Diplomats Labor to Renew Talks With N. Korea

By Glenn Kessler
Washington Post Staff Writer
Sunday, February 5, 2006

On January 18, Assistant Secretary of State Christopher R. Hill secretly slipped into Beijing and met for two and half hours with North Korea's vice foreign minister, Kim Kye Gwan, in an effort to rekindle stalled disarmament talks.

There is no word on whether the talks might resume anytime soon, though China and South Korea are pressing for this month. But in one sign of the new circumstances, Chinese officials were in the room as Hill and Kim traded talking points -- in contrast to a dinner the two men held in July that led to new talks after a 13-month hiatus, U.S. officials said. Then, the North Koreans indicated they wanted to meet with Hill alone, and the Chinese conveniently got lost on the way to the restaurant. This time, the Chinese made sure they were there.

In many ways, North Korea has become the disappearing nuclear crisis. While the world's attention has turned to Iran's nuclear program -- which U.S. intelligence judges is about 10 years away from manufacturing the key ingredient for nuclear weapons -- North Korea continues to churn out weapons-grade plutonium, building a supply that by many estimates now could yield as many as a dozen weapons.

With great fanfare in September, North Korea and United States, along with Japan, South Korea, China and Russia, announced a tentative agreement in which North Korea said it would give up its nuclear programs in exchange for aid, security assurances and eventual normalization of relations. But the mood quickly soured, and the sporadic talks to implement the agreement sputtered to a halt in an atmosphere of distrust and invective.

Petty slights, mixed messages and missed opportunities have characterized dealings between the two countries in recent months, erasing the hopes expressed in the September agreement. North Korea has seized on recent Treasury Department actions to stem its alleged money-laundering and counterfeiting activities to balk at returning to the talks, while a planned breakthrough visit by Hill to Pyongyang in November fell through after North Korea refused to even briefly turn off its nuclear reactor.

Meanwhile, China -- North Korea's biggest trading partner -- and South Korea have pressed ahead with increasing levels of investment and trade, possibly giving the government a lifeline to survive even as the United States and other countries try to crack down on its illicit trade. Representatives of both Chinese and South Korean companies have been crossing the border into North Korea with increasing frequency despite the nuclear standoff.

Even if North Korea agrees to return to the talks, the prospects for a solution appear dim, according to current and former officials. Michael J. Green, who until December was senior director for Asia policy at the White House, said that there is a "good chance that they will give the appearance of agreement to the six-party process in the hopes of keeping the pressure off them, slowing down the process and avoiding to make a choice they don't want to make -- which is give up their nuclear weapons."

The September agreement "was not a strategic decision by North Korea to dismantle its nuclear weapons," said Green, now a professor at Georgetown University and a senior adviser at the Center for Strategic and International Studies. "It was a tactical decision to sign onto the process. The key now is to use the process to force them to make the decision to give up their weapons."

In a speech to the American Enterprise Institute last week, Hill said he remains hopeful. "I believe the DPRK is going to take a deep breath and look at where its interests lie," he said, using initials for the country's official name, the Democratic People's Republic of Korea. He said holding up the six-nation talks "because of a law enforcement issue is not in the DPRK's interest," adding that "if they follow up on their part, we will follow up on our part."

If the talks resume, the United States is prepared from the start to take positive steps in response to North Korean actions to freeze and dismantle its programs, U.S. officials said. This is an advance from an offer first made in June 2004, in which the United States said it would participate only after the full extent of North Korea's programs was verified.

Yet one top U.S. official, speaking on the condition of anonymity, said, "North Korea is sidelined now as all eyes are on Iran." While there have been occasional rumors that a hard-line faction in the U.S. government has thwarted efforts by Hill and other advocates of negotiations, this official -- a skeptic of the talks -- and others discounted those reports. "It's not the rise of the hard-liners as much as it is the sinking of the North Koreans themselves," he said.

The current impasse has its roots in past disputes within the U.S. government. Under pressure from hard-liners to prove they were tough on North Korea, then-Secretary of State Colin L. Powell and his deputy Richard Armitage several years ago promoted an interagency effort to stem Pyongyang's illegal dealings. The effort bore fruit in September, when Treasury designated Banco Delta Asia in Macao as a primary money-laundering concern, accusing it of facilitating "the criminal activities of North Korean government agencies and front companies."

The designation initiated a process that forces all U.S. banks to cut off correspondent banking relations with the Macao bank. It also had even wider repercussions, a U.S. official said, because it prompted many banks around the world to curtail dealings with North Korea, fearful of being tarred with the same brush.

The Treasury Department alleged that senior officials at Banco Delta Asia accepted large deposits of cash, including the counterfeit money, and agreed to place it into circulation. Treasury officials also alleged the bank accepted multimillion-dollar wire transfers from North Korean front companies that were deeply involved in criminal activities.

David L. Asher, a former State Department official who until July helped manage the administration's "illicit activities initiative" against North Korea, estimates the criminal activities of North Korea account for 35 to 40 percent of North Korea's exports and a much higher percentage of its total cash earnings. He said the revenue generated from the illegal activities is "a major source of support for the people making decisions in Pyongyang." That is one reason, U.S. officials believe, that the government has responded so vehemently to the action.

After the September agreement, Hill had hoped to visit Pyongyang to build momentum for implementing it, becoming the first high-level U.S. official to visit the capital since 2002. U.S. officials say he had even obtained Pyongyang's permission to bring along Jay Lefkowitz, President Bush's special envoy for human rights in North Korea. But, despite repeated urgings, North Korea refused to shut down its nuclear reactor as a show of good faith. The trip, never officially announced, was scrubbed.

That decision was a "missed opportunity," said South Korean Foreign Minister Ban Ki Moon in an interview while visiting Washington last month. "We really hoped that if Assistant Secretary Hill's visit was realized, that might have helped in creating a better atmosphere for resolution of this nuclear issue."

Anthony Faiola contributed to this report from Tokyo.

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