US President Donald Trump and North Korea leader Kim Jong-un are scheduled to hold a summit at 9a.m. on 12 June in Singapore (9p.m. EST 11 June) and will be a key event for the world markets, according to Young Sun Kwon, Research Analyst at Nomura.
Key Quotes
“Our base-line view is that the US and North Korea will reach an agreement in principle at the summit, as we believe:
- Kim will accept complete, verifiable, irreversible denuclearization (CVID), including the dismantling of its intercontinental ballistic missiles (ICBM) program.
- In return, the US will provide a complete, verifiable, irreversible guarantee (CVIG) of security for the North Korean regime, which will require the establishment of formal diplomatic relations between the two countries.
- North Korea, South Korea and the US will jointly declare the end of war on the Korean peninsula.
- North Korea, South Korea and the US (and potentially China) will pursue a permanent peace treaty on the Korean peninsula.
- UN economic sanctions on North Korea will be lifted and Pyongyang will get financial aid only once its denuclearisation is confirmed, inspected and examined completely.”
“Given that the White House referred to this as the president’s “first” meeting with Kim, and that the North Korean state-run news agency KCNA has described the situation as urgently requiring countries responsible for peace and stability on the Korean Peninsula to take “practical steps” for peace, we believe there will be a number of follow-up meetings between the US and North Korea (and potentially South Korea) before a detailed timetable to achieve CVID can be drawn up. Indeed, a to-do list for CVID will need to be agreed upon as the term itself is still subject to interpretation.”
“Although not our base case, but we would not completely rule out the possibility of another last-minute cancellation or delay of the summit, although we assign only a less than 5% probability to this. Even if a cancellation or delay happens, however, we would see this as a part of the negotiation process, not a deal-breaker.”
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