South Korea cuts off almost all trade to North as warship tension builds (+ analysis); America to "ensure readiness" of South Korean defence forces but China unwilling to take sides; Britain announces £6 billion in cuts; Iran says nuclear swap is a "breakthrough"; and more

Top of the Agenda: South Korea to Cut Off Trade with North

In a televised speech, South Korean President Lee Myung-bak said his country would cut off nearly all trade with North Korea (NYT) after the sinking of a South Korean warship, a move the Obama administration supported. US President Barack Obama instructed US military commanders to coordinate with South Korea to "insure readiness and deter aggression," while South Korea's military moved to resume "psychological welfare" propaganda broadcasts at the North Korean border. North Korea responded that it would destroy any propaganda loudspeakers with artillery shells. Lee spoke just as economic and security talks between China and the United States began. China has called for restraint against North Korea, but Clinton pressed Chinese leaders to take a more aggressive stance.

China has yet to decide (WashPost) whether to back the results of the international investigation that blamed North Korea for the ship's sinking or to support Lee's call for the UN Security Council to take up the issue.

Analysis:

A Korea Times editorial says South Korea should press forward with further international sanctions against the North.

South Korea's charge against North Korea is likely to result in a drawn-out effort to get the Security Council to censure Pyongyang, writes CFR's Scott Snyder.

 

PACIFIC RIM: China Reaffirms Yuan Reform Policy

Chinese President Hu Jintao opened two days of talks between US and Chinese officials in Beijing by repeating a pledge (WSJ) to continue reform of his country's exchange-rate regime.

The US-China Strategic and Economic Dialogue will include tough issues like Iran, North Korea, and US trade concerns over China's "indigenous innovation" policy, say four CFR experts.

 

ELSEWHERE:

Iran Notifies UN of Nuclear Fuel Swap
UK Government Outlines Budget Cuts

 

This is an excerpt of the CFR.org Daily News Brief. The full version is available on CFR.org