STEVE INSKEEP, host:
You may have thought a crisis was over when North Korea said it would shut down a nuclear reactor. Maybe not quite. North Korea's agreement last month was supposed to be a first step toward giving up its nuclear weapons, but it left many issues unresolved. And during later negotiations, the North Koreans walked out.
North Korea wants the U.S. to return millions of dollars in frozen funds. And it wants the money back before it begins to address ending its nuclear program. A hint of North Korea's plans may have come in a recent comment from its chief negotiator. He suggested that at the end of the process, North Korea could keep its nuclear weapons with the blessing of the United States.
NPR's Mike Shuster has more.
MIKE SHUSTER: The suggestion that North Korea might keep its nuclear weapons after all came in a recently disclosed remark from Kim Kye Gwan to U.S. Assistant Secretary of State Christopher Hill. Kim said the U.S. ought to treat us the way you treat India. Last year the Bush administration signed a nuclear cooperation deal with India, even though New Delhi refuses to give up its nuclear weapons, a fundamental demand of U.S. policy toward India for years. Last week, North Korea demanded its frozen funds back as well.
Mr. DAVID ASHER (North Korea Working Group): Yeah, they want it all. And so far they're getting it.
SHUSTER: David Asher was a key official in the State Department during President Bush's first term, putting together a strategy to punish North Korea for its money laundering and counterfeiting among other illicit activities. In 2005, the treasury department singled out small Chinese bank, the Banco Delta Asia in Macau, for fronting for North Korea. Twenty-five million dollars connected to North Korean accounts was frozen. That stalled talks for more than a year. They resumed only after North Korea tested a nuclear device last October.
Now North Korea is insisting it must get its funds back before more talks can take place. And David Asher says the Bush administration is now too eager to comply.
Mr. ASHER: What the North Koreans want is not just $25 million in dirty money from Banco Delta back. They want us to accept them as they are - a criminal state, in effect, with nuclear weapons.
SHUSTER: The agreement North Korea signed in February with the U.S. and with China, Russia, Japan and South Korea gave it 60 days to shut and seal its known nuclear facilities. That deadline is up in two weeks and so far there are no clear indications it has taken that step.
Mitchell Reiss, former director of Policy Planning at the State Department and now Vice Provost for International Affairs at the College of William and Mary, says the administration should have seen this problem coming.
Mr. MITCHELL REISS (Former Director, State Department Policy Planning): It really illustrates North Korea's willingness to engage in brinksmanship. This is a characteristic of their diplomacy. We need to anticipate it. We need to be better prepared for it than we were this past time around.
SHUSTER: The North Koreans are setting the negotiating agenda, says Reiss, by the way they react to U.S. actions.
Mr. REISS: The argument's often made that we shouldn't care that much because it's a small amount of money. You can turn it around and say, neither should the North Koreans, given all the other things that are on the table, all the other benefits that they stand to gain by. It suggests their willingness to enter into a confrontational approach with us on issues of their own choosing, not ours.
SHUSTER: What's on the table is a host of economic and political incentives for North Korea, if it takes firm steps toward dismantling its nuclear facilities. One of the first required steps is a declaration of all nuclear activities. The U.S. intelligence community is eager to see whether North Korea will include highly enriched uranium in the declaration.
Accusations in 2002 that North Korea was engaged in a secret program of enriching uranium led to its decision to expel international inspectors and restart its known plutonium program. North Korea is believed to have enough plutonium for as many as eight bombs, besides the one it exploded in October.
A former State Department official with access to the intelligence in 2002 said there was never enough information to conclude that North Korea had a program to produce highly enriched uranium. But it was known Pyongyang had acquired gas centrifuges from Pakistan and other equipment that could be used to produce it. Now it will be crucial to see what North Korea declares about highly enriched uranium, says Jack Pritchard, former State Department special envoy for North Korea.
Mr. JACK PRITCHARD (Former State Department Special Envoy): The intelligence community doesn't know the current disposition, whether there is in fact a cascade of hundreds or thousands, or none operating, and whether there is a facility or simply a storage site where all the stuff is laying.
SHUSTER: Experts inside and outside the government believe the banking hurdle will be overcome soon, but that will only clear the way for bigger problems, such as whether North Korea will disclose all that is required of its nuclear activities. And whether it will in fact give up its weapons? The answer to that is still a long way off.
Mike Shuster, NPR News.
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