Hanoi: South Korea said it regretted that no deal was reached at a summit between North Korean leader Kim Jong Un and US President Donald Trump on Thursday but the two sides had made meaningful progress.

Trump said he had walked away from a nuclear deal at his second meeting with Kim, in Vietnam, because Kim had made unacceptable demands on lifting biting US-led sanctions.

South Korea’s presidential office, known as the Blue House, said in a statement Trump and Kim made ‘more meaningful progress than ever’, and Trump’s willingness to continue dialogue would brighten prospects for another meeting.

Not necessarily a failure, experts say

‘This is not necessarily a failure,’ Stephan Haggard, a Korea expert at the University of California, San Diego, said after the summit between US President Donald Trump and North Korea’s Kim Jong Un ended abruptly.

‘Time was short and it is clear that the administration wanted to get more in terms of additional sites outside Yongbyon and was unwilling to partially lift sanctions without more clarity or perhaps more concessions on them.’

South Korea’s government, which has been an intermediary in the process, said Trump and Kim made ‘more meaningful progress than ever’, and Trump’s willingness to continue dialogue would brighten prospects for another meeting.

Trump said the summit ended without a deal because the two sides differed on sanctions. ‘It was all about the sanctions,’ he said at a news conference before leaving Hanoi for home. ‘Basically they wanted the sanctions lifted in their entirety, and we couldn’t do that.’

‘Sometimes you have to walk, and this was just one of those times,’ Trump said. He added ‘it was a friendly walk.’

Christopher Green, senior adviser at the International Crisis Group, said: ‘For the US, it would be politically unacceptable and a terrible idea to trade all economic sanctions for the dismantlement of Yongbyon, as Kim seems to have demanded.

‘The North Koreans would have known the Americans were unlikely to take such a deal. Then, I can only imagine that both parties decided in advance that they were comfortable looking tough for the home audience by walking away empty-handed.’ Trump speaks, standing next to Pompeo, at the news conference.

David Kim at the Washington-based Stimson Center said: ‘As long as both Kim and Trump maintain political will to continue talks, we can expect there to be progress in the future. Both leaders want to maintain their relationship and want to strike a deal at some point down the road.

‘These talks were not a failure, although the sequencing and optics could have been better.’

Noboru Yamaguchi, a former general in Japan’s Ground Self Defense Force, said: ‘If denuclearisation took less than ten years that would be incredible. Making steps toward denuclearisation is more important, and there will be ups and downs. Patience is the key word and today is not a step back.’

After a series of photo-ops and public displays of bonhomie starting with dinner on Wednesday, Trump and Kim did not appear publicly together for any post-summit events. Kim left the venue without meeting the press.

At his news conference, Trump said another summit with Kim ‘might be soon, might not be for a long time’.

But he added: ‘We haven’t given up anything, and frankly think we’ll end up becoming very good friends. They were willing to give us areas but not the ones we wanted.’

US stock futures and the dollar dipped after the White House said no agreement was reached ‘at this time’ at the summit.

Shusuke Yamada, chief Japan FX strategist at Bank Of America Merrill Lynch, said: ‘Prior hopes were not that high towards the summit producing concrete agreements, but most expected the two leaders to end the meeting with a handshake. So the markets are reacting to the headlines.’

E-Mini futures for the S&P 500 extended losses and were down 0.4 percent, indicating a sluggish start for US markets. The dollar fell against the yen, and was down 0.2 percent at 110.74.

South Korea’s KOSPI stock index closed 1.7 per cent down. The won also fell against the dollar, taking the US unit to a one-week high against the local currency.

Shares of South Korea’s Hyundai Elevator, a company with high exposure to inter-Korea projects, dropped as much as 15.9 per cent.

Vietnam’s benchmark index .VNI was down 1.07 per cent to 979.4 points.

‘The expectation on Washington-North Korea summit has been dampened slightly,’ said Kim Doo-un, an analyst at KB Securities in Seoul. ‘Seoul stocks as well as overall Asian markets are extending losses in the afternoon on combined reasons - Chinese PMI and partly due to the dampened expectation on the summit.’

FOR THE FIRST TIME, KIM ANSWERS A US REPORTER

Earlier in the day, Kim, one of the world’s most authoritarian and secretive leaders, answered an American reporter’s question for the first time ever as he sat down with Trump.

Asked by a Washington Post correspondent if he was confident about a deal at the summit, Kim evenly replied, through an interpreter: ‘It’s too early to tell, but I wouldn’t say I’m pessimistic. For what I feel right now, I do have a feeling that good results will come out.’

Later, asked by a Reuters correspondent if he was ready to give up nuclear weapons, Kim said through an interpreter: ‘If I’m not willing to do that, I won’t be here’. Kim speaks during the sit-down with Trump on the second day of the Hanoi summit.

Trump looked upbeat despite a domestic political storm in Washington where his former personal lawyer Michael Cohen testified at a congressional hearing, calling the president a ‘conman’.

Body language experts said Trump and Kim showed a good rapport when they met on Wednesday and then over a dinner where they were served steak, kimchi, chocolate cake and persimmon punch.

NORTH KOREA’S ‘AWESOME’ POTENTIAL

Trump has said that, like Vietnam, North Korea could take off economically after normalising relations with the United States.

‘The potential is AWESOME, a great opportunity, like almost none other in history, for my friend Kim Jong Un,’ he said.

Hanoi, the venue for this week’s summit, was relentlessly bombed by US forces during the Vietnam War. The United States and Vietnam normalised ties in 1995, and Hanoi’s ‘doi moi’ reforms have transformed its economy.

Morgan Stanley said it estimated the opening up of North Korea’s economy, assuming a gradual Vietnam-style liberalisation, could bring investment opportunities of up to $9 billion per year and incremental consumption opportunities of $2 billion per year.

‘North Korea’s 18 million working age population would join Asia’s production supply chain at an hourly wage cost lower than Vietnam’s,’ the bank said in a research note. ‘A liberalised North Korea would provide the missing link in improving the trade connectivity of the Korean peninsula to Europe if inter-Korea rail connects to Russia and China.’