February 28, 2019 / 4:24 AM / 10 months ago

SUMMIT LIVE-Trump flies home after no deal at Kim summit; China urges patience

Feb 28 (Reuters) - 1210 GMT: PROGRESS MADE, COULD BE A DEAL LATER

“This is not necessarily a failure,” Stephan Haggard, a Korea expert at the University of California, San Diego, said after the summit between U.S. President Donald Trump and North Korea’s Kim Jong Un ended abruptly.

“It is clear that the administration wanted to get more in terms of additional sites outside Yongbyon (North Korea’s main nuclear facility) and was unwilling to partially lift sanctions without more clarity or perhaps more concessions on them.”

South Korea’s government, which has been an intermediary in the process, said Trump and Kim made “more meaningful progress than ever”, and Trump’s willingness to continue dialogue would brighten prospects for another meeting.

Prime Minister Shinzo Abe of Japan, another key U.S. ally in the region, said he fully backed Trump’s decision to walk away “and not make the easy choice”.

China, Pyongyang’s only major ally, said difficulties in U.S.-North Korea talks were unavoidable as they were now entering “deep water”, but China hopes both sides can continue their dialogue. Trump waves as he boards Air Force One to leave Hanoi after the summit. REUTERS/Leah Millis

The lack of a deal was not a setback for Kim either, said Hong Kong-based regional security expert Zhang Baohui.

“He’s raised North Korea’s international standing and improved his relationships with his neighbours ... he is winning here,” said Zhang. “If this status quo continues, I expect we will see a slow deterioration in the sanctions regime as China and South Korea start to eye fresh economic opportunities.”

Trump said the summit ended without a deal because the two sides differed on sanctions. “It was all about the sanctions,” he said at a news conference before leaving for home. “Basically they wanted the sanctions lifted in their entirety, and we couldn’t do that.”

“Sometimes you have to walk, and this was just one of those times,” Trump said. He added “it was a friendly walk.”

Christopher Green, senior adviser at the International Crisis Group, said: “For the U.S., it would be politically unacceptable and a terrible idea to trade all economic sanctions for the dismantlement of Yongbyon, as Kim seems to have demanded.

“The North Koreans would have known the Americans were unlikely to take such a deal. Then, I can only imagine that both parties decided in advance that they were comfortable looking tough for the home audience by walking away empty-handed.” Trump, standing next to Pompeo, speaks at the news conference. REUTERS/Jorge Silva

David Kim at the Washington-based Stimson Center said: “As long as both Kim and Trump maintain political will to continue talks, we can expect there to be progress in the future. Both leaders want to maintain their relationship and want to strike a deal at some point down the road.

“These talks were not a failure, although the sequencing and optics could have been better.”

Noboru Yamaguchi, a former general in Japan’s Ground Self Defense Force, said: “If denuclearisation took less than ten years that would be incredible. Making steps toward denuclearisation is more important, and there will be ups and downs. Patience is the key word and today is not a step back.”

0815 GMT: ABRUPT END TO SERIES OF PHOTO-OPS

After a series of photo-ops and public displays of bonhomie starting with dinner on Wednesday, Trump and Kim did not appear publicly together for any post-summit events. Kim left the venue without meeting the press.

At his news conference, Trump said another summit with Kim “might be soon, might not be for a long time”.

But he added: “We haven’t given up anything, and frankly think we’ll end up becoming very good friends. They were willing to give us areas but not the ones we wanted.”

0640 GMT: STOCKS, DOLLAR FALL ON NO AGREEMENT AT HANOI SUMMIT

U.S. stock futures and the dollar dipped after the White House said no agreement was reached “at this time” at the summit.

Shusuke Yamada, chief Japan FX strategist at Bank Of America Merrill Lynch, said: “Prior hopes were not that high towards the summit producing concrete agreements, but most expected the two leaders to end the meeting with a handshake. So the markets are reacting to the headlines.”

E-Mini futures for the S&P 500 extended losses and were down 0.4 percent, indicating a sluggish start for U.S. markets. The dollar fell against the yen, and was down 0.2 percent at 110.74.

MSCI’s broadest index of Asian shares excluding Japan was down 0.45 percent after earlier being mostly flat. Kim stares at Trump during talks in Hanoi. REUTERS/Leah Millis

South Korea’s KOSPI stock index closed 1.7 percent down. The won also fell against the dollar, taking the U.S. unit to a one-week high against the local currency.

Shares of South Korea’s Hyundai Elevator, a company with high exposure to inter-Korea projects, dropped as much as 15.9 percent.

Vietnam’s benchmark index .VNI was down 1.07 percent to 979.4 points.

0310 GMT: FOR THE FIRST TIME, KIM ANSWERS A U.S. REPORTER

Earlier in the day, Kim, one of the world’s most authoritarian and secretive leaders, answered an American reporter’s question for the first time ever as he sat down with Trump.

Asked by a Washington Post correspondent if he was confident about a deal at the summit, Kim evenly replied, through an interpreter: “It’s too early to tell, but I wouldn’t say I’m pessimistic. For what I feel right now, I do have a feeling that good results will come out.”

Later, asked by a Reuters correspondent if he was ready to give up nuclear weapons, Kim said through an interpreter: “If I’m not willing to do that, I won’t be here”. Kim speaks during the sit-down with Trump on the second day of the Hanoi summit. REUTERS/Leah Millis 0815 GMT: DESPITE DOMESTIC ISSUES, TRUMP WAS UPBEAT

Trump looked upbeat despite a domestic political storm in Washington where his former personal lawyer Michael Cohen testified at a congressional hearing, calling the president a “conman”.

Body language experts said Trump and Kim showed they were comfortable with each other when they met on Wednesday, first for talks and then over a dinner where they were served steak, kimchi, chocolate cake and persimmon punch.

(Click tmsnrt.rs/2U5KjIq to see an interactive graphic of the analysis given by body language experts.) A convivial dinner. REUTERS/Leah Millis

NORTH KOREA’S “AWESOME” POTENTIAL

Trump has said that, like Vietnam, North Korea could take off economically after normalising relations with the United States.

“The potential is AWESOME, a great opportunity, like almost none other in history, for my friend Kim Jong Un,” he said in a tweet.

Hanoi, the venue for this week’s summit, was relentlessly bombed by U.S. forces during the Vietnam War. The United States and Vietnam normalised ties in 1995, and Hanoi’s “doi moi” reforms have transformed its economy.

Morgan Stanley said it estimated the opening up of North Korea’s economy, assuming a gradual Vietnam-style liberalisation, could bring investment opportunities of up to $9 billion per year and incremental consumption opportunities of $2 billion per year.

“North Korea’s 18 million working age population would join Asia’s production supply chain at an hourly wage cost lower than Vietnam’s,” the bank said in a research note. “A liberalised North Korea would provide the missing link in improving the trade connectivity of the Korean peninsula to Europe if inter-Korea rail connects to Russia and China.”

(To see an interactive graphic on the Hanoi summit, click tmsnrt.rs/2VkEAP4)

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

Other summit stories:

Smoke signals: Kim Jong Un’s sister rushed off her feet on Vietnam trip

TAKE A LOOK-Trump and Kim and their second summit

Live: North Korea - Reuters social media blog here

Hanoi newsroom, Tim Kelly, Greg Torode, Cynthia Kim, Ben Blanchard, Karishma Singh, Raju Gopalakrishnan

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