Commentary

George Washington, it will be recalled, was reported to have said he could not tell a lie. His successors have also claimed to find telling lies abhorrent, but sometimes do get exposed. Nixon had a bad time of it, and more recently, Bill Clinton was found to have been rather economical with the truth. However, it is George W. Bush who is commonly considered to have taken lying to new heights, or perhaps depths. Iraq, and its mythical weapons of mass destruction (and implied ties with Al Qaeda), is the most obvious example. All governments lie, and no statement, whether it comes from Washington, Pyongyang or Wellington should be accepted uncritically. However, the present US Administration does seem to be more cavalier with reality than most. Partly it is because the United States is, in Professor Niall Ferguson’s phrase, an empire in denial, rather like the Soviet Union. The reality is constantly at odds with the rhetoric, which needs to be deconstructed. ‘Peace’ means pacification, ‘ally’ means subordinate and ‘democracy’ escapes easy definition but is not democracy as we know it.

However, the George W. Bush administration has fabricated allegations in a quite distinctive manner. It has done this in the case of Korea, as much as in respect of Iraq. The main difference has been that the Iraq allegations were put to the test, but the Korean ones are unverifiable as long as the DPRK remains a sovereign state. It is also a question not so much whether the allegations have some basis in fact, but whether the consequences of the allegation are proportionate to the evidence or the importance of the alleged ‘crime’. Seoul, anxious that the Six Party Talks succeed, is unhappy at what it sees as deliberate neocon attempts to derail them with allegations of counterfeiting, drug-running, and the like. In addition, the assertion that crimes committed by North Korean citizens are evidence that the DPRK is a ‘criminal state’ and therefore may be punished by the US as a state, through sanctions, is a violation of international law.

In October 2002 Assistant Secretary of State James Kelly claimed that he had confronted First Deputy Foreign Minister Kang Sok Ju in Pyongyang with evidence that the DPRK had a heavy enriched uranium programme for weapons production, and that Kang had admitted this. North Korea soon denied both allegations (and has continued to do so) and called Kelly a liar, but the result was that the Bush administration was able to demolish the Agreed Framework, which it had reluctantly inherited from the Clinton administration, and so unleash the present crisis. Not being at the meetings it is impossible for outsiders to be sure what transpired. The likeliest explanation, advanced by Selig Harrison (Foreign Affairs, February 2005) is that the DPRK did import centrifuges from Pakistan to process fuel from its abundant supplies of natural uranium in readiness for the Light Water Reactors promised under the Agreed Framework. The US has now managed to have that promise formally abrogated. What is also significant, Harrison continues, is that the US has never produced evidence sufficient to convince other governments. The Chinese, in particular, have publicly expressed skepticism.

In March 2005, Dafna Linzer in the Washington Post revealed that ‘US Misled allies about nuclear export’ from DPRK to Libya. This was in an attempt to put pressure on the other members of the Six Party Talks to take a hard line against the DPRK.

Then in September the US claimed that a bank in Macau was laundering North Korean-made counterfeit $100 notes (called ‘supernotes’ because of their high quality) and imposed fresh sanctions. The following month it sought the extradition of Sean Garland, president of the Irish Workers Party (IWP) on allegations of distributing them in the UK. The Americans have said they have seized $45 million worth of such notes which were part of a IWP-DPRK conspiracy to ‘destabilise’ the US dollar. It is hard to see that $45m or even $450m could have much impact and in reality the real dangers to the dollar come from Iran’s moves to denominate oil exports in Euros (which may be one of the real reasons for the reported plans for a US/Israeli nuclear attack on Iran) or the administration’s huge deficits. Be that as it may, what was striking was the timing, and the lack of evidence, not of counterfeiting as such, but who was doing it.

All this happened just after the US had very reluctantly signed the 19 September Joint Statement which opened the way for the resolution of the crisis. It was reported that the Americans knew about these counterfeits since 1989, and Garland himself had been the subject of a BBC exposé in June 2004. In fact, the charges stemmed from a strategic decision taken in February 2005 to deploy a ‘tool kit’ of accusations to pressure the DPRK and bypass the Six Party Talks. This was revealed in the New York Times and led to protests from Seoul.

When the tool kit was activated in September Seoul asked for evidence but had to wait until late January 2006 before Daniel Glaser, deputy assistant secretary for terrorist financing and financial crimes at the U.S. Treasury Department was dispatched to present the US case. His low status is perhaps indicative of the US attitude to the South Korean government. The local press subsequently reported that’ Seoul doesn't fully agree with the U.S. financial sanctions because there is no apparent evidence of the North's illicit activities’.

Whether these US measures, and more draconian ones planned, will force Pyongyang into surrender, or even further concessions, is unlikely. Cognisant that Iraq’s concessions led to invasion they are likely to strengthen resolve. However, they will exacerbate America’s relations with Russia, China and the ROK. China has hardened its defiance of US attempts to have Iran arraigned before the Security Council. There are severe limits to how far a ROK president can stand up to the United States, but occasionally the anguish shows. President Roh Moo-hyun has publicly denounced, in the strongest terms yet used, US attempts to bring down the DPRK. President Bush is driving Beijing and Seoul further from Washington and closer to each other.

Tim Beal

New Obstacle to Nuclear Talks

Inter-Korean Relations Likely to Face Serious Setback

The stalemate in the six-party nuclear negotiations is confounded further by Seoul's consenting to Washington's call to join its global efforts to stop the proliferation of weapons of mass destruction (WMD). With an agreement reached late last month, the nation is to partially join the U.S.-led multilateral campaign - the Proliferation of Security Initiative (PSI) - aimed at blocking the transfer of WMD by "rogue" countries such as North Korea and Iran. In particular, the inclusion of drills for intercepting suspected WMD shipments in annual South Korea-U.S. military exercises is certain to provoke the North and strengthen its resolve to boycott the negotiations, suspended since last November. What worries Seoul most is that this would seriously impair inter-Korean relations.

Despite the foreseeable setback to the talks and inter-Korean cooperation, and given that some 70 countries are full PSI members, the nation has no choice but to partially join the campaign. ..//.. To make matters worse, the U.S. Embassy in Seoul called upon the Korean government on Tuesday to join in Washington's financial strictures against Pyongyang. Fearing such a concession would lead to not just the collapse of the six-party negotiations but also the disruption of inter-Korean exchanges, the latest U.S. demand is hard for Seoul to accept. Besides, Seoul doesn't fully agree with the U.S. financial sanctions because there is no apparent evidence of the North's illicit activities. ..//..

Source: Korea Times 25 January 2006

North Korean Counterfeiting Complicates Nuclear Crisis

South Korea, an important United States ally in the region, apparently fears that pushing the counterfeiting issue could derail efforts to persuade North Korea to give up its nuclear ambitions…//..

That is why when a delegation from the Treasury Department arrived here this week to ask for South Korea's cooperation to stop the counterfeiting, the Americans got a chilly — and slightly puzzling — response.

South Korea, a longtime partner of Washington against North Korea, went to lengths to distance itself from the American accusations, even to the point of denying that the United States had sought its support. ..//..

The issue escalated further when South Korean President Roh Moo Hyun warned Washington in a nationally televised news conference that taking too tough a stance against North Korea could cause "friction and disagreement between South Korea and the United States." ..//..

The United States says it has found $45 million in supernotes, which it says North Korea has used to prop up its decrepit economy and keep its leaders in luxury. ..//..

In particular, many wonder why the United States has chosen to raise the counterfeiting issue now, after remaining virtually silent for more than a decade. American officials first suspected North Korea in the late 1980's, when supernotes started appearing in East Asia and the Middle East. But Washington did not take action until the penalties against Banco Delta Asia in September.

Critics point out that the penalties, which outraged North Korea, were imposed suspiciously close to an apparent breakthrough in the six-party nuclear talks on Sept. 19, when North Korea agreed to abandon its nuclear program in exchange for aid and security guarantees.

Source: New York Times, 29 January 2006

U.S. Is Shaping Plan to Pressure North Koreans

In the months before North Korea announced that it possessed nuclear weapons, the Bush administration began developing new strategies to choke off its few remaining sources of income, based on techniques in use against Al Qaeda, intelligence officials and policy makers involved in the planning say.

The initial steps are contained in a classified "tool kit" of techniques to pressure North Korea that has been refined in recent weeks by the National Security Council. The new strategies would intensify and coordinate efforts to track and freeze financial transactions that officials say enable the government of Kim Jong Il to profit from counterfeiting, drug trafficking and the sale of missile and other weapons technology. Some officials describe the steps as building blocks for what could turn into a broader quarantine if American allies in Asia - particularly China and South Korea - can be convinced that Mr. Kim's declaration on nuclear weapons last week means he must finally be forced to choose between disarmament and even deeper isolation. China and South Korea have been reluctant to impose penalties on the North. To some degree the effort arises from Washington's lack of leverage over North Korea, and the absence of good military options, and it is far from clear that the administration's development of what one official calls "new instruments of pressure" will work.. ..//..

Source: New York Times 13 February 2005

Seoul Considers `Tool Kit' Inappropriate

The United States' strategies to block North Korea's sources of income are inappropriate at the moment because the formula for six-party talks over Pyongyang's nuclear ambitions is still available, experts in Seoul said Tuesday.

A classified ``tool kit'' of techniques to pressure North Korea contains Washington's plans to stop Pyongyang's profits from counterfeiting, drug trafficking and the sale of missile and other weapons technology, the New York Times reported in its Monday edition. ..//..

But the Seoul government thinks the quarantine measures will only make it difficult to solve the nuclear standoff. ..//..

..//.. Professor Kim Ki-jung of Yonsei University in Seoul said that Washington's hardline policy toward Pyongyang could bring about a bigger crisis.

``Talking about sanctions will only complicate the situation,'' Kim said in a telephone interview. ``Pyongyang played its trump card last week. It is time to analyze the North's intention and what may be the solution to it.''

Source: Korea Times, Seoul, 15 February 2005

U.S. in Sweeping Plan to Strangle North Korea's Cash Flow

The U.S. is readying fresh sanctions against North Korea over the regime's alleged financial crimes that will be significantly more severe than the ones already in place. Raphael Perl, a congressional researcher in charge of tracking Pyongyang's drug dealings and counterfeiting, said Friday authorities completed a rough draft of an executive order that would stop any financial firms involved in transactions with North Korea from conducting business in the U.S.

That will mean all banks, brokerage houses and insurance firms and refers not only to illegal transactions but to any financial deals with the North, Perl told the Chosun Ilbo on the phone. Once the regulations are finalized, "the message to financial institutions operating in the U.S. will be that the time has come for them to choose between the U.S. or North Korea," he added…//..

But under the draft order, almost all finance companies would be effectively prohibited from doing business with North Korea. That would also affect international financial institutions outside the U.S. and thus deal a heavy blow to North Korea's overseas trade.

In Perl's reading, financial institutions would have a choice whether they are with or against the U.S., but given the importance of their U.S. interests, it would in effect force most major international firms to stop dealing with the North.

Given that Pyongyang is already boycotting six-party talks aimed at dismantling its nuclear program over the earlier measures, the plan could be the death knell for the negotiations. The news comes in a week when President Roh Moo-hyun warned of friction between Seoul and Washington if the U.S. tries to solve the North Korea problem by strangling the regime, and is unlikely to improve strained relations between the two allies. ..//..

Source: Chosun Ilbo, Seoul, 28 January 2006

Top Diplomat and Unions

Upon arrival here in mid-October, U.S. Ambassador Alexander Vershbow said he would get closer to the people of his host country. Three months have passed since then, but some Koreans do not appear to want this hard-working - and hard-talking - American envoy around anymore. On Thursday, the Korean Confederation of Trade Unions (KCTU) blocked the Ambassador's entry into its office building where he was to meet some Internet journalists also housed there. What caused this crude, childish event?

Vershbow's labeling of North Korea as a "criminal regime" may be right if backed up by hard evidence. His harsh criticism of the North Korean human rights situation at a U.S.-financed gathering could also be justified given his post. After all, the envoy might just be delivering Washington's return to hardball tactics on Pyongyang, as U.S. President Bush struggles to get out of his crisis by uniting conservatives. But a balanced diplomat could have considered his host government's position at least a little.

The U.S. diplomat went further by calling for Seoul to control its economic aid to the North to help progress in denuclearization talks. He even demanded Korean officials "objectively" evaluate U.S. bidders in an arms procurement process, stressing the interoperability of weapons. So, what's wrong? Nothing except the U.S. model for the AWACS is twice as expensive as that of the Israelis. A ruling party lawmaker has threatened to move to recall "Viceroy Vershbow," as some people call him here. ..//..

Source: Korea Times, Seoul, 15 January 2006

U.S. envoy urged to refrain from hostile remarks on N.K.

National Assembly Speaker Kim One-ki expressed regret yesterday toward recent hostile remarks about North Korea made by U.S. Ambassador Alexander Vershbow.

Vershbow labeled the North a "criminal regime" last week, and said it was the first government to take part in counterfeiting money since Adolf Hitler's Germany.

"It is undesirable for an ambassador to make remarks that do not help inter-Korean peace which is a life or death matter to us," said Kim in an interview with a radio program.

"Regrettably, the ambassador seems to be going too far," he said. Kim is a member of the ruling Uri Party. ..//..

Rep. Kim Wong-wung of the Uri Party said Tuesday he would submit a resolution to urge the government to ask Washington to recall the ambassador if he continues to take a hard-line stance against North Korea.

He said that Vershbow should bear in mind that South Korea will not regard as an ally any country standing in the way of peace on the peninsula, he added.

Source: Korea Herald, Seoul, 16 December 2005

North's rice shipped to the South

The first rice from a joint project in North Korea arrived at Gyeonggi provincial government offices yesterday following transport from Incheon port where it was unloaded last Tuesday. The first rice ever to come from the North was in 1984 as part of an aid shipment for flood damage.

The 1 metric ton of rice was part of 14.8 metric tons harvested from a joint North-South model farm project in Ryongsong district in Pyongyang. For the project, Gyeonggi province provided rice seeds, agricultural machinery, and technical know-how while the North provided the farmland and labor. ..//..

In a statement that seemed to downplay current disputes over rice imports, Kang Min-su, an official at the Korean Catholic Farmers' Association, said, "Amidst the problems we are having concerning import rice, we welcome the rice from North Korea because after all, we are one race." Mr. Kim continued, "I hope this joint venture helps North Korea with their food problem as well as be a small step towards reconciliation."

Source: JoongAng Ilbo, Seoul, 6 January 2006

South-North Trade to Exceed US$1 Billion in 2005

The annual South-North Korea trade volume exceeded US$1 billion last year for the first time. It have been 14 years to exceed US $ 1 billion, which is ten times more than US $ 100 million which was recorded in 1991. Inter-Korean was resumed in accordance with the July .7 Declaration announced in 1988 after the national division between the two Koreas.

Entry into the 'US$1-Billion South-North Trade Era' is mainly attributed to progress in the development of the Gaeseong Industrial Complex (GIC). In 2004, the GIC-related trade volume was just US$41.69 million, taking up just 6.0% of the entire inter-Korean transactions but it reached US$176.7 million during last year, accounting for 16.7% of the total bilateral trade volume.

Source: Ministry of Unification, Seoul, 23 January 2006