Nuking U.S. Diplomacy


North Korea has gained yet another concession from the United States in exchange for a promise Pyongyang has completely failed to fulfill.

April 14 was the deadline for North Korea to shut down its Yongbyon nuclear reactor and invite International Atomic Energy Agency (iaea) inspectors back in; as of this writing, North Korea still has not complied.

In a February 13 agreement signed by the U.S., the two Koreas, Japan, China and Russia, North Korea agreed to shut down and seal its Yongbyon nuclear reactor within 60 days in return for aid. North Korea made it clear, however, that no progress would be made until the U.S. released $25 million of its money frozen in a Macau bank, Banco Delta Asia (bda). The money was frozen back in 2005 after Washington accused the bank of helping North Korea launder money and circulate counterfeit bills.

North Korea’s economy is largely built on criminal activities such as selling narcotics and gun-running. Hard currency is needed to pay off the cronies that carry out the illicit activity and to pursue its nuclear and other weapons programs. In fact, the need for cash motivated the North Koreans to become experts at counterfeiting U.S. money; some of their counterfeits are so hard to detect, it is impossible to estimate how much counterfeiting they have done.

The bda sanctions, therefore, were a blow for North Korea’s economy. Moreover, they were a diplomatic slap in the face. They showed that the U.S. was willing to use its last remaining form of punishment short of military action.

Since that time, however, the Bush administration—burdened by Iran and Iraq and, since January, political pressure from a Democrat-led Congress—has moved from a policy of isolation and punishment to one of re-engagement with North Korea.

Pyongyang is fully aware of the shift. Last July, it launched a provocative series of missile tests; in October came a nuclear test. Both times, the reaction of the U.S. and the West was restrained, even weak. This emboldened the North Korean regime in demanding its $25 million back. And this time, Washington caved.

The U.S. position had been that it would not unfreeze the money because of the illicit activity for which it would be used, and because it would set a bad precedent. By completely reversing its stance, the U.S. lost the only leverage it had other than the threat of military action.

And after Pyongyang got the approval for the funds to be released, it blew the deadline to shut its plant down. It got what it wanted and still hasn’t fulfilled its end of the agreement.

According to present arrangements, even if North Korea does shut down its nuclear plant, not a single bit of plutonium has to leave the nation. This means that this unpredictable regime, after exacting the concessions it has sought, could feasibly restart its nuclear program and once again take more aid for nothing.