ANALYSIS: Singapore to Hanoi: The bumpy diplomatic road since Trump and Kim first met

February 14, 2019  07H:12  GMT/ZULU

by Wang Yang and Biodun Iginla, BBC News and Reuters, Political News Analysts, SEOUL/WASHINGTON

SEOUL/WASHINGTON - It’s been the better part of a year since U.S. President Donald Trump and North Korean leader Kim Jong Un stood face to face for the first time at their unprecedented summit in Singapore.

FILE PHOTO: U.S. President Donald Trump and North Korean leader Kim Jong Un react at the Capella Hotel on Sentosa island in Singapore June 12, 2018. REUTERS/Jonathan Ernst/File Photo

As the two leaders prepare to meet in Vietnam for a second summit, there is a growing expectation that this time they need to make a more specific agreement.

North Korea still has its nuclear weapons, and Washington has only increased sanctions on Pyongyang so the stakes are high for both leaders who have promised to overcome decades of tension and conflict between the two countries.

Here is a breakdown of what Trump and Kim have agreed to, what has - and hasn’t - happened since they last shook hands, and what may be on the negotiating table.

THE SINGAPORE AGREEMENT

The Singapore summit in June represented the first time a sitting American president met with a North Korean leader, but the statement that came out of the meeting was light on specifics, opting instead for four general commitments:

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WHAT HAS HAPPENED SINCE SINGAPORE

Just ahead of the first summit, in May, North Korea destroyed some tunnels and buildings at its Punggye-ri nuclear test site, observed by international journalists but not expert inspectors.

Immediately following his meeting with Kim, Trump made a surprise announcement that the United States would suspend military drills with South Korea, which have often been criticized by North Korea as rehearsal for war. Major exercises have been halted, while smaller ones continued.

North Korea moved quickly to repatriate 55 boxes containing what were believed to be the remains of American soldiers killed in the war.

In July, satellite images indicated North Korea had begun to dismantle some facilities at its Sohae Satellite Launching Station, but later reports by U.S. think tanks said no further dismantling had been observed.

And North and South Korea moved forward with their own reconciliation, holding three summits and taking steps to reduce military tensions along their shared border by closing some guard posts, removing landmines, and imposing a no-fly zone.

Other inter-Korea plans depend heavily on Washington’s willingness to support easing sanctions that block most economic engagement with North Korea.

The past year was a see-saw of occasional public meetings - and canceled visits - between American and North Korean officials.

U.S. Secretary of State Mike Pompeo traveled to Pyongyang multiple times, first being condemned by North Korea over “gangster-like demands” for the North’s complete, verifiable, irreversible denuclearization, then later earning Kim Jong Un’s “satisfaction” with another meeting.

Trump, meanwhile, hosted senior North Korean officials at the White House and declared that he and Kim “fell in love” after exchanging letters.

In his New Year’s speech, Kim said he was still open to meeting Trump again, but warned of a potential “new path,” which could indicate an eventual return to weapons development, if he was not satisfied with the negotiations.

A flurry of talks in early January led to Trump announcing the second summit would happen in Vietnam at the end of February.

WHAT HASN’T HAPPENED

Throughout all these talks, as well as other behind-the-scenes negotiations, neither side announced major new steps toward denuclearization, easing sanctions, or establishing a new “peace regime” for the peninsula.

Statements carried by North Korean state media complained about Washington’s opposition to signing a peace declaration or easing sanctions until North Korea takes more steps toward denuclearization.

In the meantime, U.S. intelligence and defense officials say North Korea has continued to develop its nuclear and missile arsenals, despite a self-imposed moratorium on testing, and that the country is unlikely to ever surrender all of its nuclear weapons.

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After meeting with Kim in September, South Korean President Moon Jae-in said the North is willing to “permanently dismantle” its Yongbyon main nuclear complex and allow international inspectors into some missile sites if the United States makes concessions of its own.

But neither the American concessions nor the inspections have been forthcoming so far.

WHAT MIGHT HAPPEN IN VIETNAM

American and North Korean officials have been tight-lipped about what agreement might come from the second Trump-Kim summit, but analysts say Washington needs to be open to taking interim steps for any deal to be possible.

Stephen Biegun, the top U.S. envoy to North Korea, told South Korean lawmakers that most of the recent discussions with Pyongyang had revolved around summit logistics, and that more talks were needed to address the substantive issues.

But Biegun said a “dozen” agenda items were discussed, one of the lawmakers said, and North Korea has called for easing sanctions, restarting some inter-Korean economic projects, opening a U.S. liaison office in Pyongyang, and signing a declaration formally ending the technical state of war from the 1950-53 conflict.

Other moves could include easing the ban on Americans traveling to North Korea, or providing more bilateral aid.

To win some of those concessions from Washington, North Korea could follow through on shutting its Yongbyon nuclear complex, as well as abolish key missile facilities in the presence of foreign experts, South Korean officials have said.

North Korea’s state media said in December that Pyongyang’s commitment to the “denuclearization of the Korean peninsula” also includes “completely eliminating the U.S. nuclear threat to Korea,” but did not spell out specific steps Washington should take.

While some U.S. lawmakers and analysts have speculated Trump could agreed to reduce the American military presence in South Korea, officials in Seoul and Washington have said troop levels are not up for negotiation.

ANALYSIS: U.S. government shutdown leaves data vacuum in its wake

January 23, 2019  03H:01  GMT/UTC/ZULU

by Melissa Gruz and Biodun Iginla, BBC News and Reuters Political and Business News Analysts, Washington

WASHINGTON - A partial shutdown of the U.S. government, which enters its second month on Wednesday, has delayed the publication of key economic data, leaving investors and businesses to follow their intuition and gut instincts as they make critical decisions.

Government employees receive donations at a food distribution center for federal workers impacted by the government shutdown, at the Barclays Center in the Brooklyn borough of New York, U.S., January 22, 2019. REUTERS/Brendan McDermid

The shutdown, which affects about a quarter of the federal government, started on Dec. 22 amid demands by President Donald Trump that Congress give him $5.7 billion this year to help build a wall on the country’s border with Mexico. The shutdown is now the longest in U.S. history.

Among agencies affected is the Commerce Department, leading to the suspension of the publication of data compiled by its Bureau of Economic Analysis (BEA) and the Census Bureau. The Labor Department has not been affected and its Bureau of Labor Statistics (BLS) continues to publish data, including the closely watched monthly employment report.

Data gathered by non-governmental organizations such as the U.S. Federal Reserve and Conference Board also continue to be published.

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WHAT REPORTS HAVE BEEN AFFECTED?

The first casualties were November’s new-home sales, advance trade, wholesale and retail inventories reports, which were scheduled for release in the last week of December. Publication of these reports for December is also likely to be delayed.

Also postponed was November’s construction report detailing the value of construction work on new structures or improvements to existing structures for private and public sectors. Trade data for November was also delayed.

November business inventory data as well as the factory orders report has been delayed. December’s retail sales, housing starts and building permits data have also not been released. It is unlikely that December durable goods orders, personal income and consumer spending reports will be published.

These reports constitute the source data for calculating U.S. gross domestic product, the main measure of economic output. The advance fourth-quarter GDP report, scheduled for release on Jan. 30, will likely be delayed even if parts of the government hit by the lapse reopen this week.

WHAT ARE THE IMPLICATIONS?

Businesses including manufacturers, farmers, retailers, builders and others rely on these reports in making decisions on capital spending, production and managing inventory among other activities. Government and private economists count on them to assemble a full picture of the health of the U.S. economy, and financial market participants need them to guide asset allocation decisions.

According to Robert Shapiro, a former under secretary of commerce for economic affairs in the Clinton administration, the shutdown has put all surveys on hold. Shapiro, who oversaw the data releases, said it will take time to catch up.

“GDP is the only standard gauge we have of the pace and direction of the overall economy and its major components, and the measures that comprise it help shape long-term business and financial planning and short-term investment algorithms,” said Shapiro, now a senior fellow at Georgetown McDonough School of Business in Washington.

Meanwhile, several Fed officials have voiced concerns about having to make monetary policy decisions without key information, including the bank’s preferred measure of inflation. Having “good data is how we make our decisions,” New York Fed President John Williams said last Friday.

The Fed is to hold its next policy meeting on Jan. 29-30.

The shutdown, which has left about 800,000 federal employees without pay and private contractors working for many government agencies without wages, is causing uncertainty and anxiety, leading to a retrenchment in consumer and business confidence.

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Consumer sentiment tumbled to a more than two-year low in January, and the New York Fed’s business conditions survey weakened sharply this month.

WHAT ABOUT JANUARY’S EMPLOYMENT REPORT?

The lapse in funding for the Census Bureau will not affect the January employment report, even though BLS uses Census data for the household survey portion of the report from which the unemployment rate is calculated.

The collection of data for the household survey is mostly funded by the BLS, and “at this time, is not affected by the lapse of appropriation,” it said.

Some employment-related figures from Census will not be available, however, including granular data used to round out the full picture of the job market, labor force and wage growth.

The Consumer Price Index data also will be published as scheduled. The BLS, however, said its productivity and costs report for the fourth quarter due on Feb. 6 will not be published in full if the GDP report is unavailable because it is the source data for some of that report’s measures.

WHAT COULD HAPPEN WHEN THE SHUTDOWN ENDS?

Looking back to what happened after the October 2013 government shutdown, the BEA and Census will probably publish a fresh schedule for the delayed data, and some delayed reports could be released at the same time as current data. For example, December housing starts could be published simultaneously with the January report.

Some data covering November, including new-home sales, construction spending, factory orders, advance trade, wholesale and business inventories could be released within days of a government restart, but it could take a while to publish the December data.

“There may be data which was collected for November, there may be some data collected before the shutdown, but we don’t know how much,” said Shapiro. “As for December, they would have to begin to collect the data for December. They are going to be out for some time, they will try to release them eventually.”

Analysis: Democratic U.S. House could alter foreign policy

November 7, 2018  12H:32  GMT/UTC/ZULU TIME

by Melissa Gruz and Biodun Iginla, BBC News and Reuters Political News Analysts, Washington

WASHINGTON - Democrats will use their new majority in the U.S. House of Representatives to reverse what they see as a hands-off approach by Republicans toward President Donald Trump’s foreign policy, and push for tougher dealings with Russia, Saudi Arabia and North Korea.

A rainbow forms over the U.S. Capitol as evening sets on midterm Election Day in Washington, U.S. November 6, 2018. REUTERS/Jonathan Ernst

Representative Eliot Engel, the Democrat in line to head the House Foreign Affairs Committee, said they may also push for congressional authorization for the use of military force in places like Iraq and Syria. But on some hot-button areas, like China and Iran, he acknowledged there was little they could do to change the status quo.

Now that they have taken control of the 435-member House of Representatives for the first time since 2011, Democrats will decide what legislation is considered in the chamber and have a bigger role in setting spending policy and writing legislation.

“I don’t think we should challenge something just because it’s put forth by the administration, but I do think we have an obligation to review policies and do oversight,” Engel told us at Reuters in a telephone interview.

Since they must still work with a Republican-controlled Senate to pass any bills, the Democratic majority’s greatest influence will be oversight, the ability to call hearings and, if necessary, subpoena witnesses, as they lead committees like Foreign Affairs as well as Armed Services and Intelligence.

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HOW DO THE DEMOCRATS SEE RUSSIA?

Democrats plan Russia-related investigations, such as a probe of possible business ties and conflicts of interest between Trump and Russia.

From a policy perspective, a Democratic-led House would push to punish Russia for interference in U.S. elections and activities including its aggression in Ukraine and involvement in the Syrian civil war.

The House would push for more sanctions, including measures targeting new Russian sovereign debt. It would also try to pressure Trump to enact all of the sanctions in a sweeping bill he reluctantly signed into law in August 2017.

Members of Congress have also vowed to push harder, using subpoena power if necessary, to obtain information about Trump’s summit last summer with Russian President Vladimir Putin. The White House has released few details about the meeting.

“It’s ludicrous that there could be such a high-level meeting between the two leaders and Congress should be in the dark about it,” Engel said.

He said the issue of Russia’s interference in the 2016 election “hasn’t been at all resolved.”

WILL KHASHOGGI’S KILLING INFLUENCE SAUDI TIES?

The furor over the death of journalist Jamal Khashoggi at the Saudi consulate in Istanbul has added to lawmakers’ frustration with Saudi Arabia over the war in Yemen and human rights.

A Democratic-led House would vote on legislation to block arms deals with Riyadh, make it difficult to win congressional approval of a nuclear energy deal and consider a measure to stop U.S. aircraft refueling and other support for the campaign in Yemen.

While Engel still views Saudi Arabia as a counterweight to Iran’s influence in the Middle East, he said Washington must demand more from Riyadh. “If the Saudis want our support, then they have to address some of the things that concern us,” he said.

DON’T DEMOCRATS WANT PEACE WITH NORTH KOREA?

Democrats say they are determined to obtain more information about meetings by Trump and Secretary of State Mike Pompeo with North Korean Leader Kim Jong Un, worried that Trump is so eager to make a “great deal” that he will give Kim too much.

Engel and other Democrats plan to call administration officials to testify in public, and behind closed doors, about the status of talks. But they also will walk a fine line, because they do not want to be seen as interfering with diplomacy and efforts to prevent a nuclear war.

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“I think it’s good to have some kind of a dialogue with them. But we shouldn’t be deluded in thinking that they’re going to have any major changes,” Engel said.

CAN DEMOCRATS CHANGE CHINA POLICY?

Democratic House control is not expected to yield significant changes in China policy. Democrats will hold more hearings and demand more briefings, but criticism of Beijing has so far crossed party lines and that is not expected to change.

Prominent Democrats, such as Representative Adam Schiff, who is in line to chair the House Intelligence Committee, have joined Republicans backing measures to clamp down on China, like legislation treating ZTE Corp and Huawei Technologies Co Ltd [HWT.UL] technology and phones as major cyber security threats.

But Engel and others acknowledged the need for China as a partner, particularly in dealing with North Korea. “I think we need to be careful not to lash out,” Engel said.

Like Republicans, Democrats are divided on Trump’s trade war with China. Some party members see free trade as a generator of jobs, while others back tariffs to protect workers in industries such as steel and manufacturing.

CAN DEMOCRATS REVIVE THE IRAN NUCLEAR DEAL?

Democrats were infuriated by Trump’s withdrawal from the international nuclear deal with Iran that Democratic President Barack Obama’s administration reached in 2015. But there is little they can do to change the policy as long as Republicans occupy the White House.

Lawmakers also are wary of seeming too friendly to Iran, especially given hostility to Tehran by the government of Israel. While Israeli Prime Minister Benjamin Netanyahu has worked increasingly closely with U.S. Republicans, strong ties to Israel remain a top priority for both parties.

Engel was among Democrats who opposed the Iran deal, but he said Trump should work more closely with important allies, like the members of the European Union, on that and other issues. “I think what we should do is try to repair the damage with our alliances that has been done,” he said.