Asia Times Special

Asia Times: North Korea:
A bomb at the negotiation table

By Donald Kirk
Nov 3, 2006

North Korea's sudden agreement to return to six-party talks on its nuclear weapons reveals the success of the United States in deploying a weapon that strikes far more fear among the country's ruling elite than the specter of a US "preemptive strike" so often cited in the rhetoric.

That weapon was the US Treasury Department's edict of a year ago that blockaded dealings on US markets with financial firms accused of serving as conduits for counterfeit US$100 "supernotes" printed in Pyongyang on a press imported from Switzerland.

The impact of the Treasury Department ban, which forced the small Banco Delta Asia in Macau to freeze $24 million in North Korean accounts, was amazingly clear in the brief North Korean acknowledgement of the news that had already emerged from Beijing. The Democratic People's Republic of Korea, said the statement, "decided to return to the six-party talks on the premise that the issue of lifting financial sanctions will be discussed and settled between the DPRK and the US".

So what's going on here? Will these talks that also include the US, South Korea, Japan, China and Russia be about counterfeiting - or nukes? The answer is that North Korea's leaders must have that money for payoffs among one another, all presumably at the behest of Dear Leader Kim Jong-il, as part of the program for controlling the country's top leadership. The figures, by the standards of any normal country, would appear infinitesimally small, but obviously have a lot to do with manipulation of the levers of power over mysterious, restive factions.

Thus, during the initial rounds, the chief US negotiator, Christopher Hill, will be spending much of his time on the sidelines with his North Korean counterpart, Kim Gye-gwan, talking about a topic that Hill has repeatedly said is not his business but that of the US Treasury.

The two will disagree at the outset on semantics - Hill says the "sanctions", as North Korea calls them, are not sanctions as such but rather "restrictions" that Pyongyang could avoid very quickly if it just abided by a few simple rules. Call them whatever, North Korea, squirming with a rage that has exceeded the Americans' highest hopes, has been citing them as the reason for refusing to return to the talks ever since they were suspended one year ago.

This was two months after the signing of the "statement of principles" on September 19, 2005, under which North Korea fooled the world into thinking it was giving up its nukes.

Much though the Americans may gloat over the sanctions' success, they also have had a reverse effect that has vastly escalated the stakes. While professing fears as always about a US strike, Pyongyang cited the sanctions as one basic reason for conducting a nuclear test on October 9, for which it was not quite prepared.

The test was so small - one-fifth of a kiloton, compared with the 12.5-kiloton magnitude of the atom bomb dropped on Hiroshima on August 6, 1945 - that it's likely the test was a disappointment comparable to that of the "long-range" Taepodong 2 missile that fizzled 42 seconds after launch on July 4.

Failure or not, however, North Korea, having agreed to return to the table, is doing so from what it perceives as a position of strength powered by the claim that the test entitles it to full-fledged membership in the exclusive club of nuclear powers, with all the negotiating privileges and perks that membership provides.

Chances are North Korea won't even enter talks about its nukes unless the US yields on the sanctions, possibly after the Treasury Department has reversed itself and decided, fine, those blacklisted firms are no longer misbehaving. An easy explanation for revoking the ban on Banco Delta Asia, the first and most infamous offender, would be that it has reformed after going through reams of records, many of which were on paper, not computer, and admittedly have taken a long time to review.

The North Korean nuclear test, however, has set in motion another process over which the talks may founder. What about those sanctions - real sanctions, by any standard - imposed by the United Nations Security Council after the nuclear test? On paper, they block any dealings with North Korea that may support its nuclear and missile programs, as well as the export of luxury goods into the country. The latter is another ploy for frustrating payoffs in everything from liquor to limousines by which Kim Jong-il and his aides also bestow favors as needed to uphold their power.

The fact that China went along with UN sanctions shows the Chinese wanted North Korea, as a vassal state dependent on Chinese aid, to accede to their demands to stop the nonsense and return to talks. China, however, blocked a much stronger version of the sanctions, advocated by Japan, that would have called for military action. Both China and South Korea opposed any notion of interdicting vessels moving in and out of the North. China, moreover, berated the United States for "inflexibility" - code for the refusal of the US administration to compromise.

It's now more certain than ever that China and South Korea, eager to pursue their own policy of reconciliation with North Korea, will firmly ignore suggestions for putting teeth into the UN sanctions. The most that China appears ready to do is to hold off, on occasion, on shipments of oil, the tactic the Chinese employed in September as a reminder of North Korea's utter dependence on Chinese largesse.

Seoul, after a year in which inter-Korean trade set a new record of more than $1 billion, won't consider anything so drastic as shutting down South Korean investment in Gaesong or tourism in the Mount Kumkang region, showpiece zones above the Demilitarized Zone between the two Koreas, despite US claims that much of the money supports North Korean military programs.

Differences between powers at the talks appear certain to deepen as China and South Korea align closely on a relatively gentle approach while the US and Japan hold out for interdiction as a bargaining tool ready for use if North Korea refuses to come to terms.

Japan for now is holding on to its own sanctions on dealings with North Korea, and the US may choose to maintain the Treasury Department's ban on financial firms dealing with Pyongyang for reasons that have nothing to do with counterfeiting. The US view is that North Korean accounts abroad provide refuge for earnings from the export of weapons and components in clear violation of UN sanctions.

If nothing else, however, the North Korean decision to go for the first six-party talks in a year puts off, temporarily, the debate about whether the US should fall for direct bilateral dialogue with anyone in Pyongyang. Hill and Kim Gye-gwan can hold separate sessions away from negotiators for China, Russia, Japan and South Korea, as they were doing at the talks in Beijing last year, but both sides can claim to have stuck by their demands.

North Korea will have the direct dialogue it wants, and the US will have the cover of the six-party framework that Washington sees as essential for any deal to mean anything.

The prospect of US and North Korean negotiators facing each other one-on-one, in whatever context, engenders false hopes that the United States and others, notably China, can talk North Korea into giving up its nukes. At this stage, the Washington and Pyongyang are at odds on whether North Korea really is a nuclear power.

Hill, in the seven-hour session in Beijing in which Kim Gye-gwan acquiesced to renewed six-party talks, said flatly that North Korea's test did not give it membership in the club - and the US would not negotiate on that basis.

The debate over whether North Korea is a nuclear power, moreover, pales beside the question of what Pyongyang will ask Washington to do in return for resigning from the nuclear club, that is, giving up the program.

Having proved it's capable of exploding a nuclear device, however feeble, Pyongyang is sure to press the case for an outlay of billions on billions of dollars for construction of nuclear reactors needed to help fulfill its dire energy needs. North Korea made that point in September of last year, signing on to the "statement of principles" only to demand the next day that the US first make good on the promise for reactors as specified in the failed 1994 Geneva framework agreement.

Kim Jong-il no doubt figures he can reinforce the demand by holding out the threat of yet another nuclear test if the US does not come around to a deal that would be even bigger and better than the 1994 agreement.

If the talks go nowhere, they have the advantage of putting off North Korea's rise as a serious nuclear power capable of much more than detonating a small device for propaganda purposes. One has to assume, however, that the talks will break down, sooner or later, while the US and others come up with other ways to cope with North Korea's nuclear ambitions.

Journalist Donald Kirk has been covering Korea - and the confrontation of forces in Northeast Asia - for more than 30 years.

Copyright 2006 Asia Times Online Ltd. All rights reserved.

http://www.atimes.com/atimes/Korea/HK03Dg01.html

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The US-Pyongyang paradox

By John Feffer

(Posted with permission from Foreign Policy in Focus)

North Korea's decision to return to the negotiating table is a win-win-win situation, at least temporarily. The United States, China and even North Korea gain from the announcement. However, the boost given to each country - a modest "October surprise" for the Bush administration, a diplomatic achievement for China, and a stronger negotiating position for North Korea - will not carry over into the negotiations themselves. A decision to talk, after all, does not translate automatically into a decision to compromise.

The resumption of the six-party talks is a small but much-needed bright spot in the otherwise dismal foreign-policy record of the administration of US President George W Bush. In May 2003, 67% of Americans were satisfied with America's place in the world, according to a Gallup poll. But a just-released Program on International Policy Attitudes (PIPA) poll shows a complete reversal in attitudes. Now, 68% of Americans are dissatisfied with their country's global position. Foreign policy is a huge albatross around the neck of the administration, and numerous Republican Party candidates next Tuesday's mid-term elections are trying to distance themselves from their leadership's policies.

On North Korea, according to the PIPA poll, 55% of Americans believe that the United States should talk to North Korea without preconditions. This percentage barely changed as a result of the October nuclear test. After all, North Korea's test simply confirmed that the Bush administration policy was just not working. The restarting of the six-party talks also involving South Korea, China, the US, Russia and Japan has come just in time to salvage some small diplomatic victory for the administration.

But with October marking one of the highest death tolls for US soldiers in Iraq since the 2003 invasion, with the Taliban gaining power again in Afghanistan, and with numerous domestic scandals, this small success in East Asia will not likely affect the mid-term elections.

China probably gains more than the US has from this development. After the nuclear test, Washington pundits predicted a major setback for Beijing's "soft power" approach to multilateralism. China was instrumental in convening the six-party talks and mediating between the US and North Korea. With its nuclear test, North Korea not only defied China's explicit warnings, it jeopardized Beijing's whole economic project of turning its northeastern provinces - along with North Korea's Rajin port - into an economic hub.

Short of outright war, there's nothing worse than sanctions to put a damper on regional investment. Brokering the recent seven-hour discussions between US and North Korean diplomats, China has again proved that it holds the key to Northeast Asia's future.

Finally, North Korea itself is a winner. Pyongyang didn't achieve the bilateral negotiations with the US it has been clamoring for, but no doubt some face-to-face meetings will take place on the outskirts of the multilateral negotiations. More important, North Korea has a stronger bargaining position at the table. It has more of a nuclear program (though how much more remains uncertain) and will likely ask for more in return.

Whether South Korea gains anything from the return to the talks remains to be seen. Getting back to the table has required the expenditure of much diplomacy and no small amount of arm-twisting. The prospect of a Chinese energy cutoff and the impact of the various sanctions certainly pushed North Korea to the table without achieving its coveted bilateral talks. And the prospect of an end to the non-proliferation regime has certainly pushed the US toward some small measure of compromise.

But the six-party talks still suffer from the same two problems. North Korea can't have a nuclear deterrent and trade it away at the same time. And the US can't both negotiate a regime-saving agreement with North Korea and push for regime collapse at the same time.

In 1994, when the two sides faced the same two competing paradoxes, a face-saving compromise was achieved. North Korea traded away its nuclear program but probably kept an insurance policy, namely some processed plutonium. The administration of US president Bill Clinton signed the Agreed Framework but sold it to Congress by reassuring politicians that the regime in Pyongyang wouldn't be around in 2003 when the light-water reactors were due to go on line.

Today, North Korea is further along with its nuclear program and the Bush administration is more unyielding in its attitude toward "evil" regimes. However, this time around, China is more actively involved in mediating the crisis, and South Korea has more to offer if a settlement is within reach.

Still, the six-party talks will only succeed if both Pyongyang and Washington come to an arrangement that is as flexible as the Agreed Framework. The Bush administration must finally accept the possibility of negotiating an agreement. Pyongyang must be willing to give up its nuclear program. Both sides will no doubt harbor their secrets - perhaps a cache of processed plutonium on the one hand and a persistent desire for regime collapse on the other. Without resolving these central contradictions, however, the six-party talks will go in precisely the same direction as before: nowhere.

John Feffer is the co-director of Foreign Policy in Focus for the International Relations Center.
(Posted with permission from Foreign Policy in Focus )

http://www.atimes.com/atimes/Korea/HK03Dg02.html