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Key step forward on North Korea

Agreement on funds frozen by US paves way for North Korean shutdown of its nuclear program.

By Staff writer, Donald KirkCorrespondent / April 12, 2007


This week's settlement of a dispute between the United States and North Korea over $25 million in tainted cash held in a Macao bank may be remembered as the key to full dismantlement of Pyongyang's nuclear program.

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Or it may be recalled as a retreat by a White House beset by one too many foreign fire and as a signal to troublemaker regimes, including Iran, that world powers can be forced down from tough sanctions and uncompromising positions.

Many Democrats and foreign-policy experts are joining the Bush administration in hailing an agreement Wednesday that gave North Korea immediate access to deposits the US froze in 2005 as part of a crackdown on counterfeiting in Pyongyang. The settlement paves the way for the North to shut down its Yongbyon nuclear power plant – a first step toward dismantlement of its nuclear program, to which the North agreed in February with the US and four other countries.

But hard-liners are calling the accord a bad precedent for dealing with regimes that threatenglobal stability, particularly with nuclear development.

Either way, the lesser-evil-for-greater-good agreement is emblematic of the kind of diplomatic compromise President Bush eschewed in his first term but appears more prone to accept in his second.

"Is this deal going to leave a bad taste in a lot of mouths? You bet," says Jon Wolfsthal, a nonproliferation expert at the Center for Strategic and International Studies (CSIS) in Washington. "But we have yet to determine if North Korea is really ready to give up its nuclear arms program, and if we had to jump this hurdle to find that out, it's worth the risk."

Even as US officials said the issue of the $25 million was "resolved," North Korea suggested it would need perhaps a month to shut down Yongbyon – a step that under the February agreement was to take place by Saturday.

New Mexico Gov. Bill Richardson, leading a bipartisan entourage that had just spent four days meeting senior North Korean officials in Pyongyang, said that there was no reason it should take that long for North Korean technicians to go through the whole procedure.

Mr. Richardson, talking Wednesday about his visit to Pyongyang several hours after crossing the line from North to South Korea, appeared anxious to give an impression of bluntness and firmness in response to North Korean official comments about going a month beyond the Saturday deadline set in the six-party agreement of February 13.

"I believe that is too much time," he said, recounting one of several meetings with North Koreans. "You don't need 30 days to shut down a reactor."

Look North: S. Korea's nuclear envoy Chun Young-woo talked with US Assistant Secretary of State Christopher Hill Wednesday. LEE JIN-Man/AP

Richardson noted that the North has said it will admit nuclear inspectors from the International Atomic Energy Agency within a day of receiving the frozen funds.

The US Treasury Department removed all barriers to the recovery by North Korea of the $25 million that had been frozen in Banco Delta Asia in Macau. Two years ago, the Treasury Department said that North Korea had been using the bank as a conduit for $100 "supernotes" counterfeited in Pyongyang and decreed that no firm doing business with Banco Delta Asia could do business in the US.

As of either Wednesday night or Thursday morning, according to the Treasury Department, North Korean agents could withdraw from their accounts in the bank. In return, US officials said that they expect North Korea to make good on its side of the bargain. As Richardson put it, "Now the ball's in North Korea's court to take the next significant step."

The North may not move quickly

How quickly North Korea moves, though, is far from certain. In his four days in Pyongyang, leading a delegation that included Victor Cha, top White House adviser on Asia, Richardson had the impression that all North Korea awaited was the means to recover its money.

But other experts on North Korea say that the US can expect further tricks and delays from Pyongyang as efforts proceed to successfully denuclearize the Korean peninsula.