North Korea: Where Next for the Nuclear Talks?

This report is also available in Korean and in Russian.

EXECUTIVE SUMMARY AND RECOMMENDATIONS

North Korea could now have as many as ten nuclear weapons. While six-party talks have continued without results in Beijing, North Korea has probably reprocessed its fuel rods and may have turned the plutonium into weapons. It almost certainly has enough bombs to deter an attack and still have some to sell to other states or even terrorist groups. This risk means that it is now an increasingly urgent priority to dismantle North Korea's nuclear program. Demands by the United States that North Korea do this before any deal can be reached have been rebuffed, and the talks have stalled.

It is time to change tack and put a comprehensive offer on the table that lays out exactly what benefits North Korea stands to get in exchange for giving up its nuclear program and weapons. Only a serious offer from the United States will put the other parties in a position to increase pressure on North Korea should a reasonable deal be rejected.

Before the talks began in August 2003, ICG outlined a phased negotiating strategy, designed to tackle the most immediate threat -- North Korea's reprocessing of 8,000 spent fuel rods and the restarting of the reactors that would allow it to produce more -- before addressing the details of verification, dismantlement and economic incentives.[1] Acknowledging that diplomacy is the best option but that success was not assured, the strategy involved an initial freeze, followed by detailed time-limited negotiations backed by sanctions if those negotiations failed. It also accepted the possibility of military force should North Korea cross a red line by preparing to use or transfer nuclear weapons.

It is now too late to freeze North Korea's activities at its nuclear plant at Yongbyon: it must be assumed that by now the fuel rods there previously subject to safeguards have been reprocessed and their fissile material already turned into weapons. Future talks must deal with three areas of concern -- first, eliminating such weapons as were produced before 1994; secondly, eliminating such weapons as have been produced from plutonium reprocessed after 2002 and fully accounting for that plutonium and the spent fuel now continuing to be generated in the Yongbyon reactor; and thirdly, verifiably dismantling the program, such as it is, to produce highly enriched uranium (HEU).

The focus should remain on the nuclear issue, putting on hold other current policy concerns such as missile controls, human rights, reductions of conventional forces and economic reforms, important as they all are in their own right, until this critical problem is resolved.

North Korea is only likely to respond to a mix of economic and security inducements backed by the threat of coercive measures such as sanctions. China, Russia and South Korea, however, are very reluctant to impose sanctions on the North, while Japanese steps in this direction have been driven more by the issue of North Korea's kidnapping of its citizens than concerns over the nuclear program. There will be no agreement on coercive measures unless the United States (after consultation with its other negotiating partners) first lays out a detailed plan of what North Korea can expect by way of economic assistance and security guarantees. A road map going no further than indicating the general direction of the process, indicating what might be discussed when, is not likely to be enough to persuade the North Koreans and the other participants that the U.S. is negotiating in good faith: what is also needed is a detailed picture of the destination.

This report outlines an eight-stage process under which North Korea would reveal and dismantle various components of its nuclear program while receiving a series of economic, energy and security benefits. The steps would be laid out in advance so that it would be clear if any participant was not living up to its obligations. By the end of this process, North Korea would have given up all its nuclear programs; in return it would have diplomatic relations with Japan and exchanged liaison offices with the United States. It would receive a significant input of energy assistance and aid from South Korea, Japan and the European Union. It would also have a conditional multilateral security guarantee. Having given up its weapons, it would be in a position to move forward with full diplomatic relations with the U.S., sign a peace treaty for the Korean Peninsula, and develop full relations with international financial institutions. North Korea's perceived threats to its economic and military security would be significantly reduced.

Any agreement will have to take into account a number of realities. A deal will only be possible if it includes intrusive verification. There is little willingness in the U.S. Congress to fund more aid to North Korea; therefore, Japan and South Korea will have to bear significant costs. And it is doubtful that the United States will accept any form of peaceful nuclear energy program in North Korea, meaning that plans to build light water reactors under KEDO may have to remain suspended indefinitely.

Talks with North Korea are never easy. There is some scepticism that Pyongyang will ever accept a deal, however objectively reasonable. The only way to find out once and for all is to offer it one that at least all five other parties see as such. And that will require more being put on the table than has been the case so far.

RECOMMENDATIONS

To the United States:

1.  Present (after consultation with South Korea, Japan, China and Russia) a detailed proposal fully outlining the steps North Korea will need to take to dismantle its weapons programs together with a clear picture of what economic benefits and security guarantees will be offered if they do, with elements along the following lines:

(a)  security guarantees for verified freeze of Yongbyon operation;

(b) energy planning for disclosures and declarations of intent;

(c) energy provision for signatures and access;

(d) rehabilitation and relief for agreed dismantlement;

(e) aid for dismantlement;

(f) reparations for weapons declarations;

(g) liaison office and international financial institution preparations for HEU commitments; and

(h)  liaison offices for conclusive verification.

2.  Be prepared itself to provide, at the appropriate times, the following components of any such deal:

(a) a conditional security guarantee (along with Russia, China, South Korea and Japan);

(b) support for delivery to North Korea of 500,000 tons of heavy fuel oil per year by South Korea and Japan;

(c) participation in a multilateral energy survey of North Korea, including preparations for the rehabilitation of power plants;

(d) agreement to technical assistance from the World Bank and others;

(e) relaxation of travel restrictions on North Korean diplomats and the exchange of liaison offices; and

(f) review of North Korea's inclusion on the list of terrorism sponsors.

3.  Agree to the continued suspension of the KEDO program rather than pressing for its abandonment, and postpone a decision on its future until after implementation of a deal is well underway.

4.  Draw up a plan of graduated sanctions, to be backed by a possible UN resolution, should North Korea not accept a reasonable package or violate an eventual agreement.

5.  Recognise that issues such as terminating North Korea's missile program and exports, human rights, economic reform, biological and chemical weapons, and conventional force reductions should not form part of the nuclear negotiations.

To North Korea:

6.  Accept all the reciprocal commitments required of it in the nuclear deal outlined above.

7.  Accept that the International Atomic Energy Agency (IAEA) will have to play the key role in comprehensive verification.

8.  Immediately satisfy Japanese demands for a resolution to the issue of kidnapping victims by providing Tokyo with information on their fate.

To South Korea:

9.  Prepare to provide the bulk of energy assistance for the North in conjunction with other economic development plans.

10.  Accept that the KEDO program to build nuclear plants in the North may have to remain suspended indefinitely.

11.  Be prepared to apply sanctions if North Korea refuses a reasonable deal.

To China:

12.  Apply diplomatic pressure on North Korea to accept a reasonable deal, and be prepared to apply sanctions if it refuses.

To Japan:

13.  Prepare a detailed package of reparations to be paid to North Korea following normalisation.

14.  Accept the indefinite suspension of KEDO.

15.  Be prepared to apply sanctions if North Korea refuses a reasonable deal.

To Russia:

16.  Apply diplomatic pressure on North Korea to accept a reasonable deal, and be prepared to apply sanctions if it refuses.

To the European Union:

17.  Prepare to revive the development aid plan suspended in 2002.

18.  Be prepared to apply sanctions if North Korea refuses a reasonable deal.

Seoul/Brussels, 15 November 2004