lifestyle leader

North Korea is a scary place. Like swine flu, North Korea is a disaster waiting to happen, but something that I choose to deal with by trying not to think about it and hoping it will go away.

But North Korea (the DPRK) is not going away. And what to do about it is a problem that has bedevilled senior statesmen, diplomats and international relations scholars ever since the miserable little regime was formed. They are possibly the most frustrating negotiation partners in international diplomacy - I've heard stories of negotiations breaking down because DPRK officials didn't like the placement of chairs in the conference room - and anything they agree to is liable to be ignored or reversed at a whim.

Over the years, various strategies of using carrots (aid, more trade, direct funding) and sticks (trade sanctions, financial sanctions) have been tried, but the impact has been limited. The most recent effort is a new set of UN sanctions imposed following North Korea's nuclear test in May of this year. The UN sanctions have more teeth than previous rounds, but will they have the intended effect of choking the DPRK into giving up its nuclear program?

Stephen Haggard and Marcus Noland argue that they probably won't. In a recent paper published by the Peterson Institute, the authors examine how multiple rounds of sanctions and economic isolation has altered North Korea's trade patterns. The effect of this shift has been to push North Korea towards engagement with countries that aren't particularly interested in enforcing UN sanctions.

In short, the US and its partners risk losing their leverage over North Korea. Here's a brief rundown of their findings:

• Despite the internal backlash against reform movements, the DPRK has actually become more economically open.
• Agricultural reforms are unlikely to play a role in North Korea's development, as it did in China and Vietnam; their agricultural sector is too small and fragile.
• North Korea's dependence on China and South Korea has grown dramatically; in addition, trade with partners in the middle east (Iran, Syria and potentially Egypt) has also increased.
• Meanwhile, trade with Japan, the US and Europe has either been reduced to a trickle, or has ceased entirely
• Uncertainty about the succession of North Korea's leader, Kim Jong-Il, is a further incentive for the ruling elite to circle the wagons and resist foreign influence.
• North Korea has re-arranged its external economic relations in order to reduce the impact that traditional sanctions could have.

All of this to say that China has become even more crucial to the unfolding North Korea saga. They are far and away the regime's biggest trading partner and likely the only source of significant external political pressure. By approving the UN sanctions, China is indicating its strong displeasure at North Korea's nuclear antics, but how far they are willing to push the fragile regime remains to be seen.

The US, meanwhile, is left with fewer options. Targeting financial institutions that deal with the DPRK is likely the only remaining tool that the US can use effectively. Using them will be risky, however, because once they're implemented North Korea may simply re-adjust to find new ways of doing business and leave Uncle Sam waving his stick into thin air. In the end, the threat of financial sanctions will likely prove to be more effective than actually using them.

The other option is to simply ignore them and talk about something else, as I do. Incidentally, that is Dan Drezner's half-serious advice to the Obama administration in his sobering summary of the situation.

But wait! you say. If everyone ignores North Korea, Kim Jong Il will be so ronery...