Averting a Train Wreck in North Korea

The United States and North Korea are once again barrelling down the track on a collision course. An all-too-common view in Washington is that a confrontation is inevitable because Pyongyang is determined to break the October 1994 Agreed Framework—the accord it concluded with the United States to freeze and eventually dismantle its nuclear weapons program—and is testing ballistic missiles to deliver nuclear warheads that some believe the North possesses. That is a gross misreading of the situation.

True, Pyongyang's aggressive style of diplomacy has not made it easy for the administration to stay on track. Yet, the struggle in Washington over North Korea policy could derail the U.S.-North Korean dialogue. Congress, which has tried to wrest the controls from the administration and is keeping the United States from living up to its obligations under the 1994 accord, will be to blame for any collision.

The best way to avert a train wreck and assure the survival of the Agreed Framework is for the United States to move beyond that agreement and seek to negotiate an end to North Korea's longer-range ballistic missile activities in return for much greater political and economic engagement with Pyongyang.

That will not happen unless Washington abandons its belief that the way to get states to give up their nuclear ambitions is to demonize them as outlaws and force them to disarm—the "crime-and-punishment" approach to non-proliferation. Such an approach is not likely to succeed anywhere, especially with Pyongyang. It also stands in the way of diplomatic give-and-take with North Korea, which has some chance of satisfying American interests.


U.S. Interests in Korea

The United States has four main interests at stake with North Korea at this time. First, it wants to assure that, whatever happens internally in North Korea, the artillery Pyongyang has emplaced within range of Seoul is never fired in anger. Second, Washington wants to prevent Pyongyang from acquiring nuclear arms. Third, it wants to keep North Korea from developing, testing, deploying and selling any more medium- or longer-range ballistic missiles. Fourth, the United States seeks reconciliation between the two Koreas and the peaceful reunification of the peninsula.

The only way to achieve these aims is to test whether North Korea is willing to cooperate with the United States. Coercion will not work; it will only ensure that North Korea deploys more artillery near the demilitarized zone, seeks more aggressively to acquire nuclear arms, and tests, deploys and sells more missiles.

Some favor a policy of benign neglect. Complaining about donor fatigue, they want to stop helping to feed North Koreans suffering from famine. Yet, letting more North Koreans starve to death will make peaceful reunification of the Korean Peninsula much less likely. Encouraging the collapse of North Korea, which some people think is in the American interest, is far too risky a course, especially if the United States has not achieved its first three aims. Even benign neglect of North Korea could turn out not to be very benign for the United States or its allies.

Others want to condition U.S. aid on change or reform in North Korea. Yet, it would be doctrinaire to put free market ideology ahead of security. Conditionality is also counter-productive. Change will come to North Korea when it lets in more outsiders from the international community, both governmental and non-governmental. That will be possible only if Pyongyang is willing to cooperate.

Cooperation or Confrontation?

Contrary to the conventional wisdom in Washington, there is significant evidence that Pyongyang wants to cooperate with the United States. If North Korea had been determined to acquire nuclear arms in the early 1990s, as most people in Washington believed at the time, it could have shut down its only operational nuclear reactor anytime between 1991 and 1994, removed the fuel rods, and quickly reprocessed the spent fuel to extract plutonium, the explosive ingredient in bombs. Yet, the North did not reprocess any spent fuel from 1991 on, nor did it shut down its reactor until May 1994, long after it was expected to do so, and it allowed inspectors from the International Atomic Energy Agency (IAEA) to verify these facts. That was a strange way to acquire nuclear arms. North Korea's actions suggest that, starting in 1991, it was restraining itself somewhat in the hopes of concluding a nuclear deal with the United States. On November 11, 1993, the North said as much in public.<1>

Similarly, if, as most people now believe, North Korea is determined to develop, deploy and export longer-range ballistic missiles, it should have been testing and perfecting its No Dong, Taepo Dong-I and Taepo Dong-II missiles for the past several years. Yet, the North did not test any ballistic missiles from May 23, 1993, until August 31, 1998. Again, that is a strange way to develop new missiles. This suggests that North Korea is restraining itself somewhat in the hopes of concluding a missile deal with the United States. Pyongyang has been expressing interest in such a deal since 1992, both in unofficial discussions with Americans and in its direct talks with U.S. officials. On June 16, 1998, the North said as much in public.

Why is North Korea showing self-restraint? There is no way to know for sure, but I believe Pyongyang is acting this way because it wants the United States to help ensure its security against a Japan it hates, a South Korea it fears, and a China it distrusts. Militarily, North Korea is weaker than South Korea alone, even without U.S. help. The North fears the growing military might of Japan, a fear, that until recently, Japanese diplomacy had done little to dispel. Russia is no longer its ally, and only if attacked can the North expect help from China. What better way to restrain South Korea and Japan and have a counterweight to China than to engage with the United States?

Economically, the collapse of communism in the Soviet Union and Eastern Europe and the economic transformation of China mean that North Korea needs aid, investment and trade from South Korea, Japan and the West. When the United States tried to impede closer North Korean ties to South Korea and Japan between 1988 and 1992, Pyongyang learned that Washington holds the key to opening the doors to the World Bank, Asian Development Bank and economic engagement with the West.



If North Korea wants engagement with the United States, why then is Pyongyang digging holes and testing missiles? Unfortunately, the North Koreans have learned that threats are the only way to get us to pay attention and take them seriously—a lesson Washington keeps reinforcing by its own inaction, absent such threats. Benign neglect will only lead to more trouble-making by Pyongyang.

While the North has held open its nuclear option as leverage for cooperation, it has been punctilious in observing the letter of the Agreed Framework, as demonstrated, for instance, in the "canning" of spent fuel rods at Yongbyon. Classified intelligence no doubt shows North Korea engaging in activities that concern decision-makers, but it is critical to distinguish between a threat to break the Agreed Framework and actually breaking it. North Korea may be deliberately causing alarm by manipulating what the intelligence community is seeing and hearing in order to get the United States to negotiate in earnest.

Why? In Pyongyang's view, Washington has been unwilling to extend cooperation beyond the Agreed Framework, or even to keep its end of the nuclear bargain. The Clinton administration initially understated the cost of the heavy fuel oil that it pledged to provide North Korea under the accord. Fearful of congressional reaction, it was slow to seek additional funding. As a result of Congress's refusal to authorize more funds, fuel oil deliveries fell behind schedule and by the end of 1997 the United States was technically in violation of the Agreed Framework. Only in the final days of debate on the fiscal year 1999 budget did Congress agree to the administration's full request of $35 million to fund U.S. obligations under the accord, allowing the Korean Peninsula Energy Development Organization (KEDO), the multinational consortium that was set up to implement the agreement, to continue its work. The funding came at a price, however. Congress attached conditions that would cut off all U.S. funding for KEDO this June.

Moreover, construction of the first of two light-water reactors (LWRs) to replace the reactors that are to be dismantled under the terms of the Agreed Framework got off to a slow start because previous governments in South Korea and Japan refused to provide the necessary funding. Consistent with the Agreed Framework, the delay in construction has further postponed the removal of up to six bombs' worth of plutonium in the spent nuclear fuel now in North Korea, as well as Pyongyang's obligation to clear up anomalies in the initial material declaration it made to the IAEA. Both of these steps, once regarded as urgent, especially by critics of the Agreed Framework, are now delayed by allied inaction.

Even worse, from Pyongyang's point of view, Washington was reluctant to move beyond the 1994 accord to greater political and economic engagement. After all, Pyongyang reasoned, if Washington was willing to supply nuclear reactors, improved diplomatic, trade and other ties would surely follow. When that did not happen, North Korea, believing it was adhering to the letter of the Agreed Framework and not getting much in return, began warning in January 1998 that it would abandon the accord unless Washington proceeded with implementation, including timely shipments of heavy fuel oil, a speed-up of construction of the replacement reactors, and easing of economic sanctions. In late April 1998, the North stopped the canning of the plutonium-laden spent fuel at Yongbyon, but only after all the 8,000 or so intact fuel rods were put in casks and nothing but nuclear sludge from a few disintegrating rods remained. On May 7, Pyongyang said it would need to "open and adjust" its other nuclear facilities, including the reactor, for maintenance, but in the presence of IAEA inspectors. The North also hinted it might end its freeze on reprocessing.

The recent spurt of activity at the suspect underground site at Kumchangni should be understood in this context. Had North Korea wanted to break the nuclear accord, it could have thrown out the international inspectors, opened the casks and removed the spent fuel for reprocessing. Instead, the North resumed excavation at the long-suspect underground site, which U.S. intelligence has been observing for over a decade and reassessed last spring to be nuclear-related. Although it is difficult to know for sure since no facility is yet going up, even if that assessment is correct, such an installation would take years to build—hardly a sign of Pyongyang's eagerness to break the Agreed Framework.

After talks in New York in early September, Pyongyang allowed the canning of the spent fuel to resume and is near agreement with Washington on access to the underground site. In return, the North wants progress in engagement in the form of further relaxation of U.S. sanctions, which Washington held up when the renewed activity at Kumchangni was discovered, as well as additional food it may have been led to expect over two years ago. In short, North Korea has been threatening to break the October accord without actually violating it. It looks like another instance of tit-for-tat behavior by Pyongyang—cooperate when the United States cooperates and retaliate when it reneges—intended to get Washington to negotiate.<2>

The only way to determine North Korea's intentions is to pursue diplomatic probes to see whether Pyongyang is willing to agree to access to its suspect nuclear sites and to negotiate an end to its medium- and longer-range missile program. It would, of course, be nice if North Korea stopped digging tunnels, testing new missiles and exporting missile technology just because Washington asks, but Pyongyang is unwilling to give away something for nothing. As demonstrated by the Agreed Framework, however, North Korea does not set an unreasonable price and it is prepared to live up to its end of the bargain so long as the United States does.


Probe for a Missile Deal

Since 1992, North Korea has hinted at its willingness to trade in its missile exports for a price. Its June 1998 statement went much further, suggesting the North was ready to negotiate an end to its missile development as well. That is a deal worth exploring without delay.

North Korea has long marketed missiles and components to states in the Middle East and the Persian Gulf, most recently to Pakistan and Iran. Such missile exports, Pyongyang now publicly acknowledges, are a purely commercial venture. Missiles are among the few products it can sell abroad to obtain hard currency. Such transfers, however, have become a matter of concern to the United States and neighbors of the purchasing countries.

North Korea's interest in a deal for ending its missile sales first became evident in 1992 and 1993, when Israel, after failing to get the United States to intercept North Korean missile shipments to the Middle East, tried to arrange its own deal with North Korea. The impetus was an Iranian bid to purchase 150 No Dong missiles, then under development. In October 1992, at North Korea's invitation, Israel opened talks in Pyongyang. In January 1993, Eitan Bentsur, the deputy director-general of the Foreign Ministry, went to Pyongyang and offered to establish diplomatic relations and provide investment and technical assistance in the hundreds of millions of dollars to induce the North to call off its missile sales. Israel broke off the talks under pressure from the United States after North Korea threatened to renounce the nuclear Non-Proliferation Treaty in March 1993. In another example of tit-for-tat, North Korea conducted its first and only test of the No Dong missile on May 23, 1993, in the presence of Iranian officials. Israel agreed to resume the talks in June. On June 14, just before Foreign Minister Shimon Peres was due to go to Pyongyang to try to close the deal, he met with Secretary of State Warren Christopher and South Korean Foreign Minister Han Sung Joo, both of whom objected. Instead of going to Pyongyang himself, Peres sent Bentsur to meet the North Koreans in Beijing. Israel did provide some technical assistance, but suspended all contacts later in 1993 after the United States expressed its displeasure.<3> If a missile deal with North Korea was good enough for Israel, why not for the United States?

Washington reconsidered in January 1996 and has been fitfully exploring a missile deal with Pyongyang ever since. The first round of talks was held that April. A second round was scheduled for September, but just before it was to take place, a North Korean submarine ran aground in South Korean waters while reportedly dropping off spies on a reconnaissance mission. Seoul exploited the incident to get Washington to postpone the talks. In yet another instance of tit-for-tat, North Korea began visible preparation for a missile test only to call off the test after meeting with U.S. officials in New York on October 18. The second round was finally held in June 1997 and the United States offered some easing of economic sanctions for an end to missile sales and even more for an end to missile tests. North Korea did not respond to that offer.

On June 16, 1998, however, North Korea made its reply public in a way that was reminiscent of its November 1993 public offer of a package deal to resolve the nuclear controversy. The North offered to negotiate an end to not only its missile sales but also its development of new missiles. Without more missile tests, Pyongyang would not have new missiles worth selling or deploying. An end to development may also cover production of missiles for testing. The North also coupled that offer with a threat to resume missile tests, a threat it carried out on August 31 when it launched a three-stage rocket in an unsuccessful attempt to put a satellite into orbit. It is now threatening, verbally, to try again.

According to the June 16 statement carried by the North's Korean Central News Agency, "If the United States really wants to prevent our missile export, it should lift the economic embargo as early as possible and make a compensation for the losses to be caused by discontinued missile export."<4> North Korea's announced price for an end to missile development, which is not necessarily the same thing as testing, is a peace agreement with the United States, which is not necessarily the same as a peace treaty. This accord would establish a "peace mechanism" to replace the Military Armistice Commission set up at the time of the Korean War cease-fire.

In putting Pyongyang's June 16 offer of a missile deal to the test, what should the United States seek? At a minimum, an end to the export of missiles, missile components and technology, and missile know-how. Yet, clandestine shipments are difficult to detect. A deal to end missile tests would be much easier to verify. If that proves difficult to arrange, however, the United States should seek a moratorium on further testing while missile talks proceed. A verifiable end to North Korean missile production should be the ultimate, not immediate, aim.

The North Koreans have now reportedly asked for $1 billion in compensation. Compensation for what? The missile exports they would forgo, and they might argue, space launch services as well. An upper boundary on compensation may be calculable from current demand and prices in the world market for such goods and services. The compensation Pyongyang seeks need not require substantial expenditure of public money. Compensation could take various forms: private investment by U.S. firms in the mining and agriculture sectors, for instance, to rehabilitate fertilizer and pesticides production plants; arranging for financing from international lending institutions to implement United Nations Development Program agricultural reforms; or U.S. aid to American non-governmental organizations for their work on North Korean energy and agriculture. Other countries with a strong interest in ending North Korean missile sales and tests should be asked to bear their fair share of the cost.

Yet, compensation or economic assistance does not appear to be the key to a missile deal for Pyongyang. It is mainly interested in normalizing political relations with the United States. A visit to Pyongyang by a high-level U.S. emissary who authoritatively restates the principles of mutual respect for each other's sovereignty and noninterference in each other's internal affairs that the United States agreed to in the June 1993 joint statement might do for a start.

In Congress, however, many Republicans are skeptical that North Korea would ever give up its nuclear arms or ballistic missile programs. These critics see the Clinton administration's North Korea policy as a free-fire zone and attack it relentlessly. Even some congressional Democrats sense the administration is unsure of itself when it sends a deputy assistant secretary instead of a top official up to brief Capitol Hill on talks with North Korea.

While deal-making with North Korea is anathema to some members, others need to ask whether U.S. security interests are better served with or without nuclear and missile deals. If Congress were to impede deal-making by blocking funding for KEDO and preventing the Agreed Framework from being implemented, the next president, Republican or Democrat, may have to face the prospect of war with North Korea, with potentially devastating consequences for the United States and its South Korean ally, and destabilizing effects in all of Northeast Asia.

Probing for a missile deal will have the support of Japan and South Korea. In contrast, a policy of stepping up military and economic pressure on North Korea or even benign neglect will lead to friction with the allies. Seoul knows that it will not get far in the North-South dialogue without progress in the U.S.-North Korean relations. Tokyo knows that the alternative to a missile deal, theater missile defense (TMD) systems, will antagonize China without providing a leakproof defense against North Korean missiles. That is why, even after the August 31 test, Japan still confines TMD funding to $8 million for research, a mere pittance, and refuses to fund research and development. Washington might take its cue from Tokyo: a missile deal with North Korea would be far less costly, financially and politically, than technologically unproven ballistic missile defenses.


Moving Toward Peace

Pyongyang's expressed interest in a missile deal with Washington is a sign of its larger purposes: to extricate the U.S.-North Korean dialogue from the current impasse and to end its lifelong enmity with the United States. American economic sanctions, dating from the Korean War, are a monument to that enmity. Ending the U.S. embargo is the key to a missile deal. Putting an end to U.S. sanctions and establishing a new peace arrangement in return for an end to North Korea missile sales and tests would give both sides something to show for their efforts. It would also improve the political conditions for an even more far-reaching deal in the four-party talks to defuse the conventional military confrontation in Korea. Without meaningful political and economic engagement, the North is unlikely to agree to meaningful military disengagement. How can we expect Pyongyang to end its artillery threat to Seoul while the "Trading with the Enemy Act" remains in force?

Four-party talks among the United States, North and South Korea, and China could do much to reduce the risk of war on the peninsula. That, not a peace treaty to write a formal conclusion to the Korean War, is the main point of the talks. To deal with incidents along the Korean demilitarized zone (DMZ), the United States wants confidence-building measures like a hot line and advanced notice of military exercises. North Korean officials have privately expressed interest in such measures. Even more significantly, following an armed clash in the DMZ on July 16, 1997, the North began broadcasting on loudspeakers that a certain number of their soldiers will go out for routine reconnaissance at a certain time and a certain location in the DMZ.

For its part, North Korea seeks to replace the outmoded Military Armistice Commission. It seems to have in mind three-way talks, but not under a U.N. flag, which is a symbol of wartime enmity to the North. North Korean willingness to resume military-to-military talks at Panmunjom was one sign of its interest last summer. The North had boycotted the talks ever since a South Korean general replaced an American general as head of the allied delegation. Kim Dae Jung's new government in Seoul did much to bring about the resumption of talks by agreeing to let an American general resume chairing the delegation.

Yet, the volatile stalemate on the peninsula will not be defused without more far-reaching steps, like limiting the size of military exercises, sharing intelligence with the North to dispel dangerous misperceptions, pulling back and thinning out forward-deployed forces on both sides, and negotiating mutual force reductions. Such steps have yet to receive sufficient study in the U.S. government.

North Korea may want to reduce its defense burden, but it cannot do so without reciprocal steps by South Korea and the United States, which have military superiority. Pyongyang will not insist on the withdrawal of all U.S. forces from Korea or revocation of the U.S. security treaty with Seoul. Quite the opposite, it will want both to remain in place for a while as a way to rein in South Korean forces. Its representatives have spoken privately of a change in the role of U.S. forces to that of peace-keepers standing in the DMZ. Such a formula could be a way to end the artillery threat to Seoul.

The United States nearly stumbled into war with North Korea at the height of the nuclear crisis in June 1994 when President Clinton approved the dispatch of substantial reinforcements to Korea, a fateful step that was likely to trigger mobilization by Pyongyang and risk a conflict neither side wanted. Incidents like the U.S. helicopter that strayed across the DMZ and repeated incursions by North Korean spy submarines should remind policy-makers that the lives of thousands of Americans and millions of Koreans remain at risk.

Hawks stress the need for deterrence to keep Pyongyang at bay, but deterrence alone will not keep the peace in Korea, especially if North Korea begins to fall apart. Cooperation, or "cooperative threat reduction," in the emerging security parlance, is also needed. It will take sustained political engagement and military reciprocity by Washington, Seoul, and Pyongyang to defuse the armed standoff on the Korean Peninsula. That is worth a serious try, starting with a missile deal.


1. In an official statement made public by the Foreign Ministry, Kang Sok Ju, head of the North Korean delegation to the high-level talks, insisted on "a clear distinction" between inspections to assure "continuity of safeguards," which it had already accepted and "might be expanded," and "full compliance with the safeguards agreement," which required "a package solution" in talks with the United States. Statement by Kang Sok Ju, "The Nuclear Problem of the Korean Peninsula Can Never Be Solved by Pressure, But Be Solved Only by Means of Dialogue and Negotiation," November 11, 1993. <Back to text>

2. Leon V. Sigal, Disarming Strangers: Nuclear Diplomacy with North Korea, Princeton: Princeton University Press, 1998, Chapter 5. <Back to text>

3. "S. Korea Asks Peres Not to Visit N. Korea," Reuters, June 21, 1993; "Israelis Say U.S. Opposes North Korean Deal," The New York Times, August 15, 1993, p. 3; David Hoffman, "Israel Agrees to Suspend Contacts with North Korea," The Washington Post, August 17, 1993, p. A15; Robert S. Greenburger, "North Korea's Missile Sales in Mideast, Along with Nuclear Issue, Raise Concern," The Wall Street Journal, July 19, 1993, p. A6. <Back to text>

4. "KCNA Defends DPRK's Missile Policy," Foreign Broadcast Information Service, June 16, 1998. <Back to text>

Leon V. Sigal, a consultant at the Social Science Research Council and adjunct professor at the School of International and Public Affairs at Columbia University, is author of Disarming Strangers: Nuclear Diplomacy with North Korea.
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