The PRC, I think, wants to maintain North Korea as an impotent buffer state under its thumb and the United States wants to quarantine North Korea as a nettlesome nuclear power (and, perhaps, an important non-Chinese justification for the enormous U.S. North Asia military presence). Neither superpower, in other words, places a high priority on seeing North Korean diplomacy evolve beyond the current futility.
That definitely put the USA on the wrong side of the DPRK, which understandably cited the Libyan precedent as justification for why it could never, ever surrender its nuclear weapons.
For me, the anti-North Korea financial sanctions announced this week--and the concurrent hearing conducted by the House Foreign Relations Committee--were an exercise in nostalgia in the matter of policies, rhetoric, and even actors, and also a bitter reminder of two lost years of US DPRK policy, and the bomb they helped birth.
Even for the Bush administration, whose attitude toward foreign policy fiascos was usually one of callous insouciance, it was a Defcon 1 disaster.
Given the virtually total separation of the US and DPRK economies, Treasury measures that hit North Korea indirectly--by, effectively, sanctioning foreign financial institutions that do business with the DPRK, not the DPRK itself--quickly rose to the top of the agenda when it was time to "do something" about the Sony hack.
In his testimony before the House Committee on Foreign Affairs on January 13, Daniel Glaser advised that the Obama administration had crossed a Rubicon of sorts by openly deploying unilateral Treasury sanctions as a "because we can" tool of coercive diplomacy divorced from the financial violations they were originally designed to counter. The "weaponization" of US financial regulation, in other words, is pretty much complete (and the inconvenience of trying to justify Treasury sanctions using boondoggles like the Supernote canard is pretty much circumvented):
E.O. 13687 [signed by President Obama on Jan. 2, 2015; gives Treasury the authority to sanction the DPRK government and Workers' Party of Korea for the Sony hack and "other egregious acts"--ed.] represents a significant broadening of Treasury’s authority to increase financial pressure on the Government of the DPRK and to further isolate the DPRK from the international financial system. With the issuance of E.O. 13687, Treasury, for the first time, has the authority to designate individuals and entities based solely on their status as officials, agencies,instrumentalities, or controlled entities of the Government of the DPRK or the WPK. Treasury also now has the authority to designate those acting on their behalf or providing them with material support.
In his written statement, Royce identified the Executive Order as enabling a full-spectrum financial jihad against banks of any jurisdiction doing business with North Korea.
[T]he significance of this new Executive Order may come from the broad power it gives the President to target anyone who is a part of the North Korean government or is assisting them in any way for anything. That is, if the Administration chooses to use it to its full advantage.
We need to step up and target those financial institutions in Asia and beyond...
In his verbal opening remarks, Royce referred to the BDA sanctions as a success, a characterization I hope that readers of this post will take with a grain of salt.
Financial sanctions against the DPRK, of course, brings the unwelcome issue of the People's Republic of China back to to the fore.
But actively and aggressively wielding that weapon is another matter.
It's worth noting that the testimony of Song Kim, the Obama administration's special representative for North Korea policy, was markedly short of fire-eating and notably larded with "doors open" verbiage, which leads me to believe that the Obama administration is actually more interested in fostering a Burma-type strategic realignment by North Korea toward the US tolerated by the PRC in a spirit of forbearance, and not really that enthusiastic about a regime change/collapse scenario that might please Ed Royce but also trigger a Chinese intervention.
So I suspect the current posturing on financial sanctions is more an exercise in political kabuki before the new Republican-controlled Congress than a genuine attempt to relive the dubious glories of 2005.