Archive
CRS — The Trans-Pacific Partnership Negotiations and Issues for Congress
The Trans-Pacific Partnership Negotiations and Issues for Congress (PDF)
Source: Congressional Research Service (via Federation of American Scientists)
The Trans-Pacific Partnership (TPP) is a proposed regional free trade agreement (FTA) being negotiated among the United States, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. On March 15, 2013, Japanese Prime Minister Shinzo Abe announced that Japan would seek to participate in the TPP negotiations. On April 24, 2013, the Obama Administration gave Congress notice of its intent to negotiate with Japan in the TPP, and Japan is expected to participate in the next round of negotiations in late July 2013. U.S. negotiators and others describe and envision the TPP as a “comprehensive and high-standard” FTA that aims to liberalize trade in nearly all goods and services and include commitments beyond those currently established in the World Trade Organization (WTO). The broad outline of an agreement was announced on the sidelines of the Asia-Pacific Economic Cooperation (APEC) ministerial in November 2011, in Honolulu, HI. If concluded as envisioned, the TPP potentially could eliminate tariff and non-tariff barriers to trade and investment among the parties and could serve as a template for a future trade pact among APEC members and potentially other countries. Congress has a direct interest in the negotiations, both through influencing U.S. negotiating positions with the executive branch, and by passing legislation to implement any resulting agreement.
The 17th round of negotiations concluded in Lima, Peru on May 24, 2013, and the 18th round is scheduled to be held in Malaysia July 15th-25th 2013. The current goal is to reach an agreement in time for the October 2013 APEC summit in Indonesia. For this deadline to be achieved, outstanding negotiating positions may need to be tabled soon in order for political decisions to be made. The negotiating dynamic itself is complex: decisions on key market access issues such as dairy, sugar, and textiles and apparel may be dependent on the outcome of controversial rules negotiations such as intellectual property rights or state-owned enterprises.
Twenty-nine chapters in the agreement are under discussion. The United States is negotiating market access for goods, services, and agriculture with countries with which it does not currently have FTAs: Brunei, Japan, Malaysia, New Zealand, and Vietnam. Negotiations are also being conducted on disciplines to intellectual property rights, trade in services, government procurement, investment, rules of origin, competition, labor, and environmental standards and other issues. In many cases, the rules being negotiated are intended to be more rigorous than comparable rules found in the WTO. Some topics, such as state-owned enterprises, regulatory coherence, and supply chain competitiveness, break new ground in FTA negotiations. As the countries that make up the TPP negotiating partners include advanced industrialized, middle income, and developing economies, the TPP, if implemented, may involve substantial restructuring of the economies of some participants.
The TPP serves several strategic goals in U.S. trade policy. First, it is the leading trade policy initiative of the Obama Administration, and is a manifestation of the Administration’s “pivot” to Asia. If concluded, it may serve to shape the economic architecture of the Asia-Pacific region by harmonizing existing agreements with U.S. FTA partners, attracting new participants, and establishing regional rules on new policy issues facing the global economy—possibly providing impetus to future multilateral liberalization under the WTO.
As the negotiations proceed, a number of issues important to Congress are emerging. One is whether the United States can balance its vision of creating a “comprehensive and high standard” agreement with a large and expanding group of countries, while not insisting on terms that other countries will reject. Another issue is how Congress will consider the TPP, if concluded. The present negotiations are not being conducted under the auspices of formal trade promotion authority (TPA)—the latest TPA expired on July 1, 2007—although the Administration informally is following the procedures of the former TPA. If TPP implementing legislation is brought to Congress, TPA may need to be considered if the legislation is not to be subject to potentially debilitating amendments or rejection. Finally, Congress may seek to weigh in on the addition of new members to the negotiations, before or after the negotiations conclude.
CRS — Foreign Assistance to North Korea
Foreign Assistance to North Korea (PDF)
Source: Congressional Research Service (via Federation of American Scientists)
Between 1995 and 2008, the United States provided North Korea with over $1.3 billion in assistance: slightly more than 50% for food aid and about 40% for energy assistance. Since early 2009, the United States has provided virtually no aid to North Korea, though episodically there have been discussions about resuming large-scale food aid. Additionally, the Obama Administration officials have said that they would be willing to consider other types of aid if North Korea takes steps indicating that it will dismantle its nuclear program. However, barring an unexpected breakthrough, there appears little likelihood the Obama Administration will provide large-scale assistance of any type to North Korea in the near future. In February 2013, North Korea announced it had conducted its third test of a nuclear device, a move that came weeks after its apparently successful launch of a long-range missile. Members of Congress have a number of tools they could use to influence the development and implementation of aid programs with North Korea.
Food Aid. North Korea has suffered from chronic, massive food shortages since the mid-1990s. Food aid—largely from China, South Korea, and the United States—has been essential in filling the gap. As of mid-2013, according to many observers, it appears that while North Korea’s continued food shortages are not severe enough to create a crisis situation, they are causing chronic malnutrition and stunting in vulnerable populations in certain regions. Many analysts think the Obama Administration will be reluctant to provide large-scale aid after the breakdown of a February 2012 deal, in which the United States announced it would provide North Korea with large-scale food aid in return for concessions by Pyongyang on its nuclear and missile programs. The deal unraveled in April 2012 after North Korea launched a long-range rocket in defiance of United Nations sanctions. Since then, the United States and North Korea have not reached any agreements, including on food aid. In June 2012, the Senate voted to prohibit food aid to North Korea.
Providing food to North Korea poses a number of dilemmas. Pyongyang has resisted reforms that would allow the equitable distribution of food and help pay for food imports. The North Korean government restricts the ability of donors to operate in the country. Additionally, multiple sources have asserted that some of the food assistance is routinely diverted for resale in private markets or other uses. However, it is likely that food aid has helped feed millions of North Koreans, at times possibly staving off a repeat of the famine conditions that existed in North Korea in the mid-late 1990s, when 5%-10% of the population died. South Korean President Park Geun-hye’s government has indicated that they would be willing to offer North Korea food aid as part of her plan to foster a “new era” in inter-Korean relations.
Energy Assistance. Between 1995 and 2009, the United States provided around $600 million in energy assistance to North Korea. The aid was given over two time periods—1995-2003 and 2007-2009—in exchange for North Korea freezing its plutonium-based nuclear facilities. In 2008 and 2009, North Korea also took steps to disable these facilities. However, no additional energy assistance has been provided since 2009, when Pyongyang withdrew from the Six-Party Talks— involving North Korea, the United States, China, Japan, and Russia—over North Korea’s nuclear program. The move followed condemnation and sanctions by the U.N. Security Council for North Korea’s April 2009 launch of a suspected long-range missile and May 2009 test of a nuclear device.
In 2007 and 2008, the United States also provided technical assistance to help in North Korea’s nuclear disablement process. In 2008, Congress took steps to legally enable the President to give expanded assistance for this purpose. However, following North Korea’s actions in the spring of 2009, Congress rejected the Obama Administration’s requests for funds to supplement existing resources in the event of a breakthrough. Congress did approve monies for the State Department’s general emergency nonproliferation fund that the Administration could use in North Korea.
Asia’s Story of Growing Economic Freedom
Asia’s Story of Growing Economic Freedom
Source: Cato Institute
The global financial crisis reinforced a sense that the world is "shifting East"—to Asia. The essential story of modern Asia is its unprecedented expansion of economic freedom, enabled by market liberalization. Economic freedom, however, remains substantially repressed across the region.
There are three key policy challenges to expanding economic freedom in Asia today. The first is to open up financial markets, which remain backward and repressed by command economy controls. The second is to renew trade and foreign-investment liberalization, which has stalled since the Asian crisis of the late 1990s. And the third is to open up energy markets, which, even more than financial markets, are throttled by government interventions.
Increasing Asian consumption of fossil fuels will increase carbon emissions. Mainstream advocacy of carbon reduction in Asia should be met with skepticism, given its potential to lower growth substantially. A far better approach is one based on adaptation to global warming through market-based efficiency measures.
Asia’s poorer economies should concentrate on "getting the basics right" for "catch-up" growth. These are "first-generation" reforms of macroeconomic stabilization and market liberalization. Asia’s middle- and high-income economies need to focus also on "second-generation" reforms—more complex structural and institutional reforms to boost competition and innovation. Diverse political systems can deliver catch up growth. But autocracies are badly fitted to deliver second-generation reforms for productivity- led growth. The latter demands a tighter link between political and economic freedoms.
The Asian miracle is not the product of superior technocratic minds who concocted successful industrial policies. Rather, freedom and prosperity bloomed on Asian soil because government interventions were curtailed and markets unleashed. Classical liberalism, however partially implemented, has worked in Asia. It is a system to which Asians should aspire.
A Study on the External Environment of Chinese Investments in the United States
A Study on the External Environment of Chinese Investments in the United States
Source: Brookings Institution
China’s outbound foreign direct investment (FDI) is entering a stage of rapid development. Outbound investment in 2010 was $68 billion, first among developing countries and fifth in the world. However investment has been concentrated in developing countries in Asia, Africa and Latin America. The share of investment in developed countries in Europe and North America has been relatively low. Up to the end of 2009, China’s accumulated FDI to developed countries totaled $18.17 billion, 7.4% of its total stock of outbound FDI. Of this, FDI stock in the United States was $3.34 billion, just 1.4% of China’s total outbound FDI stock. And, in great contrast to China and the United States’ status as one another’s second largest trading partners, China’s stock of FDI in the United States only represents 0.1% of the total stock of FDI to the United States. This is far below the share of FDI stock in the United States by Mexico, Saudi Arabia, South Korea, Brazil and India, and is merely equal to the levels of New Zealand and Austria. According to calculations by the Asia Society, by 2020 China’s outbound FDI will surpass $1 trillion USD, of which a good share will flow to developed countries like the United States.
Explaining High Health Care Spending in the United States: An International Comparison of Supply, Utilization, Prices, and Quality
Explaining High Health Care Spending in the United States: An International Comparison of Supply, Utilization, Prices, and Quality
Source: Commonwealth Fund
This analysis uses data from the Organization for Economic Cooperation and Development and other sources to compare health care spending, supply, utilization, prices, and quality in 13 industrialized countries: Australia, Canada, Denmark, France, Germany, Japan, the Netherlands, New Zealand, Norway, Sweden, Switzerland, the United Kingdom, and the United States. The U.S. spends far more on health care than any other country. However this high spending cannot be attributed to higher income, an older population, or greater supply or utilization of hospitals and doctors. Instead, the findings suggest the higher spending is more likely due to higher prices and perhaps more readily accessible technology and greater obesity. Health care quality in the U.S. varies and is not notably superior to the far less expensive systems in the other study countries. Of the countries studied, Japan has the lowest health spending, which it achieves primarily through aggressive price regulation.
CRS — U.S.-Chinese Motor Vehicle Trade: Overview and Issues
U.S.-Chinese Motor Vehicle Trade: Overview and Issues (PDF)
Source: Congressional Research Service (via Federation of American Scientists)
The U.S. auto industry employs nearly 800,000 workers and is a major employer in certain parts of the country. International competition is fierce, with many automakers and thousands of parts makers vying for market share. Because of the industry’s importance to the U.S. economy, the rapid rise of China’s auto assembly and auto parts industries in recent years has raised concerns among some Members of Congress.
In 2009, China overtook the United States to become both the world’s largest producer of and market for motor vehicles. In 2012, assemblers in China sold 19 million vehicles, and forecasts project more than 30 million vehicles will be sold there in 2020. China’s increasing importance in this industry presents a unique set of opportunities and challenges for the United States. On the one hand, China is in some respects a relatively open market; it was the fourth-largest export market for U.S. autos and auto parts in 2012 at $7.3 billion ($5.7 billion for autos and $1.6 billion for auto parts), and has welcomed foreign direct investment by U.S.-based auto and auto parts manufacturers. Every year since 2010, General Mo tors has sold more cars in China (through exports and its joint ventures there) than in the United States.
On the other hand, China maintains a number of trade and investment barriers that affect trade flows in autos and auto parts. Foreign automakers can produce autos in China only through 50/50 joint ventures with Chinese partners. In addition, U.S. and other foreign auto firms have reportedly faced pressures relating to transfer of technology, export performance, and domestic content requirements. Although the United States imports few vehicles from China, China has become the fourth-largest source of U.S. auto parts imports, with shipments of $14.5 billion in 2012.
The Chinese government has made the development of its auto and auto parts industries, including “new energy vehicles,” a major economic priority, and has implemented a number of industrial policies to promote and protect Chinese auto firms with the long-term goal of making them globally competitive. As a result, auto and auto parts trade has become a source of conflict between the United States and China, most recently in 2012, when the Obama Administration asked the World Trade Organization (WTO) to consider whether alleged Chinese subsidies of auto and auto parts manufacturers violate international rules.
China’s demand for motor vehicles is likely to continue growing rapidly because its population of 1.3 billion is just beginning to have the financial resources to purchase automobiles. For the United States, this will mean many new opportunities and challenges. Unlike some other markets, such as Korea, China’s large internal demand may well shape the industry for many years, with exporting a secondary interest. China’s rising investments in U.S. parts makers such as Nexteer and B456 Systems may help develop a U.S. tec hnology lead in fuel-efficient, low-emission vehicles. But the prevalence of state and munici pal ownership of many Chinese auto and auto parts companies may also cause friction. Many in Congress have called on the Obama Administration to take a tougher stand against China’s industrial policies that may favor Chinese automakers over foreign automakers.
Emergence of Avian Influenza A(H7N9) Virus Causing Severe Human Illness — China, February–April 2013
Emergence of Avian Influenza A(H7N9) Virus Causing Severe Human Illness — China, February–April 2013
Source: Morbidity and Mortality Weekly Report (CDC)
On March 29, 2013, the Chinese Center for Disease Control and Prevention completed laboratory confirmation of three human infections with an avian influenza A(H7N9) virus not previously reported in humans (1). These infections were reported to the World Health Organization (WHO) on March 31, 2013, in accordance with International Health Regulations. The cases involved two adults in Shanghai and one in Anhui Province. All three patients had severe pneumonia, developed acute respiratory distress syndrome (ARDS), and died from their illness (2). The cases were not epidemiologically linked. The detection of these cases initiated a cascade of activities in China, including diagnostic test development, enhanced surveillance for new cases, and investigations to identify the source(s) of infection. No evidence of sustained human-to-human transmission has been found, and no human cases of H7N9 virus infection have been detected outside China, including the United States. This report summarizes recent findings and recommendations for preparing and responding to potential H7N9 cases in the United States. Clinicians should consider the diagnosis of avian influenza A(H7N9) virus infection in persons with acute respiratory illness and relevant exposure history and should contact their state health departments regarding specimen collection and facilitation of confirmatory testing.
Navigating today’s complex business risks” Europe, Middle East, India and Africa Fraud Survey 2013
Navigating today’s complex business risks" Europe, Middle East, India and Africa Fraud Survey 2013 (PDF)
Source: Ernst & Young
Our survey of over 3,000 board members, managers and their teams delivers three clear messages:
Executives and their teams are under increased personal pressure to produce growth in extremely challenging conditions.
Unethical conduct — including fraud, bribery and corruption — in response to this pressure is not just a just a hypothetical risk. One in five respondents have seen financial manipulation occurring in their companies. Fifth-seven percent believe that bribery and corruption are widespread in their country.
Compliance programs work, but not well enough. Companies that do not keep asking the right questions — and demanding answers — are exposing themselves to significant risk.
Special Report: Japan Boldly Resets Its Economy
Special Report: Japan Boldly Resets Its Economy
Source: Knowledge@Wharton (University of Pennsylvania)
Japan is recovering from far more than the tsunami, the Fukushima nuclear disaster and the global financial crisis: It is also attempting to bounce back from two decades of economic lethargy. The country faced a similar period in the 1920s and early 1930s, leading Japan’s then-finance minister to loosen monetary policy, drive down the yen and increase spending. The economy quickly reversed course. Today, Prime Minister Shinzo Abe is taking similar steps. This special report examines the implications of Abe’s new economic policies and analyzes two problem areas — finance and higher education.
“Swept Away” — Abuses against Sex Workers in China
“Swept Away” — Abuses against Sex Workers in China
Source: Human Rights Watch
This 51-page report documents abuses by the police against female sex workers in Beijing, including torture, beatings, physical assaults, arbitrary detentions, and fines, as well as a failure to investigate crimes against sex workers by clients, bosses, and state agents. The report also documents abuses by public health agencies, such as coercive HIV testing, privacy infringements, and mistreatment by health officials.
Taxes: Afghan Government Has Levied Nearly a Billion Dollars in Business Taxes on Contractors Supporting U.S. Government Efforts in Afghanistan
Source: Special Inspector General for Iraq Reconstruction
Since 2008, the Afghan Ministry of Finance (MOF) has levied over $921 million in business taxes, and associated penalties, on 43 contractors that support U.S. government efforts in Afghanistan. DOD, INL, and USAID have agreements with the Afghan government that provide exemption from certain Afghan taxes. SIGAR identified instances where contractors were taxed despite these agreements. For example, $93 million of the $921 million represented taxes levied on business receipts and annual corporate income—a tax category that both the U.S. and Afghan governments have agreed should be exempt for contractors operating under covered agreements. SIGAR also identified instances in which the MOF assessed tax liabilities on contractors even though the contractors held MOF-issued tax exemption certificates. For example, the MOF issued Business Receipts Tax and annual corporate income tax assessments on some DOD contractors, even though the contractors should have been exempt from both tax categories. Three DOD contractors in SIGAR’s sample that held MOF-issued tax exemption certificates were improperly assessed nearly $59 million in business receipts and annual corporate income taxes. U.S. and MOF officials disagree about the tax-exempt status of subcontractors. MOF officials assert that the DOD and State INL agreements provide tax-exempt status only to prime contractors, and not subcontractors, whereas U.S. government officials contend that the agreements provide tax exemption for all non-Afghan companies (both prime and subcontractors) supporting U.S. government efforts. Given these ongoing disputes and the ambiguous nature of the MOF-issued assessments, the 43 contractors in SIGAR’s sample have paid approximately $67 million of the $921 million in total tax assessments, and most still face unresolved assessments. As a result of the outstanding assessments, the MOF has restricted contractors’ freedom of movement and refused to renew business licenses, and the Afghan government has even arrested some contractor personnel. The combined effect is the potential interruption of support to U.S. military operations.
New From the GAO
New GAO Reports
Source: Government Accountability Office
CAPITAL PURCHASE PROGRAM
Status of the Program and Financial Health of Remaining Participants
GAO-13-458, May 7, 2013
PAKISTAN
Reporting on Visa Delays That Disrupt U.S. Assistance Could Be Improved
GAO-13-427, May 7, 2013
VA CONSTRUCTION
Additional Actions Needed to Decrease Delays and Lower Costs of Major Medical-Facility Projects
GAO-13-556T, May 7, 2013
2012 Global multichannel consumer survey
2012 Global multichannel consumer survey
Source: PriceWaterhouse Coopers
The 2012 global multichannel retail consumer survey was completed by more than 11,000 respondents from 11 different countries. For PwC, this is our most comprehensive research to date on multichannel retailing. In order to truly understand the trends and spot the patterns in multichannel shopping, we surveyed only those consumers who self-identified as online shoppers.
The 11 countries covered in the survey were:
- Brazil
- Canada
- China
- France
- Germany
- Netherlands
- Russia
- Switzerland
- Turkey
- United Kingdom
- United States
Report on North Korea’s Military and Security Developments
Report on North Korea’s Military and Security Developments (PDF)
Source: U.S. Department of Defense
The Democratic People’s Republic of Korea (DPRK) remains one of the United States’ most critical security challenges in Northeast Asia. North Korea remains a security threat because of its willingness to undertake provocative and destabilizing behavior, including attacks on the Republic of Korea (ROK), its pursuit of nuclear weapons and long-range ballistic missiles, and its willingness to proliferate weapons in contravention of its international agreements and United Nations Security Council Resolutions.
Military and Security Developments Involving the People’s Republic of China 2013
Military and Security Developments Involving the People’s Republic of China 2013 (PDF)
Source: U.S. Department of Defense
THE PEOPLE’S REPUBLIC OF CHINA (PRC) continues to pursue a long – term, comprehensive military modernization program designed to improve the capacity of its armed forces to fight and win short-duration, high-intensity regional military conflict . Preparing for potential conflict in the Taiwan Strait appears to remain the principal focus and primary driver of China’s military investment. However, as China’s interests have grown and as it has gained greater influence in the international system, its military modernization has also become increasingly focus ed on investments in military capabilities to conduct a wider range of missions beyond its immediate territorial concerns, including counter – piracy, peace keeping, humanitarian assistance/disaster relief, and regional military operations. Some of these missions and capabilities can address international security challenges, while other s could serve more narrowly-defined PRC interests and objectives, including advancing territorial claims and building influence abroad.
Targets, Interest Rates, and Household Saving in Urban China
Targets, Interest Rates, and Household Saving in Urban China
Source: International Monetary Fund
This paper studies a panel of China’s provinces over the period 1996-2009 during which urban household saving rates increased from 19 percent of disposable income to 30 percent. It finds that the increase in urban saving rates is negatively associated with the decline in real interest rates over this period. This negative association suggests that Chinese households save with a target level of saving in mind. When the return to saving declines (increases), it becomes more difficult (easier) to meet a target and households increase (lower) their saving out of current disposable income to compensate. The results are robust across specifications and to the inclusion of additional variables. A main policy implication is that an increase in real deposit rates may help lower household saving and boost domestic consumption.
CRS — U.S. Policy Towards Burma: Issues for the 113th Congress
U.S. Policy Towards Burma: Issues for the 113th Congress (PDF)
Source: Congressional Research Service (via U.S. Department of State Foreign Press Center)
U.S. policy towards Burma has undergone a discernible shift in its approach since a quasi-civilian government was established in March 2011. While the overall objectives of U.S. policy towards the country remain in place—the establishment of civilian democratic government based on the rule of law and the protection of basic human rights—the Obama Administration has moved from a more reactive, “action-for-action” strategy and a skeptical and cautious attitude towards the newly created Union Government and Union Parliament to a more proactive mode. The new approach is designed to foster further reforms based on some form of partnership with the Union Government, headed by President Thein Sein.
During the last two years, the Obama Administration has conducted much of its policy towards Burma using existing constitutional and legal authority, while regularly consulting with Congress about the actions taken. The 112th Congress passed five laws containing provisions related to U.S. policy in Burma. Three laws—P.L. 112-33, P.L. 112-36, and P.L. 112-163—extended the general import ban contained in Section 3 of the Burmese Freedom and Democracy Act of 2003 (2003 BFDA, P.L. 108-61) which is subject to annual renewal. P.L. 112-74 placed restrictions on the use in Burma of appropriated funds for certain Defense and State Department programs. P.L. 112-192 granted the Secretary of the Treasury the option of instructing the U.S. Executive Director at any international financial institution to “vote in favor of the provision of assistance for Burma by the institution, notwithstanding any other provision of law” if the President has determined that to do so is in the national interest of the United States. The 113th Congress will have the opportunity to decide what role it will play in the future course of U.S. policy in Burma.
The Administration’s Burma policy in 2011 and 2012 may be characterized as the combination of increasing engagement with Burma’s Union Government, Union Parliament, and selected opposition groups, and the waiving or easing of many of the existing economic sanctions imposed on Burma by various laws, including the 2003 BFDA and the Tom Lantos Block Burmese JADE (Junta’s Anti-Democratic Efforts) Act of 2008 (P.L. 110-286). However, the Administration may decide that it is approaching the limit of actions it can take with regard to easing of sanctions without Congress passing new legislation.
Some critics of the Obama Administration say that it has moved too fast and too far in easing the existing sanctions, given the continued reports of serious human rights violations and significant restrictions on civil liberties. Other critics think the Administration has moved too slowly and cautiously in waiving sanctions, hindering the reform process in Burma and blocking greater U.S. participation in Burma’s economic development.
Certain key issues with regard to Burma’s political situation may be important to the future course of U.S. policy in Burma. First, President Thein Sein’s vision for Burma’s “disciplined democracy” has not been clearly elaborated, and his commitment to further reforms remains untested. Second, the view of Burma’s military leadership on political reforms is uncertain. Third, the path for possible reconciliation between the country’s Burman majority and various ethnic minorities is unclear.
CRS — North Korea’s Nuclear Weapons: Technical Issues
North Korea’s Nuclear Weapons: Technical Issues (PDF)
Source: Congressional Research Service (via U.S. Department of State Foreign Press Center)
This report summarizes what is known from open sources about the North Korean nuclear weapons program—including weapons-usable fissile material and warhead estimates—and assesses current developments in achieving denuclearization. Little detailed open-source information is available about the DPRK’s nuclear weapons production capabilities, warhead sophistication, the scope and success of its uranium enrichment program, or extent of its proliferation activities. In total, it is estimated that North Korea has between 30 and 50 kilograms of separated plutonium, enough for at least half a dozen nuclear weapons. North Korea’s plutonium production reactor at Yongbyon has been shuttered since its cooling tower was destroyed under international agreement in June 2008. However, on April 1, 2013, North Korea said it would resume operation of its plutonium production reactor. Experts estimate it will take approximately six months to restart. This would provide North Korea with approximately one bomb’s worth of plutonium per year.
While North Korea’s weapons program has been plutonium-based from the start, in the past decade, intelligence emerged pointing to a second route to a bomb using highly enriched uranium. North Korea openly acknowledged a uranium enrichment program in 2009, but has said its purpose is the production of fuel for nuclear power. In November 2010, North Korea showed visiting American experts early construction of a 100 MWT light-water reactor and a newly built gas centrifuge uranium enrichment plant, both at the Yongbyon site. The North Koreans claimed the enrichment plant was operational, but this has not been independently confirmed. U.S. officials have said that it is likely other, clandestine enrichment facilities exist. Enrichment (as well as reprocessing) technology can be used to produce material for nuclear weapons or fuel for power reactors. An enrichment capability could potentially provide North Korea with a faster way of making nuclear material for weapons and therefore is of great concern to policymakers.
North Korea has made multiple policy statements in the past year asserting its nuclear weapons status: in May 2012, North Korea changed its constitution to say that it was a “nuclear-armed state.” In January 2013, North Korea said that no dialogue on denuclearization “would be possible” and it would only disarm when all the other nuclear weapon states also disarm. In March 2013, North Korea stated its goal of expanding its nuclear weapons program.
Many experts believe that the prime objective of North Korea’s nuclear program is to develop a nuclear warhead that could be mounted on North Korea’s intermediate-range and long-range missiles. This was confirmed by North Korean official statements in late March 2013.
Miniaturization of a nuclear warhead would likely require additional nuclear and missile tests. In January 2013, a North Korean statement said that it would respond with a nuclear test “of higher level.” On February 12, 2013, the North Korean official news agency announced a “successful” underground nuclear detonation, and seismic monitoring systems measured a resulting earthquake that was 5.1 in magnitude. This is magnitude is slightly higher than past tests, but yield estimates are still uncertain. The South Korean Ministry of Defense estimated that the test yield was between 6 and 7 kilotons, while the U.S. Director of National Intelligence so far has said “approximately several kilotons.” North Korea claimed that the February 12, 2013, nuclear test was to develop a “smaller and light” warhead. At a minimum, the test would likely contribute to North Korea’s ability to develop a warhead that could be mounted on a long-range missile. To date, no open source date on test emissions is available that might show whether the North Koreans tested a uranium or plutonium device. This information could help determine the type and sophistication of the North Korean nuclear warhead design, about which little is known.
New From the GAO
New GAO Reports
Source: Government Accountability Office
1. Security Force Assistance: More Detailed Planning and Improved Access to Information Needed to Guide Efforts of Advisor Teams in Afghanistan. GAO-13-381, April 30.
http://www.gao.gov/products/GAO-13-381
Highlights -
http://www.gao.gov/assets/660/654290.pdf
2. National Preparedness: Efforts to Address the Medical Needs of Children in a Chemical, Biological, Radiological, or Nuclear Incident. GAO-13-438, April 30.
http://www.gao.gov/products/GAO-13-438
Highlights -
http://www.gao.gov/assets/660/654265.pd
Regional Economic Outlook: Asia and Pacific
Regional Economic Outlook: Asia and Pacific
Source: International Monetary Fund
Growth in the Asia-Pacific region shows signs of improving as extreme risks emanating from advanced economies have receded and domestic demand remains resilient, supported by relatively easy financial conditions and robust labor markets. A small and gradual pick-up in growth to over 5¾ percent is projected in the course of 2013. Risks to the outlook from within the region, such as rising financial imbalances and asset prices in some economies, are coming clearer into focus. Although Asia’s banking and corporate sectors have solid buffers, monetary policymakers should stand ready to respond early and decisively to shifting risks, and macroprudential measures will also have a role to play. In many Asian economies, some fiscal consolidation could also rebuild the space needed to respond to future shocks and preempt potential overheating pressures from capital inflows. In particular, there is a growing need to make tax and spending policies more efficient. To sustain high growth rates and alleviate the “middle-income trap” across Emerging Asia, the policy agenda will vary by jurisdiction but will also often include strengthening infrastructure investment and reforming goods and labor markets.
