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Update No: 046 - (22/02/07)

Will the deal hold?
It is just possible that future historians will record 13 February, 2007 as a turning point: not only in resolving North Korea's long-standing nuclear issue, but also in the DPRK's wider relations with the world. On that date the long-running six-party nuclear talks - both Koreas, the US, China, Japan and Russia - which days earlier had seemed close to collapse, finally reached a detailed agreement on how to begin (if no more) the long process of nuclear disarmament by Pyongyang, and much more besides.

Even on paper this is a remarkable triumph for diplomacy, albeit an ironic one. In effect the Bush administration, after six years without a consistent policy and four years into a second, avoidable North Korean nuclear crisis, has now signed up to a deal whose broad shape undeniably resembles the 1994 US-DPRK Agreed Framework (AF) reached by Bill Clinton - which Republicans had excoriated as conceding too much to a rogue state. The Democrats who now control Congress did not fail to note this, while regretting that Bush did not see the light earlier - before the DPRK tested a nuclear device in October.

Must be multilateral
One way that Bush clearly differs from Clinton has been in insisting on a multilateral rather than a bilateral process - to the chagrin of Pyongyang, which likes the idea of talking one-on-one as equals to the global superpower. With China under President Hu Jintao keener than his predecessors to take an active role as honest broker, the rather unwieldy six-party process got under way in August 2003. It was stymied initially by an unrealistic US demand - at the insistence of Washington's hawks, notably vice-president Dick Cheney - for North Korea's complete, verifiable, irreversible nuclear disarmament (CVID), more or less upfront. 

The US stance eased slightly in 2005 with the second Bush administration. A new head of delegation and assistant secretary of state for Asia, Christopher Hill, an experienced negotiator in the Balkans, after great effort in September 2005 cajoled North Korea into signing up to an outline of principles. This seemed stillborn: it was at once interpreted quite differently by Washington and Pyongyang, while the US Treasury Department's decision at the same time to pursue North Korea for financial crimes gave Kim Jong-il a pretext to take his bat home for over a year. Even when six-party talks finally resumed in mid-December, they got nowhere; North Korea's chief negotiator, vice foreign minister Kim Kye-gwan, would discuss nothing nuclear but demanded the immediate lifting of all US financial sanctions. Many wondered aloud if the six-party format had run its course.

Berlin breakthrough
Such gloom just weeks ago makes the new agreement all the more remarkable. As noted in last month's Update, what broke the ice was a bilateral meeting between Hill and Kim in Berlin in mid-January. Notwithstanding Bush's professed aversion to bilateralism, this was clearly beneficial: despite denials from DC, there is little doubt that the basic shape of the February agreement was sketched in Berlin. The six would hardly have been ready to meet again so soon without assurance that this would not be another wasted journey.

Extra energy
Not that this pre-planning guaranteed plain sailing when the sextet reassembled in Beijing on February 8. North Korea not only drives a hard bargain, but one never knows what it may choose to raise as a crunch point. This time, apparently, Kim Kye-gwan said nothing about US financial sanctions - but instead held out for energy aid on a scale way beyond what the other parties could realistically offer. That stubbornness brought the talks close to collapse, and only a marathon 16 hour session into the small hours on February 12-13 saved the day. Tight Chinese redrafting and chairing was also credited.

Tight timelines
The deal thus snatched from the jaws of defeat is remarkable in many ways. Not least, in contrast to the vagueness of seemingly interminable on-off talks hitherto, it specifies tight timelines which in the coming weeks will show whether the parties really mean it or not.

Thus several separate specific steps are envisaged within sixty days. By mid-April North Korea "will shut down and seal for the purpose of eventual abandonment" its Yongbyon nuclear site - including a reprocessing facility which is Pyongyang's only known source of plutonium for bomb-making. This shutdown - the US insists this is more than the mere "freeze" of Yongbyon earlier, under the AF - will be verified by the International Atomic Energy Agency (IAEA), whose inspectors were expelled in early 2003 when Yongbyon was reopened and the DPRK left the Nuclear Non-Proliferation Treaty (NPT), the first signatory state ever to do so. Senior IAEA officials are expected to visit Pyongyang early in March to discuss the modalities of implementing the agency's return to the DPRK.

HEU row looms
Also within 60 days, North Korea must list all of its nuclear programmes which are to be eventually given up. This is potentially a can of worms, as there is no way to know if any such list will be fully comprehensive and exhaustive. In particular, the agreement is oddly silent on whether the DPRK has a second nuclear weapons programme based on highly enriched uranium (HEU). It was US accusations, denied by Pyongyang, of a covert HEU operation which unleashed the second North Korean nuclear crisis in late 2002. The US has been shy in offering proof, but this is assumed to come from revelations by Pakistan's former nuclear entrepreneur Dr A Q Khan. It is hard to envisage either the US dropping its HEU concerns, or North Korea coming clean. This is just one of several knotty issues which the new six-party agreement postpones or fudges rather than resolves.

How much oil upfront?
Kim Jong-il is not known for doing something for nothing," so naturally he will be rewarded for this. As under the 1994 AF, the quid pro quo takes the form of badly needed energy assistance. For shutting Yongbyon North Korea will receive aid equivalent to 50,000 tons of heavy fuel oil (HFO). A further 950,000 tons, worth some US$300 million, will follow once it furnishes "a complete declaration of all nuclear programmes and disablement of all existing nuclear facilities, including graphite-moderated reactors and reprocessing plant."

Ominously, Pyongyang media reported the new deal as offering the full million tons right away - and in exchange for a merely temporary shutdown at Yongbyon. Pessimists may readily anticipate angry exchanges over who said who would do what first in mid-April.

Diplomatic dance
Cautious optimists, however, dare to hope the deal will not unravel, inasmuch as it also addresses a wider range of underlying diplomatic issues. Thus also within 60 days, both the US and Japan will start bilateral talks with North Korea. Washington will move to end longstanding sanctions under the Trading with the Enemy Act - these are decades old, and quite separate from the recent US financial measures - and also the DPRK's designation by the State Department as a state sponsor of terrorism. With Tokyo the main agenda is "the settlement of unfortunate past" (sic): code for past abductions of Japanese, and potential compensation by Japan for its occupation of Korea from 1910 to 1945.

Out of the loop?
Neither of these looks easy. The US can easily lift trade sanctions, but some in the Bush administration - reportedly kept out of the loop over the details of the Beijing deal by the Secretary of State, Condoleezza Rice - are said to be unhappy at letting North Korea off the terrorist list. One consequence would be for the US no longer to automatically veto any bid by the DPRK to join and receive aid from bodies like the World Bank and the International Monetary Fund (IMF); not that Pyongyang has seemed in a hurry to do this.

Yet there is no recent evidence - though plenty until the 1980s - implicating North Korea in international terrorism. Pyongyang's past crimes include kidnapping Japanese citizens, which Kim Jong-il astonishingly admitted and apologized for in 2002. But Pyongyang's failure to come fully clean on this has poisoned Japan-DPRK ties. Shinzo Abe, Japan's newish prime minister, made his name by taking a hard line on the abductions issue; and with his popularity already waning, he is unlikely to back down now. So bilateral talks with the US look set to be difficult, while those with Japan may quickly break down.

Five working groups
If two months is a tight timetable by past six-party and North Korean standards, the new agreement also envisages a flurry of activity far sooner than that. For one thing, unusually and encouragingly it sets a date for the next full six-party meeting. This is set to convene on March 19, barely a month after the last round finished.

Moreover, even before that no fewer than five separate working groups are due to meet to discuss how to implement this large and varied agenda. Specifically, their respective remits cover: denuclearization of the Korean peninsula; normalization of DPRK-US ties; ditto with DPRK-Japan relations; economic and energy cooperation; and establishing a Northeast Asia peace and security mechanism. Though all five will be coordinated, "in principle, progress in one WG shall not affect progress in other WGs."

If that sentence and sentiment seems contradictory, working groups as such are a big step forward. Establishing these should both institutionalize the process and permit details of implementation to be thrashed out, unlike the pattern hitherto of intermittent, unwieldy plenary talks at vice-ministerial level interspersed with long fallow periods of stasis. For the first time this holds out the prospect of continuity and cumulative if slow progress.

A separate peace treaty
The new agreement also provides that separately from the six-party talks, "the directly related parties will negotiate a permanent peace regime on the Korean peninsula." This addresses North Korea's longstanding demand for a treaty to formally end the 1950-53 Korean War, hitherto subject only to an armistice. The likely parties here are the direct combatants: the two Koreas, the US and China. The point of having a separate forum is to exclude Russia and especially Japan from this. It is not just that neither was officially a combatant in 1950-53. Half a century of animosities remain, and neither Korea would countenance the hated former colonial power having a formal role in such a peace treaty.

A bad deal?
All this is a remarkable turnaround - not to say a volte-face for George W Bush. So while most comment has been cautiously favourable, there have been predictable shrieks from Washington's hawks. John Bolton, until recently US ambassador to the UN, and widely believed to be a Dick Cheney 'groupie,' was quick to denounce the new agreement as a bad deal, which in effect rewards nuclear proliferation and thus sends the wrong signal to Iran.

It is a measure of the neo-cons' waning star, amid the Iraq nightmare, that pro-engagers in the Bush administration finally won the political leeway to strike this deal at all. Yet it is a hostage to fortune for George W Bush. Should Kim Jong-il fail to deliver, critics on right and left alike will be quick to pounce. There is already the cynical suggestion that in his final two years Bush is thinking of his legacy, and would like to leave office with a foreign policy record not unremittingly negative. In that light, North Korea is at least a separate kettle of fish from the Middle Eastern imbroglio - 'axis of evil' or no.

Large lacunae
Even for supporters of engaging North Korea, there is no denying that this agreement, just like the 1994 AF, postpones or fudges some of the thornier issue. Besides its silence on HEU as already mentioned, the main gap here is the bomb. Thus despite having tested a nuclear device last October, Pyongyang is not required at this stage even to declare and itemize, much less surrender, its nuclear weapons or fissile material. We are a long way from strident demands for CVID, now. At best this is a very preliminary step; the hope being that the wider diplomatic process, working groups and so forth will create a new atmosphere in which Kim Jong-il will "do a Libya" and come fully in from the cold.

Yet it is far from clear whether the dear leader will ever give up a new nuclear deterrent which he may view as his sole guarantee of respect - and of avoiding the fate of Iraq. He may well conclude, to the contrary, that it was having and testing the bomb which finally forced Bush to deal with him. Moreover Kim owes Bush no favours, and may well string out the talks until a new, hopefully more amenable Democrat president follows in 2008.

How now, Macao?
Another puzzle is that US financial sanctions against Banco Delta Asia (BDA) in Macao, the issue which sank the previous round of six-party talks in mid-December, are wholly unmentioned in the new agreement. The presumption is that separate talks between the DPRK and the US Treasury Department have reached a compromise whereby about half the US$24 million frozen in BDA accounts will be deemed legitimate and released. Yet Pyongyang is as unlikely to give up on the rest of the money as Washington is to drop its concerns, which go beyond money-laundering to actual counterfeiting of US currency. So here again, the road ahead may not prove smooth.

A sea-change?
Undue speculation may be premature, since we shalll soon see if Pyongyang delivers. On past form it can be expected to try to evade, redefine, prevaricate and move the goalposts. Dividing its interlocutors is another favourite ploy; although all six signed up to the new agreement, familiar fissures remain. Thus there is much scepticism in Japan, which has been excused from paying for any energy aid unless there is progress on abductions.

Who pays?
Who exactly will finance North Korea's HFO remains to be determined. In the 1994 AF, the US subcontracted this to a consortium, the Korean Peninsula Energy Development Organization (KEDO). KEDO's other principals, South Korea and Japan, bore the lion's share of expense, especially towards constructing two light water reactors (LWRs) later abandoned unfinished. KEDO still exists, by a thread, and North Korea intermittently goes on demanding fresh LWRs or the equivalent in energy aid.

In Seoul, relief for the government of President Roh Moo-hyun that it can now resume its 'sunshine' policy of engagement is tempered by a weary resignation as to who will end up signing the cheques. Roh gave a hostage to fortune in happier times, with an offer of 2 million kilowatts of electricity that was written into the earlier six-party joint statement of September 2005. That could cost US$8 billion dollars over ten years. But Roh's term of office ends a year hence. If as looks likely the conservative opposition Grand National Party (GNP) wins upcoming presidential and parliamentary elections, in December 2007 and January 2008 respectively, it will be less keen to deliver this and will demand more reciprocity of Pyongyang more generally. 

Inter-Korean talks to resume
For now, however, the six-party agreement eases the way for Seoul to resume bilateral ties which had largely lapsed since last July's North Korean missile test. It was promptly agreed to hold a 20th round of ministerial North-South talks, the first since July 2006, in Pyongyang starting on February 27. South Korea will be asked, and may well agree, to unblock much-needed food and other aid frozen since last summer. Yet the Southern public has grown more sceptical, weary and wary of a nuclear North. So as the elections approach, and with the South's ruling Uri party starting to splinter, there may be fewer votes than before in one-sided largesse towards the North.

A turning point?
In conclusion, watch this space! Any deal is better than no deal, but only time will tell - and quite soon - whether the Pyongyang leopard has changed his spots. We live in hope.

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