The Iran-North Korea Connection

In late March, South Korean news agency Yonhap revealed that officials from a blacklisted North Korean company, Korea Mining Development Trading Corp., had visited Iran. As the UN Security Council recently tightened sanctions against Pyongyang in retaliation for a series of nuclear and missile tests undertaken by the DPRK, the revelation fueled speculation that Iran was cooperating with North Korea to procure illegal weaponry. The scandal came at an especially unwelcome time for South Korea, which had scheduled working-level talks with Iran in early April to discuss their economic ties and the implementation of sanctions against North Korea.

North Korea’s military cooperation with Iran is not surprising. The two nations have maintained a relatively consistent partnership since the 1979 Iranian Revolution. This alliance has persisted despite the stark contrast between North Korea’s strict crackdowns on religious belief and the theocratic nature of the Iranian regime. Favorable relations between the DPRK and Iran can be explained by both countries’ common anti-American foreign policy identities, and North Korea’s provision of vital technological assistance to Iran’s military.

Despite Seoul’s disapproval of Iran’s ties with North Korea, the scandal is unlikely to cause a lasting rift between Seoul and Tehran. Any erosion of diplomatic relations with Iran would jeopardize South Korea’s vital economic interests and implicitly erode the credibility of its efforts to push for an Iran-style grand bargain with North Korea.

North Korea and Iran: A Long-Standing Defense Partnership

The 1979 Iranian revolution, which overthrew the pro-American Shah, resulted in Tehran facing international isolation due to its hostile relations with both the Western and Soviet blocs. While Iran and the DPRK established diplomatic relations after Khomeini’s rise to power, both countries were cautious to form a full-fledged partnership. Iran feared that aligning too closely with North Korea would eviscerate any hopes of cooperation with South Korea. Similarly, North Korea believed that it could provide military assistance to Iran and still retain Iraq as a trade partner, even though war broke out between Iran and Iraq in 1980.

While Iran was successful in keeping South Korea as a strategic partner, despite Seoul’s close alliance with the United States, North Korea’s relations with Iraq broke down in 1982 after Saddam Hussein snubbed the DPRK by sending an unofficial representative to a covert summit in Pyongyang. This diplomatic rift caused North Korea to provide Tehran with Scud missiles and artillery that could be employed against the Iraqi military.

The collapse of the Soviet Union abruptly ended North Korea’s access to subsidized oil in 1991. It forced the DPRK to look to Iran, one of the few oil-rich countries with which it had diplomatic relations, as a potential energy source. Iran restructured North Korea’s debt in 1987 and strengthened its energy linkages with the DPRK, in exchange for North Korean assistance in its missile technology and nuclear programs.

There is evidence that both countries engaged in military technology sharing during the 1990s. Alon Levkowitz, a professor at Tel Aviv’s Bar-Ilan University, contends that Iran probably shared test data with the DPRK after its 1998 launch of the Shabab-3 missile and that Russian metallurgical assistance to Iran’s missile program indirectly benefited Pyongyang’s nuclear ambitions.

This cooperation intensified after North Korea successfully tested a nuclear bomb in 2006. South Korean press reports revealed in 2011 that hundreds of DPRK scientists were working in Iranian nuclear facilities, assisting Tehran in computer technology development. Iranian scientists were also allegedly present during North Korea’s 2013 nuclear test. In the months leading up to the July 2015 nuclear deal, North Korea sent three delegations to assist Iran in developing nuclear warhead and ballistic missile systems.

This long-standing technological cooperation combined with North Korea’s support for Iranian regional allies, Hezbollah and Bashar Al-Assad in Syria, explains the continued cooperation between Tehran and Pyongyang. As North Korea continues to upgrade its missile and nuclear technologies in the face of crippling sanctions, a revival of its historic oil-for-weapons partnership with Iran could play a vital role in keeping its economy afloat.

The Response from Washington and Seoul

Revelations of North Korean military cooperation with Iran predictably resulted in fierce condemnations from Republicans in the United States, who scathingly opposed the Iran nuclear deal. Rep. Ted Poe, a Republican Congressman from Texas and member of House Foreign Affairs Committee, wrote an op-ed for The Hill, highlighting the destabilizing consequences of Iran’s continued nuclear cooperation with the DPRK.

Poe contends that the Iran deal gave Tehran billions of dollars that could be diverted to the development of ballistic missiles. As North Korea has been a trusted arms supplier to Iran since the 1980s and has a cash-strapped economy, Pyongyang stands to be a major beneficiary of this extra income. The security threat to Israel and the United States resulting from an enhanced DPRK-Iran partnership would be amplified further in eight years time, once the ballistic missile ban is lifted and Iranian missile development is no longer covert.

From South Korea’s standpoint, however, the DPRK’s cooperation with Iran is a mere minor setback and an unsurprising development. South Korea has a long history of maintaining close trade relations with Iran, despite the ROK’s alliance with the United States and public disdain for Iran’s broader foreign policy. In a 2014 BBC World Service poll, only 12 percent of South Koreans viewed Iran as a positive influence in the world, yet South Korean diplomats and business leaders have worked to strengthen foreign investment linkages, energy sector cooperation, and cultural ties.

Three factors explain why Iran’s renewal of ties with North Korea is unlikely to significantly weaken the Tehran-Seoul partnership. First, South Korea’s economy, for decades, has relied extensively on Iranian oil shipments, although tightened UN sanctions against Tehran caused a decline in South Korea’s oil imports from Iran. In 2009, Iran was the ROK’s fourth largest source of crude oil, shipping 157,000 barrels per day. In 2015, thanks to UN, EU, and U.S. sanctions targeting Iran’s oil exports, South Korea’s imports of Iranian oil dropped to 114,595 bpd. However, both sides hope to nearly double that figure by the end of this year.

The Iran nuclear deal’s ratification has led to a massive upsurge in oil shipments to South Korea from Tehran, with an 81 percent increase observed between March 2015 and March 2016. South Korea has made a particularly large investment in Iranian condensate, a light form of oil that can be processed into fuels and petrochemicals. While South Korea could import condensates from Qatar, Iran’s chief industry rival, Tehran’s urgent need to re-enter the global energy trade after a period of prolonged isolation means it would be more likely than Doha to make deals on Korean terms. This ensures that Seoul and Tehran will continue to cooperate in the energy sector regardless of Iran’s military linkages with North Korea.

Second, China’s economic slowdown and the accompanying plunge in South Korean exports to the PRC, has caused South Korea to expand linkages with its other major trade partners. Last month’s Korea-Iran Joint Economic Committee confirmed this trend, as both countries agreed to expanded trade relations in infrastructure, power plant construction and information technology. As the volume of South Korea’s international exports have shrunk for 14 consecutive months (the longest slump in the ROK’s modern history, according to Forbes), the ROK can ill afford to alienate Iran during a time of economic vulnerability.

Finally, acknowledging the failure of diplomacy with Iran to curb Tehran’s belligerence would be a major blow to the credibility of the South Korean government. Since the 2013 Geneva talks, South Korea has cited Western progress toward the suspension of Iran’s nuclear program as a precedent for similar engagement with North Korea. Cutting back economic cooperation with Iran at a time when the United States is aspiring toward normalized relations would be a tacit acknowledgement of diplomacy’s shortcomings and would make the problem of North Korean aggression appear even more intractable to an already skeptical public.

Continued military cooperation between North Korea and Iran is a setback for Western policymakers seeking to normalize relations with Tehran and make the Iranian regime less belligerent on the world stage. Ironically, South Korea, the country most affected by this pernicious development, has a very low capacity for retaliation and this ensures that the South Korea-Iran partnership will continue to expand regardless of Iranian collaboration with Pyongyang.