Sunday, October 15, 2006

Price of a broken deal in North Korea

Twelve months ago it seemed the west's nuclear confrontation with North Korea had reached an unexpectedly happy ending. In a deal brokered by China on September 19 2005, Kim Jong-il's regime pledged to give up its atomic weapons, abandon existing nuclear programmes and rejoin the UN Nuclear Non-Proliferation Treaty that it had repudiated in 2003.

In return the US agreed to recognise North Korea's territorial integrity and eschew all hostile actions. The Bush administration thereby effectively withdrew its earlier threats of forcible regime change levelled against a founder member of President George Bush's "axis of evil".

The US also promised to move towards normalised relations if Pyongyang kept its side of the bargain. It even revived the idea of helping North Korea build a light-water nuclear reactor for civilian power generation, a scheme promoted by the Clinton administration in the 1990s but later dropped by Mr Bush.

The September deal brought sighs of relief across Asia and in Washington, where rightwing newspaper editorials hailed a "triumph of US policy". It spawned talk of a new era of strategic cooperation between the US and China, a denuclearised Korean peninsula, and the peaceful reunification of North and South Korea.

But the celebrations were premature. For reasons that remain unclear, the US treasury department chose almost the exact moment the deal was struck to move against a Macau-based bank called Banco Delta Asia. US officials announced the bank could face punitive action under US banking rules and Patriot Act anti-terrorism laws over suspicions that it was being used by North Korea for money laundering and counterfeiting.

Intentionally or not, the US had dealt the Pyongyang regime a major blow that years of bilateral aid, trade and export sanctions had failed to achieve.

Apparently facing financial strangulation, Pyongyang's leadership resorted to the only diplomatic weapon it had.

[Excerpt of article by Simon Tisdall, The Guardian]

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