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South Korean President Moon Jae-in at a news conference at the presidential Blue House in Seoul, South Korea, on May 27, 2018.

South Korean President Moon Jae-in at a news conference at the presidential Blue House in Seoul, South Korea, on May 27, 2018. (SeongJoon Cho/Bloomberg)

SEOUL, South Korea - North Korea had a clear message for the South last week - it’s us or the United States.

The North’s decision to pull out of a recently established liaison office near the border on Friday cast a spotlight on the limits facing President Moon Jae-in’s signature policy of engaging with the communist state within the confines of U.S.-led efforts to denuclearize the divided peninsula.

It also underscored concerns that Moon has reached an endpoint in his ability to play mediator after the collapse of the second summit last month between President Donald Trump and North Korean leader Kim Jong Un.

Instead, North Korea has stepped up efforts to divide the longtime allies by pressuring the South to follow through with an ambitious agenda of inter-Korean projects that have been stalled by international sanctions.

“Moon is in such an awkward place right now because he really does have a credibility gap. I think he was overly optimistic and overly positive about being able to engineer the situation,” said Jenny Town, a Korea specialist at the Stimson Center in Washington, D.C.

“He was very successful at the beginning to bring both sides to the table … but he hasn’t been able to influence what they think,” she added.

The U.S. and North Korea agreed to a general promise to work toward the “complete denuclearization of the Korean Peninsula” during their first summit on June 12 in Singapore. But they have been unable to reach agreement on details as the North demands the removal of crippling sanctions in exchange for steps already taken.

Washington has insisted it will maintain economic pressure on the North, and the Treasury Department on Thursday imposed punishing measures against two Chinese shipping companies accused of helping the North.

The issue was further complicated when Trump tweeted Friday that he had ordered “the withdrawal of those additional Sanctions!”

U.S. officials later clarified that Trump was not referring to Thursday’s announcement but rather additional North Korea sanctions under consideration but not yet formally issued.

“President Trump likes Chairman Kim, and he doesn’t think these sanctions will be necessary,” White House spokeswoman Sarah Huckabee Sanders told reporters.

Growing impatience North Korea’s withdrawal from the liaison office was the latest sign of its growing impatience.

On March 15, Vice Foreign Minister Choe Son Hui also dangled the possibility of formally ending participation in nuclear talks and lifting a nuclear- and missile-testing moratorium.

North Korea also has rebuilt a launch site at Sohae that it had partially dismantled as part of disarmament steps last year, according to recent satellite images.

North Korean officials informed the South of the plans during a meeting at the liaison office on Friday, saying the decision was “in accordance with instructions from the superior authority,” South Korea’s Unification Ministry said.

North Korean officials said their South Korean counterparts could stay and promised to give notice about practical matters later.

The South Korean government said it “regrets the decision” and held out hope that the North would change its mind.

Town said the North Koreans were issuing a direct challenge to Moon.

“North Korea was willing to do some of the humanitarian stuff like family reunions and the sports exchanges and things like that, but again the golden prize in all of this was the economic cooperation,” she said in a telephone interview.

“The North Koreans are saying ‘stop waiting for the Americans. You promised you were going to do this and you need to do this. It needs to be a Korean matter,’” she added.

The two Koreas opened the liaison office in the border town of Kaesong in September to facilitate a slew of economic and cultural exchanges in accordance with agreements between Moon and Kim, who held three summits of their own last year.

That was followed by a series of high-profile events, including a groundbreaking ceremony for a planned project to modernize North Korea’s railways and roads and eventually connect them with the South. But U.S.-led sanctions prevented the effort from going further.

Moon’s challenge The impasse has dealt a blow to Moon politically and domestically. The president’s approval ratings have fallen to record lows, with pollsters blaming the summit collapse as well as economic concerns.

“The general public’s reaction is to blame North Korea, and then to criticize Moon for his naivete in believing what Kim Jong Un has been saying over the past year,” said Choi Kang of the Asan Institute, a South Korean think tank.

“His public approval will go down further if he’s not able to mediate between the two parties because this is the only one possible remaining area he can claim he has succeeded,” Choi said.

Moon, who took office in May 2017 promising to pursue peace with the North, has vowed to continue working to get Pyongyang and Washington back to the table.

But experts said the impasse in nuclear talks between Washington and Pyongyang has left him little room to maneuver.

“North Korea sees South Korea is not in a position to play a really meaningful mediator role in this game,” Choi said. “They want to make it clear that South Korea must make a choice between the United States or North Korea.”

Twitter: @kimgamel

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