The Yellow Sea off the Korean peninsula has become a potential flashpoint for a wider conflict. An escalating series of confrontations by the Democratic People’s Republic of Korea (DPRK) has seen the sinking of a Republic of Korea (ROK) naval vessel and the shelling of civilian settlements on an island near the boundary. The disputed nature of this maritime boundary, known as the Northern Limit Line (NLL), as well as the volatility of DPRK politics has created a serious risk that any further provocation might turn into a wider conflict. While international attention is once again focused on the North’s nuclear program, there is an urgent need to implement measures that could reduce the possibility of a clash in the Yellow Sea becoming something worse.

The Northern Limit Line, drawn up after the Armistice of 1953, has never been recognised by the DPRK. The boundary, which is not considered an international maritime boundary because both Koreas regard this dispute as domestic, crosses an area of fishing grounds that are important to the ailing Northern economy and are close to busy Southern ports. The disputed aspect of the line, the economic importance of the area, the ambiguities of the rules of engagement and the long history of violent confrontations have made it a flashpoint for conflict.

The sinking in March 2010 of the ROK vessel Ch’ŏnan and the shelling in November of Yŏnp’yŏng Island are the most recent and deadly of the confrontations in this area. Relations are at their worst point in more than a decade with much of the progress of recent years undone. The South has found itself hamstrung, unable to respond to North Korea with any force for fear of precipitating a wider confrontation. Impatience is growing and there are demands from the right in Seoul for more robust terms of military engagement in the event of future clashes.

The DPRK appears to have heightened tensions as part of a transition in power from Kim Jong-il, the sickly 68-year-old leader, to his 28-year-old son Kim Jŏng-ŭn. While almost nothing is transparent in this hereditary dictatorship, it appears that the attacks are an effort to give the inexperienced heir some appearance of military and strategic prowess. They also signal to potential rivals among North Korean elites that Kim Jong-il is willing to take on the South to promote his son and he would therefore have no problem confronting domestic opponents.

Pyongyang politics aside, the disputed boundary represents a grave risk. Negotiations on common exploitation of marine resources, particularly the crab that is fished in the area, have come to nothing and there has been little progress on various confidence building measures that could help prevent future crises, for example: the use of common radio frequencies, or better signalling of intent by vessels and a naval hotline. While in past talks the North has been willing to discuss economic cooperation, it has done little to address security issues.

The response to the attack against the Ch’ŏnan culminated in the U.S. and South Korea organising combined and joint military exercises in the area, with a U.S. aircraft carrier participating for emphasis. Military exercises and clear signalling to Pyongyang that it cannot attack its neighbours with impunity are necessary to restore deterrence and prevent escalation on the Korean peninsula. North Korea would lose an all-out war against South Korea and its ally the United States, but Seoul is constrained in retaliating forcefully because it has so much to lose. Even talk of using force rattles markets and impacts the South Korean leadership, which must take into account the mood of its electorate. Pyongyang, isolated from global markets and domestic political forces, does not face such constraints. Rather the disparity permits it to provoke the South at very little cost even while falling behind in the overall balance of conventional forces.

The Ch’ŏnan sinking and Yŏnp’yŏng Island attack are two extraordinary examples of deterrence failure where the North has exploited weaknesses in Seoul’s defence posture. In the ongoing period of succession in Pyongyang, and Seoul’s adjustment of its defence posture and rules of engagement, there is a real danger that the North will continue its asymmetric attacks in the Yellow Sea or elsewhere in the South. As the sinking of the Ch’ŏnan showed, the North is able to carry out stealthy attacks using mini-submarines and torpedoes, but it has other lethal asymmetric capabilities as well.

While the restoration of robust deterrence is the most urgent task, it alone is not sufficient to prevent conflict. Recalibrating the South’s deterrent posture will require revised rules of engagement and close alliance cooperation with the U.S. While Crisis Group recommends both Koreas cease live fire artillery drills in the area near the NLL, this does not suggest Seoul should abandon its right to self-defence and the use of retaliatory force against any attacks. Retaliation can be delivered with other weapons systems, such as ground-based precision-guided munitions or air strikes from ROK fighters. Live fire artillery drills on the five islands are not necessary for their defence, and the North is much more likely to be deterred by other weapons systems and revised rules of engagement that enable their use.

In addition to deterrence, the DPRK’s interlocutors must prioritise the potential flashpoint that is the NLL because of its critical security implications for the region. The two Koreas have failed to establish an equitable maritime boundary and should submit the issue for arbitration through the International Court of Justice or a tribunal possibly under the framework of the UN Convention on the Law of the Sea (UNCLOS).

China was initially very reluctant to pressure North Korea because it believes clashes in the Yellow Sea are a natural consequence of the unsettled inter-Korean maritime boundary and did not in themselves constitute a serious regional security threat. Of greater concern to Beijing has been a stepped-up U.S. military presence in the region and large-scale U.S.-ROK and U.S.-Japan military exercises. But China’s assessment of conflict risks evolved following the live fire drills at Yŏnp’yŏng Island on 20 December, driving its shift from a very muted and cautious approach to making more bilateral and multilateral efforts to push all sides to address the issue, aside from at the Security Council where it blocked action. Given the choice between war or a heightened U.S. military presence, Beijing has made the pragmatic decision to go along with the latter in the short term. China’s approach to clashes in the disputed areas of the Yellow Sea will be a test of its willingness, capacity and credibility in addressing regional conflict risks.

Likewise, Washington should make it clear to Seoul that the NLL is not a maritime boundary, and that the two parties must seek a peaceful resolution of this dispute in accordance with international law. Furthermore, the U.S. must clarify its intention to fulfil its alliance commitments and emphasise that attacks will not be tolerated. At the same time, Washington and Seoul must be prepared to engage Pyongyang and return to the Six-Party Talks to implement all commitments to denuclearise the Korean peninsula and establish a regional peace regime.

Seoul/Brussels, 23 December 2010