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Marcus Noland

Marcus Noland

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Articles by Marcus Noland

Noland on the Trade Talks Podcast: Sanctions on North Korea

November 30, 2017

This week NK launched an ICBM theoretically capable of hitting Washington. This podcast I recorded with Soumaya Keynes (The Economist) and Chad P. Bown (PIIE) examines the origins of the North Korean economy, and how its characteristics could be amenable (or not) to the use of economic sanctions and Inducements to resolve this issue.
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North Korea Back on the Terrorism List

November 21, 2017

Yesterday President Donald Trump put North Korea back on the list of state sponsors of terrorism. (The country was originally listed in 1987 and removed in 2008.) Relisting will impose additional financial sanctions; remove sovereign immunity from civil lawsuits, making it possible for such suits as the one undertaken by the surviving relatives of Reverend Kim Dong-shik, who was kidnapped by North Korean agents and died in their custody; and require US executive directors at international financial institutions such as the International Monetary Fund and Asian Development Bank to oppose North Korean membership. In the wake of the assassination of Kim Jong-nam with a chemical weapon in a public space, one is tempted to ask, "what took so long?"
In the wake of the assassination of Kim

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Self-inflicted KORUS damage

November 3, 2017

Last year, in the context of the political campaign, and Donald Trump’s pledge to get tough with our trade partners, Sherman Robinson, Tyler Moran, and I did some modeling of what trade wars with China and Mexico might look like. One of the things we did was look at scenarios, in which rather than responding in kind, with across-the-board tariffs, China responded asymmetrically, targeting particular US industries.
Specifically, we looked three illustrative scenarios: a Chinese halt to aircraft purchases, an instruction to state-owned enterprises to stop buying US business services, and a soybean embargo. Problems with the way the necessary data is collected prevented us from examining a corn embargo, and the prevention of Chinese students coming to the United States for higher education.

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Collateral Damage

November 2, 2017

Last week I was in Seoul for a couple of events focusing on trade. Needless to say, there was considerable unease about the Trump administration in general, and in the area of trade policy, its threat to abrogate the KORUS free trade agreement.
What is less appreciated is how South Korean interests could be impacted by trade policies motivated by concern over China. My colleague Chad Bown has been doing fascinating work on the Trump administration’s implementation of "contingent" or "process" protection. The most well-known of these instruments are antidumping (AD) and countervailing duty (CVD) cases. What sets the Trump administration apart are two things: first, its willingness to employ seldom used parts of US trade law, such as global safeguards and the Section 232 national security

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Writing About North Korea

October 18, 2017

I was recently invited to appear on a panel hosted by the Korea Economic Institute on media coverage of North Korea. Such invitations are ego-gratifying but then the anxiety sets in about actually having anything to say. But the prospect of public humiliation concentrates the mind. You can be the judge of whether I successfully pulled together my somewhat inchoate thoughts on the topic.
Obviously, I am no expert on the media, though sometimes semioticians and media analysts make appearances in this blog. David Zeglen, who has written about media portrayals (and attendant misunderstanding) of the marriage of Kim Jong-un and Ri Sol-ju, is a case in point. And my main point of reference is the mainstream Western or specifically, English-language, press.
Why do I think that writing about

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Hawaii Prepares for Nuclear War

October 13, 2017

Careful readers of this blog may recall that Hawaii is my second home. When I was back in the summer, I was surprised by the level of anxiety over the possibility of a North Korean nuclear attack. As I wrote at the time, much like in the movie “Jaws,” there was a split by those that felt compelled to prepare in the face an imminent threat and representatives of the tourism industry who preferred to whistle past the graveyard.
Plenty of residents have personal memories of the attack on Pearl Harbor, and I initially did not appreciate the unique degree of vulnerability felt locally, borne of history and geography. News outlets carried stories on an almost daily basis, describing everything from how the disaster warning system, oriented toward hurricanes and tsunamis, was being updated for a

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Dollarization in North Korea

October 4, 2017

North Koreans have long used foreign currencies as a store of value (indeed, even preferring to hold their savings in gold or trinkets in preference to the domestic currency), and Steph Haggard and I documented the use of foreign currencies for transactional purposes by businesses. A recent paper by Sung Min Mun and Seung Ho Jung, “Dollarization in North Korea: Evidence from a Survey of North Korean Refugees” extends this inquiry, using a 2015 refugee survey to focus on the use of foreign currencies by households.
The term dollarization has its origins in the displacement of local currencies by the US dollar in Latin America during the 1980s. In the North Korean case, both the US dollar and Chinese yuan are used widely, with one of those currencies or the other dominant depending on

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A Game-theoretic Solution to the North Korea Problem

September 29, 2017

A couple of colleagues forwarded to my attention an interesting piece by University of Chicago professor Harald Uhlig. In the Chicago School tradition of taking simple assumptions and rigorously following them to bizarre conclusions, he uses game theory to analyze the North Korean nuclear issue and concludes that the optimal policy consists of immediate South Korean surrender, withdrawal of US troops from the peninsula, and the conclusion of a Unified Korea-US Free Trade Agreement. Sufficed to say, with such prescriptions I doubt that Professor Uhlig will be joining the Trump NSC staff, though perhaps he could make the People’s United Party candidate’s list in the next South Korean national assembly election. I think that he is serious, though I am not absolutely sure: this could be some

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2016 BOK Growth Estimates

September 20, 2017

Ziplining beats parsing questionable figures

At a closed-door conference earlier this year in Seoul, a group of South Korean and American economists gathered to analyze the North Korean economy. Someone observed that because of the unexpected change in the South Korean election calendar, the 2017 Bank of Korea analysis of the North Korean economy would be released under a progressive government. Estimating macroeconomic changes in North Korea is a dirty job, but someone has to do it, and the analysts at BOK deserve our thanks. Nevertheless, it is widely suspected that their work is subject to politicization, and when two of the Americans—expecting a big jump in estimated growth—attempted to solicit bets on the 2016 estimated growth rate they could find no takers.
So when the BOK

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Donald Trump: The Sam McDowell of American Diplomacy

September 19, 2017

Before there were advanced analytics, pitchers kept note on hitters on index cards. The scouting cards of the Cleveland Indians’ big lefthander, Sam McDowell, reputedly all consisted of a single line: “Smoke ‘em inside.”
(For readers unfamiliar with baseball, this phrase means to throw the ball very hard very close to the hitter. It is an intimidation tactic aimed at forcing the batter away from home plate.)
McDowell rode that singular tactic to 141 career wins, but I’ve always wondered how many more games he could have won if he had learned to throw the change.
"President Trump handed the Kim regime the soundbite of the century." 

(Personal aside: as a youngster this lefthander achieved McDowell-like intimidation through sheer wildness, once striking three consecutive batters, including

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Save North Korean Refugees Day: Friday, September 22nd

September 15, 2017

Please see below a note from Suzanne Scholte of the North Korea Freedom Coalition on Save North Korean Refugees Day: Friday, September 22.

"Rescue those being led away to death"*
Dear Friends:
Where in the world will you be next Friday, September 22nd for the Worldwide Save North Korean Refugees Day? Will you take part?
We cannot allow the latest provocations of the Kim Jong Un regime to divert us from the root cause of this problem: the atrocious violations of human rights being committed by this Kim regime and abetted by Xi Jinping.
Eighty percent of North Korean escapees carry poison so they can kill themselves if they are arrested in China. They would rather die than be repatriated to North Korea. China’s “repatriation policy is a death sentence for North Koreans”.**
Why Should We

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Slave to the Blog: The Survivor Edition

July 28, 2017

I thought that summer in Hawaii might provide respite from all things North Korea. Fat chance.  As soon as I arrive Pyongyang tests a missile and we’re back to duck and cover. (Millennials can google that reference. Really young readers—don’t worry, you’ll be practicing it when school re-opens next month.) The state of Hawaii is initiating civil defense planning for a North Korean nuclear attack.
It’s estimated that it would take a North Korean missile 20 minutes to reach the Sandwich Islands, so state officials figure they have 12-15 minutes to warn the public. Accordingly, the public education campaign will emphasize actions that can be undertaken quickly. The gist of the plan: well, since Hawaii doesn’t have fallout shelters per se, grab your shades (that blast can be bright), find a

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With Friends Like These…

July 25, 2017

A typical pattern in enacting sanctions against North Korea is for sponsors in the US House of Representatives to introduce legislation which passes out of committee or is even approved by the full House but goes nowhere in the Senate. But the die has been cast, and when the next North Korean provocation rolls around, the legislative template has been set. That is essentially how the North Korea Sanctions and Policy Enforcement Act (NKSPEA) was passed last year. This year Representative Ed Royce, chair of the House Foreign Affairs Committee, introduced strengthened legislation in the form of the Korean Interdiction and Modernization of Sanctions (KIMS) Act. The bill passed the House 419-1 in May, the lone holdout being a gentleman from Kentucky in a foil hat.
(OK, I made up the part about

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Knowing Where the Bodies Are Buried

July 20, 2017

The 2014 publication of the UN Commission of Inquiry report concluded that crimes against humanity were being perpetrated in North Korea and contributed to the establishment of the South Korean government’s Center for North Korean Human Rights Records and the UN Human Rights Office in Seoul.
The latest manifestation of the COI’s influence is the publication of the report “Mapping Crimes Against Humanity in North Korea” by the Seoul-based Transitional Justice Working Group. This organization was established in 2014 and receives support from the US National Endowment for Democracy. The report represents the continuation of a line of research using satellite photography to document North Korean human rights abuses that began in 2003 with David Hawk’s  pathbreaking “The Hidden Gulag,”

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Crucial Silences

July 12, 2017


Sometimes what is important lies in the crucial silences of what is left unsaid. The world was exposed to just such an episode of silence last week at the Hamburg G20 summit. To recap, on July 4, Independence Day in the United States, North Korea tested an ICBM. In a departure from the past when Pyongyang attributed its missile activity to satellite launches and other peaceful uses of space, this time the official news agency KCNA, dropped the pretense, describing the new missile as capable of hitting the “heart of the United States” with “large heavy nuclear warheads.” The missile’s unusual trajectory was designed, according to KCNA, “to test warhead’s ability to endure the intense heat and vibrations as it re-entered the earth’s atmosphere.”
To add insult to injury, KCNA

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Childhood Immunization and North Korean Refugees in China

June 27, 2017

While concerns over geopolitical tensions understandably dominate current attention to the Korean peninsula, a humanitarian crisis continues to fester. I was reminded of this when I stumbled across a paper, “Childhood immunizations in China: disparities in health care access in children born to North Korean refugees,” by Hyun Jung Chung, Seung Hyun Han, Hyerang Kim, and Julia Finkelstein in the journal International Health and Human Rights. The bottom line is unsurprising: refugee children exhibit markedly lower rates of immunization than Chinese, and even internal migrant Chinese peers. But the authors uncover some subtleties with potentially disturbing implications in reaching this conclusion.
The study is based on a survey done in 2010 in the Yanbian Autonomous Region. The authors

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Why Sanctions and Inducements On North Korea Don’t Work

June 20, 2017

Peterson Institute For International Economics
The Peterson Institute for International Economics is a private nonpartisan nonprofit institution for rigorous, intellectually open, and indepth study and discussion of international economic policy.

1750 Massachusetts Avenue, NWWashington, DC 20036

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Otto Warmbier, 1994-2017

June 20, 2017

Otto Warmbier, a 22 year-old University of Virginia student, died yesterday from injuries sustained while in detention in North Korea. Our condolences go out to the Warmbier family: their grief must be unimaginable.
Denied legal representation, in March 2016 Warmbier was convicted in a North Korean court and sentenced to 15-years hard labor, for attempting to steal a propaganda poster. The punishment was utterly disproportionate to the crime.
Until last week, that hour-long trial was the last time Warmbier was seen by any outsider. In detention, in contravention to an existing diplomatic agreement, Warmbier was denied consular visits by the Swedish embassy which represents US interests in Pyongyang.
What happened to Warmbier in prison will never be known. Medical examination suggests that

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Probing Firm-level Sanctions Evasion

June 19, 2017

C4ADS has put out another fascinating report tracking individuals and firms in the North Korean sanctions evasion network. My takeaway from their report from last year was that presumably due to its size and isolation, North Korea doesn’t produce a lot of individuals with the requisite skill mix to operate overseas to carry out sanctions evasion effectively. They have a relatively thin bench, and their network does not have a lot of redundancy, so taking out a few agents could noticeably impair their network. (Note I did not say “destroy,” I wrote “impair.”) A case in point was the operative Kim Song-il, who operated multiple front businesses out of Singapore. Kim was arrested in Hawaii, convicted in Utah, and is reportedly serving his time in a federal prison in Pennsylvania.

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North Korea Comments on Trump Impeachment Prospects

June 2, 2017

Earlier this week Rodong Sinmun, the official newspaper of the Central Committee of the Workers’ Party of Korea, carried a story stating that US President Donald Trump faced a growing likelihood of impeachment, triggered by the firing of FBI Director James Comey and the leaking of secrets to Russia. The story even quotes Trump’s tweets about “fake news” and being the victim of the worst political witch-hunt in history, concluding that the Trump twitterstorm demonstrated the “vulnerability of the isolationism, unilateralism, and protectionism” of his policies (translation by Dagyum Ji at NK News).  
The gathering momentum for impeachment has been reinforced, according to the Rodong Sinmun analysis, by public protests throughout the US inspired by the impeachment of Park Gye-hye. The article

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Slave to the Blog: The Rising Tensions Edition

May 31, 2017

Posts in the “Slave to the Blog” category are those in which we revisit or update issues on which we have blogged previously. When we’re lucky there is a unifying theme. Looking at these stories, that theme seems to be “rising tensions.”
Steph Haggard practically makes a living writing about foreigners, often Americans, who have been detained in North Korea. (Actually, he doesn’t make a living doing this, but that’s another story.) Anyway, we concluded a post earlier this month on PUST Professor Kim Hak-song with “At some point, it would not be all that surprising if the US government moves to tighten travel restrictions legally.”
Ask and ye shall receive.
Last week legislation introduced in the House by Democratic Congressman Adam Schiff of California, rumored to be eyeing a presidential

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Sanctions, NGOs, and Whack-a-Mole

May 30, 2017

The intelligence community engages in a thankless task of tracking and exposing sanctions evasion schemes, at the level of enforcement a surely frustrating game of “whack-a-mole.” Within the US government, the placement of individuals and entities on sanctions lists is constrained by the need to preserve sources and methods. The public listings are the proverbial tip of the iceberg. 
That process is repeated around the world, so by the time one gets to the UN Security Council lists, which amount to the intersection of the target lists that individual governments are willing to reveal, one is truly working with the tip of the iceberg. The cumbersomeness of this process impedes effective sanctions enforcement.
By putting their results into the public domain, [private researchers] relieve the

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The Kaesong Industrial Complex, the Moon Administration, and UNSCR 2321

May 26, 2017

In the past week, newly appointed Blue House special advisor for diplomacy and security affairs Moon Chung-in (no relation to Moon Jae-in) has been in the press advocating what might be termed a “Korea First” model of reviving inter-Korea relations. Specifically, he has signaled an early re-opening of the Kaesong Industrial Complex and Mt. Kumgang tourism projects. Unification Ministry spokesman Lee Duk-haeng stated that “We plan to take a flexible look at all major issues involving North Korea as long as they do not violate the framework of international sanctions.” The closure of KIC was essential for the Park government to have any credibility when it requested the international community to sanction North Korea in the wake of the fourth nuclear test: it was untenable to ask others to

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Making Money off Mayhem

May 24, 2017

Using the stock market to assess the zeitgeist is inadvisable, but the blog queue is bare…so here goes.
This train of thought was stimulated by a recent report by Nam Gilnam of the Korea Capital Market Institute titled “Politically-themed Stocks: Characteristics and Investment Risks.” In this paper, Dr. Nam identifies 60 “politically-themed” stocks, generally those allegedly linked to a presidential candidate via kinship, school ties, or regional ties. Those stocks do in fact exhibit unusually high volatility in the run-up to the election. On the day following the election, stocks associated with the winner on average exhibit an abnormal return of approximately 5 percent, while those associated with the second-place candidate exhibit an abnormal fall of about 6 percent. However, there is

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Trump Administration Contemplates the North Korea Model

May 12, 2017

When President Trump indicated that he would be “honored” to meet with North Korean leader Kim Jong-un everyone jumped to the conclusion that the President’s purpose was to negotiate a nuclear deal. But recent developments suggest that Trump may have a very different agenda in mind.
The key is a recent report from Reuters by the indefatigable James Pearson and his colleague Sue-Lin Wong titled “Made in North Korea: As tougher sanctions loom, more local goods in stores.” According to their piece, for the last four years the DPRK has been following a policy of import substitution with North Korean characteristics (aka "import substitution in our own style"). The aim has been to displace Chinese products with locally manufactured alternatives. Domestically produced goods replacing Chinese

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Donald Trump, Agent of Influence

May 2, 2017

With Steph Haggard, down, possibly for the count, after learning that President Trump would be “honored” to meet with that “smart cookie” Kim Jong-un, the youngster, who in the words of SNL punching bag Sean Spicer, is leading his country forward with nuclear weapons and truly creative assassinations of potential rivals (ok, Spicer didn’t actually say that last bit), it is left to me to pick up the baton. 
(Sorry for the run-on sentence, but the Trump Administration generates so much material that it’s nearly impossible to constrain oneself.)
Many observers believe that Trump’s apparent missteps reflect a fundamental lack of preparation, staffing, and organization, that the President, is, as one chatterer put it, an “ignorant oaf.” But the more I think about it, the more I am coming to

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Slave to the Blog: The Déjà Vu All Over Again Edition

April 28, 2017

Yeah, yeah, yeah, I know that North Korea is not unchanging. But sometimes when I open the paper, I feel like [expletive] Rip Van Winkle. Three tales that seem to bear distinct resemblance to events of the not-too-distant past.
Back in the good old days, the North Koreans used to steal railroad cars from the Chinese. They’d dismantle them and sell them back as scrap. (Pretty gangster move, eh?) Eventually the Chinese rail ministry had enough and said “no more,” prohibiting Chinese trains from crossing into North Korea. One of the more useful things that I have done in this job was to tip off the press during the 2007 famine scare that World Food Program grain was piling up in Dandong because 1,800 wagons had disappeared in North Korea. The publicity contributed to a deal that for

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Non-Interference and Other Pieties

April 26, 2017

I have long advocated the abolition of South Korea’s National Security Law which grants the government extraordinary power to ban political speech. (And in this regard, I welcome the report that South Korean courts may soon de-blacklist Martyn Williams’ extraordinarily informative North Korea Tech blog.) But when making the anti-NSL argument, I do acknowledge that South Korea faces challenges that until recently most other democratic societies did not, namely overt and covert campaigns by a hostile foreign state seeking to influence electoral outcomes. Such concerns are underscored by the growing evidence of Russian interference in US and European elections enabled by technological change, and the possibility that North Korea could take its activity to a new more decisive level.

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