North Korea's Plan to Unload the Fuel Rods Again

Abstract

Why are they speeding up? Not as a provocation or threat, as media have made seem, but because they want to use Yongbyon as a bargaining chip in bilateral negotiations with U.S. to resolve stalemate over resumption of six party talks.North Korea does want to return to six party talks. Kim Gye Gwan said it is very important to us to resume six party talks because we would be big beneficiaries if September 19, 2005 Beijing declaration is implemented. But first they want to negotiate an end to financial sanctions imposed by U.S. right after September 19 agreement, which they regard as a violation of accord.The financial sanctions are very severe. The United States has in effect asked all banks in world not to deal with North Korea or to handle any transactions involving North Korea. The Bush Administration says that is only carrying out law enforcement against money laundering and counterfeiting and seeking to stop transactions relating to weapons of mass destruction. But Treasury Department has made clear that its goal is to cut off all North Korean financial intercourse with rest of world.Here's what Undersecretary of Treasury Stuart Levey told Wall Street Journal on August 23: the U.S. continues to encourage financial institutions to carefully assess risk of holding any North Korea-related accounts. On August 29 he said, are having a very difficult time finding banking services. You are seeing a near complete isolation. On September 9 he said, the line between North Korea's licit and illicit money is nearly invisible, and U.S. government is urging financial institutions around world to think carefully about risks of doing any North Korea-related business.I found instances in North Korea authenticated by foreign businessmen and foreign embassies in which legitimate imports of industrial equipment for light industries making consumer goods have been blocked. The North Koreans understandably see this as a regime change policy designed to bring about collapse of their regime through economic pressure. They think U.S. government is so divided between Vice President Cheney and State Department that is incapable of carrying out September 19 agreement.What they are saying is in effect, want U.S. to show us is ready to move toward normal relations in accordance with September 19 agreement. If U.S. will not lift all of financial sanctions, all at once, then should show us in other ways that has got its act together and is giving up regime-change policy.What they have in mind are bilateral negotiations without preconditions leading to a package deal that would be followed by six party talks. For example, U.S. would lift some or all of sanctions in return for North Korean concessions such as a freeze of Yongbyon reactor, a missile-testing moratorium, or a commitment not to transfer nuclear weapons or fissile materials to third parties. Or U.S. would offer incentives such as energy aid and removal from terrorist list in return for a North Korean compromise on aspects of financial sanctions.Here is what Kim Gye Gwan said: I am optimistic that Bush administration will climb down in near future and return to September 19 agreement. They have no choice, since we are ones who hold key to six party talks. The Administration is under pressure from China and South Korea. Previously they said financial sanctions were law enforcement and could not be discussed in six party talks, but now they are changing their tune. Previously they said there could be no bilateral contacts before six party talks. Now they are sending signals suggesting bilateral contacts. We are trying to find out whether they are ready for serious discussions without seeking to impose preconditions.My own view is that only way to break deadlock in six party talks is to find some way to resolve sanctions issue through bilateral negotiations. …