South Korea is taking small steps to try to keep the North Korea peace process alive, but significant economic engagement remains out of reach until significant denuclearization progress with the U.S. is reached.
During the inter-Korean summit in April, South Korean President Moon Jae-in and North Korean leader Kim Jong Un agreed to improve relations, in addition to jointly confirming the goal of complete denuclearization of the Korean Peninsula.
The North Korean leader reiterated his broad commitment to denuclearization when he met with U.S. President Donald Trump at the Singapore Summit in June.
Subsequent nuclear negotiations between Washington and Pyongyang have appeared to stall over fundamental disagreements about the expected extent of the North’s nuclear disarmament, and when concessions such as sanctions relief would come.
United Nations sanctions imposed in 2017 ban nearly 90 percent of North Korea’s trade. The Bank of Korea in Seoul said North Korea’s gross national product (GDP) shrank by 3.5 percent last year, the country’s worst economic downturn since 1997.
Without a U.N. agreement to ease sanctions, South Korea cannot offer economic incentives that might encourage the Kim government to accelerate denuclearization progress.
And the liberal Moon administration does not want to try to pressure Pyongyang at this time, according to Go Myong-Hyun, a North Korea research fellow at the Asan Institute for Policy Studies in Seoul.
“The South Koreans should make it very clear to the North Koreans that we can take away the Korean dialogue from them unless North Koreans make a firm commitment to denuclearization. But that is not something that the South Korean government is willing to do right now,” said Go.
Instead Seoul is continuing efforts to increase bi-lateral cooperation and reduce cross border tensions, as was also agreed to at the inter-Korean summit.
On Wednesday South and North Korea exchanged lists of potential participants for the upcoming reunion for families that have been separated since the 1950-1953 Korean War. The reunion, which will bring together 100 people from each country, will be held August 20-26 at the Mount Kumgang resort on the North's east coast.
According to the government in Seoul about 57,000 South Koreans, most of them over 70 years old, have indicated interest in meeting family members from the North that they have not seen or communicated with in over 60 years.
The authoritarian North Korean government severely restricts outside contact with its people. Since the 2000 Inter-Korean summit that first eased tensions between the North and South, there have been 20 family reunions held. The last was in 2015.
The two Koreas also agreed to field unified sports teams in six events, including women’s basketball and dragon boat racing, at the Asian Games to be held in Indonesia in September.
The South Korean Foreign Ministry said Wednesday that a North Korean delegation of 34 athletes and staff will fly to the South via Beijing on Saturday to begin joint practices.
The Korea Canoe Federation said the dragon boat and canoe paddlers will train at the Chungju Tangeum Lake International Rowing Center, about 150 kilometers south of Seoul.
And on Tuesday the South Korea Defense Ministry said it is considering withdrawing some forces from the demilitarized zone separating it from North Korea in the first step towards transforming the area into a "peace zone."
The heavily fortified demilitarized zone was created as part of the armistice that ended the Korean War in 1953 and that split the communist-held North and democratic South, although the two sides are still technically in a state of war.
At the inter-Korean summit Moon and Kim agreed to cease all hostile acts and turn the heavily fortified demilitarized zone into a peace zone.
The defense ministry also informed lawmakers it would seek a joint program with the North and the United States to unearth the remains of war dead buried in the buffer zone.
However, North Korea has not indicated it would reciprocate with a plan to withdraw its forces as well.
According to satellite images released on Tuesday, North Korea began dismantling key facilities used to develop engines for ballistic missiles at its Sohae Satellite Launching Station.
U.S. President Donald Trump welcomed the news of the closing of the engine-testing site. U.S. Secretary of State Mike Pompeo said the site closure is “entirely consistent” with the commitment made by Kim at the Singapore Summit.
However Pompeo also expressed some frustration at the North’s refusal to allow in outside experts to oversee denuclearization measures being implemented.
“We've been pressing for there to be inspectors on the ground when that engine test facility is dismantled consistent with Chairman Kim's commitment,” said Pompeo.
Analysts say the goodwill gesture by the North will not significantly reduce its ability to conduct future tests from other launch sites or rebuild this facility in the future.