Global Investing Hot Spots

The North Korean nuclear threat to the Trump presidency

Clay Dillow, special to CNBC.com
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This undated picture released from North Korea's official Korean Central News Agency (KCNA) on June 23, 2016 shows a test launch of the surface-to-surface medium long-range strategic ballistic missile Hwasong-10 at an undisclosed location in North Korea.
KCNA | AFP | Getty Images
The dangerous tie between North Korea and Iran
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The dangerous tie between North Korea and Iran

The No. 1 foreign policy threat that may be awaiting President-elect Trump is North Korea's nuclear capability and its close ties with Iran. It's a high-stakes game of brinkmanship, with a whole new layer of uncertainty as the U.S. administration changes guard in the weeks ahead. Time will tell if Trump will pull out of the nuclear pact the United States signed last year with Iran, potentially freeing the Mideastern power to act on its ambitions.

According to military officials, the United States and South Korea remain on high alert after receiving reports that North Korea may test-fire an intermediate-range ballistic missile when Trump enters the White House in January. The missile test is said to be a warning that Pyongyang will not give up its nuclear- and missile-development programs.

The Musudan, or BM-35 missile, has an estimated range of 3,500 kilometers, which is enough to allow it to target the U.S. Pacific territory of Guam, an island with key strategic assets for U.S. forces.

Though Western security analysts know very little for certain about the missile test expected, arms-control experts and North Korea watchers can agree one thing is likely: A small group of Iranian observers will be there to witness the latest demonstration of North Korean ballistic missile technology.

The cozy military relationship between the Democratic People's Republic of Korea (DPRK) and Iran no longer receives the attention it did two decades ago, when the two countries actively exchanged ballistic missile technology and know-how. But the relationship may be pulled back into focus as the next U.S. presidential administration attempts to manage a tenuous rapprochement with Tehran at the same time North Korea dials up its nuclear and ballistic missile provocations.

Little exists in the way of hard evidence suggesting the two countries are currently co-developing ballistic missiles or exchanging critical nuclear technologies, experts say. However, Iranian scientists and military officers have reportedly observed most of North Korea's major missile and nuclear tests over the past 20 years.

Decades of previous cooperation between the two countries raises the specter that Iran — its economy and government coffers on the mend after years of devastating sanctions — could offer monetary assistance to the cash-strapped hermit kingdom in exchange for missile technology, or even assistance with its now-halted nuclear program at some point in the future.

"There's no really good evidence that they cooperate on nuclear issues," said Dr. Jeffrey Lewis, director of the East Asia Nonproliferation Program at the Middlebury Institute of International Studies at Monterey in California. "But given the scale of the cooperation we've seen on the missile side, would it shock me? No, it would not shock me."

Military bedfellows

Security ties between North Korea and Iran reach back at least as far as the Iran-Iraq war in the 1980s, when North Korea supplied Iran with hundreds of Soviet-designed Scud-B and Scud-C ballistic missiles during the latter half of the decade and into the early 1990s. Iran renamed its Scuds Shahab-1 and Shahab-2, respectively, and its engineers began tinkering with the technology under an indigenous ballistic missile technology program.

North Korea also supplied Iran with its own medium-range No-dong missile, a scaled-up adaptation of Scud technology with an estimated 1,500-kilometer — or roughly 930-mile — range first flown by North Korea in 1993. Iran dubbed its No-dong derivatives Shahab-3 and developed several variants that remain in Iran's arsenal, including one with a reported range of roughly 1,900 kilometers, or nearly 1,200 miles. (Pakistan also received Scud technology from North Korea around this time, renaming its missile variants Ghauri.)

North Korean military participates in the celebration of the 70th anniversary of the founding of the ruling Workers' Party of Korea in Pyongyang on October 12, 2015.
KCNA | Reuters

In the latter half of the 1990s, the concrete ties between the various Scud-based ballistic missile technology programs of North Korea, Pakistan and Iran become less clear. "In a historical sense, the North Koreans provided a lot of liquid fuel missile technology and missiles to a lot of folks, including the Pakistanis and the Iranians," said Tom Karako, a senior fellow and director of the Missile Defense Project at the Center for Strategic and International Studies. "The early Shahab missiles and the Ghauris in Pakistan were basically North Korean Scuds with different paint jobs — literally — transferred from North Korea to those countries. Later these countries got their own liquid- and solid-fueled technologies up and running on their own," he said.

In other words, from the late 1990s onward, Iran and North Korea continued to develop their ballistic missile technologies, though exactly how much co-development or technology exchange has occurred between the two remains unclear. "Pyongyang and Tehran may share test data on a limited basis and perhaps trade conceptual ideas," Michael Elleman, an expert on Iran's ballistic missile program and senior fellow at the International Institute for Strategic Studies' Middle East office, wrote in post 38 North, a North Korea analysis website hosted by the U.S. Korea Institute at Johns Hopkins University, in September. "But there is little evidence to indicate the two regimes are engaged in deep missile-related collaboration, or pursuing joint-development programs."

Not all experts agree strictly with that characterization, however. Lewis points to similarities not only between North Korean and Iranian Scud derivatives like the No-dong and Shahab but also similar design choices, incorporated into the two countries' space launch rockets and the migration of design concepts and components from one country to the other.

One such instance of technology transfer allegedly came to light earlier this year when North Korea tested a new rocket engine incorporating Iranian technology. In response, the U.S. Treasury Department sanctioned individuals associated with Iran's ballistic missile program, Lewis notes. "We know that there's a pretty robust collaboration," he said. "We see the cooperation right up until this day."

Iran-North Korea nexus

What exactly this means for the future of the U.S.-Iran nuclear accord and international efforts to curb North Korea's nuclear and ballistic missile provocations is unclear. North Korea has conducted nine ballistic missile launches and two nuclear tests this year, but heightened tensions between the DPRK and its neighbors, as well as the United States, have taken a backseat to more outwardly visible national security issues, like the campaign against the Islamic State and Russian military provocations in Syria and Eastern Europe.

One of those ballistic missile tests of an extended-range No-dong missile took place just prior to the final U.S. presidential debate in October, but neither the test nor North Korea registered within the debate as a pressing national security issue.

"I think in the public consciousness, it has registered — I think people are more aware now than they were in the past — but in the political circles, it's not getting the attention it should," said Jenny Town, assistant director of the US-Korea Institute and managing editor of 38 North. "I think part of that is because there are no easy answers."

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Nor is there an abundance of smoking guns. "I think these days anything that looks like sanctions violations when it comes to North Korea is going to cause some kind of crackdown," Town said. But while it's relatively easy to flag the transport and exchange of whole missile systems or dual-use technologies, both Iran and North Korea are independently far enough along in their respective missile and nuclear programs that such wholesale movement of technologies and systems isn't necessary. Instead, whatever transfers may be taking place are likely of knowledge and data or of components and parts — pieces of the technology puzzle that are far more difficult to monitor.

North Korean leader Kim Jong Un
KCNA | Reuters

Nonetheless, North Korea is drawing closer to developing working long-range intercontinental ballistic missile technology that could potentially reach the mainland United States, and its nuclear program continues to progress toward a miniaturized device capable of launching aboard land- or submarine-based ballistic missiles. In August, North Korea tested just such a submarine-launched missile for the first time. It also successfully tested its intermediate-range Musudan missile in June, though two subsequent tests in October failed. Some analysts have floated the idea that one or both of those subsequent failures may not have been Musudan missiles at all, but tests of a North Korean ICBM known as the KN-08.

Though North Korean long-range ICBM technology has yet to prove itself in tests, the technology continues to progress, raising the prospect that the isolated nation could offer the technology to one of its few friends in exchange for necessary missile expertise, nuclear know-how, cash or some combination of the three.

"What confidence do we have that North Korea, for the right amount of cash, wouldn't sell just about anything?" Karako said. "The answer to that is: just about none. There's just about nothing that they won't sell. I don't think we have any reason to be confident about the North Koreans being self-constrained."

That could push the Iran/North Korea military relationship back to the fore as Washington eases sanctions and economic constraints on one party while ratcheting up pressure on the other. While North Korean leader Kim Jong Un's father, Kim Jong Il, proved by comparison a more predictable and measured leader, the younger Kim has demonstrated a stubborn resolve to push ahead with efforts to develop a North Korean intercontinental nuclear missile capability.

"On the North Korean side, it's pretty disturbing, based just on their actions alone, on things we don't have to speculate about," Karako said. "This is something that could come to a head far sooner than anyone would like."

— By Clay Dillow, special to CNBC.com