South Korean President Lee Jae-myung meeting with US President Donald Trump this week in Washington (Alex Wong/Getty Images)

Seoul will struggle to find currency for Pyongyang talks

Without economic incentives or offering entree to the White House, South Korea could find itself sidelined in North Korea diplomacy.

Nika Pasko

27 August 20254 min read

During White House talks with US President Donald Trump this week, South Korea’s Lee Jae-myung expressed hope that Trump and North Korea’s Kim Jong-un might agree to meet once again. In the few months since Lee’s inauguration in June, his administration has taken conciliatory steps toward North Korea, aiming to de-escalate the situation and pave the way for reopening negotiations.

But this time Seoul has little to offer Pyongyang, suggesting that Lee’s efforts are unlikely to succeed.

Previous periods of reconciliation on the Korean Peninsula are instructive for the conditions that led to dialogue. In the 2000s, North Korea was open to negotiations with South Korea, considering the benefits that Seoul was willing to provide unconditionally during the administrations of Kim Dae-jung and Roh Moo-hyun. North Korea’s economy was then weak. Foreign aid had been largely cut off after the collapse of the socialist bloc and a collapse in industrial production was followed by severe famine. The primary value of talks with Seoul was its readiness to engage Pyongyang economically and facilitate US–North Korea diplomatic exchanges. As inter-Korean economic ties intensified, bilateral trade increased from $222 million in 1989 to $1.79 billion in 2007.

The subsequent collapse of the six-party talks and souring of relations put reconciliation on hold. That changed after 2018 with Moon Jae-in’s outreach efforts and then the Trump summitry, which despite the fanfare, failed to deliver a deal and stumbled on the question of denuclearisation. The Covid pandemic then saw North Korea isolate itself even further.

In 2023, inter-Korean trade stood at zero. (China remains North Korea’s major partner, while Russia’s share has been increasing rapidly as well.)

Given the contrast in how North Korea perceives Trump and Lee, Pyongyang might not need Seoul’s assistance at all.

Lee has suggested that an Arctic shipping route could become a potential area for cooperation among South and North Korea, Russia, Japan, and the United States. During his election campaign, Lee emphasised the importance of entering the Arctic maritime trade to develop South Korea’s port cities and boost trade.

But North Korea is likely to be excluded from any projects, as technical cooperation, financial transactions, and logistics are blocked by sanctions.

Former cases of South Korea’s participation in logistics projects involving North Korea show how vulnerable they were to security threats. In 2013–15, South Korea was involved in Khasan-Rajin project, a joint logistics initiative between Russia and North Korea to ship Russian coal via Rajin in North Korea. Shipments stopped after North Korea’s nuclear test in 2016, when South Korea banned any vessel, regardless of flag, from entering its ports if they had stopped at North Korea in the past 180 days. The situation was further aggravated after the UN imposed sweeping sanctions in 2016–17. Russia’s attempt to revive the project during the short inter-Korean thaw during Moon’s presidency yielded no results.

South Korea does not presently have any commercial projects to offer North Korea that would not be affected by international restrictions. Non-commercial economic activities might face opposition domestically, even among progressives, as they have adopted a more pragmatic approach to North Korea, believing that economic activities contribute to its military build-up more than to trust-building.

Public opinion still favours conciliatory initiatives in North Korea policy, but support for tough measures is also expressed clearly. Polls this year showed roughly two-thirds of South Koreans still believed that unification is necessary, but 31% argued for sanctions and deterrence.

The War Memorial of Korea, Seoul (Lee Jeong-woo/Korea.Net)

Lee’s hopes for reconciliation would also depend on the value Pyongyang sees in Seoul acting as a broker for relations with Washington. In the past that has depended on both the flexibility of the South Korean president and the foreign policy priorities of the US administration. Kim Dae-jung’s “Sunshine policy” might not have achieved its success without Bill Clinton’s diplomatic support, who called Kim’s approach “clear-eyed” and “wise”. Similarly, Moon Jae-in’s ambition might have stalled had Trump not decided to shift from the maximum pressure approach to top-level engagement with North Korea.

This time, North Korea openly dismissed Lee as a diplomatic counterpart, claiming that he is “not a figure who can change the tide of history”. Soon after Lee’s administration came to power, North Korea reaffirmed its vision of South Korea as a hostile state, making it increasingly difficult for Seoul to be a mediator. The threshold for starting negotiations with Washington became higher when Kim Jong-un’s sister and influential player Kim Yo-jong stated that talks could only resume if the United States does not demand denuclearisation.

She did not dismiss the dialogue completely, however, citing a good personal relationship between Kim and Trump. Given the contrast in how North Korea perceives Trump and Lee, Pyongyang might not need Seoul’s assistance at all. If it wants back-up as a mediator, there is a higher chance that Moscow would play this role, considering an increasingly close North Korea–Russia relationship.

This time, the decisive factor in South Korea’s attempts to engage with North Korea will be a shift that occurred in Pyongyang’s stance toward Seoul in recent years. North Korea now sees South Korea as its systemic adversary, limiting the room for peaceful initiatives.

About the author

Nika Pasko

Nika Pasko is a PhD candidate at the Graduate School of International Studies, Hanyang University.

Topics

North Korea South Korea United States