This conference was sponsored by the National Intelligence Council and the Federal Research Division of the Library of Congress. Additional copies of this conference summary can be obtained from the office of the National Intelligence Officer for East Asia.

The views expressed in this report are those of individuals and do not represent official US intelligence or policy positions. The NIC routinely sponsors such unclassified conferences with outside experts to gain knowledge and insight to sharpen the level of debate on critical issues.

Introduction

The National Intelligence Council (NIC) held a conference on 23 February 2001 in cooperation with the Federal Research Division of the Library of Congress on “North Korea’s Engagement—Perspectives, Outlook and Implications.”  The conference featured discussion of seven commissioned papers that are published in this report.  Sixty government and nongovernment specialists participated in the conference.  Following is a brief summary of the views of the specialists.

Engagement: Causes, Status, Outlook

The specialists agreed that North Korea is pursuing greater contact with South Korea, the United States, and other concerned powers stemming from its dire economic need and the importance of international support for the survival of the regime.  Kim Chong-il has so far pursued a controlled opening and not embarked on fundamental systemic change.  He has consolidated his power following the death of his father, Kim Il Sung, and is clearly responsible for the changes in policy and greater opening seen thus far.  International support, especially material assistance from South Korea and other donors, has been a key incentive in North Korea’s pursuit of engagement.

The results have included extensive North Korean contacts with South Korea, the United States and other concerned powers; large-scale donations of food, fertilizer, fuel and other assistance; rail, road, and tourism projects spanning the DMZ; and current and prospective agreements regulating North Korea’s missile and weapons of mass destruction (WMD) programs.  North Korea has become increasingly dependent on foreign support, and the overall danger of war on the peninsula has declined.  Specialists caution, however, that many uncertainties remain, especially regarding North Korea’s intentions and the military standoff on the peninsula that continues without significant change.

Most specialists foresee incremental progress in North Korea’s engagement over the next two years, subject to possible fits and starts because of adverse developments in North Korea or among the concerned powers.  Progress will remain contingent on a range of variables, and could be halted or reversed under some circumstances.  Kim Chong-il has played a key role in North Korea’s diplomatic opening but does not appear to have a “master plan” for engagement.  He is likely to continue to exploit the opportunities presented by South Korean President Kim Dae Jung’s sunshine policy and other international openings.  Because the South Korean leader’s policy is critically important to the current phase of engagement, the end of his term in two years makes longer term projections difficult, according to the specialists.

Many at the conference thought that the engagement process was likely to slow this year because of strong controversy in South Korea over the costs and limited benefits so far of the sunshine policy at a time of uncertainty in the South Korean economy.  Some note that a visit by Kim Chong-il to Seoul later this year could spur the process ahead again. Some speculate that North Korean elites remain divided over the pace and course of engagement and are wary that a US policy review could lead to lower priority for engagement with the North Korean regime.  The central role of the military in North Korean decision making could be a drag on forward movement, though some experts judge that military opposition was offset by the Korean People’s Army leadership’s receipt of financial and other benefits related to the engagement process.

The experts were pessimistic that the North Korean regime over the longer term (five to 10 years) would be able to carry out needed economic changes while sustaining tight political control, as have the communist regimes in China and Vietnam.  North Korea’s pervasive economic weaknesses and hidebound political and economic elite are among major impediments to effective longer term change.

The specialists judge that US policy has played a key role in North Korea’s recent engagement, second only to South Korea’s sunshine policy.  US support for engagement, which several participants note began as early as the Reagan Administration, provides important political backing for Kim Dae-jung in the face of his many domestic critics. It also allows Japanese leaders to provide aid and pursue negotiations with P’yongyang, despite broad skepticism among Japanese elites and public opinion.

Issues in Dispute

The specialists differ strongly over how engagement has affected North Korea’s intentions.  Some argue that North Korean leaders are determined to make substantial changes in order to survive and develop in a new international environment defined by P’yongyang’s increased dependence on foreign assistance and support.  The regime has reached a turning point requiring more economic reforms and nascent moves to ease military tensions.  In contrast, others argue that growing aid dependency and international contacts have not changed North Korea’s long-term strategy to dominate the peninsula by military means.  North Korean changes thus far are the minimum needed to take advantage of the recent and unexpected material benefits provided by South Korea, the United States, and other powers; the changes could be easily reversed under different circumstances.  Those who hold this point of view believe that greater reciprocity must be an aspect of engagement with North Korea.  They especially believe in the need to seek concrete concessions, especially regarding the conventional balance of forces on the peninsula, that keeps in step with additional benefits and concessions for P’yongyang.

Implications

The specialists assess that North Korean engagement will have the following implications for other countries:

China is well positioned to gain from continued gradual North Korean engagement.  Incremental progress supports Beijing’s interests in stability on the peninsula, avoids costly Chinese efforts to shore up the failing North Korean regime, and allows China to pursue ever closer relations with the more powerful and influential South Korean government.  Prevailing trends and easing tensions on the peninsula appear to add to Chinese arguments against US regional and national missile defense programs and undercut the rationale for much of the US military deployments in Northeast Asia.

Japan is poorly positioned to benefit from some recent trends in North Korean engagement, though it does benefit from the reduced risk of war on the peninsula.  Gradual progress in P’yongyang’s relations with South Korea, the United States and others has reinforced North Korea’s deeply rooted antipathy to Japan.  Tokyo fears being called upon repeatedly to support financially and politically US and South Korean arrangements with North Korea that do little to meet Japan’s concerns.  Thus, Japan believes that US efforts to curb North Korea’s long-range missile development do not address Japan’s concern with the immediate threat posed by North Korea’s deployed medium range ballistic missiles.  Japan also worries about the long-term implications of a reunified Korea that is anti-Japan.

South Korea will face deepening debate and political controversy if Kim Dae Jung’s sunshine policy continues to elicit only limited gestures and assurances from North Korea.  The demand for greater reciprocity is likely to increase as opponents jockey for advantage while President Kim’s power wanes as he approaches the end of his term.

The conferees generally believe that the United States probably will see its influence reduced somewhat as North Korea—while still focused on the US connection—seeks military security, economic assistance, and political recognition from a broader range of international players.  US ability to control the pace of the engagement process probably will decline as South Korea, China, and others improve their relations with P’yongyang.

The specialists assess that North Korea’s engagement increasingly challenges the US security paradigm of the past 50 years that has viewed North Korea as a major enemy and military threat.  It complicates the existing rationale for the US military presence in Northeast Asia and challenges US values and norms as American policy provides aid and pursues negotiations with a regime that affronts many US-backed norms.
Because of the multifaceted and complicated array of US policy issues related to engagement with North Korea, several specialists favor a senior US policy coordinator for North Korea, though others oppose such a step as unneeded in the current context.

Welcome and Ground Rules

Robert L. Worden, Chief, Federal Research Division, Library of Congress, and Robert G. Sutter, National Intelligence Officer for East Asia, National Intelligence Council

Panel One:  Perspectives on North Korea’s Engagement

Mitchell Reiss, William and Mary School of Law—Avoiding Déjà vu All Over
Again:  Some Lessons from US-DPRK Engagement

Daryl Plunk, Heritage Foundation—The New US Administration and North
Korea Policy:  A Time for Review and Adjustment

Donald Oberdorfer, Johns Hopkins University, Nitze School of Advanced
International Studies—North Korea’s Historic Shift:  From Self-Reliance to Engagement

Panel Two:  Perspectives on North Korea’s Engagement (continued)

Nicholas Eberstadt, American Enterprise Institute—commentary

Panel Three:  Implications for South Korea, Japan, and China

Kongdan Oh, Institute for Defense Analyses—North Korea’s Engagement:
Implications for South Korea

Victor Cha, Georgetown University—The Ultimate Oxymoron:  Japan’s
Engagement with North Korea

Jonathan Pollack, Naval War College—China and a Changing North Korea:
Issues, Uncertainties, and Implications

Panel Four:  Implications for the United States:  General Discussion

Michael McDevitt, Center for Naval Analyses—Engagement with North Korea: Implications for the United States

Conference Coordinator:  Andrea Savada
Library of Congress

Mitchell B. Reiss
Dean of International Affairs
Director of the Wendy & Emery Reves Center for International Studies
College of William & Mary
 

A little noticed anniversary took place earlier this year.  Nine years ago, in January 1992, U.S. Under Secretary of State for Politics Arnold Kanter met in New York with Kim Young Sun, the Korean Workers Party Secretary for International Affairs, in what was the first-ever senior-level meeting between the United States and the DPRK.  Kanter laid out the seven preconditions North Korea needed to meet if it wanted to normalize diplomatic relations with the United States, including resolving the question of the North’s separation of plutonium for use in nuclear weapons.[1]    Kim promised that the DPRK would sign a safeguards agreement with the IAEA in the next few days and would also implement a bilateral inspection regime in accordance with its December 1991 Denuclearization Declaration with the ROK.

Nine years later, diplomatic relations are still not normalized between the two countries and important elements of the North’s nuclear weapons program remain unresolved.  Relations during the intervening period have oscillated from the high drama of the June 1994 nuclear crisis to the smiling diplomacy of Secretary of State Madeleine Albright’s visit to P’yongyang in October 2000.  In between, we have witnessed mutual recriminations, allegations of bad faith, belligerence, aggression, inattention, and even some cooperation and agreement.

One theme running through this entire period has been misunderstanding – of each other’s decision-making procedures, intentions, motives and sometimes even policy objectives.

How could it be otherwise?  The DPRK, the “Hermit Kingdom,” has long been the most isolated country in the world.  What little interaction P’yongyang had with the international community decreased further with the end of the Cold War.  Its superpower patron and largest supplier of military equipment, the Soviet Union, disappeared.  The North’s other strategic partner, China, advanced its own interests by engaging in a prosperous trade with the ROK and allowing the simultaneous admission of both Koreas into the United Nations.  The DPRK’s fraternal allies in Eastern Europe were all toppled by internal revolutions.

Perhaps fearful of defections, P’yongyang kept its officials on a short leash; those who were allowed out of the country were not allowed out very often.  At the DPRK’s Mission to the UN in New York City, North Korean representatives have been confined to radius of 20 miles from midtown Manhattan.  They do not have regular contact with U.S. officials or other knowledgeable Americans and have only a rudimentary understanding of how the American political system works.  They have been abysmal at public relations on the few occasions they have attempted to shape U.S. domestic and international opinion.
 
For the United States, the Korean peninsula has always been relatively neglected when compared to the much larger and more powerful Japan and China, which have received far greater time, attention and resources.  With the Asian economic meltdown in late 1998, Indonesia further displaced North Korea on the U.S. diplomatic agenda.  Contributing to this institutional reluctance was the fact that North Korea was a diplomatic black hole.  Few U.S. officials were fluent in Korean, fewer still had ever met with North Koreans, and only a “privileged” few had ever visited the North.

The severe famine in North Korea in mid-decade also contributed to this institutional neglect.  It seemed the game was not worth the candle as Washington came to believe the North was in imminent danger of collapse.  Because the DPRK enjoyed no domestic constituency in the United States and because of Congressional hostility (especially among Republican members) to the October 1994 Agreed Framework nuclear deal, many Clinton Administration officials abjured responsibility for this issue, believing it to be a political “loser” and “career ender.”  Senior officials ignored or delegated the matter to more junior officials, which often amounted to the same thing.  For long periods of time, it appeared as if no one at the State Department was in charge of this issue.  Under these multiple disincentives, initial enthusiasm for American engagement gradually surrendered to complacency.

Unsurprisingly, the resulting record of U.S.-DPRK interaction has been mixed.  Towards the goal of a more stable and secure Korean peninsula, some important progress has been achieved.  Work at the nuclear facilities covered by the Agreed Framework has ceased; this freeze is being monitored by international inspections.  These facilities could have produced a nuclear arsenal of 20-30 nuclear weapons by now.  In addition, the North has agreed to a moratorium on ballistic missile tests.

But serious questions remain over the scope of P’yongyang’s nuclear activities, its ongoing chemical and biological weapons programs, its readiness to eliminate its ballistic missiles and its interest in reducing its forward-based military posture along the DMZ.  Is North Korea really stringing the United States along, willing to agree to meetings in return for food aid but unwilling to relinquish its weapons of mass destruction (WMD) programs?  Does it calculate that diplomatic “fatigue” will eventually allow it to avoid fully cooperating with the IAEA to reveal the complete history of its nuclear program?  Will it balk at confidence-building measures that ask it to withdraw its conventional force deployments along the DMZ?  Will it refuse to make any fundamental changes in the nature of its regime, allowing only a modicum of foreign investment so it can maintain itself in power?

In sum, what are the North’s intentions?  The answer to this question is unknown (perhaps even by many in North Korea).  The new Bush Administration will need to probe the North Korean regime aggressively to learn this answer.

This answer -- and subsequent policy decisions by American officials -- will be influenced by many factors, including the lessons learned and policies adopted by the DPRK.  Consequently, it will be useful not only to review the last nine years of engagement between the United States and North Korea and examine what lessons might be extracted.  It will also be helpful to speculate as to what lessons North Korea may have learned during this period as well.[2]

Strategic Lessons for the United States

1. Be Humble

After almost a decade of interaction, the United States still doesn’t understand North Korea very well.  The country continues to be “the longest running intelligence failure in U.S. history,” in the words of the former American Ambassador to South Korea, Donald P. Gregg.  How are decisions made in the North?  Who’s up and who’s down?  Who makes the decisions?  We simply do not have very good knowledge.

A short list of serious misestimates by U.S. Government officials and outside experts would include the prediction that the “Dear Leader,” Kim Chong-il, would be unable to consolidate his power and rule the country after his father’s death in July 1994.  On the contrary, the past few years have not only demonstrated his tight hold on power, but also his ability to maintain control and prevent social unrest despite a disastrous famine and debilitating economic conditions.  Another example came in August 1998, when the U.S. intelligence community was strategically blindsided when P’yongyang tested a more advanced ballistic missile years ahead of its estimates. [3]   Finally, many observers both in and out of the U.S. Government predicted that the North would collapse in mid-1990s because of food shortages and economic decline. [4]

The lesson should be clear: humility should be our guide.  We need to recognize we still do not understand the DPRK very well.  In this environment, the risk for senior policy-makers is that anyone can assert he or she is an expert.  Therefore the assumptions behind the policy proposals need to be stated explicitly and analyzed with care.

2. Let’s Make a Deal

A second lesson learned over the past nine years is that it is possible to do business with North Korea, even on very sensitive issues.  In October 1994, P’yongyang agreed to freeze its nuclear facilities at Yongbyon and allow them to be inspected around-the-clock by the IAEA.  In September 1999, the North agreed to suspend its ballistic missile tests; this pledge was later upgraded to a ballistic missile moratorium and placed in writing.  And the Korean Peninsula Energy Development Organization (KEDO) project represents an ongoing example of the North’s willingness to enter into a variety of commitments – on direct North-South transportation links, on establishing an independent communications network in the North, on sweeping privileges and immunities for KEDO employees (especially, ROK nationals) working at the nuclear site, and on sending DPRK technicians to South Korea for reactor training.  These agreements, and others, prove that diplomacy can bring tangible benefits.

3. But It Won’t Be Easy

If it has been possible to reach agreement with the North Koreans, a closer examination of the negotiating histories shows that reaching agreement has rarely been easy.  The North Koreans are skilled and experienced negotiators, and consequently like to keep all their options open for as long as possible.

In addition, the DPRK has been much more comfortable than the United States in conducting negotiations in an atmosphere of high tension or even confrontation.  At times, P’yongyang has even tried to generate bargaining leverage for itself by artificially ratcheting up tensions.  Examples are its March 1993 announcement that it would withdraw from the NPT in ninety days and its unmonitored unloading of reactor fuel in May-June 1994.  (In multilateral negotiations at KEDO during the Supply Agreement negotiations, North Korea repeatedly threatened to walk out, terminate the Agreed Framework and restart their nuclear program if KEDO did not relent or capitulate on an issue.)  This type of behavior should be expected. [5]

The United States has done best in these negotiations when it has followed four rules.  First, Washington needs to have a very clear idea of its objectives and priorities.  In the past this was easier said than done, given the broad spectrum of views by key participants in the Clinton Administration.  U.S. policy objectives were also influenced by South Korea and Japan, whose interests and priorities in dealing with North Korea were often similar to, but not identical with, those of the United States.

Second, Washington has done best in these talks when it has insisted on strict reciprocity.  Indeed, the Agreed Framework is structured so that each party must reciprocate in a tangible manner before the other will respond.  The United States has largely followed this “tit-for-tat” approach in its ballistic missile talks with the North, trading a relaxation of sanctions in return for a suspension of tests.[6]   KEDO has also adopted this approach in its dealings with the DPRK.

Third, when dealing with the DPRK, patience is not only a virtue, it confers a tactical and strategic advantage.  North Koreans are culturally very patient -- much more so than most Americans.  Ambassador Stephen W. Bosworth expressed it succinctly: “Never be more eager than the North to reach a deal.” [7]

Fourth, and related to this point, is that the United States should not be afraid to walk away from the table if the North’s position is unreasonable.  The occupational hazard for every negotiator is what might be termed the “Bridge on the River Kwai” phenomenon.  Just as the British colonel, played by Alec Guiness, fired on British commandoes to stop them from destroying the bridge, Washington must never lose sight of its larger objectives in its haste to curry favor or reach agreement.

4. And Will the North Keep Its Side of the Bargain?

As difficult as it is to reach agreement with P’yongyang, an agreement once reached usually sticks.  Under the Agreed Framework nuclear freeze and with KEDO, North Korea has demonstrated that it can keep its side of the bargain.

There are two important caveats here.  First, the North will keep its side of a bargain – up to a point.  For P’yongyang, no contract is immutable.  North Korea has attempted, sometimes successfully, to revisit and renegotiate commitments previously made.  This has been observed in at least two sets of circumstances.  If it believes the other party is not living up to its side of the bargain, it will backtrack on some of its commitments.  And when a commitment has become politically or economically inconvenient, the North often has engaged in highly literal interpretations of the text to weaken or erode completely its responsibilities.  There is not much to be gained from arguing in response about the “spirit” of an accord.  This is a particular hazard for American negotiators trained in the Western legal system. [8]

The second point is obvious, but worth noting nonetheless.  All agreements with North Korea need to be verified continuously, rigorously and comprehensively to ensure strict compliance.

5. U.S. Leadership is Essential

As the most powerful country in the region and globally, the United States has an indispensable role to play on the Korean peninsula.  But American leadership will be neither cheap nor easy.  It will take additional financial resources, which in the past Congress has been reluctant to make available.  For example, Congress has been unwilling to fully fund KEDO’s heavy fuel oil shipments to the DPRK, which are expected to double this year to approximately $120 million.  Needless to say, it demeans the United States and diminishes its influence throughout Asia if Washington is unwilling to adequately fund the terms of an important U.S. initiative.  (At the same time, the United States can also better leverage its European, Persian Gulf and Asian partners to win their financial support for the KEDO project.)

Diplomatically, Washington’s leadership in engaging North Korea can also provide helpful political “cover” for Seoul and Tokyo to do likewise.  Following the U.S. lead, rather than being seen to act independently, can be helpful in dampening criticism from domestic political opponents in South Korea and to a lesser extent in Japan who oppose engagement with the North. [9]

6. But Who’s in Charge?

The past few years have shown that North Korea is too important to U.S. national security interests to be ignored.  P’yongyang poses a number of challenges for American policy-makers, ranging from nuclear issues, ballistic missiles, North-South interaction, conventional forces, humanitarian relief and economic sanctions.  One of the main challenges for any Administration is to bridge the gap between the arms control/nonproliferation experts and the regional/area specialists in the Administration.  Both the defense issues and the politics must be “right.”

These issues require consistent attention at a very senior level, preferably by a single person with broad responsibilities.  Implementing the policy – building support within the Administration, winning Congressional backing, and coordinating with key allies – will all be indispensable to engaging with the North.  Mid-level officials, no matter how talented, cannot adequately perform these tasks.

Indeed, it was only after former Secretary of Defense William J. Perry became North Korea Policy Coordinator in November 1998 that the Clinton Administration was able to overcome what one critic termed its policy of “strategic incoherence” towards the North and articulate a clear way forward.

The period leading up to Perry’s appointment proves that if the Executive branch does not aggressively take the lead on a foreign policy issue, Congress may move to fill the policy vacuum.  During the past few years, Congress has passed a variety of legislation, some of which has placed additional constraints on the President’s ability to carry out policy towards the DPRK.  [10]  Much of this was due to Congressional distrust of the Clinton Administration’s stewardship of U.S. foreign policy generally and towards the DPRK in particular.  But Congress has now become a stakeholder in U.S. policy towards North Korea and will likely watch closely the Bush Administration’s actions towards the North.

7. Dynamic Environment, Rapidly Changing

Within the last twelve months, much has changed on the Korean peninsula.  The June 2000 summit between Kim Dae-jung and the “Dear Leader,” Kim Chong-il, was remarkable political theatre.  Following this historic event, the two sides have signed an agreement for a Seoul-to-Shinuiji rail link, P’yongyang has attended ASEAN Regional Forum for the first time, joint de-mining activities continue along the DMZ, North and South Korean defense ministers met on Cheju Island and there has been a dialing down of the propaganda aimed at the South.  (One South Korean wit has claimed that Korea has gone from being the “Land of Morning Calm” to the “Land of Morning Surprises.”)

It is unclear whether these positive developments will continue, but past practice suggests that the situation will continue to evolve in unpredictable, at times even dangerous, directions.  It is useful to recall that only a few short years ago, the South Korean Navy sunk a North Korean patrol boat on the wrong side of the Northern Limit Line, P’yongyang launched a Taepo-Dong I ballistic missile over Japan, North Korean commandoes tried to infiltrate the South by submarine, and the North routinely spewed forth poisonous rhetoric condemning the South Korean leadership and the illegitimacy of the Seoul regime.

At times, the United States has not been able to keep pace with these rapid developments, learning of meetings between the two Koreas or policy changes only after-the-fact.  Washington has at times reacted to events rather than shaped them to U.S. ends.  This lesson supports the arguments expressed above for greater commitment to intelligence gathering, greater attention by senior policy-makers, and greater assertion of American leadership.

8. The United States Can Go It Alone
(But It Is Better If It Does Not Have To)

Although the United States must always be willing and able to act unilaterally to defend its interests, it can significantly reinforce its position and advance its policies in Northeast Asia if it works closely with important allies, such as Japan and the ROK.

As an American official once said about NATO, “The trouble with alliances are the allies.”  With any multilateral enterprise, members’ interests overlap but are not necessarily identical; they often diverge in important ways, whether due to shaky parliamentary coalitions, domestic public opinion, financial constraints, or bilateral pressures.  The same reality applies to Northeast Asia.  While Seoul and Tokyo share many of Washington’s interests in dealing with North Korea, their priorities and tactics at times may differ widely.

Although some policy differences can never be completed eliminated, the last few years have demonstrated that often they can be overcome, moderated or minimized in pursuit of a larger common goal.  One institutional example is KEDO, where nationals from all three countries (and the European Union) work closely together to implement the LWR project since 1995.  Moreover, Seoul and Tokyo will bear almost all of the estimated $5 billion financial burden (a price-tag sure to rise as the project encounters further delays).  Indeed, construction of the LWR plants would be impossible without these contributions since Congress passed legislation in 1999 prohibiting any U.S. funds from being used by KEDO to underwrite the costs of LWR construction.

Another example is the highly useful and long overdue Trilateral Oversight and Coordination Group (TCOG), a U.S.-ROK-GOJ mechanism recommended in the Perry Report.[11] Here the United States has worked closely with its allies to forge a common approach to North Korea.  Since P’yongyang has proven skillful in the past at exploiting differences among the three countries, this intensive consultation is crucial.  An option for the Bush Administration is to continue the TCOG, but with an upgrade in status to symbolize the importance Washington attaches to this issue and to ensure that senior-level officials are both informed and involved.

Finally, there is additional “value added” of Washington going forward in concert with its allies.  Should the United States need to reverse course, enhance its deterrence posture or adopt punitive measures against North Korea, it will have a much easier time winning support from Seoul and Tokyo if all three parties have previously worked closely together in their policy approach to P’yongyang. [12]

9. What “Rogue” Regime?

The United States no longer refers to the DPRK as a “rogue” regime or any other of the pejorative labels that passed for policy wisdom for a number of years.  Kongdan Oh and Ralph C. Hassig have written that attempts to dismiss North Korea as a rogue regime offer little insight into North Korean objectives and motivations, and offer little guidance to U.S. policy-makers seeking to bring North Korea into the international community as a functioning participant. [13]  In other words, if Washington truly believed that the North Koreans were rogues, with its imputation of irrationality, then all policy prescriptions would lead to an analytical dead end.  How can you deal with a crazy state? [14]

For this same reason, calling North Korea a rogue regime created a number of domestic problems, not least the difficulty of explaining to Congress and the American public why Washington was meeting and negotiating with P’yongyang.  Avoiding this linguistic shorthand allows the United States greater flexibility to engage diplomatically with the North.  No doubt this was one reason why Secretary of State Albright did an about-face on this issue in June 2000, when she expunged the term from the diplomatic lexicon in favor of “states of concern.” [15]  Some early signs indicate that the Bush Administration will steer clear of this trap and deal with the North on a pragmatic basis. [16]

Strategic Lessons For North Korea

There are obvious limits as to how well we can understand North Korean behavior.  But some thought must be paid to what the North may have learned from the past years of engagement with the United States.  As Washington reviews the past decade, the lessons it divines -- and the policy prescriptions it proposes -- will be influenced by North Korea’s anticipated future behavior.  This behavior will have been shaped by the lessons P’yongyang has learned from recent experience with the United States.  In other words, there will be what political scientists and economists call “strategic interdependence,” where decisions are affected by the dynamic interaction between two actors who find themselves in a “game.”  It is therefore useful to speculate, from an American perspective, what lessons the North Koreans may have learned from the past nine years of engagement with the United States.

1. The United States is Afraid of the North’s Strength

The United States respects the North’s military power.  Whether it is P’yongyang’s nascent nuclear weapons program, ambitious ballistic missile program, or million-man military, the North’s potential to destabilize Northeast Asia (and other regions through ballistic missile exports) attracts Washington’s attention.  Whenever the North has engaged in highly provocative behavior, the United States has responded by immediately re-engaging diplomatically and seeking to address some of P’yongyang’s concerns.  Prominent examples are the North’s March 1993 threat to withdraw from the Nonproliferation Treaty, the unmonitored unloading of spent fuel in May-June 1994 and the August 1998 Taepo-Dong I ballistic missile test.  Within weeks of each event, Washington found itself back at the negotiating table with P’yongyang, thereby acceding to one of the North’s main objectives.  And of course, the preponderance of North Korean conventional force along the DMZ, including artillery that can reach Seoul, acts as a constant threat to the South and U.S. forces stationed there.

For this reason, it is entirely possible the DPRK might apply this lesson to the new Bush Administration, testing them if the North believes it is being ignored.  According to a recent article by Robert Manning: “[D]o not be surprised if P’yongyang tries to provoke a crisis – perhaps threatening to withdraw from the Agreed Framework – in an effort to test the new Administration and put it on the defensive.” [17]

2. The United States is Afraid of the North’s Weakness

As worried as the United States is about the North’s strength, it is also concerned about its weakness.  A so-called “hard landing” by North Korea would result in enormous human suffering and physical hardship in the North and risk destabilizing the Korean Peninsula and perhaps beyond.

To avoid this possibility, the United States has taken the lead in propping up the North Korean regime in an attempt to stave off collapse.  This assistance has taken the form of food and other humanitarian aid.  North Korea is now the largest recipient of U.S. aid in Asia, topping $160 million in 1999 alone, and totaling around $800 million since the mid-1990s.  [18] That this assistance has routinely continued despite periodic North Korean belligerence, provocations and lack of cooperation has sent a powerful signal to P’yongyang, namely, that the United States will feed the North – regardless of the policies it adopts.  For North Korea, it would appear, there has been such a thing as a free lunch.

3. The United States is an Unreliable Partner

For P’yongyang, the United States may appear to be an unreliable partner, often promising more than it can deliver.  The LWR project, which was a centerpiece of the Agreed Framework negotiated by the United States, had a target date of 2003; it now appears the project is at least five years behind schedule.  Further delays may be expected.  It is likely KEDO will claim that these delays will escalate costs, which will contribute to further delays.

Washington has proven unreliable with respect to another element of the Agreed Framework as well – the pledge to deliver 500,000 metric tons of heavy fuel oil (HFO) annually to the DPRK until the first LWR is completed.  For the past three years, this commitment has not been met; the North has had to wait additional months to receive its quota of oil.  This problem may reach a crisis this year, as skyrocketing oil prices will double KEDO’s cost in delivering HFO.

If Washington cannot be trusted to keep its word on a matter of such obvious importance, why should P’yongyang trust it on other matters?

4. The Normal Rules Don’t Apply to North Korea

Whether because of its strength or its weakness, North Korea has not had to honor the same diplomatic and economic rules as other countries.   The United States (and the ROK) have been willing to “encourage” North Korea to attend meetings, such as the four-party talks, to consent to inspections at Kumchang-ri, and to allow family reunions by offering certain inducements.  Often these inducements (or what used to be called “carrots”) have taken the form of food aid or financial assistance.  This U.S. policy of “food for meetings” started in 1996 and lasted through the end of the Clinton Administration. [19]  To use a term from contemporary psychology, the United States has “enabled” North Korea by indulging its bad habits.

This also contradicted longstanding U.S. policy of not using humanitarian assistance as a lever to try to compel political change.  The Clinton Administration approach here attempted to do two things simultaneously and ended up doing neither very well.  First, it wanted to deflect charges of appeasement from its domestic critics who viewed food assistance as providing comfort to the enemy (especially given doubts about how the food was monitored and distributed).   Second, it wanted to promote diplomatic movement with the North.  It came up short in both instances.  Getting the North to the negotiating table was not sufficient to satisfy the Clinton Administration’s critics, especially in Congress.  And “bribing” the North to attend meetings with food aid sent the wrong signal to P’yongyang.  Once the North merely showed up, aid would flow and its primary policy objective was achieved.

This preferential treatment carried over to the economic realm.  Foreign investors (admittedly, mostly South Korean) have acquiesced in highly dubious financial transactions with the North despite the extremely hostile investment environment characterized by the absence of the rule of law, private property rights, or any dispute resolution mechanisms.  These ventures, often assisted by under-the-table payoffs to North Korean officials, promise little if any return on investment.

Moreover, it is not even clear that these investments have achieved this political purpose – such as the promotion of North-South interaction -- that could somehow justify the expense.  To take one example, North Korea is not only reported to receive an estimated $10 million per year from its tourism project with Hyundai, but it still manages to keep its own people insulated from ideological contamination by strictly limiting access to the South Korean tourists.

5. Big Brother is Watching

It is clear that the United States has invested tremendous resources to uncover North Korea’s military capabilities, especially with respect to WMD, and that these resources are quite sophisticated.  This became evident during the 1993-94 nuclear crisis, when the United States shared high-resolution satellite pictures with the IAEA; these pictures showed two undeclared spent fuel sites at the Yongbyon nuclear complex.  In addition, IAEA inspectors trained by the United States were later able to uncover evidence of “irregularities” in the DPRK’s initial declaration to the IAEA concerning the amount of plutonium it had separated.

But the lesson here is more complicated because of the Kumchang-ri episode.  In this case, the United States falsely claimed that the DPRK was building an underground nuclear site thought to house either a reprocessing facility or nuclear reactor.  In fact, U.S. officials who visited the site found no such facility.

So what is the real lesson?  Perhaps that the United States used Kumchang-ri as a pretext for other purposes?  Or that U.S. capabilities are not as good as previously thought?  That the North should continue to conceal and deceive the outside world on nuclear issues as a way to get Washington’s attention and food assistance?  And to the extent P’yongyang understands U.S. detection capabilities, will this lead the North to adopt more sophisticated deception and concealment efforts?

6. The United States Will Support the “Sunshine” Policy

The promotion of North-South dialogue has long been a staple of U.S. policy towards the DPRK; this principle was enshrined in the October 1994 Agreed Framework and was regularly repeated by U.S. officials in their meetings with the North through the rest of the decade.  The culmination of this approach was realized by the June 2000 summit between the two Kims.

Reviewing Washington’s long-time emphasis on North-South dialogue, a lesson the North has learned is that it will be difficult for the Bush Administration to reverse course. [20]   Although early indications suggest that the Bush Administration will continue to support inter-Korean dialogue, it is possible that P’yongyang may still try to leverage its relations with Seoul to compel Washington to re-engage with the North on its timetable, not the Bush Administration’s.

Conclusion

During the past decade, both countries have climbed some way up a fairly steep learning curve.
North Korea and the United States will need to draw upon this experience if they wish to move forward together in securing a more stable Korean Peninsula during the next few years.

For the United States, however, dealing with the DPRK likely to get more, not less, difficult in the next few years.  The North’s recent diplomatic offensive, what their press has termed “magic diplomacy,” may constrain Washington’s future flexibility in ways that are difficult to predict.  As other countries improve relations with the North, there is a risk that preserving good ties with P’yongyang will be seen as an end in itself, or as a better means to an end than issuing threats or demonstrating a robust deterrence through military exercises.  There is already a growing sense in Asia that the best way to work with North Korea now that the hermit kingdom has left its isolation is to broadly engage P’yongyang through coaxing and “incentives” rather than through overt displays of deterrence. These countries, including U.S. allies, may criticize, frustrate or oppose American actions they view as provocative to the North.  Washington will suffer a backlash if it is being perceived as adopting unreasonably harsh measures against P’yongyang.

In fact, Washington has faced this problem before.  In early 1994, as tensions on the Korean peninsula increased, the U.S. Commander in South Korea requested that US/UN forces be reinforced with Patriot missiles.  In the face of strong criticism from Seoul, Washington backed down.  Only in March, after a round of North-South talks ended badly, were the missiles shipped to South Korea.  And during the 1993-94 period, the United States consistently faced resistance at the UN Security Council when it tried to adopt sanctions against North Korea for violating its IAEA and NPT obligations.

With P’yongyang’s expanded contacts and warming relations, this problem will increase.  For example, North Korea’s new friends may now even more harshly criticize any hardening of the U.S. position over negotiating the end of the North’s nuclear weapons and ballistic missile programs.  Attempts by the United States to seek sanctions in the United Nations or reinforce American troops on the peninsula would likely be met with strong criticism from U.S. adversaries and allies alike.  Washington will feel growing pressure to be more flexible, more generous, and more forthcoming.  North Korea may thus be encouraged to raise its asking price, harden its stance, and be more patient in dealing with the United States than before (not a welcome thought).  Under these circumstances, Washington may lose control over the pace and perhaps even the agenda of its negotiations.

In short, the risk is that a subtle shift in the balance of power at the negotiating table may take place.  And no one is more adept than the North Koreans at engineering crises and exploiting differences between the United States and its allies to gain concessions from Washington and others.  American efforts to resolve the North’s WMD programs, missile threats, and the conventional force threat will take longer, cost more, and prove a greater test of alliance relations – and U.S. diplomatic skill -- than before.  In the past, the North Koreans have played a weak hand well.  Now they will have the chance to play a much stronger hand.

Daryl M. Plunk
Senior Fellow
The Heritage Foundation

Introduction
While most Americans are anxious to see the new Bush Administration achieve forward movement on such domestic issues as tax reform and education, significant foreign policies already confront the United States.  One area that requires early attention is the US-Republic of Korea alliance.  In recent months, new developments in relations between democratic South Korea and communist North Korea require that Washington review its policies toward the North and, where necessary, make appropriate adjustments.

Hopeful but Slow Progress

The hostile, 50-year old standoff between North and South Korea fundamentally was affected by last June’s leaders’ summit in the North’s capital, P’yongyang.  The talks between South Korea’s President Kim Dae-jung and North Korean leader Kim Chong-il were the first such meetings between the two bitter enemies since Korea was divided in 1948. Before departing P’yongyang, President Kim Dae-jung signed a formal agreement with the de facto leader and Defense Commission Chairman of the North that identified concrete avenues toward reconciliation and eventual reunification of the Koreas.

The significance of the summit and the pact cannot be overestimated.  Never before have political talks between the North and South reached such high levels. South Korean President Kim deserves praise for his relentless pursuit of the summit after years of diplomatic stalemate. The next major step in the budding peace process will be the reciprocal visit to Seoul by the North Korean leader.  While a date for that visit has not been set, there are increasing signs that it may take place around April.

US-South Korean Coordination is Essential
Washington should applaud President Kim’s success at negotiating the pact as well as establishing Seoul’s leadership role in the process, a role that the Clinton Administration had downplayed in the past. To sustain the momentum that President Kim’s visit to P’yongyang has sparked, the United States now should execute a careful strategy that keeps Seoul out in front and continues to offer any US benefits to the North on a strict, reciprocal basis.  This principle of reciprocity was rarely enforced during the Clinton Administration and now deserves close scrutiny by President Bush as he and his senior advisors review America’s North Korea policy.

The June 2000 Joint Declaration

The four-point pact signed by Kim Dae-jung and Kim Chong-il in P’yongyang on June 14 is brief and concise, yet broad in its implications:

First, the two leaders declared that on the matter of national reunification, Koreans should play the leading role. This is significant since the Clinton Administration in recent years assumed the lead role. In doing this, it inhibited the North–South dialogue and thus stymied any meaningful progress toward tension reduction on the Peninsula.

Second, the two Korean leaders pledged to negotiate toward a “loose form of federation.” In President Kim Dae-jung’s mind, this would involve a confederation stage during which the two governments would cooperate closely on economic, social and political matters. Defense and foreign policy issues would remain the sovereign domain of the respective governments. After a gradual period of reconciliation under the confederation arrangement, the two sides eventually would negotiate formal procedures for reunification of the nation.

Third, the two leaders pledged to move swiftly to address the plight of more than 1 million relatives separated since the national division of Korea. They agreed to arrange a large separated-family member exchange for National Liberation Day on August 15.

Fourth, the leaders pledged to greatly expand their countries’ economic ties, and even cited several specific infrastructure projects on which the two sides could cooperate.

Tensions Remain High

Despite Seoul’s successful efforts to resume North-South dialogue after a nearly decade-long hiatus, little meaningful progress has been achieved.  A very limited and highly regimented exchange of several hundred separated relatives occurred, and the two sides are wrangling over the next exchange.  Critics of President Kim’s “Sunshine Policy” toward P’yongyang worry that Kim Chong-il simply is allowing for perfunctory North-South interaction in return for stepped up food and financial assistance from Seoul.  The Kumgang-san tourism business, funded mainly by the Hyundai Group, is painted by President Kim’s opponents as an operation that, by some accounts, has generated as much as $25 million in monthly profits for the North.  While the South Korean leader deserves credit for achieving the historic summit, Seoul should take care that a proper degree of North Korean reciprocity also is secured.  Above all, the North must be pressed to begin reduction of its conventional military threat.

In Senate testimony on February 7, 2001, CIA Director George Tenet said that the North continues to pursue a “military first policy” at the expense of other national objectives.  As a result, “the North Korean military appears for now to have halted its near-decade-long slide in military capabilities.”  He concluded that Washington “has not yet seen a significant diminution of the threat from the North to American and South Korean interests.”

The US-Korea security alliance remains dominated by the serious military threat posed by communist North Korea, and the Korean peninsula remains the only spot in the world where tens of thousands of American lives are at risk.  Despite its tattered economy, the North’s regime maintains one of the world’s largest standing armies and has used its nuclear weapons and long-range missile development programs to extort support from the US and the international community.  The North’s forward deployed forces require the continued presence of 37,000 US troops in South Korea at a cost of about 3 billion US taxpayer dollars per year.

North Korea Policy:  Past Lessons

The Bush Administration wisely announced early on that America’s policies toward the North would be reviewed and, where necessary, changes would be made.  In this regard, an analysis of President Clinton’s policies and their results is a useful exercise.  How were the past policies conceived, and what did they achieve?  For one thing, North Korea became one of America’s largest recipients of foreign assistance.  Since 1994, around half a billion dollars has been spent by Washington on the North in the form of humanitarian food assistance, payments to the North for the return of US Korean War-era MIA remains and energy assistance required under the 1994 US-North Korea nuclear deal.

Early in his first term, President Clinton grappled with the North’s renegade nuclear weapons program.  After many months of tedious negotiations with the North, the first-ever U.S.-North Korea political agreement was signed in October 1994.  The so-called Agreed Framework offered benefits to the North including improved trade and political ties with Washington, a $50 million per year fuel oil supply and construction of two nuclear reactors valued at about $5 billion.  Together with a consortium of about a dozen nations, the United States is raising funds to support this process, although Seoul has pledged to pick up most of the tab.  In return, the North agreed to “freeze” its current nuclear program, preventing it from processing any more weapons-grade plutonium than it already has.

The Clinton Administration proclaimed that the nuclear threat had been checked.  There were serious holes in this assertion, however.  Washington backed down on its earlier demand that the North provide a full accounting of its enriched plutonium stockpile.  Inspection of its storage sites, which the North is obliged to allow under other international treaty obligations, has been delayed for years to come.  As a result, the North may have already secretly assembled nuclear bombs.   Even senior Clinton Administration officials made this public admission.  This makes the North’s missile technology advances all the more threatening.

As part of the deal, the North promised to resume substantive dialogue with the South in pursuit of tension reduction.  It refused to do this for nearly six years, yet the Clinton Administration downplayed this direct violation of the Framework.

The North continued its ballistic missile development program and exported its missile technology to nations hostile to the US.  P’yongyang’s conventional military threat remains and, considering its missile advances, has become more dangerous.  It is receiving assistance from the US and its allies in return for a so-called nuclear “freeze” that has left all of the North’s nuclear weapons development capabilities in P’yongyang’s hands.  Regarding fundamental US national security considerations on the peninsula, Clinton’s North Korea policies largely have failed.

Why So Far Off Course?
 Clinton Administration officials often answered Agreed Framework critics with the accusation that the policy’s opponents never proposed any viable alternatives.  That simply is not true.  The Heritage Foundation, among others, was promoting a variety of policy options when the nuclear crisis heated up in 1993.  The recommendations in this paper’s conclusion generally are in line with the ones Heritage espoused during that timeframe.  The fact is that the Geneva deal was poorly negotiated and poorly designed.

 The North’s threat and bribery tactics have repeatedly paid off for P’yongyang.  Actually, the most significant “freeze” in play today relates to three key issues.  Unlike the much touted yet illusionary nuclear freeze, these other frozen aspects run decidedly counter to the interests of the US, South Korea and its allies.  They are:

1)  Political and military tensions on the peninsula remain frozen at dangerously high levels.  Indeed, given the profound ripple effects throughout the region of the North’s missile program, tensions are increasing and drawing other nations into the fray.   The Agreed Framework has ironically and disturbingly created more instability and frictions than it has solved.

2)  The US was frozen into a largely fruitless bilateral political dialogue with P’yongyang.  Trapped in a tedious and inconclusive series of talks with the North, the US became the focus of most of the North’s attention and energy.  Lost in the shuffle was anything resembling a clear, forward-looking, comprehensive plan for achieving lasting peace in Korea.

3)  As a direct result of point two, South Korea was frozen out of the point position it once held with respect to peace negotiations with the North.  For decades, the US required that the North deal directly with Seoul since, in the end, only the two Koreas can ink the formal agreements that will be necessary to get the reconciliation process going.  The US position once was that Washington could not solve the stalemate on its own.  That US position was overturned by the October 1994 deal.  Until last June, the North had refused to hold even one formal government-to-government dialogue session with the South.  The June summit had more to do with Seoul’s dogged pursuit of the breakthrough and the North’s frustration with the Agreed Framework than with the US-North Korea deal itself.

Why did our Geneva negotiators not anticipate these problems?  How could they not have suspected that the first political agreement between Washington and P’yongyang would turn the North away from, not toward, productive dialogue with the South?