The North Korean Nuclear Issue and the Settlement of Peace in and around the Korean Peninsula

Yoon Young-Kwan
Minister of Foreign Affairs and Trade Republic of Korea

Speech and Q & A session at the Asia Society

New York, September 26, 2003

Thank you very much Mr. Cloonan for your kind introduction.

President Platt, Vice President Peters and Ambassador Holbrooke, distinguished guests, ladies and gentlemen.

I am very pleased to be here today to meet with America's leading figures on foreign affairs and Korean Peninsula issues. It is always stimulating to speak with such a distinguished audience. Today I would like to present a view on the North Korean nuclear issue and peace settlement on the Korean peninsula. This view focuses more on the structural dimension, in other words, distribution of power aspect of international system from a broad perspective than on state-to-state relations. The end of the cold war brought about major changes in international relations and now it seems that the wave of change has finally reached the shores of the Korean Peninsula-- the last vestige of the cold war. The factors, which brought about the end of the cold war are now slowly penetrating into the Korean Peninsula, particularly North Korea. And as we all know in this age of globalization, such global trends cannot be resisted. The issue is not whether such a change will occur, but whether it will happen gradually in a peaceful way or suddenly amid great danger and chaos. During the cold war, North Korea was engaged in diplomatic, economic and military cooperation with other countries of the communist bloc. It was neither diplomatically isolated nor was its economy suffering as badly as it is today. Moreover, from a military point of view, North Korea not only enjoyed security, which the bloc provided, but frequently flexed its military muscle to threaten South Korea.

However, the collapse of the socialist bloc in Eastern Europe in the 1990s began to affect North Korea, beginning with North Korea's diplomatic isolation. Then the sharp decrease in energy supply and economic assistance that followed dealt a serious blow to North Korea's economy and to its conventional military capabilities. In addition, the political and economic changes that happened in Eastern Europe probably had much psychological impact, deepening North Korea's concern about its future. Along with the fall of Eastern Europe in the 1990s, North Korea began to feel its relative power declining. For instance, since the early 1990s North Korea has seen its relative capability gap with South Korea continue to widen, most notably in the following three areas: The first disparity is in terms of economy. In 2002, South Korea's gross national income was 28 times that of North Korea. The second is in the disparity in conventional military capabilities between North Korean armed forces and the allied forces in the south. The energy shortage severely crippled North Korea's conventional military capabilities. The third disparity is in the diplomatic front. In the early 90s, South Korea established diplomatic ties with the former Soviet Union, China and Eastern Europe -- Countries that were considered as traditional partners of North Korea. In particular, South Korea's relations with China and Russia quickly developed into those of close partnership. On the other hand not only did North Korea fail to make any new friends, its relationship with these old friends began to get more and more limited. To this day North Korea has yet to establish formal relations with the United States, Japan and many countries of Western Europe. This has further isolated North Korea from the rest of the world.

I think the widening power gap between North Korea and the outside world in the last one or two decades most likely strengthened the will of North Korea to become a nuclear power. As such we can safely assume that North Korea's economic, military and diplomatic hardships all came together to cause the current nuclear crisis. It is true that North Korea tries to wield its nuclear program as a leverage to overcome its predicament. North Korea suggests that it would give up its nuclear option in return for a security guarantee, normalization of relations with the United States and unhindered cooperation and assistance with regards to its economic development. However, in a paradoxical twist, all this led to North Korea's diplomatic isolation to become even more severe while its economy continued on its downward path, also leading North Korea on a confrontational path with the international community. This is how the situation stands today.

Now let's consider how we should tackle the North Korea nuclear issue. As the issue has economic, military and diplomatic aspects intertwined, we need a comprehensive solution which takes all factors into account. In this respect it is reassuring that the first round of six party talks reached a consensus on the need for a comprehensive solution which will not only resolve the nuclear issue but also address North Korea's security concern and economic needs. At the same time the complex nature of the problem requires us to adopt a multilateral approach as well. This is because North Korea's nuclear development is not just a bilateral issue between the United States and North Korea. Of course the issue is related to the Agreed Framework of 1994, but it is also related to the NPT and the 1992 Joint Declaration on the denuclearization of the Korean Peninsula between the two Koreas. North Korea's demand for security guarantee also has a multilateral aspect as any such assurance will directly influence Korea-US relations, US-Japan relations and relations among other regional countries. Furthermore any kind of economic assistance to North Korea will have to involve not only the US but also North Korea's neighboring countries and various international financial institutions. The coming rounds of the Six Party talks will discuss detailed methods of terminating North Korea's nuclear weapons program and seek ways to ease North Korea's security concern and economic hardship in one way or another. The United States now seems to be working on a more detailed plan for these issues, including North Korea's security concern. This greatly enhances the prospects for a diplomatic resolution of the North Korean nuclear issue.

Ladies and Gentlemen, there are a few observations against the current approach of resolving the nuclear issue through negotiations and dialogue citing many reasons. I would like to offer some of my own thoughts. First, there is a view that North Korea will never abandon its nuclear ambition and will continue to deceive its dialogue partners. This argument is largely based on the experience of broken promises with North Korea. For instance it is true that the current phase of the North Korean nuclear crisis began when North Korea admitted the existence of an HEU program in October 2002. Developments like this have led many people to surmise that negotiations with North Korea are meaningless since North Korea will disregard any future agreements in the same manner. In fact, North Korea's diplomatic isolation, economic difficulties and military inferiority complex all persisted even after the 1994 Agreed Framework came into effect. This is why North Korea might have tried to hedge by clandestinely violating the agreement and began its HEU program. However, if the ongoing talks can come up with a comprehensive solution, dealing with security, economic and diplomatic dimensions, North Korea will feel secure enough to give up its nuclear ambitions and divert scarce resources from military build-up to economic development.

After all, North Korea's economy cannot be revived in any meaningful way without substantial foreign assistance. I believe that the major reason North Korea wishes to normalize its relations with the United States and Japan is to sell off its nuclear program for foreign economic assistance. In addition, departing from the statement it made during the three-party talks in April, North Korea stated at the Six Party talks that it is not their intention to transfer nuclear materials abroad. North Korea clearly saw in Afghanistan and Iraq how sensitive and dangerous an issue it can be to transfer weapons of mass destruction to the outside world. If North Korea attempted to deceive the world again after reaching an agreement at the Six Party Talks, the entire international community not to mention the participants of the talks, will turn their back on North Korea. In particular China, the country which North Korea is most dependent on, will not condone such a behavior on the part of North Korea. North Korea would then be completely isolated diplomatically and face even more serious economic hardship. North Korea knows that. If there remains any suspicion on North Korea's true intentions, the process of the Six Part talks will give us ample opportunity to ascertain them. In particular how cooperative North Korea is on the issue of verification process with respect to dismantling its nuclear weapons and facilities will be an important acid test. We have nothing to lose from the Six Party talks. And once North Korea normalizes its relations with the United States and Japan, a relationship of interdependence, or even dependence, will develop between North Korea and the rest of the world. Such a network of interdependence or dependence will serve as leverage with which to dissuade North Korea from any other activities that undermine peace and stability in the region.

The second view says that North Korea will never voluntarily seek reform or open itself up to the outside. This is because reform will make political control of the North Korean society impossible. However there is a way out of this dilemma for North Korea. Taiwan and South Korea in the 1970s and the newly industrialized countries in Latin America successfully managed political control and development of a market economy at the same time. China's gradual reform and liberalization policy is another good example. Though not as fast as the outside world hopes, North Korea is gradually heading towards reform and openness. The introduction of a market based price system in July 2002 was one such example. The North Korean government allowed groceries and cooking materials to be exchanged at market prices instead of government-set prices. This led to a certain increase in the number of food markets in recent months in North Korea. Besides, many projects North Korea is pursuing now – the Kaesong Industrial Complex project, the Shineuiju Special Administration Zone project, linking railways and roads with South Korea – and its keen interest in connecting gas pipelines with Russia all demonstrate North Korea's willingness to study the Chinese model of opening up.

Such projects once launched, could have significant politico-economic implications in the long term. However, for North Korea's nascent price system to function properly, foreign aid and economic assistance are vital. Since July 2002, a shortage of supply of goods has pushed up North Korea's inflation rate to 300%. What is worse, North Korea is presently classified as a state sponsor of terrorism under US domestic law. This restricts North Korea's membership to international financial institutions and large-scale international economic assistance is not available. North Korea is in an ironic situation where it cannot obtain assistance from the international community to carry out its reform plan, even if it wants to do so.

On the premise of the first two arguments, a third argument further asserts that regime change is preferable to a negotiated solution with North Korea. Even if we suppose the first two arguments are valid, radical approaches such as pursuing a regime change in North Korea is not a reasonable option. If the US seeks regime change, North Korea will probably never give up its nuclear program. Instead it will become even more desperate and cling to its nuclear option as the last resort. Any hint at trying this scenario would abruptly increase the military tension between the United States and North Korea as well as between South and North Korea. The heightened tension would strengthen the voice of hardliners in North Korea and weaken that of moderate reformists. The Korean people strongly object to any radical measure, for obvious reasons. Koreans do not want reunification to happen suddenly either. Korea is not yet ready to bear the sudden economic, psychological and social shock that will accompany a sudden reunification. Problems like the influx of North Korean refugees or the difficulty of adapting North Koreans to the principals and practices of a market economy are easily foreseeable. As a matter of fact, South Korea is not the only country, which opposes a drastic change. Japan, China and Russia, desiring a stable neighborhood and worried about the possible inflow of North Korea refugees, also do not agree to the idea of radical changes on the Korean Peninsula. In short, North Korea's sudden collapse is not among our choices. What is important is for us to closely cooperate and coordinate to manage the current situation prudently so that positive changes can happen smoothly and peacefully. At the future rounds of the Six Party talks, the first priority definitely must be given to the resolution of the North Korean nuclear issue. Most Koreans, however, hope that the Six Party Talks will go further than that.

Now I would like to discuss mid to long term goals and go beyond the nuclear issue. Fifty years after the Korean War ended, inter-Korean relations are still largely prescribed by the Armistice Agreement. As we work towards the resolution of the North Korean nuclear issue, we also hope that the current state of armistice will be replaced by an internationally guaranteed permanent peace regime. I believe that the time has come for Korea and the United States to begin a serious in-depth study on the modality of a peace regime. Concurrent with the establishment of an institutionalized peace regime, we have to begin to think about how to realize arms control on the Korean Peninsula. If North Korea's security concerns are resolved and the peace regime is established on the Korean Peninsula, tension will significantly decrease and negotiated arms control will become a certain possibility. After all, it would be hard for North Korea to revitalize its economy unless a substantial portion of the resources that goes to the military is released through the process of arms reduction. The Korean government's strategy to achieve such mid to long-term goals is best described in the “Peace and Prosperity Policy” of the current administration. This policy is based on the premise that politics and economics are inseparable. It regards the unstable North Korean economy as one of the main factors causing instability on the Korean Peninsula. Introducing elements of a market economy will vitalize North Korea's economy which in turn will have a positive impact on North Korea's domestic, political and diplomatic behavior. The more North Korea becomes economically interdependent or dependent within the global network, the more natural will it be for North Korea to follow international norms in diplomatic dealings. The Peace and Prosperity Policy aims at boosting interdependence, not only between the two Koreas but also between the Koreas and their neighboring countries such as the United States, Japan, China, Russia and the ASEAN. The European experience in the 1950s is a good guide for us here. During the span of 100 years until the end of the Second World War, France and Germany had fought three major wars against each other. Yet the two countries were able to thaw their confrontational relationship through growing economic cooperation under the European Coal and Steel Community(ECSC), and as a result have made possible the peace and prosperity of today. Successful achievement of these goals will not only bring peace to the Korean Peninsula but with that as a stepping stone will also contribute to stability and prosperity in northeast Asia. Conversely, increased economic engagement among the two Koreas and neighboring countries will positively affect the peace process on the Korean Peninsula. In this sense, the objectives of South Korea's economic policy and its policy towards North Korea overlap with one another. In pursing the short-term goal of resolving the nuclear issue and the mid to long-term goal of establishing a peace regime on the Korean Peninsula the Korea-US alliance should serve as the central pillar. For my government, the relationship with the United States is the basis of our North Korea policy. Our bilateral relationship transcends the issue of North Korea in terms of its time, scope and value. This is my answer to a frequently-raised question, "Does South Korea intend to become a mediator between the United States and North Korea?" Our two countries need to maintain a strong partnership throughout the process of building peace and prosperity on the Korean Peninsula and in northeast Asia.

Ladies and gentlemen. Before closing, I would like to touch on "anti-Americanism" in Korea. Actually the problem is mainly technical issues that have to do with the US forces based in Korea. These technicalities can be easily resolved through close consultations between our two governments. Much has already been done. I must admit, however, that recently there was a surge of what we call anti-American sentiment, especially among the younger generation. But with the efforts of our two governments I am certain the critical energy can be converted into creative dynamo that can contribute to promoting our common interest and deepening understanding between our peoples.

I believe that the Korea-US alliance is one of the most successful alliances the United States has throughout the world. From the ashes of a total devastation caused by three years of atrocious war, Korea has now emerged as a flourishing democracy with the 12th largest economy in the world. Throughout that process, the help from the United States was indispensable. We cannot overemphasize the importance of the contribution our alliance has made to all the success we enjoy today. It is my wish and belief that our two countries, through close consultation and cooperation will successfully resolve the North Korean issue, consolidate peace on the Korean Peninsula and in northeast Asia. The result will be a safer and more prosperous world with less danger of WMD proliferation and terrorism. The Korea-US alliance will provide a firm bedrock for our cooperation in achieving these common goals in the 21st Century.

Thank you.

Q and A:

Question: You talk about a comprehensive approach. But the question is, how do you start? Where do you start? Our own administration is saying let's get rid of the nuclear weapons first and then we can do the other things. The North Koreans are saying, let's do the other things and then we can get rid of nuclear weapons. I am oversimplifying. You are right in the middle of this. Where do you start?

Minister Yoon: It is very difficult to resolve all of the related issues at one time. Therefore, we probably need to adopt a kind of step-by-step approach in dealing with those issues. By adopting a step-by-step approach, we may be able to build confidence among the governments of the six participating countries. All the six countries agree that the North Korean nuclear issue should be dealt with by a step-by-step approach but in a comprehensive way, in the sense that we deal with all the related dimensions of the nuclear problem. We may start the process by addressing the issue of dismantling nuclear program and addressing North Korea's “security concern”. Probably we could try to develop a modality of understanding or agreement on those two issues between North Korea on the one hand and the United States and other parties on the other.

Question: I have a question about the dilemma faced by the US in addressing anti-American sentiment in South Korea. I understand South Korea wants the military out of Seoul. But when the US military indicates willingness to pull out of Seoul, that creates tension in terms of possibly provoking North Korea and worrying the government that the so-called trip wire of US forces is no longer there. So how do you resolve that issue?

Minister Yoon: I think you have addressed two issues. That is, the relocation of Yongsan Garrison and that of the Second Infantry Division to further south. We have to separate those two. Both our governments have reached a basic agreement on how to do deal with these two issues. We have agreed to implement the relocation of Yongsan Garrison by the end of 2006. Regarding the relocation of the Second Infantry Division, the two Presidents agreed that it should be done in a careful way, considering the security, economic, and political conditions of the Korean Peninsula. There is no difference of views between our two governments. I think the talks have been managed smoothly until now.

Question: The United States and South Korea have a decades-old, strong alliance. Given that relationship, can you tell us of any firm assurances that South Korea has received from the United States that it will not seek regime change in the north, ever, after certain circumstances are met. John Bolton made some very strong statements about North Korea that led to concern on the part of many that regime change may be an absolute goal of the United States' current administration.

Minister Yoon: My answer is that President (George) Bush himself repeated his statement that the United States has no intention to invade North Korea. And he and other policy makers in this country publicly declared that they will not pursue regime change in North Korea. I think that is the public policy of this government and that is the answer to your question. There may be different views on this, but what matters is the public policy stated by key policy makers of this government.

Question: One view that you did not address is that of an internal collapse in North Korea. It seems that China to some degree preparing for such a possibility by amassing over 100,000 troops near the southern border. Why do you not address this view? Do you think it not a great possibility and if so, why? And what is the possibility of a military coup in North Korea if reforms generate great dislocation in its economy?

Minister Yoon: I think it is prudent for a policy maker not to answer hypothetical questions. For instance, if I answered that our country will prepare for this kind of scenario or that, it would give me a very hard time when I return to Korea!

Question: May I refer to an article that says Yoon-Powell agree to disagree. I am unhappy because I do not think you disagree. According to this article, Powell said that the North Koreans must disavow nuclear development first. The impression given by this article is that you disagree with this basic proposition. I don't think so? Would you like to take advantage of this opportunity to clarify? Did you really disagree? I don't think so!

Minister Yoon: Actually, you have provided the answer to the audience already. We do not disagree.

Question: After many years of trying to stay out of it, China has emerged as a very key player in the last year and a half. Can you talk about the Chinese dynamics, particularly the role Beijing has to play, either facilitating the talks, mediating between the Six Parties or leading the way, and coming up with the ideas.

Minister Yoon: I think China's role in preparing the Six-Party Talks and in facilitating the dialogue process was very constructive. All other participating countries of the Six-Party Talks agree that China did a very good job. I think it is against China's own national interest to let North Korea have its own way regarding its nuclear program. It may have a very negative impact for China’s own national security strategy and national interest, and that is the reason China has been very active in the recent months. The Chinese government also understands that the United States and Korea have been close allies for half a century and, when they talk with my government or when they have diplomatic dealings with our country, they understand the importance that we Koreans attach to our alliance. It is a basic ground on which the relationship between Korea and China stands on. As I have said, the Korea-US alliance will continue to be the central pillar for the Korean government in coming decades. And that, I presume, answers the frequently raised question of whether the Korean government is trying to mediate between the United States and North Korea. The answer to that question is ‘no’, for our alliance means far more than that and transcends the issue of North Korea.

Question: With regard to your saying politics and economics is inseparable, that is something I believe in. I believe commerce rules international relations. What would be your comments on the next negotiating team going in under Secretary of Commerce Donald Evans and just discuss commerce and bilateral talks between North Korea and the United States government.

Minister Yoon: People in the US State Department would probably say that North Korea is not yet ready to have this kind of close commercial relationship with the United. North Korea is still on the US list of terrorism-sponsoring countries. My understanding is that, until the North Korean authorities satisfy the conditions raised by the US government, the US government will not deal with North Korea on a commercial basis. And until the US government removes North Korea from its list of terrorism-sponsoring countries, North Korea will not be able to enter the IMF or World Bank. The current situation being like that, some private company representatives may try to make a deal with North Korean companies or the government, but I do not think bilateral public commercial relations can be set between the two countries, as of now.

Question: One of the things that puzzles many Americans is the apparent difference in opinion between South Korean public opinion, particularly young people, and the Bush Administration on the nature of the threat of the development of nuclear weapons in North Korea. I have heard some people say that the conventional threat has been there so long that the nuclear addition to that is not that serious. Others say they don't believe that North Koreans would use nuclear weapons on the south and might be more likely to use them against Japan or another country. What is your view of why the South Korean people seem less exorcized about this threat than the American administration.

Minister Yoon: That is an important point. There is some gap in the views about the nature of the threat from North Korea. One reason is that South Korea is already under the threat of several thousands of artilleries located along the DMZ. We can be attacked by the huge number of North Korean artilleries at any moment, if North Korea decides to do so. Of course that doesn't mean they can win a war against us. But still, we are under the threat of so many artilleries from North Korea. Another kind of perception gap that may exist between Korean and the US is on the nature of terrorism. September 11 was a very important, brutal event that has affected the American psyche and national security strategy of this country. Even though South Koreans share vividly the feelings and worries of the US citizens, there may still be a certain gap on the nature of the danger of terrorism people perceive, since South Koreans tend to see themselves already under the threat of those conventional military weapons. Of course, South Koreans are worried about the possible impact of North Korea's nuclear position. We certainly understand that, if North Korea comes to possess nuclear weapons, that will affect the Japanese government's decisions and intensify military rivalries in the region. This would undermine South Korea's security situation and negatively impact its economy and credit situation. South Koreans clearly understand the potential threat posed by North Korea's nuclear position but are already under conventional threat. How to narrow that perception gap is very important to policy makers. We understand the overall strategy implication of North Korea's nuclear position, and have been trying our best to educate the people of Korea on that.

Question: We were saddened by the tragic death of the Korean farmer at the recent WTO talks. But I think that a lot of people realized for the first time that within Korea there is growing skepticism about increased globalization and skepticism about American relations. Going ahead five years in the future, do you see Korean domestic political opinion becoming more insular and isolated as we have seen in Japan for decades and certainly how we see in France.

Minister Yoon: It is my impression that ordinary Koreans think that it is inevitable for a country like South Korea to open its economy further. That is the general trend. The current Korean government aims to achieve the goal of peace and prosperity on the Korean peninsula and in northeast Asia. To achieve that goal, we have to open our economy. That is the reason we have been trying to make free trade arrangement with Chile, and consider making ones with Singapore, and even Japan. South Koreans are taking a more and more open attitude towards the economic opening of South Korea. After all, the size of our country is very small. We don't have much natural resource and, such being the condition, opening our economy to outside world is the only reasonable tactic. I think almost everybody in Korea shares that understanding. Of course farmers resist that trend, and my government has been trying to help them successfully adjust to the new economic structure. I think South Korea has to go in that direction, and I think most Koreans agree on that point.

Question: Of economy, military security and diplomatic relations, I think the economy is really the key. And you mentioned the widening gap between North and South Korea standard of living. What level of economic cooperation is taking place and what is the plan for the future with or without the Six Party negotiations?

Minister Yoon: I would explain our government's position in this way: we are trying to increase our economic interaction with North Korea because it will help North Korea change their style of economic management. And that in turn will bring about positive political and diplomatic impact on North Korea. At least that is our medium- and long-term goal. This is totally different from giving away or unilateral provision of economic assistance. What we are aiming for is to change the economic management style in one way or another by making North Korea more involved within the international network of economic interdependence. To pursue the kind of medium- and long-term policy of economic engagement, we have to have a very favorable security environment. The problem is that North Korean is tempted to develop nuclear weapons, aggravating the short-term security environment and presenting a very big dilemma for my government. That is why we are eager to cooperate with the United States and neighboring countries in urging North Korea to give up their nuclear option. They have to understand they cannot eat the cake and have it too. They have to choose between nuclear weapons and economic survival. It will be probably only after they give up their nuclear option that significant economic resources will flow into North Korea. If that happens, our hope will be achieved: that the nature of North Korea’s economic system may change and they will better follow political and economic norms of the international community.

Question: How has the war in Iraq affected your diplomatic efforts to normalize relations with North Korea?

Minister Yoon: My impression is that the situation in Iraq has not much affected inter-Korean relations so far. North Korea criticized my government's decision to send construction and medical units to Iraq several months ago. But that criticism didn't hurt inter-Korean relationship.