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Don Lopez

How to Deal With North Korea
by James T. Laney and Jason T. Shaplen
From Foreign Affairs, March/April 2003

James T. Laney is President Emeritus of Emory University and Co-Chairman of an independent task force on "Managing Change on the Korean Peninsula," sponsored by the Council on Foreign Relations. He served as U.S. Ambassador to South Korea from 1993 to 1997. Jason T. Shaplen was Policy Adviser at the Korean Peninsula Energy Development Organization (KEDO) from 1995 to 1999 and is a member of the task force.


Progress in reducing tensions on the Korean peninsula, never easy, has reached a dangerous impasse. The last six months have witnessed an extraordinary series of events in the region that have profound implications for security and stability throughout Northeast Asia, a region that is home to 100,000 U.S. troops and three of the world's 12 largest economies.

Perhaps the most dramatic of these events was North Korea's December decision to restart its frozen plutonium-based nuclear program at Yongbyon -- including a reprocessing facility that separates plutonium for nuclear weapons from spent reactor fuel. Just as disturbing was the North's stunning public admission two months earlier that it had begun building a new, highly-enriched-uranium (HEU) nuclear program. And then came yet another unsettling development: a growing, sharp division emerged between the United States and the new South Korean government over how to respond.

But recent events have not been entirely negative. In the two months prior to the October HEU revelation, North Korea had, with remarkable speed, undertaken an important series of positive initiatives that seemed the polar opposite of its posturing on the nuclear issue. These included initiating an unscheduled meeting between its foreign minister, Paek Nam Sun, and Secretary of State Colin Powell in July -- the highest-level contact between the two nations since the Bush administration took office; inviting a U.S. delegation for talks in Pyongyang; proposing the highest-level talks with South Korea in a year; agreeing to re-establish road and rail links with the South and starting work on the project almost immediately; demining portions of the demilitarized zone (DMZ) and wide corridors on the east and west coasts surrounding the rail links; sending more than 600 athletes and representatives to join the Asian Games in Pusan, South Korea (marking the North's first-ever participation in an international sporting event in the South); enacting a series of economic and market reforms (including increasing wages, allowing the price of staples to float freely, and inaugurating a special economic zone similar to those in China); restarting the highest-level talks with Japan in two years; holding a subsequent summit with Japanese Prime Minister Junichiro Koizumi, during which Pyongyang admitted abducting Japanese citizens in the 1970s and 1980s; and finally, allowing the surviving abductees to visit Japan.

Viewed individually, let alone together, North Korea's initiatives represented the most promising signs of change on the peninsula in decades. Whether by desire or by necessity, the North finally appeared to be responding to the long-standing concerns of the United States, South Korea, and Japan. Equally important, Pyongyang seemed to have abandoned its policy of playing Washington, Seoul, and Tokyo off one another by addressing the concerns of one while ignoring those of the other two. For the first time, the North was actively (even aggressively) engaging all three capitals simultaneously.

Until October, that is, when North Korea acknowledged the existence of its clandestine HEU program -- ending the diplomatic progress instantly. Once the news broke, Pyongyang quickly offered to halt the HEU program in exchange for a nonaggression pact with the United States. But Washington, unwilling to reward bad behavior, initially refused to open a dialogue unless the North first abandoned its HEU effort. In November, the United States went a step further: saying that Pyongyang had violated the 1994 Agreed Framework and several other nuclear nonproliferation pacts, Washington engineered the suspension of deliveries of the 500,000 tons of heavy fuel oil sent to the North each year under the 1994 accord. The Agreed Framework had frozen the North's plutonium program -- a program that had included a five-megawatt experimental reactor, two larger reactors under construction, and the reprocessing facility -- narrowly averting a catastrophic war on the Korean Peninsula.

In the weeks following the suspension of fuel shipments, the United States hardened its stance against dialogue with the North -- despite the fact that most U.S. allies were encouraging a diplomatic solution to the situation. North Korea responded by announcing plans to reopen its Yongbyon facilities. It immediately removed the seals and monitoring cameras from its frozen nuclear labs and reactors and, a few days later, began to move its dangerous spent fuel rods out of storage. Pyongyang subsequently announced its intention to reopen the critical reprocessing plant in February 2003. On December 31, it expelled the inspectors of the International Atomic Energy Agency (IAEA). And on January 9, it announced its withdrawal from the nuclear Nonproliferation Treaty.

Although Washington, strongly urged by Seoul and Tokyo, ultimately agreed to talks, the situation appeared to be worsening almost daily. Depending on how it is resolved, the standoff could still prove a positive turning point in resolving one the world's most dangerous flash points. But it could also lead to an even worse crisis than in 1994. The proper approach, therefore, is to now re-engage with North Korea without rewarding it for bad behavior. Working together, the major external interested parties (China, Japan, Russia, and the United States) should jointly and officially guarantee the security of the entire Korean Peninsula. But the outside powers should also insist that Pyongyang abandon its nuclear weapons program before offering it any enticements. Only when security has been established (and verified by intrusive, regular inspections) should a prearranged comprehensive deal be implemented -- one that involves extensive reforms in the North, an increase in aid and investment, and, eventually, a Korean federation.


To understand how the most promising signs of progress in decades quickly deteriorated into nuclear brinkmanship, it is necessary to first understand the origins and motivation behind the North's HEU program and Pyongyang's subsequent decision to restart its plutonium program. Even before North Korea admitted that it was building a new HEU program, the United States had long suspected the country of violating its relevant international commitments. Three years ago, such concerns had led to U.S. inspections of suspicious underground facilities in Kumchang-ni. Although those inspections did not reveal any actual treaty violations -- in part because Pyongyang had ample time to remove evidence before the inspectors arrived -- suspicions lingered. These doubts proved justified in July 2002, when the United States conclusively confirmed the existence of the North's HEU program.

It now seems likely that Pyongyang actually started its HEU program in 1997 or 1998. Although Kim Jong Il's motives for doing so will probably never be clear (his regime has a record of confounding observers), there are two plausible explanations. The first focuses on fear: namely, North Korea's fear that, having frozen its plutonium-based nuclear program in 1994, it would receive nothing in return. Such a suspicion seems unreasonable on its face, since, under the 1994 Agreed Framework negotiated with Washington, Pyongyang was to be compensated in various ways for abandoning its nuclear ambitions. But from the perspective of a paranoid, isolated regime such as North Korea's, this concern was not without justification. Almost from its inception, the provisions of the 1994 accord fell substantially behind schedule -- most notably in the construction of proliferation-resistant light-water reactors in the North and improved relations with the United States.1 North Korea may thus have started its HEU program as a hedge against the possibility that it had been duped, or, more likely, that new U.S., South Korean, or Japanese administrations would be less willing to proceed with the politically controversial program than were their predecessors.

A second, darker, and more likely explanation for Pyongyang's decision to start the HEU program holds that the North never really intended to give up its nuclear ambitions. Whether motivated by fear, honor, or aggression (the determination to stage a preemptive strike if threatened), Pyongyang views a nuclear program as its sovereign right -- and a necessity.

Whichever of these theories is true, the North seems to have undertaken its HEU program slowly at first, ramping it up only in late 2000 or 2001. And it was able to hide the program until July 2002, when U.S. intelligence proved its existence. Although Bush administration officials insist otherwise, it is possible, as North Korean officials have suggested, that Pyongyang decided to step up its nuclear program in response to what it perceived as Washington's increasingly hostile attitude -- a hostility demonstrated to North Koreans by President Bush's decision to include them in the "axis of evil" and to set the bar for talks impossibly high. This perceived hostility was further encouraged when the administration announced its new doctrine of preemptive defense. Notwithstanding the president's remarks to the contrary, Pyongyang views the new defense doctrine as a direct threat. After all, if Washington is willing to attack Iraq, another isolated nation with a suspected nuclear program, might it not also be willing, even likely, to do the same to North Korea?

This fear helps explain why the North decided to restart its plutonium program. Many within the senior ranks of the North Korean military believe that if the United States attacks, Pyongyang's position will be strengthened immeasurably by the possession of several nuclear weapons. North Korean planners thus reason that they should develop such weapons as quickly as possible, prior to the American attack that may come once Washington has concluded its war with Iraq.


There are again two plausible explanations for why the North revealed its HEU program in October 2002. Since its earliest days in office, the Bush administration has made clear that it favors a more hard-line approach to North Korea than did the Clinton team. Even prior to the North's HEU admission, Bush's support for the 1994 Agreed Framework was lukewarm at best. His administration considered the accord a form of blackmail signed by his predecessor -- even though, after a long review of North Korea policy in 2001, the Bush administration found it could not justify abandoning the pact without having something better with which to replace it. In short, Washington grudgingly considered itself bound by a diplomatic process it viewed as distasteful -- if not an outright scam.

When U.S. Assistant Secretary of State James Kelly visited North Korea in early October, he took with him undeniable evidence of the North's HEU program. He also took with him very narrowly defined briefing papers, hard-line marching orders that reflected the influence of the Defense Department and the National Security Council.

Anticipating isolation and a worsening of already strained relations in the face of Washington's evidence, Pyongyang opted to play one of its few remaining trump cards: open admission of its nuclear program. This openness, Kim may have hoped, would keep the Bush administration from disengaging entirely. By acknowledging its HEU effort, Pyongyang essentially sent Washington the following message: "We understand that despite everything we've done over the past several months you want to isolate or disengage from us. Well, we admit we have a uranium-based nuclear program. You say you don't want to deal with us. Too bad -- you can't ignore a potential nuclear power. Deal with us."

Another hypothesis to explain the timing is that Pyongyang simply miscalculated. North Korea watchers learned long ago to expect the unexpected, but even the most jaded observers were surprised in September 2002 when Kim admitted to Koizumi that the North had abducted 13 Japanese in the 1970s and 1980s to train its spies. Kim apologized for the abductions and, with remarkable speed, subsequently authorized a visit of five of the surviving abductees to Japan. In doing so, he removed a decades-old barrier to normalization of relations between the two nations (and to the payment of billions of dollars in hoped-for war reparations from Tokyo).

Kim's gamble on coming clean about the abductions appeared at the time to have paid off. Notwithstanding the predicted public backlash in Japan, further talks between Tokyo and Pyongyang took place in October (after the HEU admission).2 Having experienced better-than-expected results in admitting to the abductions, Kim may have hoped for the same by confessing to his HEU program. His thinking may have been that, in view of Washington's evidence, Pyongyang would eventually have had to come clean anyway. That being the case, it was better to do so sooner rather than later, thereby removing one of the primary obstacles to improved U.S.-North Korea relations. Kim may further have surmised that the timing of such a revelation in October was advantageous, given recent progress in talks with Japan and South Korea. He probably hoped that Tokyo and Seoul would pressure Washington to mitigate its response.

In the weeks immediately following Kelly's visit, Washington made it clear that it did not see a military solution to the crisis on the Korean Peninsula. This left isolation, containment, and negotiation as the only viable alternatives. A policy of isolation would seek the North's collapse but would not address the HEU problem and would likely result in the North's restarting its plutonium-based nuclear program. Containment, or economic pressure designed to squeeze the North, would seek to punish Pyongyang while leaving the door open to future negotiation. It too would not address the HEU problem but, it was hoped, might maintain the freeze on the plutonium program. Negotiations, meanwhile, would seek to address the nuclear problem but could be viewed by some as a reward for bad behavior.

If a successful isolation or containment policy wins the day, the North will have miscalculated in coming clean. If, however, a policy of dialogue and subsequent negotiation ultimately emerges -- or if isolation or containment fails (in part because Washington is unable to persuade China, South Korea, and Russia to endorse it over a sustained period) -- Kim will have played his cards exceedingly well.


Many pundits and policymakers in Washington, on both sides of the aisle, argue that the revelations about Pyongyang's clandestine HEU program prove that President Clinton's policy of engaging the North was a mistake. This argument maintains that giving in to blackmail leads only to more blackmail.

Although it is inherently valid, such analysis is too simple. In 1994, the United States was on the edge of war with North Korea. Washington had beefed up its forces in the theater, installed Patriot missile batteries in the South, and was reviewing detailed war plans. The White House had even begun to consider the evacuation of American citizens. The 1994 Agreed Framework, although deeply flawed, represented the best deal available at a far from ideal time. It remained so for several years. And although it has been disappointing on many levels, the agreement has not been useless.

Indeed, it averted a potentially catastrophic situation. Instead of a war (which the U.S. military commander in South Korea, General Gary Luck, estimated would have killed a million people, including 80,000 to 100,000 Americans), Northeast Asia has experienced eight years of stability. This has had vast implications beyond security. In 1994, South Korea's GDP was 323 trillion won; today, even after the 1997 financial meltdown, its GDP is approximately 544 trillion won.3 This transformation would have been unlikely in the face of imminent armed conflict. China has similarly experienced explosive growth, much of which might also have slowed had there been a major confrontation on its porous border with North Korea.

The Agreed Framework also provided the parties with critical breathing room, which has allowed new realities to emerge both within North Korea and among the United States and its allies -- developments that improve the chances for a better, more comprehensive deal today. To cite one example, in 1994, Kim Jong Il had only recently succeeded his father, North Korea's founder Kim Il Sung. Viewed as weak, mentally unstable, and without a power base of his own, Kim was expected to last a mere two weeks to several months. Today, however, he is acknowledged as the only power in North Korea and has established diplomatic relations with scores of nations, including many of Washington's closest allies in NATO and the European Union. This puts him in a vastly better position to strike a deal.

For its part, the United States in 1994 could not have counted on Russia or China to support its position toward North Korea. Today, however, Washington is likely to receive baseline support -- albeit not carte blanche -- from both. Indeed, although there has hardly been unanimity among the outside powers, there has already been evidence of such cooperation, in the form of a joint Chinese-Russian declaration issued in early December stating that the two powers "consider it important ... to preserve the non-nuclear status of the Korean Peninsula and the regime of non-proliferation of weapons of mass destruction."

Another benefit of the breathing room created by the 1994 accord is the North's economic dependence on the South. South Korea today is North Korea's largest publicly acknowledged supplier of aid and its second-largest trading partner. Although not as successful as he would have liked, former South Korean President Kim Dae Jung's "Sunshine Policy" of engaging the North has, in conjunction with the North's economic collapse, given Pyongyang a strong economic interest in avoiding a crisis. (Although the numbers are much smaller, the situation is not wholly unlike that between Taiwan and China.) Should the North exacerbate current tensions, the economic fallout would be traumatic, and the loss of South Korean investment could destabilize the North.


The timing of the steps now taken to resolve the current crisis will be crucial to their success. Indeed, timing is important to understand because the North's HEU program does not pose an immediate threat. Although it has the potential to eventually produce enough uranium for one nuclear weapon per year, it has not yet reached this stage and is not expected to do so for at least two to three more years, according to administration officials and the Central Intelligence Agency.

The North's decision to reopen its plutonium-based nuclear program at Yongbyon poses a more critical and immediate threat, however. Prior to its suspension in 1994, most experts believe this program had already produced enough plutonium for one or two nuclear weapons. The 8,000 spent fuel rods from the five-megawatt reactor contained enough plutonium for an additional four to five nuclear weapons.4 The IAEA monitored the freeze via seals, cameras, and on-site inspectors. It also canned the 8,000 existing spent fuel rods, placed them in a safe-storage cooling pond, and monitored them until its inspectors were expelled from North Korea on December 31.

The five-megawatt reactor, when operational, will produce enough plutonium for one or two additional nuclear weapons per year. But the 8,000 rods represent an even more immediate challenge. If the North follows through on its threat to reopen the reprocessing facility in February, it would take just six months to reprocess all of its spent fuel and extract enough plutonium to make four or five additional weapons. This would bring Pyongyang's nuclear arsenal to between five and seven weapons by the end of July. It could have enough plutonium for one to three weapons even sooner.

Thus there exists only a short window of opportunity before the North's recent action translates into additional nuclear-weapons material on the ground. The trick to unraveling the current impasse is to avoid rewarding the North for its violations of past treaties with a new, more comprehensive agreement. Blackmail cannot and should not be condoned. The starting point for future discussions should therefore be that the North must completely and immediately abandon its HEU and plutonium-based programs. This pledge must be accompanied by intrusive, immediate, and continuous inspections by the IAEA.

It is a tenet of all international negotiations, however -- particularly those that involve the Korean Peninsula -- that all crises create opportunity, and this one is no different. At its core -- politics stripped aside -- the current standoff will allow Washington to scrap the flawed Agreed Framework and replace it with a new mechanism that better addresses the concerns of the United States and its allies. In many ways, the North's HEU admission and its subsequent decision to reopen its plutonium program might therefore be viewed as a blessing in disguise. The Bush administration can finally rid itself of a deal it never liked and never truly endorsed and replace it with one that addresses all of Washington's central concerns, including the North's missile program and its conventional forces. Washington must, however, be willing to make such a deal attractive to the North as well.

Yet timing poses an immediate barrier to negotiating a new mechanism. Pyongyang has insisted it will give up its HEU and plutonium programs only after Washington signs a nonaggression pact with it. But the Bush administration, while publicly reassuring the North that it has no intention of invading, has justifiably insisted that Pyongyang give up these programs before there is any discussion of a new mechanism. The North seems unwilling to lose face by giving up this trump card without a security guarantee, and Washington is unwilling to take any action that appears to reward Pyongyang before it has fully dismantled its nuclear programs.

Those who think they can outwait Pyongyang by isolating it or pressuring it economically, as the Bush administration proposed in late December, are likely to be proved wrong. North Koreans are a fiercely proud people and have endured hardships over the last decade that would have led most other countries to implode. It would therefore be a mistake to underestimate their loyalty to the state or to Kim Jong Il. When insulted, provoked, or threatened, North Koreans will not hesitate to engage in their equivalent of a holy war. Their ideology is not only political, it is quasi-religious. Pyongyang also enjoys an inherent advantage in any waiting game: Beijing. Although China might initially support a policy of economic pressure, Beijing is afraid that it will face a massive influx of unwanted refugees across the Yalu River should the North collapse. To guard against this event, it will ultimately allow fuel and food (sanctioned or unsanctioned) to move across its border with the North. Similarly, South Korea, which also wants to avoid a massive influx of refugees, is unlikely to support a sustained, indefinite policy of squeezing the North. In mid-December, it elected by a larger margin than predicted a new president who ran specifically on a platform of expanding engagement with Pyongyang.

The way to cut the Gordian knot of who goes first is through a two-stage approach. The first stage would provide the North with the security it craves while also ensuring that Pyongyang is not rewarded for its bad behavior. To achieve this end, the four outside interested powers (the United States, Japan, China, and Russia -- each of which has supported one side or the other in the past) would jointly and officially guarantee the security and stability of the entire Korean Peninsula. Washington may not be able or willing to convene a meeting of the four powers to this end. If not, back channels or unofficial initiatives should be used to encourage Moscow or Beijing to take the lead. Both Russia and China have sought to increase their influence on the Korean Peninsula in recent years. This plan would solidify their places at the table.

Once the security of the peninsula has been guaranteed by the outside powers, it will be time for stage two: a comprehensive accord, again broken into two parts. The North must completely give up its HEU and plutonium programs and allow immediate, intrusive, and continuous inspections by the IAEA; end its development, production, and testing of long-range missiles in exchange for some financial compensation; draw down its conventional troops along the DMZ (although there will be no reduction of U.S. troops at this time, and only a very limited reduction of U.S. troops in five years, should the situation permit); and, finally, continue to implement economic and market reforms.

In exchange for the above, Japan would normalize its relations with the North within 18 months of the agreement's coming into effect. This normalization would include the payment of war reparations in the form of aid, delivered on a timetable extending five to seven years. Both halves of the peninsula would also enter a Korean federation within two years of the agreement's coming into effect. And as soon as the IAEA had verified that the North has dismantled its nuclear weapons programs, Washington would sign a nonaggression pact with Pyongyang. This pact, which by prior agreement would automatically be nullified by subsequent signs that the North was not cooperating or was initiating a new nuclear program, would include the gradual lifting of economic sanctions over three years.

The United States, South Korea, Japan, and the European Union -- the primary members of the Korean Peninsula Energy Development Organization (or KEDO, which was set up to administer the Agreed Framework) -- would further maintain the organization and provide the two new light-water reactors stipulated in the original deal. KEDO would also resume delivery of heavy fuel oil until the first reactor was completed.

In addition to the above measures, China and Russia would agree to support the North economically via investment. All outside parties to the deal -- the United States, South Korea, Japan, China, and Russia -- would also contribute to the compensation the North would receive in return for ending its long-range missile program.

Finally, five years after the above accord is signed, a Northeast Asia Security Forum, consisting of the four major powers plus South and North Korea, would be created to ensure long-term peace and stability throughout the region.

The timing of the various parts of stage two will be critical to its success. To this end, the leaders of all the countries involved (or their high-ranking representatives) should meet in person to negotiate the deal. North and South Korea, Japan, China, Russia, and the United States must all sign on if the plan is to work.

Certain components of the comprehensive deal (such as the U.S.-North Korea nonaggression pact and the missile accord) should exist as separate agreements, referenced in but not attached as appendices to the main text. They should be fully agreed and initialed prior to signing the comprehensive deal. Immediately after signing the comprehensive agreement, the North would have to take the first step by fully dismantling both its HEU and its plutonium programs and allowing IAEA inspections to verify these steps. Only after the IAEA had certified the dismantling would the nonaggression and missile pacts be signed: in the case of the nonaggression pact, by Pyongyang and Washington alone, and in the case of the missile pact, by Beijing, Moscow, Pyongyang, Seoul, Tokyo, and Washington.


Initially, Washington's response to North Korea's HEU and plutonium programs consisted mostly of condemning Pyongyang. Then, in early January, President Bush and Secretary of State Powell took steps to ease the tension. Following a trilateral meeting with South Korea and Japan (during which Seoul and Tokyo pressed for a diplomatic approach), Washington finally agreed to open a dialogue with Pyongyang. The Bush administration, however, limited the scope of the meetings to discussion of how North Korea could abide by its international commitments. It is now time to move beyond this narrow agenda to a policy of resolution -- one that addresses all concerns on the Korean Peninsula.

Such a shift is particularly important given the very serious rupture that has opened between Washington and Seoul. At precisely the time that the situation in North Korea has reached a crisis stage, U.S.-South Korean relations have hit their lowest level ever. Korean anti-Americanism -- far more than just a difference of opinion on how to deal with the North -- was responsible for the election of Roh Moo Hyun as president in December. Roh beat a more hard-line rival specifically by distancing himself from Washington's position on the North and by promising to continue Kim Dae Jung's Sunshine Policy. More critically, he promised a new, more prominent role for South Korea in its relationship with the United States. America will therefore no longer be able to force its position on the more assertive and restless South Korean population.

The process above, fortunately, will address the major concerns of all the parties involved. It will assure North Korea of the underlying security it seeks, without requiring Washington to sign a nonaggression pact until after Pyongyang has dismantled its HEU and plutonium programs. If the North balks despite a security guarantee by all major outside powers and the prospect of a comprehensive accord, isolation or economic pressure by Washington and its allies will not only remain a viable alternative, it will be stronger and more fully justified than it would be otherwise, and will more easily win the unified, sustained support of major players in the region. The upside to exploring the path presented above is therefore massive, and the downside very limited. Doing nothing, meanwhile, could become the most dangerous option of all.


1 The 1994 Agreed Framework called for best efforts to be made to deliver two light-water reactors to North Korea: one in 2003 and one in 2004. Even before the North admitted to having an HEU program -- which has cast the future of the Agreed Framework into doubt -- it had become unlikely that the first light-water reactor would be completed before 2008 or the second before 2009. To be fair, however, responsibility for the delay is borne by both sides, and primarily by the North, since it has frequently been intransigent on practical issues related to the agreement's implementation.

2 The visit of the surviving abductees to Japan in October was originally scheduled to last two weeks. After the North acknowledged its HEU program, Japan refused to allow their return and pressed for their North Korean relatives to be allowed to join them. Interestingly, although the dispute remains unresolved, Tokyo and Pyongyang have opted to handle it quietly -- even as Japan has made clear that future progress with the North is tied to this issue.

3 In U.S. dollar terms these figures equal a 1994 GDP of $404 billion (using the 1994 exchange rate of 800 won to the dollar) and a 2001 GDP of $422 billion (using today's much lower exchange rate of 1,290 won to the dollar).

4 Had the Agreed Framework not been signed in 1994, the North's plutonium-based program would by today have produced enough plutonium for up to 30 nuclear weapons. Critics of the accord should not ignore this fact.