N. Korea's Threats Add To Asia's Atomic Jitters

Clinton and South Korean president meet tomorrow in Washington to discuss lifting of sanctions on North.

Even as it strives to contain shockwaves from last month's Indian and Pakistani nuclear tests, the United States is confronting serious problems with Asia's other atomic hot spot, Communist-run North Korea.

Pyongyang is threatening to reactivate the nuclear arms program it halted under a 1994 accord with the US. It has backed up its warnings by suspending an American-run plutonium disposal program and hinted it could restart the reactor that produced the bombmaking material.

The issue will feature in talks in Washington tomorrow between President Clinton and his South Korean counterpart, Kim Dae Jung. The discussions could mark a critical juncture in Mr. Clinton's efforts to bring peace to the Korean Peninsula, where 37,000 American troops defend South Korea, and ease Asia's growing atomic jitters.

President Kim is urging the US to end longstanding trade sanctions on North Korea to reduce its isolation and help revive its dying economy. US officials and independent experts also say this is North Korea's main aim in threatening to revive its nuclear-arms program, something they do not think it really wants to do.

For Clinton, the situation poses very difficult choices and risks.

The US contends the secretive North Korean regime has done little to lower tensions with South Korea to warrant an easing of sanctions. It blames Pyongyang for the collapse in April of peace talks in Geneva, in which Seoul and Beijing also participated. "We are prepared to move forward when they are," says a US official in Washington, who asked that his name not be used.

By bowing to North Korea's threats, some experts say, Clinton would be giving up his strongest leverage to compel it to sign a formal treaty with Seoul to replace the truce that ended the 1950-53 Korean War. He would also ignite a political firestorm in the GOP-run Congress.

But other experts and some US officials say that by not lifting the sanctions, Clinton could undermine North Korean moderates. Moderates favor trading the nuclear-arms program for the economic and political plums offered by the US in the Agreed Framework - an unprecedented pact that froze the North's nuclear program and which the US hoped would lead to a formal peace on the peninsula. Should they be sidelined, experts say, hard-liners could force a resumption of the program, pushing the peninsula toward war.

"The North Korean nuclear program is frozen ... but it's still there," warns a well-informed source in Washington. "The danger exists that they [North Korea] will revert back to their previous rogue status."

"If we do not do anything on the sanctions issue, six months from now I think the Agreed Framework will be in danger," says Selig Harrison, an American academic who visited Pyongyang in May. "There is a division in North Korea between hawks and doves."

It was in a meeting with Mr. Harrison that North Korean Foreign Minister Kim Yong-nam threatened to break out of the Agreed Framework. The threat has also been made by other officials and North Korean media. Under the pact, Pyongyang froze and is to dismantle a 5-megawatt reactor and other facilities. US experts arrived to "can" for disposal spent fuel rods from which bomb-grade plutonium can be extracted. The process was almost finished when it was suspended in April.

In return, a US-led consortium, the Korean Energy Development Organization (KEDO), is building reactors from which it is harder to extract plutonium. Until they are finished, the US is providing North Korea with 500,000 tons of fuel oil a year.

North Korea has linked its threats to oil-delivery delays. KEDO is due to deliver 400,000 tons by Oct. 20, but owes about $47 million to suppliers. While the US is committed to providing $30 million a year, Japan and South Korea, the other KEDO members, refuse to kick in funds as they must pay the bulk of the $5.2 billion reactor project.

As a result, the administration may be forced to ask Congress to cover KEDO's debt. But GOP sources say there is little chance of that happening. The US, they say, has already given KEDO more than $80 million, aside from spending $2 billion a year on the defense of South Korea.

North Korea is also believed to harbor grave doubts - shared by some US officials - about whether the reactors will be built. Work on preparing the site began last summer. But the project, due to be completed by 2003, is more than a year behind schedule. Furthermore, the Asian financial crisis has raised questions about whether South Korea and Japan will be able to pay their shares of the financing.

But North Korea's concerns, experts say, go beyond the reactor project to the provision of the Agreed Framework calling for moves by the US to "reduce barriers to trade and investment." "This is the main reason they signed," Harrison says. "The nuclear freeze seemed to be the way to open up various economic opportunities."