The Corner

North Korea

Last week, the U.S. got the Banco Delta Asia to release the $25 million proceeds of North Korea’s counterfeiting and other illegal activities—as a “confidence-building” measure to entice North Korea to shut down its Yongbyon nuclear reactor. But North Korea missed the 60-day deadline stipulated in the Six-Party February 13 agreement for shutting the reactor down. As of now, there is no word on whether the funds have been withdrawn, and still no sign of a reactor shut-down.

I asked a State Department official what conditions the U.S. had attached to the release of the funds. He told me that the U.S. has “received assurances that the funds will be used for the good of the North Korean people.” No assurances more specific than that; and no verification on the disposition of funds beyond that.

As Nicholas Eberstadt and others have predicted for some time, one of the ultimate objectives of North Korea’s nuclear program is extortion. It certainly appears that the extortion has begun. Without the most minor quid pro quo, the North Koreans got the U.S. to reverse an entirely appropriate response to the counterfeiting of U.S. currency by a foreign government. Essentially, North Korea stole $25 million from lawful holders of U.S. dollars, and when we captured the money, they demanded that we give it back in exchange for mere promises by a government that routinely breaks its promises.

All of that is bad news. But it may have a silver lining—in the Six Party Talks. Through patient diplomacy, the United States has forged a series of agreements between North Korea and 5 other countries. China and South Korea are now as embarrassed by North Korea’s failure to shut down the reactor as the U.S. is angry about it. The government of South Korea is considering whether it can proceed to give 400,000 tons of rice aid to North Korea under the circumstances–and whether to transfer the initial 50,000 tons of fuel oil called for in the February 13 agreement. That shows the potential strength of the Six-Party framework–We have ensured that we will not be the only victims of North Korea’s extortion.

This will be a decisive week for U.S. diplomacy. We should not be surprised if North Korea withdraws the $25 million from its Banco Delta Asia accounts, and fails thereafter to shut down the nuclear reactor or implement its other agreements. But the crucial thing then will be the reaction of China and South Korea. If they take do not react to North Korea’s latest broken promises, we will have the clearest evidence yet that the Six-Party strategy has failed.

And then what? What do you do when negotiations with a rogue nuclear state become pointless?

You continue negotiating pointlessly — and you pray. Keep that in mind as you watch Iran go nuclear.

Mario Loyola — Contributing editor Mario Loyola is senior fellow and Director of the Center for Competitive Federalism at the Wisconsin Institute for Law and Liberty. He began his career in corporate ...

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