Trump agreed to nothing with North Korea — and completely defied the experts - CNBC

As U.S. and North Korean delegations geared up for a second summit between their two leaders, many analyst predictions were identical.

Both sides, the experts said in published notes and interviews, would pocket some easy wins during the two days of meetings in Hanoi, Vietnam — but nothing major would happen.

As he often does, U.S. President Donald Trump defied expectations, walking away from the negotiating table and canceling a pre-planned agreement signing. There was no new deal with North Korean leader Kim Jong Un.

Going into the Hanoi summit, the starting positions of both sides were unambiguous. Trump wanted North Korea to give up its nuclear weapons as he dangled the prospect of an economic boost to the repressive country. Kim sought to see sanctions eased without losing the strategic benefits of his weapons of mass destruction.

After a brief one-on-one and a "social" dinner appeared to go well on Wednesday, Trump and Kim were set for a big day of meetings on Thursday.

The White House schedule was clear: First there would be arrival statements, then a one-on-one discussion, then an expanded meeting, then a working lunch and then a "Joint Agreement Signing Ceremony."

Instead, neither leader ever made it to the lunch. With little warning, the White House announced the talks would be wrapping up ahead of schedule, and there would be nothing to sign.

"The two leaders discussed various ways to advance denuclearization and economic driven concepts," White House spokeswoman Sarah Sanders said. "No agreement was reached at this time, but their respective teams look forward to meeting in the future."

Trump clarified his actions in a post-summit press conference, saying the disagreement had centered on North Korea's demands for the removal of sanctions.

"Basically, they wanted the sanctions lifted in their entirety and we couldn't do that," the president said. "They were willing to de-nuke a large portion of the areas that we wanted, but we couldn't give up all of the sanctions for that."

North Korea currently faces United Nations sanctions and separate sanctions from the United States. The UN blocks some imports and exports and has frozen the assets of individuals connected with Pyongyang's nuclear program. The United States restricts the North Korean economy further and targets more individuals.

Trump said he could have chosen to sign a small agreement — "we actually had papers ready to be signed" — but he ultimately decided that Kim's regime was not sufficiently playing ball.

"Sometimes you have to walk, and this was just one of those times," Trump said, adding that he believed the summit had concluded on "very friendly" terms.

That turn of events defied expectations. Experts had been predicting for days that both leaders were politically incentivized to agree to a few small items.

Such widely predicted measures included opening representative offices in each other's countries and potentially some move to officially declare an end to the Korean War (the fighting stopped in 1953 following an armistice).

For one, Steve Okun, senior advisor at U.S.-based consulting firm McLarty Associates, projected on Thursday morning that the summit would end with some sort of peace declaration — not a peace treaty because that requires input from China and South Korea, too — promises of liaison offices and potentially a road map for future discussions.

"Maybe we will get some type of further commitment on no testing or no more production, but it's not going to be detailed," Okun said Thursday.

U.S. news website Vox published a story on the Tuesday before the summit saying that a tentative outline deal included a peace declaration, an agreement to return remains of American troops to U.S. soil, the establishment of liaison offices, and an agreement for North Korea to stop producing some nuclear weapons materials in exchange for the reduction of some sanctions.

Analysts also pointed to Trump's shifting language on North Korean denuclearization as a sign he was aiming for small wins at the Hanoi summit. Last week, the president made headlines when he said he had "no pressing time schedule" for Kim's regime to relinquish its nuclear capabilities.

The U.S. leader further spurred projections of a watered-down deal when he repeatedly said at the start of Thursday's talks that he didn't want to hurry the North Korean autocrat.

"No rush. No rush. No rush. There's no rush, we just want to do the right deal. Chairman Kim and myself we want to do the right deal. Speed is not important, what's important is that we do the right deal," Trump said Thursday morning.

Following those comments, Okun told CNBC he expected "some sort of incremental deal."

That would be enough for Trump and Kim to boast of success back in their respective countries, analysts said.

"For both leaders, a limited amount of progress is going to be success enough," Richard Fenning, CEO of risk consultancy Control Risks, said Wednesday. "This, I think, is a kind of continuity summit."

Fenning predicted Trump would label the talks "a tremendous success" and Okun said he expected the president to trumpet a "historic" deal.

Instead, Trump acknowledged on Thursday that American efforts had fallen short — for the time being.

He told reporters that he did not have any current plans for future talks with Kim, but that he ultimately expected the two sides would bridge their gaps "with time."

For now, all of the sanctions on Pyongyang will continue, Trump said. He would only remove those economic penalties, he added, if Kim's regime agrees to remove many more of its offensive capabilities than it brought to the table in Hanoi.

"(Kim) wants to de-nuke, but he wants to just do areas that are less important than the areas that we want. We know the country very well, believe it or not, we know every inch of that country," Trump said during the post-summit press conference.

All told, Lisa Collins, a fellow with the Korea Chair at the Center for Strategic and International Studies, said she did not think the Hanoi summit had undone the benefits of last year's historic first meeting between Trump and Kim in Singapore.

"I do think there's something to be gained by the second meeting. Obviously President Trump still feels like he has a decent relationship with Kim Jong Un," she said. "I think it's good that they got further in their talks on what sites the North Koreans would need to dismantle in order for the United States to lift certain sanctions, so I think that is actual progress."

That was the message from Secretary of State Mike Pompeo, who said after the summit that the two leaders had made "real progress" during their talks: "We are certainly closer today than we were 36 hours ago."

Asked during the post-summit news conference if he was still pushing for North Korea's "complete, verifiable denuclearization," Trump declined to lay out his position.

"I don't want to say that to you because I don't want to put myself in that position from the standpoint of negotiations — but, you know, we want a lot to be given up," he said.

Analysts from political risk consultancy Eurasia Group said in a post-summit note that they were "not concerned" that the lack of an agreement in Hanoi would lead to a renewed rise in tensions. Rather, they said Trump's "dodging" of questions about his commitment to a fully denuclearized North Korea "will fuel speculation that the U.S. has already given up on this goal — which would in itself be a major concession without North Korea having apparently provided much, if anything, in return."

As for whether Kim will again launch ballistic missiles beyond his borders — a practice he's stopped since 2017 — Trump said he did not expect any new provocations. The president claimed that Kim promised him over dinner on Wednesday that North Korea "is not going to do testing of rockets and nuclear."

Trump added: "I trust him and I take him at his word."

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February 28, 2019 at 06:04PM