North Korean Nuclear Agreement: Annotated

Posted January 3, 2007

Categories: Articles, Korea


<p><b>Just in time for Valentine’s Day, the United States and North Korea bridged their differences and produced a preliminary agreement to resolve their outstanding conflicts. The accord is not exactly a declaration of love. It’s not even a bunch of roses and big box of chocolates. But it’s the friendliest the two countries have gotten in the last six years. </p></b>


<p>The February 13 agreement freezes North Korea’s nuclear program in exchange for 50,000 tons of heavy fuel oil. The agreement is interesting as much for what it doesn’t say as for what it does. Here’s a provision-by-provision analysis. </p>


<p><i>The Parties held serious and productive discussions on the actions each party will take in the initial phase for the implementation of the Joint Statement of 19 September 2005. The Parties reaffirmed their common goal and will to achieve early denuclearization of the Korean Peninsula in a peaceful manner and reiterated that they would earnestly fulfill their commitments in the Joint Statement. The Parties agreed to take coordinated steps to implement the Joint Statement in a phased manner in line with the principle of “action for action”. </i></p>


<p>On September 19, 2005, in the last successful round of six party negotiations among North Korea, South Korea, China, Russia, Japan, and the United States, the parties produced a Joint Statement that pointed toward denuclearization and normalization of relations between the United States and North Korea. But Washington and then Pyongyang immediately issued their own interpretations of the agreement, which highlighted their difference of opinion over key ambiguous provisions. At the same time, the U.S. Treasury Department was preparing a case against Banco Delta Asia, a bank in Macao, China that Washington accused of holding North Korean money-laundering accounts. </p>


<p>The talks broke down, North Korea pushed ahead with its nuclear program, and the United States responded with a new round of sanctions, backed by Japan and authorized by the UN. North Korea ended its missile test moratorium in July 2006 and tested its first nuclear weapon in October.  </p>


<p>The key phrase here is “action for action.” Initially, the United States resisted giving North Korea anything in the way of compensation until the complete, verifiable, and irreversible dismantlement (CVID) of the nuclear program was completed. North Korea wanted some proof of good intentions as well as some very concrete assistance for its ailing economy. With this new agreement, Washington compromised by providing some energy assistance up front. </p>


<p>Washington also showed flexibility on the negotiating format. Although this agreement stresses the “Parties” in the six-sided negotiations, this agreement was really hammered out in large part in bilateral negotiations between the United States and North Korea in December in Berlin. The Japanese call this form of negotiating before the negotiations <i>nemawashi</i>, and it is significant that the United States has finally agreed to approach the talks in the Asian style. </p>


<p>These changes in U.S. position are significant since it is popular in Washington to claim that political, economic, and military pressures induced flexibility in Pyongyang. But as Gavan McCormack perceptively argues in a recent <a href=”” target=”_blank”><i> Japan Focus essay</i></a>, “North Korea had scarcely changed its position since the Beijing talks began – or indeed since it entered the Geneva Agreements with Clinton. It had always been ready for a freeze, leading to step-by-step de-nuclearization, but only as part of a process leading to security and normalization.” </p>


<p><i>II. The Parties agreed to take the following actions in parallel in the initial phase: </p>


<p>1. The DPRK will shut down and seal for the purpose of eventual abandonment the Yongbyon nuclear facility, including the reprocessing facility and invite back IAEA personnel to conduct all necessary monitoring and verifications as agreed between IAEA and the DPRK. </i></p>


<p>The key word here is “eventual.” North Korea announced after the agreement was signed that the freeze on its plutonium facilities at Yongbyon was only temporary. While this is literally true, since the agreement doesn’t specify a date for the abandonment of the program and moving from freeze to dismantlement is contingent on a number of other factors, the February 13 agreement is clear that the ultimate goal is denuclearization. </p>


<p><i>2. The DPRK will discuss with other parties a list of all its nuclear programs as described in the Joint Statement, including plutonium extracted from used fuel rods, that would be abandoned pursuant to the Joint Statement. </i></p>


<p>The unspecified issue here is the highly enriched uranium (HEU) program that the United States accused North Korea of pursuing in 2002. Essentially, the Bush administration gave up the existing freeze on North Korea’s plutonium facilities, as mandated under the 1994 Agreed Framework, in order to pursue the nuclear will-o-the-wisp of the HEU program. Although Pyongyang has largely denied the existence of this program, U.S. government officials say that they’ve known about North Korean attempts to develop a second path to nuclear weapons since the late 1990s. Now the question will be whether the Bush administration will insist early in the process that North Korea admit to the HEU program or whether, in the interests of maintaining the plutonium program freeze, it will fudge the issue until a point in the future when the two countries trust each other more. </p>


<p><i>3. The DPRK and the US will start bilateral talks aimed at resolving pending bilateral issues and moving toward full diplomatic relations. The US will begin the process of removing the designation of the DPRK as a state-sponsor of terrorism and advance the process of terminating the application of the Trading with the Enemy Act with respect to the DPRK. </i></p>


<p>The phrase “pending bilateral issues” refers largely to the Banco Delta Asia conflict. Although the North Korean funds frozen in the BDA accounts amount to only about $24 million, the Treasury Department’s undersecretary for terrorism and financial intelligence Stuart Levey traveled around Asia to convince U.S. allies to shut off North Korea’s access to the international financial system. In other words, BDA put North Korea’s entire economic reform program in jeopardy – since how successful can a transition to capitalism possibly be without capital? After insisting for over a year that BDA and the nuclear talks have no relationship, U.S. negotiators quite speedily agreed in this round of six-party talks to resolve the BDA issue within 30 days. </p>


<p>North Korea is hoping that the removal of longstanding U.S. sanctions – connected to the terrorism list and the Trading with the Enemy Act – will also create greater investor confidence and loosen the spigot of international investment. The State Department notes that North Korea last engaged in a terrorist act in 1987 when it blew up a South Korean jetliner. Removal of North Korea from the terrorism list is long overdue. </p>


<p><i>4. The DPRK and Japan will start bilateral talks aimed at taking steps to normalize their relations in accordance with the Pyongyang Declaration, on the basis of the settlement of unfortunate past and the outstanding issues of concern. </i></p>


<p>The phrase “unfortunate past” is quite an elliptical expression. Attempts at rapprochement between Tokyo and Pyongyang, particularly Japanese Prime Minister Junichiro Koizumi’s visit to North Korea in 2002, fell apart over the issue of abductees. Although North Korea admitted in 2002 to having abducted Japanese citizens as part of a spy-training program, bilateral disagreements continue over the precise number of abductees and their subsequent fate. </p>


<p>But “unfortunate past” also refers to Japan’s conduct during World War II. Tokyo has still not resolved the issue of “comfort women” (the women from Korea and elsewhere drafted into sexual slavery for the Japanese army) or slave laborers in Japanese factories. In 1965, Japan provided a lump sum payment to South Korea as compensation-by-another-name during the diplomatic normalization process. North Korea expects a similar, inflation-adjusted sum, which may run as high as $10 billion. Since this sum would likely be attached to infrastructure development projects that benefit Japan’s construction industry, Tokyo is not averse to making a settlement with North Korea. But current Prime Minister Shinzo Abe consolidated his own political position by elevating the North Korean threat as a rationale for Japan moving away from its “peace constitution” and toward a “normal” military posture. Perhaps now that many of these changes in Japan’s military and foreign policy are well underway, Abe will have less need of the North Korean threat, and rapprochement will again be politically feasible. </p>


<p><i>5. Recalling Section 1 and 3 of the Joint Statement of 19 September 2005, the Parties agreed to cooperate in economic, energy and humanitarian assistance to the DPRK. In this regard, the Parties agreed to the provision of emergency energy assistance to the DPRK in the initial phase. The initial shipment of emergency energy assistance equivalent to 50,000 tons of heavy fuel oil (HFO) will commence within next 60 days. </i></p>


<p>North Korea reportedly demanded more heavy fuel oil upfront, and U.S. negotiator Chris Hill warned his counterpart Kim Gye Gwan that asking too much would put the entire agreement at risk. The final figure of 50,000 tons is what the United States provided North Korea annually under the Agreed Framework. Critics of the agreement point out that if the Bush administration had simply shown flexibility back in 2002, it might have prevented North Korea from going nuclear at roughly the same cost in heavy fuel oil. </p>


<p><i>The Parties agreed that the above-mentioned initial actions will be implemented within next 60 days and that they will take coordinated steps toward this goal. </p>


<p>III. The Parties agreed on the establishment of the following Working Groups (WG) in order to carry out the initial actions and for the purpose of full implementation of the Joint Statement: </p>


  1. Denuclearization of the Korean Peninsula</p>


  1. Normalization of DPRK-US relations</p>


  1. Normalization of DPRK-Japan relations</p>


  1. Economy and Energy Cooperation</p>


  1. Northeast Asia Peace and Security Mechanism</i></p>


<p>These working groups are the heart of the agreement. The United States expects to transform the freeze into a complete, verifiable, and irreversible dismantlement. North Korea wants diplomatic recognition from the United States and Japan as well as significant energy and other inputs into its economy. The “peace and security mechanism” promises to institutionalize the Six Party Talks as a framework for regional discussions much like the Association of South East Asian Nations (ASEAN) Regional Forum. </p>


<p>Herein lies a roadmap for Northeast Asian peace. And this is why China has worked so hard as the convener of the Six-Party Talks. The prospect of war, and even just the enduring tensions in the region, are bad for business. China needs a stable regional environment for its high-growth, high-export economic model. It has talked about turning the working group structure into a more permanent regional security mechanism. It is telling that China wants the United States involved in this process. China doesn’t want to replace the United States in the region. It is satisfied in playing a significant but not a hegemonic role. </p>


<p><i>The WGs will discuss and formulate specific plans for the implementation of the Joint Statement in their respective areas. The WGs shall report to the Six-Party Heads of Delegation Meeting on the progress of their work. In principle, progress in one WG shall not affect progress in other WGs. Plans made by the five WGs will be implemented as a whole in a coordinated manner. </i></p>


<p>In principle, progress in one working group won’t affect progress in other working groups. This follows the separate but equal approach of the Helsinki process from the 1970s. However, North Korea won’t go the final step of denuclearization without major progress accomplished in the other fields. </p>


<p><i>The Parties agreed that all WGs will meet within next 30 days. </p>


<p>IV. During the period of the Initial Actions phase and the next phase – which includes provision by the DPRK of a complete declaration of all nuclear programs and disablement of all existing nuclear facilities, including graphite-moderated reactors and reprocessing plant – economic, energy and humanitarian assistance up to the equivalent of 1 million tons of heavy fuel oil (HFO), including the initial shipment equivalent to 50,000 tons of HFO, will be provided to the DPRK. </p>


<p>The detailed modalities of the said assistance will be determined through consultations and appropriate assessments in the Working Group on Economic and Energy Cooperation. </i></p>


<p>A major question is: who will pay for all of this? The initial shipment of heavy fuel oil is not a significant outlay, but nearly a million tons certainly is. The Bush administration will have to go to Congress for approval of whatever portion of this amount the United States will contribute. Here, support from the Democrats will be critical. The Democrats will face a temptation to point out that the current deal is a lot less than the Agreed Framework, which the Bush administration scuttled in 2002. The Dems can play up the “told you so” angle and place themselves in a harder line camp than the administration. It’s happened before. In 1994, out of their disgust for Clinton, congressional Republicans made full implementation of the 1994 agreement impossible. The Democrats have to decide whether their animosity toward Bush will motivate them to undermine the current agreement. </p>


<p><i>V. Once the initial actions are implemented, the Six Parties will promptly hold a ministerial meeting to confirm implementation of the Joint Statement and explore ways and means for promoting security cooperation in Northeast Asia. </p>


<p>VI. The Parties reaffirmed that they will take positive steps to increase mutual trust, and will make joint efforts for lasting peace and stability in Northeast Asia. The directly related parties will negotiate a permanent peace regime on the Korean Peninsula at an appropriate separate forum. </i></p>


<p>The Korean War ended in an armistice. If this separate forum does indeed replace the armistice with a permanent peace treaty, then one of the most contentious chapters of the Cold War will be closed. Such a treaty – and indeed all of the moves toward regional peace in the February 13 agreement – gives an enormous boost to South Korea. Seoul has labored long and hard to improve relations with Pyongyang. These efforts won the support, belatedly, of the Clinton administration and a Nobel Peace Prize for South Korean leader Kim Dae Jung. During the Bush years, however, South Korea has been increasingly isolated in its efforts. </p>


<p>And indeed, just one day after the signing of the February 13 agreement, South Korea announced that ministerial talks with the North, which had broken down in the aftermath of Pyongyang’s July 2006 missile launches, would resume shortly.


<p>The next round of Six Party Talks is set to begin on March 19. It is the first time that the negotiators have identified a date for the next round to take place. This seemingly minor detail may give greatest cause for optimism. </p>


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