After the North Korean Nuclear Breakthrough: Compliance Or Confrontation? Crisis Group Asia Briefing N°62, 30 April 2007 2

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After the North Korean Nuclear Breakthrough: Compliance Or Confrontation? Crisis Group Asia Briefing N°62, 30 April 2007 2 Policy Briefing Asia Briefing N°62 Seoul/Brussels, 30 April 2007 After the North Korea Nuclear Breakthrough: Compliance or Confrontation? I. OVERVIEW comprehensive, phased, negotiated settlement is still the best way of convincing the North to give up its nuclear weapons. The North Korea nuclear talks finally achieved a breakthrough on 13 February 2007, when the six parties The “Actions for Actions” format of the 13 February struck a general denuclearisation deal. Pyongyang agreed deal is the right strategy but the follow-on phases are to dismantle its nuclear facility at Yongbyon and admit conspicuously vague, with only the general statement International Atomic Energy Agency (IAEA) inspectors that the North will receive 950,000 tons of fuel oil upon within 60 days in exchange for energy aid and security full denuclearisation. The U.S., South Korea, China and assurances. Many vital details must be settled by further Japan now need to put forth a detailed, comprehensive talks, and that first deadline has passed without the North offer for the second and subsequent phases – and back yet admitting the inspectors. Although it has said it will that offer with a credible threat of coercive measures within 30 days, the fear has been raised that the deal may should Pyongyang renege on the deal. prove another failed attempt to bring Pyongyang into the international mainstream. However, the U.S. and other In November 2004, Crisis Group proposed an eight-step, members of the six-party talks should continue to push phased negotiations process that specified the rewards forward by adopting and putting forward a serious, phased the North would receive in exchange for dismantling negotiation strategy that offers specific economic rewards its nuclear program. With only slight modifications, it and security assurances for specific actions taken by the remains the best strategy for achieving denuclearisation. North to achieve denuclearisation. Now that the process is in motion, it is time to continue on to the more difficult steps. The roadmap should look like this: While the 13 February deal was very much a step in 1. Verified freeze of Yongbyon in exchange for the the right direction, it nevertheless offers more questions funds which have now been unfrozen and 50,000 than answers. Critical details, such as a timetable for tons of fuel oil. denuclearisation, remain to be worked out. It will take time to overcome six decades of enmity and mistrust between 2. Energy planning in exchange for declaration of the U.S. and North Korea. Convincing Pyongyang to nuclear programs. give up its nuclear card, which it may see as the ultimate 3. Energy provision in exchange for signatures and guarantee for regime survival, will certainly be difficult. access. The stalling of implementation due to delay in freeing up the North Korean funds at Macao’s Banco Delta Asia 4. Rehabilitation and relief in exchange for agreed (BDA) illustrates how seemingly simple steps can become dismantlement. obstacles that tie up the whole process. Despite the 5. Aid and lifting of UN sanctions in exchange for challenges and uncertainties, however, resolving the dismantlement. nuclear issue is vital for regional peace and stability. 6. Security assurances in exchange for weapons and The 13 February deal has been criticised in the U.S. highly-enriched-uranium (HEU) declarations. Conservatives accused President George W. Bush of 7. International financial institution (IFI) preparations rewarding North Korea for conducting a nuclear test on in exchange for HEU commitments. 9 October 2006, while Democrats said the deal was little different from the Agreed Framework his predecessor 8. Liaison offices and normalisation in exchange for negotiated in 1994 and which collapsed in 2002. Many conclusive verification. expressed scepticism about whether the North intends to Given North Korea’s history of breaking international give up its nuclear program. Despite the ambiguities and agreements and the value it places on its nuclear program, uncertainties, the agreement is a preliminary step toward any offer should incorporate stringent verification processes. resolving the North Korean nuclear problem. A It should also identify appropriate coercive measures as the After the North Korean Nuclear Breakthrough: Compliance or Confrontation? Crisis Group Asia Briefing N°62, 30 April 2007 2 price of default on promises – normally sanctions, but not uranium enrichment program or call on the North to excluding, in an extreme case like an attempt to transfer account for its existing nuclear weapons. nuclear material to another country or non-state actor, the use of military force. Resolving the nuclear issue must The 13 February deal represented a reversal of policy by remain the top priority, with other important issues the Bush administration, which until October 2006 had such as human rights violations, economic openings and refused to engage in bilateral talks or make a concrete offer conventional arms, set aside until denuclearisation is to the North. The change first became apparent when the achieved. Negotiations with North Korea are invariably U.S. contacted the North Korean embassy in Beijing in difficult; nevertheless, a comprehensive, phased negotiation December 2006 regarding a bilateral meeting, with the strategy offers the best chance of achieving denuclearisation. two sides holding discussions in the Chinese capital at the end of that month. In January 2007, the envoys again met outside the six-party framework, this time in Berlin, to II. FROM NUCLEAR BREAKOUT TO discuss the outlines of what became the foundation for BREAKTHROUGH the 13 February accord. The deal was reached because Pyongyang and Washington A. THE BUSH ADMINISTRATION DISCOVERS found themselves facing a situation of mutual need. Feeling the pinch of the financial crackdown undertaken by FLEXIBILITY Washington in September 2005, the North steadfastly insisted that unfreezing its bank accounts in Macao was After three years of talks during which North Korea tested a precondition for resuming the nuclear talks. Meanwhile, 1 both long-range missiles (July 2006) and a nuclear device the U.S. found itself mired in a deepening bloodbath in 2 (October 2006), the six-party talks finally produced a Iraq and facing a series of setbacks in the Middle East breakthrough on 13 February 2007. According to that and Afghanistan. In the wake also of the Republican Party day’s Joint Statement, North Korea agreed to shut down losses in the November 2006 midterm elections, the Bush its Yongbyon nuclear reactor and reprocessing plant and administration desperately needed a diplomatic victory.5 allow IAEA inspectors to monitor and verify this process As an observer put it, the 13 February deal was “one small 3 within 60 days. step for diplomacy, one giant leap for Bush”.6 In return, the North would receive energy aid equivalent Despite the breakthrough, critics have accused Bush 4 to 50,000 tons of heavy fuel oil. The U.S. also agreed to of giving in to “nuclear blackmail”,7 and many remain resolve the issue of $25 million in North Korean frozen sceptical as to whether North Korea will uphold its end of assets at Macao’s Banco Delta Asia within 30 days. The the deal.8 Its policy reversal, particularly its retreat regarding statement created five working groups, each of which the Macao money laundering and counterfeiting was to meet within 30 days, to discuss a range of issues: investigation and consent to allow Ethiopia to purchase denuclearisation of the Korean Peninsula, normalisation arms from North Korea in January 2007,9 suggest how of U.S.-North Korea relations, normalisation of Japan- eager Washington was for a denuclearisation deal and the North Korea relations, economic and energy cooperation extent it was willing to go to accommodate the North to and establishment of a North East Asia peace and security make one happen. mechanism. After these initial steps were implemented, the sixth round of the six-party talks was to start on 19 March 2007, with a ministerial meeting to follow. Much remains not only to be implemented but also to be negotiated. The second phase calls for North Korea to make a “declaration of all nuclear programs and disablement of all existing nuclear facilities” in return for 950,000 tons of fuel oil. However, the Joint Statement 5 Glenn Kessler and Edward Cody, “U.S. flexibility credited does not specifically mention the North’s suspected in nuclear deal with N. Korea”, The Washington Post, 14 February 2007; David E. Sanger, “Outside pressures snapped Korean deadlock”, The New York Times, 14 February 2007. 1 See Crisis Group Asia Briefing N°52, After North Korea’s 6 Jack Pritchard, “North Korea Update”, Korea Insight, Korea Missile Launch: Are the Nuclear Talks Dead?, 9 August 2006. Economic Institute, March 2007. 2 See Crisis Group Asia Briefing N°56, North Korea’s Nuclear 7 “Faith-based nonproliferation”, The Wall Street Journal, 14 Test: The Fallout, 13 November 2006. February 2007. 3 “Initial Actions for the Implementation of the Joint Statement”, 8 “Nuclear bargaining”, The Washington Post, 14 February U.S. State Department, www.state.gov/r/pa/prs/ps/2007/February 2007.0 /80479.htm. 9 Michael R. Gordon and Mark Mazzetti, “North Koreans arm 4 Ibid. Ethiopians as U.S. assents”, The New York Times, 8 April 2007. After the North Korean Nuclear Breakthrough: Compliance or Confrontation? Crisis Group Asia Briefing N°62, 30 April 2007 3 B. THE NEW DEAL: (VAGUE) ACTIONS FOR North Korea by insisting that the issue of kidnapped ACTIONS Japanese citizens be resolved before normalisation, and North Korea demanded an apology for Japanese At first glance, the 13 February agreement appears little colonisation of the Korean peninsula. Talks ended after different from the 1994 Agreed Framework which a mere 45 minutes on the second day with no date set for collapsed in 2002: Both demand a “freeze” of North future meetings.
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