The North Korea nuclear negotiations have stalled, and the prospects for future progress are dim. Meanwhile, Pyongyang continues to produce weapons-grade plutonium and now has a stockpile large enough to build as many as a dozen nuclear weapons. On 5 July 2006, it defied international pressure and test-fired seven missiles in the direction of Japan, including one of a type that could eventually be capable of reaching the U.S. Seoul faces difficult security choices at a time when relations with Washington and Tokyo are deeply strained. The only real chance of breaking out of the downward spiral is for the U.S. to adopt a new approach, including more readiness to talk bilaterally and less rhetorical vitriol, in order to test the North’s willingness to return to the six-party talks and work toward a deal.

This briefing updates Crisis Group reporting on North Korea, focusing on the nuclear and missile standoff and the often conflicting responses of the parties. Negotiating with the North is usually exasperating but the half-hearted and often self-defeating approach followed by the Bush administration of talks coupled with name-calling has ensured that the exercise goes nowhere. Attempting to squeeze North Korea into capitulation or collapse by wielding economic sanctions at the moment when negotiations were beginning to bear fruit, refusing to meet with the North outside the multilateral talks and pressing human rights concerns have reduced the six-party talks involving North and South Korea, the U.S., China, Japan and Russia to “dead man walking” status. Seoul and Beijing, however, are slowly realising their unconditional engagement has also failed to elicit the desired behaviour from the North.

While the UN Security Council did nothing when the North launched a missile in 1998 that travelled much farther than any of those in July 2006, this time it unanimously adopted Resolution 1695, which condemns the missile launch and imposes a partial arms embargo. The fact that China voted for Resolution 1695 after abstaining from one with less bite after the much more serious offence of leaving the Nuclear Non-Proliferation Treaty (NPT) in 1993 shows that even the North’s most important benefactor is losing patience.

While reluctant to join sanctions, Seoul announced that it would halt humanitarian aid shipments until the missile crisis is resolved, thus leaving the North at its most isolated in decades. If Pyongyang is not given a face-saving way of backing down, it could escalate the confrontation by testing another missile or even conducting a nuclear test, which would certainly lead to even harsher condemnation and more severe sanctions.

Unless negotiations resume soon with both sides showing more flexibility, Washington and Pyongyang could find themselves on a collision course, with Seoul caught in the middle. The U.S. should:

• free up North Korean assets in Macao that can be traced to legitimate business activities;
   
• appoint a senior envoy for the six-party talks and equip him or her with broad authority to negotiate and to visit Pyongyang for informal bilateral discussions; and
   
• refrain from veiled threats and name-calling.

Even though South Korea is in a difficult position, and the North has refused to allow it a meaningful role in the standoff, it should take several steps to improve the situation, including:

• linking the expansion of economic cooperation to the resumption of the six-party talks;
   
• de-linking humanitarian assistance to the North from inter-Korean cooperation, nuclear and missile issues and resuming such aid in response to the severe July floods;
   
• supporting implementation of Security Council Resolution 1695 by actively participating in the Proliferation Security Initiative; and
   
• refraining from openly criticising other six-party talks participants, especially the U.S. and Japan.

All parties at least claim to be committed to finding a diplomatic solution. At present, the six-party talks are the only vehicle for achieving that outcome. In the end, the North may decide that it cannot give up its nuclear capabilities at any price, but until we find out, it will be virtually impossible to gain the support of China and South Korea for more vigorous measures.

Seoul/Brussels, 9 August 2006