NORTHEAST ASIA PEACE AND SECURITY NETWORK ***** SPECIAL REPORT ***** March 3, 1999 The following is the report of a meeting hosted by the Union of Concerned Scientists (UCS) on October 22, 1998, on the subject of engagement with the DPRK. The meeting consisted of a small group of experts discussing the possibility of negotiating limits to the DPRK's nuclear and missile development programs. The report is also available on the UCS website: http://www.ucsusa.org/ ------------------------------- Report on 22 October 1998 Meeting on US Engagement with North Korea On October 22, 1998, the Union of Concerned Scientists hosted a small group of people with expertise relevant to North Korea to discuss the possibility of negotiating limits to North Korea's nuclear and missile development programs. The purpose of the meeting was to consider what would be required to make limits on its weapon programs acceptable to North Korea. Below is a summary of the general conclusions of that meeting. The participants concluded that the United States should assertively pursue negotiations on a cooperative threat reduction program with North Korea to test Pyongyang's interest in such a program. To gain domestic support for such an effort, the Clinton administration should frame it as the security issue it is and present it as a series of coordinated steps that could significantly reduce tensions on the Korean peninsula and decrease the potential threat posed by North Korea's weapons programs and sales. Goals of the Cooperative Threat Reduction Program The participants concluded that, in the near-term, a cooperative threat reduction program should have both a nuclear and missile component. In the longer term, this approach could be extended to attempt to reduce the North Korean conventional threat and end its chemical and biological weapons program. The program should consist of a set of phased and linked measures that would create strong incentives for North Korea to abide by the terms of the agreement, recognizing that it will ask the same in return. The current US-DPRK talks on terrorism should probably be kept separate from the negotiations on this program. However, progress in the terrorism talks may be necessary in order for the United States to lift enough sanctions to make a missile deal possible. To be politically viable in the United States, such a program of cooperative threat reduction must include steps that clarify the status of the suspect nuclear site at Kumchang-ri. There now appears to be significant progress on this issue that would open the way for further steps. On the nuclear issue, the United States should strive to keep the Agreed Framework on track and to pursue steps that go beyond it, if possible. For example, the Agreed Framework links North Korea's obligation to account for its past nuclear activities and come into full compliance with its safeguards agreement to the timeline for delivery of key nuclear components of the reactor. That process is already behind schedule. The United States may be able to expedite inspection of the Yongbyon facility in a way that North Korea finds acceptable by proposing that the United States and North Korea move expeditiously toward a nuclear cooperation agreement and begin talking about terms and conditions. This approach could give the IAEA access to North Korea's nuclear sites earlier than stipulated by the Agreed Framework. Members of a North Korean delegation visiting Sandia's Cooperative Monitoring Center recently said their government is ready to talk about nuclear cooperation and de- nuclearization. There have been discussions of consultations between the US Department of Energy and the North Korean Atomic Energy Commission. For example, North Korean officials have said they are interested in having DOE train its atomic inspectors. The United States should follow through on these discussions and could suggest expanding the scope of these consultations. In the meantime, the United States should make clear that North Korea must preserve information that will eventually allow the IAEA to construct a history of its past nuclear activities. On missile issues, the United States should seek a complete ban on the sale or transfer of technology for all ballistic and cruise missiles, as well as a ban on technical assistance for such systems. It should also seek a ban on tests of missiles with ranges greater than 180 kilometers. Such a measure would go beyond the terms of the Missile Technology Control Regime (MTCR) and would be the same restriction currently limiting South Korea's missile development. However, a test limit of 300 kilometers-the limit imposed by the MTCR-is also possible if it is acceptable to South Korea. If North Korea insists on a two-phased agreement, first dealing with missile sales and only later with tests, the United States should insist on a moratorium on North Korean tests while talks proceed. These measures would allow North Korea to retain its existing missile forces for the time being to address its security concerns. Such an agreement would therefore have the character of the Agreed Framework, which is first to freeze the program, and then attempt to roll it back. Optimally, the United States would also like to establish a moratorium on the deployment of any new missiles. While desirable, we believe this should not be part of an initial agreement, since it is difficult to verify and may complicate negotiations and implementation. However, this issue should be linked to the agreement by making clear to North Korea that deployment of new missiles other than the Nodong, which is reportedly already being deployed, would be seen as provocative and could scuttle agreement or bring negotiations to a halt. What does North Korea want in return? The participants concluded that North Korea's primary goal in negotiations is the normalization of relations with the United States. It is clearly concerned about its economy and its ability to feed its people, and measures that help in these areas will be needed in a negotiation package. But economic assistance is not the core of a deal to limit North Korean weapons of mass destruction and will not be sufficient by itself. Political normalization with the United States is the fundamental issue that must be offered for negotiations to have any chance of leading to sustained, productive engagement with North Korea and progress in the long-term. On June 16, 1998, North Korea stated publicly that it was willing to discuss limiting missile development, not just sales, "after a peace agreement is signed between the DPRK and United States and the US military threat is completely removed." It is potentially important that North Korea conditioned this limit on signing a "peace agreement," not a formal peace treaty, with the United States and on removing the "US military threat," not US troops. This wording suggests some flexibility on the part of North Korea. The peace agreement that the North has talked about in the past would replace the Military Armistice Commission with a new "peace mechanism." North Korea also stated that its "missile export is aimed at obtaining foreign currency" and that to end exports the United States should lift its economic embargo "as early as possible" and compensate North Korea for its foregone sales. North Korea may also seek compensation for revenue that it could have raised by offering satellite launch services had it been allowed to develop its space-launch capability. It is reportedly seeking $1 billion a year for three years, which it would use to convert its missile industry. One can also learn something about North Korea's interests by looking at its negotiations with Israel in 1993, which Israel believed would stop North Korean missile sales to the Middle East. In those negotiations, in addition to economic assistance, North Korea sought assistance in managing its gold mines, as well as thousands of trucks that were presumably intended largely for its mining industry. The agreement that was eventually reached was said to commit Israel to provide substantial investment assistance for civilian projects in North Korea. (Israel backed away from this agreement under US pressure and it was never implemented; at the time, the United States was negotiating with North Korea over its nuclear program.) Elements of a package The participants identified a number of elements that could be used to make up a negotiating package. They concluded that North Korea appears unwilling to negotiate in earnest until it believes that the United States is serious about engaging it in a constructive way. As a result, the existence of a package that the United States would put on the negotiating table is in some ways more important than the specifics of the package. However, it is important for North Korea to see this process as a high-level one within the US government. It is crucial that President Clinton is seen to be personally involved in this process and that the package is seen as his initiative having his support. The participants suggested a package consisting of three general parts. Within these, there are a number of specific measures the United States could put on the table, linked to specific North Korean actions. (1) The first and most important part to Pyongyang is political and is in many ways symbolic. The North Korean desire to be treated with respect and to begin a process of normalizing relations with the United States is even greater than its desire for economic assistance. For this reason a high-level US envoy, presumably former Defense Secretary Bill Perry, who was recently appointed as the Clinton administration's North Korea Policy Coordinator, should travel to Pyongyang. The envoy might declare a desire to end the era of adversarial relations, making reference to the US-DPRK joint statement of June 1993, and seek a moratorium on missile tests while discussions continue. This step by itself may constitute a significant part of what is needed for the package to be acceptable to North Korea. Such a visit could take place in concert with an "invitation" by North Korea to visit the suspect site at Kumchang-ri. The United States should make clear that such an invitation and successful resolution of the issues surrounding that site would open the way for a broader package of measures. In addition, the United States should make clear that the North should refrain from missile tests while talks proceed. During this visit, the United States should propose some specific measures, such as those discussed in sections (2) and (3) below. The United States should also reaffirm its commitment to the Agreed Framework, and as part of that should state its intention to ensure that construction of reactors under the Agreed Framework is not further delayed and to take what steps are possible to get it back on schedule. In addition, the United States should declare its readiness to open a liaison office in Pyongyang, and to have North Korea do so in the United States. This step was expected to occur by the end of 1998, but that plan was scuttled by North Korea's missile launch in August. (2) The second part of the package is both political and economic. Given the present mood on Capitol Hill, the participants focused on measures that would not require the US Congress to appropriate funds. As part of its negotiating package, the United States should waive all the sanctions associated with the Trading With the Enemy Act (TWEA), which can be done by the President. The sanctions issue is important both politically and economically. Easing sanctions would be an important sign of US commitment to the process of political and economic normalization. In addition, dropping TWEA sanctions is important even it if does not initially lead to a significant opening of direct US trade and investment. It would allow, for example, the United States to grant North Korea an annual textile quota and permit South Korean and other foreign investors now being courted by Pyongyang to export textiles and other products made with low-wage North Korean labor to the US market. Such an arrangement would allow North Korea to begin earning foreign exchange and could encourage further opening of North Korea to foreign investment. Some amount of hard currency may be necessary for an agreement banning missile sales. Most of the measures discussed at the meeting would not provide immediate economic assistance and North Korea has argued that it must be compensated for what it would lose by ending its missile sales. Israel has in the past shown an interest in providing some hard currency to North Korea as well as a commitment to assist in lining up trade and foreign investment as a way of stopping North Korean missile sales to the Middle East. The United States should urge Israel to provide such assistance as part of a US package for North Korea. Compensation, however, could take other forms, including some of those discussed below. (3) There are a number of other measures that can be used as parts of a negotiating package and that North Korea has shown an interest in. For example, the United States could pledge a major contribution to the United Nations Development Program (UNDP) initiative intended to help North Korea grow more of its own food through measures such as the repair of irrigation systems, assistance with fertilizer, etc. This program was developed with participation by North Korea, which is enthusiastic about it, and is estimated to cost $300 million over three years. The United States could also help solicit funds for this project from a number of countries, who are tiring of giving food aid to the North and would like to see an alternative to the prospect of substantial food contributions continuing for the indefinite future. South Korea, the European Union, China, and perhaps eventually Japan would likely contribute. (China currently donates a million tons of grain annually to help stabilize the situation in North Korea.) The participants concluded that food aid per se should not be part of the package, and in general should be decoupled from the negotiations over North Korea's military programs. A second measure would be a US commitment to help North Korea improve its mining sector. Such a step could be very important since minerals are one of the main resources that North Korea can sell abroad, and helping to develop this resource would provide North Korea with a means to earn foreign exchange. The United States could help establish a minerals development fund to assist North Korea in developing its mining technology and infrastructure. This could be used in part to encourage private capital to help develop the mining sector. The two governments could take additional steps apart from this to encourage private investment in this sector. North Korea also appears to be interested in measures that would help it develop non-nuclear energy technologies. For example, it has expressed an interest in sending scientists to the National Renewable Energy Laboratory. It also recently cooperated in a small-scale project with the Nautilus Institute to install wind turbines in a rural North Korean village. The prospect of benefiting from an energy development fund similar to those discussed above could be an incentive for North Korea to cooperate in other areas. China may be interested in participating in measures such as those discussed above even though it did not want to join KEDO. China has talked about the importance of regional economic cooperation, and may be willing to contribute money and technical assistance to some or all of these programs. China's involvement in these programs could be very beneficial and should be encouraged. The United States could also push for trilateral negotiations, as a side negotiation to the Four-Party Talks in Geneva, to replace the Military Armistice Commission with a tripartite command. Such a move could be very important symbolically, since it would mean that while US troops would remain in Korea, the UN command that waged the Korean war would be removed. The participants noted that the expanded General Officers' Talks at the DMZ are tripartite talks that recognize South Korea as an equal partner in negotiations. Participants: Steve Fetter University of Maryland Selig S. Harrison Century Foundation K.A. Namkung Atlantic Council of the United States Leon Sigal Social Science Research Council John Steinbruner Brookings Institution David Wright Union of Concerned Scientists and Security Studies Program, MIT -----------------------------