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Petraeus Sees Tougher North Korea Sanctions Pushing Kim to Talks

U.S. needs to keep targeting the banks ‘enabling’ Pyongyang.

Petraeus Sees Tougher North Korea Sanctions Pushing Kim to Talks
U.S. and South Korean soldiers, foreground, and North Korean soldiers, background, stand guard next to the meeting rooms that straddle the border between the two Koreas in the truce village of Panmunjom in the Demilitarized Zone (DMZ) in Paju, South Korea.(Photographer: SeongJoon Cho/Bloomberg)

(Bloomberg) -- David Petraeus, the retired general and former Central Intelligence Agency director, said the U.S. needs to continue tightening sanctions on North Korea to get the country’s “attention” and persuade it to accept a diplomatic accord over its nuclear arsenal.

President Donald Trump is facing a situation with North Korea “very, very different than it has been for other administrations” given Pyongyang’s progress toward developing an intercontinental ballistic missile capable of striking the U.S. mainland, Petraeus said. That means the U.S. needs to keep squeezing financial institutions in China and elsewhere “that are enabling North Korea to operate in the global financial world without which they would be in very desperate condition.”

Until a breakthrough is achieved, Petraeus said, North Korea will be the centerpiece of U.S.-China ties, taking precedence over other priorities such as trade and military actions in the South China Sea.

“The elephant in the room is going to continue to be North Korea,” Petraeus, 64, said in an interview Monday in Boston. “At the end of the day there is going to have to be some diplomatic resolution of this.”

Kim’s test this month of a missile that may be capable of traveling in excess of 5,500 kilometers (3,400 miles) demonstrated technological improvements from previous launches and showed the regime is nearing the ability to deliver a weapon as far as Alaska. That said, one successful test doesn’t mean North Korea has worked out all the bugs in its system, or that its missiles can deliver miniaturized nuclear warheads.

That latest launch prompted the U.S. to warn it would consider all options, including cutting trade with countries that continue to do business with the regime, even though North Korea’s top trade partner -- China -- is also the U.S.’s.

The Trump administration last month took steps to penalize a Chinese bank, a Chinese shipping company and two Chinese citizens in an attempt to reduce North Korea’s access to the international financial system. Treasury Secretary Steven Mnuchin said at the time that the measures were “in no way targeting China” but instead focused on “North Korea’s external enablers.”

But limits to the U.S. ability to persuade the rest of the world to treat North Korea’s weapons program more harshly were also on display after the latest missile test. Nikki Haley, the U.S. ambassador to the United Nations, called an emergency hearing of the Security Council after the launch, where she said a unified international community could cut off hard currency, restrict the flow of oil and boost air and maritime restrictions on Pyongyang. The administration, she said, is willing to “go our own path if other countries didn’t join in.”

So far, though, the Security Council hasn’t formally condemned the launch or supported new sanctions. That debate continues.

To contact the reporters on this story: Bill Faries in Washington at wfaries@bloomberg.net, Erik Schatzker in Boston at eschatzker@bloomberg.net.

To contact the editors responsible for this story: Bill Faries at wfaries@bloomberg.net, Larry Liebert