Source: Nikkei Asian Review

After North Korea commemorated the 20th anniversary of the first inter-Korean summit last week by blowing up the joint liaison office, a de facto embassy with the South, it said there was "no future" for North-South relations.

North Korea followed the office's destruction with threats of military action to redeploy forces to areas of the Demilitarized Zone it had withdrawn from as part of a 2018 inter-Korean agreement.

This aggression comes after a more than a year of stagnation in the relationship between the two Koreas. Rolling back gains from a period of incremental progress, it shows the impossible position South Korean President Moon Jae-in is in -- and highlights just how subordinate inter-Korean relations are to U.S. policy.

Coming off his party's decisive victory in the April National Assembly election, Moon appeared poised to renew his push for inter-Korean cooperation. His most important policy priority, inter-Korean diplomacy had stalled because of an impasse in negotiations between the U.S. and North Korea.

Now, North Korea is systematically dismantling the progress made under inter-Korean agreements in 2018 that were the hallmark of a period of rapprochement Moon ushered in and the crowning achievement of his presidency.

While the U.S. and North Korea have agreed upon almost nothing specific enough to be actionable in their talks, inter-Korean agreements -- the April 2018 Panmunjom Declaration, the September 2018 Pyongyang Joint Declaration and the September 2018 Comprehensive Military Agreement -- laid out specific symbolic, humanitarian, military and economic measures intended to increase cooperation and decrease tensions.

The two Koreas successfully implemented many of the symbolic, humanitarian and military measures outlined in the agreements, and bilateral relations underwent a positive transformation.

The countries began to have more regular interactions at the working level, established the liaison office, worked to remove guard posts on either side of the DMZ and implemented a no-fly zone, among other measures, and the peninsula enjoyed a period of quiet and stability for over a year.

The promise of economic relief was the most important part of these agreements to North Korea and its primary motivation for entering into negotiations over its nuclear program with the U.S. But on this front, Moon has been at Washington's mercy.

Under the current U.S.-led sanctions regime, nearly all forms of economic cooperation with the North are illegal. After U.S. President Donald Trump and North Korean leader Kim Jong Un walked away from the Hanoi summit in February 2019 with no agreement and no sanctions relief for Pyongyang, North Korea lost faith in Moon's ability to deliver on economic relief, either through inter-Korean projects or persuading the U.S., and began to pull back.

Moon, like many of his progressive counterparts in South Korea, believes that economic cooperation can build trust that diffuses tension and encourages the regime to denuclearize. Though South Korea has continued to uphold and abide by current sanctions, Moon has suggested that the U.S. and international community consider relaxing them to incentivize North Korea to denuclearize.

Moon's reasoning is directly opposed to that underpinning the U.S. negotiating position, which is firmly opposed to any sanctions relief without verifiable and irreversible steps toward denuclearization.

In the few months leading up to North Korea's demolition of the liaison office, the Moon administration appeared more willing to push the boundaries on cross-border economic projects to salvage inter-Korean relations.

In January, he expressed interest in exploring "independent tourism to North Korea," effectively suggesting a way to work around U.N. sanctions and allow South Korean citizens to visit North Korea through tour programs not sponsored by the South Korean government or companies.

In May, the Unification Ministry announced it would allow "flexibility" in its interpretation of Seoul's unilateral sanctions against North Korea, declaring they would no longer impede inter-Korean cooperation. After North Korea threatened to demolish the liaison office, but before it did so, the Moon administration announced it would crack down on activist groups sending leaflets across the border, drawing criticism from human rights groups.

Over the past week, however, the Moon administration has taken a harder line, at least rhetorically. South Korea admonished North Korea's "rude and senseless" act, and has warned of a strong response should North Korea take further steps to worsen the situation. It also sent its top nuclear envoy to Washington to discuss how to address the growing crisis, but details have yet to emerge from those discussions.

At this point, it appears clear that North Korea is interested in creating a crisis, not cooperation. While North Korea's economy is suffering greatly under the combined pressure of sanctions and border closures because of COVID-19, by escalating tensions it puts pressure on South Korea to grant concessions and frames it to a domestic audience as responsible for North Korea's economic situation.

Even if limited economic relief could de-escalate tensions in the short term, the positive impact would not be long-lasting. Long-term peace and stability on the Korean Peninsula can only be achieved when North Korea no longer has nuclear weapons, and there is no reason to believe it would not divert economic relief to support its nuclear program. As long as Washington and North Korea's negotiating positions remain where they are, neither party has either hope of overcoming the impasse.

This article was originally published in the Nikkei Asian Review.