Center for International Policy

The following was prepared for a conference on "The Second Bush Administration and the Korean Peninsula" sponsored by the Sejong Institute in association with the Korea Foundation and Joong Ang Ilbo, in Cheju, South Korea, March 30th-April 1st, 2005.

The North Korean Nuclear Crisis and U.S.-North Korea Relations

On June 25, 2004, the United States and South Korea both put forward detailed proposals for a denuclearization agreement with North Korea at the six-party negotiations in Beijing.

The most significant feature of the U.S. proposal was that it explicitly ruled out the normalization of relations with Pyongyang as a reward for denuclearization. Even after the dismantlement of its nuclear capabilities, normalization would follow only if North Korea "changes its behavior on human rights," addresses the "issues underlying" its inclusion on the U.S. State Department terrorist list, eliminates chemical and biological weapons programs, "puts an end to the proliferation of missiles and missile-related technology, and adopts a less provocative conventional force disposition."

By contrast, the South Korean proposal envisaged discussions on normalization in parallel with the first steps toward dismantlement. In the South Korean proposal, once steps toward dismantlement begin, the parties would agree to "make efforts to remove obstacles on the way toward normalization of diplomatic relations and significantly improve the environment for economic cooperation between North Korea and the international community."

North Korea is not likely to agree to a meaningful denuclearization agreement with acceptable verification provisions unless denuclearization measures are explicitly linked at each step of the way with incremental movement toward the economic and political normalization of U.S.-North Korean relations. The Bush Administration, for its part, is not likely to pursue a denuclearization agreement providing such linkage for two interrelated reasons. First, the dominant policymakers in the Administration believe that North Korea is not really prepared to liquidate its nuclear weapons program; cannot be trusted to implement a step-by-step denuclearization process, and for this reason, must be required to make the comprehensive unilateral concessions at the outset of negotiations envisaged in the June 25th proposal. Second, they believe that economic rewards and political legitimacy should not be accorded to North Korea in exchange for denuclearization. The Pyongyang regime will collapse sooner or later, in this view, and economic rewards will only postpone this desirable outcome.

This paper will begin by setting forth the intellectual rationale that underlies U.S. policy toward North Korea in the context of the emerging lineup of appointees to key Administration positions. Next, I will discuss the internal dynamics within North Korea that condition Pyongyang's response to what the U.S. does, pointing out discrepancies between what has actually happened during the past decade and the misperceptions of recent history that govern Administration attitudes. Finally, I will consider the options open to South Korea, China, Japan and Russia in dealing with what is likely to be an increasingly dangerous impasse between North Korea and the United States.

I.
The belief that North Korea is not prepared to liquidate its nuclear weapons, at any price, has been most explicitly articulated by Robert G. Joseph, who will succeed John Bolton as Undersecretary of State for Security and Arms Control.

It is Joseph who first promoted the concept of "counter-proliferation" to justify the U.S. right of preemptive attack set forth in the September, 2002, Bush National Security Doctrine. It is Joseph who has most forcefully articulated the rationale for a national missile defense program, focused on North Korea, and for a new generation of nuclear weapons capable of penetrating hardened underground targets such as those in North Korea. It is Joseph who fathered the "Proliferation Security Initiative" during his recent tenure in the National Security Council.

In a National Defense University study before joining the Bush Administration, he did not challenge the view, expressed by the South Korean President, Roh Moo Hyun, in a November 12, 2004 Los Angeles speech, that North Korea wants nuclear weapons to deter a preemptive U.S. attack like the one in Iraq. In Joseph's view, however, as one who has supported the Iraq invasion, it is necessary and inevitable for the United States to reserve the right of preemption, and North Korea expects this. Moreover, he says, this is only one of the reasons why Pyongyang cannot be expected to give up its nuclear weapons.

"States such as North Korea and Iran do not seek nuclear weapons because the United States has nuclear weapons," he argued in the NDU study. "Rather, their motives for acquiring nuclear weapons are numerous and wide-ranging, ranging from status, to regime survival, to use as tools of aggression to attack neighbors. Key among these incentives is deterring the United States from intervening with conventional forces in regions in which these states seek to achieve their goals through the use of force."

Applying this line of thought to the policy debates over North Korea, Joseph has argued in inter-agency meetings that it would be risky to negotiate step-by-step denuclearization agreements, since Pyongyang will never fully surrender its nuclear option, and the United States must insist on "complete, verifiable, irreversible, dismantlement" (CVID) of its nuclear capabilities, up front, at the start of negotiations.

Joseph will inherit a bureaucratic infrastructure in the Bureau of Arms Control and International Security that Bolton has staffed with like-minded officials. The most potent of these Bolton holdovers, Paula De Sutter, Director of the Verification and Compliance Division, is anathema to State Department proponents of a more flexible policy.

The new Deputy National Security Advisor in the National Security Council will be Jack Crouch, until recently Ambassador to Romania, who has made controversial statements relating to Korea in earlier years. In one of them, in 1994, he advocated bombing attacks on North Korean nuclear facilities; in another, in 1991, he criticized President George H.W. Bush for withdrawing U.S. nuclear weapons from South Korea.

The newly-appointed Director of Asian Affairs in the NSC, Victor Cha, revealed the underlying Bush rationale for a multilateral approach to negotiating with North Korea in his book Nuclear North Korea. The purpose of the six-party Beijing negotiations, he said, is not to seek a nuclear settlement with Pyongyang but, rather, to demonstrate that a settlement is impossible with a state dedicated to conquest of the South and to developing nuclear weapons.

"The policy imperative," he wrote, "is to show the North's intention to proliferate despite the carrots offered to it; make clear to allies and regional powers that the U.S. has exhausted all efforts at cooperation; and rally the coalition to coerce the regime through force and economic sanctions into nonproliferation compliance and/or regime collapse."

What about Condoleeza Rice herself?

Both Rice and Deputy Secretary of State Robert Zoellick, in Foreign Affairs articles in January 2000, before Bush won his first term, treated North Korea as a possible candidate for "regime-change." Rice said that North Korea and Iraq are "living on borrowed time." Zoellick declared that, "in dealing with the likes of Iraq and North Korea, the United States needs to offer consistent long-term direction to guide coalitions that will deter and even replace these brutal regimes."

Since taking office, apart from listing North Korea as one of six "outposts of tyranny," Rice has avoided direct calls for regime-change. In her March 12th, 2005 interview with editors of The Washington Times, she emphasized that Pyongyang cannot be trusted. Asked whether North Korea, like Iran, would be offered economic incentives, she replied that North Korea "is a lot different because we have some experiences from 1994…What they did was, they took the carrots and never lived up to their obligations, in fact, started breaking their obligations----a one-sided version of history that I challenge in the pages that follow.

On the issue of normalization, as The New York Times noted, (March 9th, 2005), the new U.S. Representative at the United Nations, John Bolton, argues that "diplomatic normalization with North Korea should only come when North Korea is a normal country."

President Bush, the most outspoken Administration advocate of the regime-change policy, told Bob Woodward in Bush At War that he "loathes" Kim Jong Il and would like to "topple" his regime.

Outside the Administration, neo-conservative intellectuals argue that the United States must promote a change of regime in Seoul in order to promote regime-change in Pyongyang. On November 22nd, 2004, the Project for the New American Century urged the Administration to "develop a strategy to deal with problems created by the government now in office in Seoul." In his article "Tear Down this Tyranny" (Weekly Standard, November 29th, 2004), Nicholas Eberstadt declared that "instead of appeasing South Korea's appeasers, America should be speaking over their heads directly to the South Korean people, building and nurturing the coalitions in South Korean domestic politics that will ultimately bring a prodigal ally back into the fold."

II.
The ascendancy of hard-line policymakers in the U.S. debate over how to deal with North Korea has strengthened proponents of nuclear weapons in the long-standing internal debate within North Korea over how to deal with the United States.

The debate in Pyongyang does not reflect a power struggle. Kim Jong-Il's position is secure. He is needed out in front to legitimize the regime in Pyongyang because he is the heir to the mantle of Kim Il Sung. But there is a serious policy struggle. On one side are hardliners who favor nuclear weapons and believe it is impossible to reconcile with the United States. On the other, pragmatists who are ready to give up nuclear weapons in return for normalized relations with the United States and large-scale economic assistance. Kim Jong-Il favors the pragmatists. But he is not the absolute ruler his father was, and he cannot disregard the hardliners.

The origins of the North Korean debate go back to 1991. Two critical events occurred in that year. First, Russia and China told the North Koreans that they would have to pay cash for everything from then on. Cash on the barrelhead. No more interest-free loans, no more military aid, and above all, no more free food and oil. Then on September 27th, 1991, President George H.W. Bush withdrew U.S. tactical nuclear weapons from South Korea.

The end of Cold War economic aid meant that North Korea faced an economic crisis, and the younger, more pragmatic leaders in the Workers Party decided they had to get U.S., Japanese, and South Korean capital and technology in order to stay solvent. They recognized that the West would ask them to get rid of their nuclear program as a precondition for normal relations. The resulting debate in the Workers Party went something like this, based on what some of those involved have told me.

The pragmatists in this debate said, "We don't need nuclear weapons, after all, now that the Americans have removed theirs." The hard-liners said, "They've only removed them from Korea, they can still hit us from submarines in the Pacific. And anyway, you're very naïve. Even if we give up nuclear weapons, they'll never help us. They want our collapse and our absorption by South Korea."

This debate came to a head at a meeting of the Workers Party Central Committee on December 24,1991. Kim Il Sung sided with the pragmatists and a compromise was reached. North Korea would test the Americans to see whether a deal could be made. If the United States would normalize relations and help economically, North Korea would give up its nuclear weapons program.

During the last two years of the first Bush Administration, the pragmatists made preliminary overtures to the United States and got nowhere. At first, they got nowhere with the Clinton Administration. Clinton simply told them to stop their nuclear weapons program or else. As a result, in the spring of 1994, tensions with North Korea almost erupted into a war. I think there would have been a war if Jimmy Carter had not taken matters into his own hands. Carter went to Pyongyang and got Kim Il-Sung to accept a freeze of his nuclear weapons program starting immediately, opening the way for the Agreed Framework.

The United States got up front what it wanted from that agreement, by stopping a plutonium-based nuclear program that would otherwise have produced 30 nuclear weapons a year. North Korea got only promises, most of them unfulfilled except for shipments of oil. The U.S. promised in the agreement to move toward normal relations, but Clinton did not even take the first step toward normalization by ending economic sanctions. Why? U.S. domestic politics. The agreement was signed on October 21, 1994, and a month later the Republicans won big in the Congressional election. They bitterly criticized the agreement and Clinton wanted to save his political capital for other battles. Six years later, in June 2000, Clinton did finally begin to move toward ending sanctions and normalizing relations. But during those six years, the political situation inside North Korea did not stand still. The pro-nuclear hawks in Pyongyang kept telling Kim Jong-Il that he had been conned, that the U.S. was not prepared for friendship, and that North Korea should resume making nuclear weapons and missiles. So when Pakistan made its offer of uranium enrichment technology to pay for missiles, the hawks pressed successfully for accepting it.

Kim Jong Il followed a two-track policy to keep both his hawks and his doves happy. The uranium program was a hedge in case the United States refused to normalize relations. It was also a violation of the 1991 North-South Denuclearization Agreement and of the 1994 agreement. But at the same time, North Korea did continue to honor the operative provisions of the 1994 agreement barring plutonium production. So it is a gross oversimplification to say that North Korea cannot be trusted again because it cheated. Both sides failed to honor all aspects of the 1994 agreement.

As I have argued in Foreign Affairs, (January, 2005), it is apparent that North Korea has attempted to obtain the components necessary to make weapons-grade enriched uranium. But it is far from clear that Pyongyang has been able to obtain all of the needed components in quantities sufficient for enrichment to weapons-grade. The Director of the South Korean Intelligence Service made a similar assessment in his testimony before the National Assembly Intelligence Committee on February 24th 2005. If, as available evidence suggests, A.Q. Khan gave Pyongyang only prototypes and blueprints and did not provide already-manufactured centrifuges in large numbers, there is no basis for assuming that North Korea has been able to establish an enrichment facility. The CIA report to Congress on November 19th, 2002, which said that such a facility was under construction and might be able to produce "one or two" uranium-based nuclear weapons by "mid-decade," was based on a worst case scenario that has clearly been discredited now that the "mid-decade" milestone is behind us.

The uranium issue has accelerated the hard-line shift that has been taking place within North Korea since the advent of the Bush Administration and that still continues. The North Korean hawks were vindicated when the Administration abrogated the Agreed Framework in December 2002, accusing Pyongyang of cheating by establishing a weapons-grade enrichment facility. Together with the National Security Doctrine, followed by the Iraq invasion, the abrogation of The Agreed Framework has given the Pyongyang hawks a powerful rationale for pursuing weaponized nuclear capabilities. The advocates of a denuclearization deal are now on the defensive and Kim Jong-Il is, thus, increasingly compelled to raise the price for a settlement.

III.
The Task Force on U.S. Korea Policy under my chairmanship has presented a specific proposal for a four-step denuclearization process in which steps toward the full normalization of economic and political relations are linked directly to each step of denuclearization (See Appendix for a summary of the proposal).

As this paper shows, the prospects for a step-by-step denuclearization agreement with U.S. participation during the next four years are minimal. The United States can be expected to press North Korea's neighbors to pursue the course projected by Cha: "to coerce the regime through force and economic sanctions into non-proliferation compliance and/or regime collapse."

Faced with such a U.S. posture, what are the options open to South Korea, China, Japan and Russia?

One option would be to keep some semblance of the six-party negotiations going for as long as possible in order to tie down the Bush Administration diplomatically, minimizing the chances that it will take provocative quasi-military or military steps that could set in motion an escalating cycle of challenge and response leading to war. Conceivably, under pressure from Seoul, Beijing, Tokyo and Moscow, the United States and North Korea will modify their present terms for a settlement and begin serious bargaining. A more likely outcome, however, is that the United States will grow impatient and set a deadline for reaching an agreement.

In the event that Washington is unwilling to continue the six-party process, South Korea, China, Japan, and Russia would have the option of carrying on the Beijing dialogue without direct U.S. participation. If they do pursue this option, every effort should be made to do so in close consultation with the United States and with its concurrence. As in the current European Union negotiations with Iran, now belatedly blessed by the White House, Seoul, Beijing, Tokyo and Moscow could offer incentives that Washington is not prepared to offer. Washington would be asked not to subvert the process and to provide security assurances.

In the Task Force proposal, North Korea's neighbors, not the United States, would bear the principal financial burden, as they did in the Agreed Framework. If the four powers offered to reward North Korea for denuclearization on terms similar to those suggested by the Task Force, emphasizing up-front incentives relating to energy security, North Korea would in all likelihood agree to re-freeze its plutonium program and to relinquish the plutonium reprocessed since December, 2002, as the first step in a denuclearization process.

A commitment by the four powers to join in preserving North Korea's territorial integrity and sovereignty, together with a reciprocal North Korean pledge ruling out aggression against its neighbors, would greatly enhance regional security and could well compel the United States to reconsider its regime-change policy.

Appendix
THE FOUR-STEP DENUCLEARIZATION PROCESS
Preparatory Phase

Declaration of Denuclearization

· North Korea would commit itself to the complete elimination of its "nuclear weapons programs," without the specific reference to its uranium facilities required in the June 24, 2004 U.S. denuclearization proposal

· The United States would pledge to respect North Korean sovereignty and commit itself to the goal of normalized relations and a tripartite peace treaty ending the Korean War (the United States, South Korea, and North Korea.)

· North Korea would pledge not to initiate a military attack against the United States and would reaffirm its 1991 commitment not to attack South Korea…

· The United States would pledge not to initiate a military attack against North Korea or to seek to undermine its government…

· North Korea would permit the inspection access necessary for the International Atomic Energy Agency to determine how much plutonium has been reprocessed since the expulsion of the inspectors following the breakdown of the Agreed Framework in December, 2002; the sequestering of this plutonium and any spent fuel under international controls, and the shutdown of the Yongbyon reactor and reprocessing plant under international controls.

If North Korea agrees to surrender all of the plutonium found through the inspection process for shipment out of the country, the United States, South Korea, China, Japan, and Russia would reciprocate with:

· The resumption of shipments of the 500,000 tons of oil per year delivered under the Agreed Framework, which were cut off in December 2002.
· The exchange of liaison offices with North Korea by the United States and Japan as the first step toward fully normalized relations.
· Bilateral and multilateral programs of assistance for the economic and social development of North Korea valued collectively in accordance with an agreed price per kilogram of the plutonium surrendered.

The Task Force does not specify how much should be offered in payment per kilogram. However, for illustrative purposes, it points out that if the plutonium inventory totals 40 kilograms, and if a price of $25 million per kilogram were agreed upon, the funds available for these assistance programs would total $1 billion. The Task Force also notes that South Korea and Japan had agreed to provide $4 billion and $1 billion respectively to construct light water reactors under the Agreed Framework, and that the United States spent $405,106,000 from 1995 through 2003 for oil shipments and for administrative support of the light water reactor project.

· Upon conclusion of the proposed aid agreement, North Korea would initiate steps to rejoin the Nuclear Non-Proliferation Treaty and permit the resumption of the IAEA inspection access cut off in December 2002.

· North Korea would agree to surrender the remainder of its plutonium inventory, including pre-1994 plutonium reprocessed prior to the Agreed Framework.

· The United States would end the remaining U.S. economic sanctions against Pyongyang and would encourage the World Bank and the Asian Development Bank to move toward North Korea membership for these institutions. This would require the removal of North Korea from the U.S. List of State Sponsors of Terrorism.

· North Korea would open previously-barred waste and storage sites and other plutonium-related facilities to a level of inspection acceptable to the IAEA.

· The United States would initiate talks with North Korea to set the stage for the elevation of liaison offices in Pyongyang and Washington to the status of embassies.

· The United States would declare its readiness to keep open the option of completing one or both of the two light water reactors promised under the Agreed Framework, as South Korea and Japan have urged.

If North Korea permits the unimpeded inspection access necessary to determine what, if any, weapons-grade uranium enrichment facilities exist, and takes the comprehensive measures necessary to eliminate any such facilities, the United States would:

· Establish full diplomatic relations, upgrading its liaison office in Pyongyang to an Embassy.
· Authorize Exxon-Mobil to pursue a natural gas pipeline to South Korea that would cross North Korea.
· Open negotiations on a tripartite peace treaty ending the Korean War.