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Dick K. Nanto, Specialist in Industry and Trade Foreign Affairs in the Defense, and Trade Division, and Emma Chanlett-Avery, Analyst in Asian Affairs Foreign Affairs in the Defense, and Trade Division, produced this report for the Congressional Research Service. The report presents an overview of the DPRK economy and notes recent changes in the economy, information on DPRK economic reforms, and profiles the country’s relationship with each of its major trade partners.

Emma Chanlett-Avery, Analyst in Asian Affairs at the Foreign Affairs, Defense, and Trade Division of the Congressional Research Service, and Mary Beth Nikitin, Analyst in Nonproliferation at the Foreign Affairs, Defense, and Trade Division, of the Congressional research Service, write, “The previous taboo within the Japanese political community of discussing a nuclear weapons capability appears to have been broken, as several officials and opinion leaders have urged an open debate on the topic. Despite these factors, a strong consensus – both in Japan and among Japan watchers – remains that Japan will not pursue the nuclear option in the short-to-medium term.”

Steven A. Hildreth, Specialist in Missile Defense and Non-Proliferation in the Foreign Affairs, Defense, and Trade The U.S. Department of State released this report on May 9th detailing recent developments in the Six Party Talks process. The report notes, “Eight out of 11 agreed disablement activities at the three core facilities have been completed. Work on disablement activities continues… These actions have halted the DPRK’s ability to produce additional weapons-grade plutonium for its nuclear weapons program.”

Steven A. Hildreth, Specialist in Missile Defense and Non-Proliferation in the Foreign Affairs, Defense, and Trade Division of the Congressional Research Service, writes, “Within possible range of the Taepo Dongs are
U.S. military facilities in Guam (3,500 km), Okinawa, and Japan… In this configuration, it is estimated that it could deliver a 700 – 1,000 kg warhead to a range of 2,500 km, which could put Japan and Okinawa within range. For the Taepo Dong 1 to achieve greater range its payload would have to be decreased. Some analysts speculate that a reduced payload configuration could deliver a 200 kg warhead into the U.S. center and a 100 kg warhead to Washington D.C., albeit with poor accuracy.”

The International Crisis Group, an independent, non-profit, multinational organization, working through field-based analysis and high-level advocacy to prevent and resolve deadly conflict, writes, “Pyongyang wants Russia to balance China’s growing influence but appears to recognise that Moscow will never provide the level of support it once did. The North has been keen to discuss economic cooperation but has lacked the political will to reform its economy sufficiently for foreign investment, even from a country as inured to corruption and government interference as Russia… there is unlikely to be much growth in bilateral cooperation unless the nuclear crisis is resolved peacefully, and the North opens its economy.”

Larry Niksch, Specialist in Asian Affairs at the Foreign Affairs, Defense, and Trade Division of the Congressional Research Service, and Raphael Perl, Specialist in International Affairs at the Foreign Affairs, Defense, and Trade Division of the Congressional Research Service, writes, “A second potential policy response might be to proceed with removing North Korea from either the terrorism list or the Trading with the Enemy Act in reciprocity for North Korea allowing completion of the disablement of the Yongbyon nuclear facilities, but hold back on removing North Korea from the other until North Korea fulfills its obligation for a declaration of its nuclear programs.”

Mary Beth Dunham Nikitin, Analyst in WMD Nonproliferation at the Foreign Affairs, Defense, and Trade Division of the Congressional Research Service, writes, “Congress will have a clear role in considering U.S. funding for the disablement and decommissioning of North Korea’s nuclear facilities, as well as other inducements for cooperation as agreed in the Six Party talks. For example, the President has submitted a request to Congress for $106 million “to provide Heavy Fuel Oil or an equivalent value of other assistance to North Korea on an ‘action-for action’ basis in support of the Six Party Talks in return for actions taken by North Korea on denuclearization” as part of the 2008 War Funding Request.”

Richard Tanter, Director of the Melbourne Office of the Nautilus Institute, writes, “Australian nuclear policy does indeed need to be reviewed. But such reconsideration of our current policy failures needs to be genuinely and comprehensively realist, informed by abiding commitments to the avoidance of nuclear next-use, and eschewing any suggestion that if our half-hearted arms control measures do not bear fruit, then Australia too will take the genocidal option, and once again and try to join the nuclear club.”

The Second Session of the Sixth Round of the Six-Party Talks was held in Beijing among the People’s Republic of China, the Democratic People’s Republic of Korea, Japan, the Republic of Korea, the Russian Federation and the United States of America from 27 to 30 September 2007. The parties released this joint statement.

Go to the U.S. State Department Response here.

William H. Cooper, Specialist in International Trade and Finance in the Foreign Affairs, Defense, and Trade Division at the Congressional Research Service, and Mark E. Manyin, Specialist in Asian Affairs in the Foreign Affairs, Defense, and Trade Division of the Congressional Research Service, describe the impact of the US-ROK Free Trade Agreement on the Kaesong Industrial Park. They write, “according to the details of the agreement released thus far, it appears the United States backed away from the principle of not ever expanding the KORUS FTA to North Korea-made products…[however] the United States would be able to control the decision to and pace of any move to grant preferential treatment to North Koreamade products.”