SEOUL — South Korean President Moon Jae-in said Friday his government plans to discuss with the United States the possibility of restarting joint inter-Korean economic projects to induce nuclear disarmament from North Korea.
Moon's comments during a nationally televised speech came a day after a high-stakes nuclear summit between President Donald Trump and North Korean leader Kim Jong Un collapsed over what the Americans saw as excessive North Korean demands for sanctions relief in exchange for limited disarmament steps.
The breakdown is a setback for Moon, whose desire for closer relations between the Koreas hinges on a nuclear breakthrough between the United States and North Korea.
While Moon has prioritised stabilizing relations with the North amid the larger nuclear negotiations, his dovish approach has caused disagreements with Washington, which sees economic pressure as its main leverage with Pyongyang.
"I vow to help usher in an era of a peace-driven economy on the Korean Peninsula," said Moon, who preaches that South Korea should be in the "driver's seat" in international efforts to deal with the North.
However, if the nuclear negotiations derail, Moon could potentially face a serious dilemma over whether to continue to engage with the North or join another U.S.-led pressure campaign against it.
In a speech in Seoul commemorating the anniversary of a 1919 Korean uprising against Japanese colonial rule, Moon made a nationalistic call for inter-Korean cooperation, which he says would drive progress in negotiations between the United States and North Korea.
Moon said he would "consult" with the United States on resuming operations at an inter-Korean factory park in the North Korean border town of Kaesong and restarting South Korean tours to the North's scenic Diamond Mountain resort. It's impossible for Seoul to resume the projects under the current U.S.-led sanctions against the North. Moon also proposed the creation of a joint economic committee between the Koreas aimed at developing the North's crippled economy, which he said would be possible with progress in the North's denuclearization.
"We will closely communicate and cooperate with the United States and North Korea so as to help their talks reach a complete settlement by any means possible," he said. "Progress in inter-Korean relations will lead to the normalization of North Korea's relations with the United States and Japan, expanding into a new order of peace and security in Northeast Asia."
While Moon had been expected to make ambitious new proposals for engagement with the North during Friday's lavish ceremony in downtown Seoul marking the centennial of an admired historical event, his speech ended without major announcements or fresh plans on inter-Korean economic activities. Moon spokesman Kim Eui-kyeom did not give a definite answer when asked whether the breakdown of the Hanoi forced Moon to modify his proposals.
Moon said the United States and North Korea still made "meaningful progress" in Hanoi as conversations between Trump and Kim Jong Un would have "enhanced mutual understanding and built more trust."
U.S. Secretary of State Mike Pompeo said in Manila, Philippines, on Friday that the North Koreans demanded "full" sanctions relief in talks in Hanoi, contradicting North Korean Foreign Minister Ri Yong Ho who disputed that account and said that the North asked only for partial relief.
"These are global demands for the denuclearization of North Korea and we are anxious to get back to the table so we can continue the conversation that will ultimately lead to peace and stability and a better life for the North Korean people and a lower threat, a denuclearized North Korea," Pompeo told reporters.
There had been hopes in Seoul that Trump and Kim would reach a deal that meaningfully reduces North Korea's nuclear weapons capability and softens sanctions against Pyongyang, which would give Moon more room to push his ambitious ideas on inter-Korean engagement. Aside of restarting the Kaesong factory park and South Korean tours to Diamond Mountain, the Koreas also aspire to reconnect their railways and roads.
The collapse of the Trump-Kim talks shows Seoul's expectations for quick sanctions relief were clearly unrealistic considering the wide gap that remains between Washington and Pyongyang over sanctions and disarmament steps.
Moon has desperately tried to maintain an impression that things are headed toward the North's denuclearization, trying to keep hard-liners in Washington at bay and a positive atmosphere of dialogue alive. That could become much harder to do if the United States and North Korea struggle to put their negotiations back on track and amid growing doubts on whether Kim would ever voluntarily deal away an arsenal he may see as his strongest guarantee of survival.
While Moon focuses predominantly on North Korea issues, critics say huge problems are being mishandled at home, including a decaying job market, falling birth rates and deep age, gender and political divides. Hwang Kyo-ahn, former South Korean prime minister and leader of the conservative Liberty Korean Party, criticized Moon for overselling a "rosy fantasy" on the North's denuclearization and that people's hopes are now turning into uneasiness.
"South Korea loses the most from the Hanoi summit ending without agreement," said Alison Evans, an analyst from IHS Markit. "Without progress on North Korea, Moon's domestic agenda becomes his only metric of success for voters, who have already criticized his administration for failing to deliver on economic metrics such as unemployment."
Moon had hoped to follow the Trump-Kim meeting with his own fourth summit with Kim, preferably in Seoul, a prospect that now looks murkier.