As Trump lands in Hanoi, experts warn against hasty peace deal with North Korea

February 26, 2019

(Reuters) –

TRUMP ARRIVES IN HANOI, TALKS WITH KIM TO BEGIN ON WEDNESDAY (1400 GMT)

U.S. President Donald Trump has arrived in the Vietnamese capital Hanoi for his second summit meeting with North Korean leader Kim Jong Un on dismantling Pyongyang’s nuclear weapons program.

The two-day summit kicks off with a one-on-one meeting on Wednesday between the two leaders, followed by dinner with aides. A series of meetings between the two sides will be held on Thursday.

Kim arrived earlier in the day after a two and a half-day train journey from Pyongyang and through China, and then a 170-km (105-mile) road journey from the Vietnamese border to Hanoi.

Kim waves at the Dong Dang railway station in Vietnam, on the border with China. REUTERS/Athit Perawongmetha

While there is no real expectation that the second meeting between the two will bring a final deal on ridding North Korea of nuclear weapons that threaten the United States, there are some hopes it could lead to a declaration that the 1950-53 Korean War is at last formally over.

The London-based International Institute of Strategic Studies said such a deal needed to be carefully worked out, otherwise it could lead to regional security risks. “Peace between Washington and Pyongyang might contribute to an untimely withdrawal of U.S. forces from South Korea, encouraging dangerous misconceptions in Pyongyang,” it said.

For an interactive graphic on Kim Jong Un’s train journey to Vietnam and preparations for the Hanoi summit, click https://tmsnrt.rs/2VkEAP4

EXEMPTING S.KOREA FROM N.KOREA SANCTIONS A POSSIBLE CONCESSION – ANALYST (0545 GMT)

One possible concession that could be offered to North Korea at the summit is exempting South Korea from sanctions imposed on the North for pursing nuclear weapons, said Brian Meyers, a professor at South Korea’s Dongseo University.

“I urge everyone to focus less on the Pyongyang-Washington axis and more on the Pyongyang-Seoul axis because that’s where the action is,” Meyers said on the Reuters Global Markets Forum.

He said the key issue to be decided at the summit was whether the North would agree to close or allow monitoring of its Yongbyon nuclear facility. “This would not necessarily solve the problem of the North’s existing nukes but it would still be a significant enough concession to enable the Americans to loosen sanctions,” Meyers said.

To join the Reuters Global Markets Forum, please contact mailto:divya.chowdhury@thomsonreuters.com

Kim Young-hwan, an analyst at KB Securities in Seoul, said there was unlikely to be a strong reaction in South Korean financial markets to any loosening of sanctions.

“Stocks with exposure to inter-Korean business exchanges will benefit and post some gains in the following months,” Kim said. “But their weighting on the broad index is just around 4 percent, and therefore, you can’t expect any significant rally for the whole market even if there’s a material agreement at the summit.”

(To see an interactive graphic on inter-Korean relations, click https://tmsnrt.rs/2KdXMcS)

SUMMIT DOESN’T HAVE MUCH RELEVANCE FOR FINANCIAL MARKETS-ANALYST(0415 GMT)

Financial markets are unlikely to react much to the summit between Trump and Kim, according to a research note by Robert Carnell, ING’s chief economist for the Asia-Pacific.

“We may (who knows) see a historic ending of the state of war between the two Koreas, but that has been a paper war for decades,” Carnell wrote.

“We may get some further offers to denuclearize, but I think we already had this, so what would be new? And there may be some carrot of sanctions removal from the U.S., though no doubt contingent on further progress. 

“Politically, sure it would be a positive development. But I can’t invest in that.” 

Historically, there has been little direct correlation between the tensions over North Korea and prices on global financial markets.

(For a graphic on ‘Markets vs. North Korea’s provocations’ click https://tmsnrt.rs/2BWJQkN)

JAPAN WANTS U.S. TO PROD N. KOREA ON ABDUCTED JAPANESE (0815 GMT)

The summit between U.S. President Donald Trump and Kim Jong Un is another opportunity for Japan to prod the North Korean leader over the return of any Japanese citizens abducted by Pyongyang in the 1970’s and 1980’s to train its spies, Japanese government spokesman Yoshihide Suga said as Trump headed to Hanoi.

Trump, who raised the abduction issue when he met Kim in Singapore in June, spoke with Prime Minister Shinzo Abe by phone before he left the United States, Chief Cabinet Secretary Suga said.

“As he did last time, President Trump strongly pledged to help resolve the abduction issue,” he said at a regular press briefing in Tokyo.

IN HANOI, KIM COULD SHARE HOTEL WITH SOME U.S. MEDIA (0310 GMT)

Kim is staying at the Melia hotel while he is in Hanoi for the summit.

Just before he arrived on Tuesday, the Vietnamese government announced that the White House media center, a facility for the traveling press, was being shifted from the Melia to another location.

But as things stand, some members of the U.S. press corps traveling with Trump remain individually booked to stay at the Melia and it was not clear if they were being shifted elsewhere.

(Karishma Singh, Raju Gopalakrishnan)

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