough to fill all the jobs on offer.

“There is just so much work around for people that it’s just hard to lure them away,” said Susan Brewer, Gray’s vice president of human resources.

(Reporting by Ann Saphir in Oakland, Calif., Jonathan Spicer in Canton, New York and Howard Schneider in Washington; Editing by Andrea Ricci)