New phase as N. Korea shuts down reactor

International observers are monitoring the step. Six-party talks on the North's nuclear program resume in Beijing on Wednesday.

The shutdown of North Korea's five-megawatt reactor at its nuclear complex ushers in a new phase in a standoff that is likely to face many more cycles of tension and talks.

The central problem, say analysts in Seoul, South Korea, is that the shutdown leaves unresolved major issues that are not specifically mentioned in the six-nation agreement reached in February for North Korea to get rid of its entire nuclear program.

"Yes, it's significant," says Kim Tae Woo, senior researcher at the Korea Institute of Defense Analyses, "but its significance is limited."

"Even though they shut down the reactor, we should think about their nuclear weapons," adds Mr. Kim, alluding to six to a dozen nuclear warheads that the North is believed to have fabricated at Yongbyon, 60 miles north of Pyongyang. "North Korea will try every attempt to maximize the confrontation."

Kim Sung Han, a professor at the Korea Institute of Foreign Affairs and National Security, cites North Korea's nuclear stockpile as among the topics that are likely to emerge when six-party talks resume this week in Beijing. Next on the agenda, he says, will be North Korea's commitment to reveal everything related to its nuclear program.

"North Korea is suspected of reprocessing 50 kilograms of nuclear material," says Mr. Kim. There's also the question of North Korea's program for fabricating warheads with highly enriched uranium – something the North has denied doing.

The February agreement, signed by North and South Korea as well as the US, China, Japan, and Russia, avoids mention of the North's existing warheads or highly enriched uranium. North Korean negotiators made clear they would not go along with any deal that mentioned uranium.

Under the accord, North Korea was to have shut down the five-megawatt reactor within 60 days of its signing but delayed pending the return of $25 million from its frozen accounts in Banco Delta Asia in Macao – an issue that held up talks ever since a September 2005 "memorandum of understanding."

About that time, the US Treasury blacklisted the bank as a conduit for $100 "supernotes" counterfeited in Pyongyang and banned any firm doing business with the bank from dealings in the US financial system. That snag was removed only when the US arranged for the transfer of the funds through the Federal Reserve Bank to the Russian central bank.

North Korea further delayed the shutdown until last weekend, when it received 6,200 tons of heavy fuel oil from South Korea – the first of a series of shipments under which the North will get 50,000 tons for fulfilling the initial condition of the six-party agreement. South Korea has also sought to soothe tensions by resuming rice shipments, suspended after the North test-fired seven missiles in July last year and then conducted an underground nuclear test last October.

Chun Yong Woo, South Korea's nuclear envoy, has said the talks in Beijing will be "critical." Christopher Hill, the US nuclear envoy, meeting Mr. Chun in Seoul before Beijing, has repeatedly demanded a complete list of North Korea's nuclear inventory, saying North Korea has to make clear what it's done to develop warheads with highly enriched uranium.

A team of inspectors from the UN's International Atomic Energy Agency has arrived in Pyongyang to monitor the shutdown. The last inspectors were expelled at the end of 2002 after the breakdown of the 1994 Geneva framework agreement under which North Korea had shut down the reactor in return for the promise of twin light-water nuclear energy reactors.

Verification may take a couple of weeks but is not expected to present serious problems. Intelligence analysts in Seoul have said the reactor is outdated and worn out. "They were planning to shut it down anyway," says one US analyst, who spoke on condition of anonymity. "That's not the problem."

Meanwhile, the North has its demands. Kim Myong Gil, minister at the North's UN mission, called for the US and Japan to end "hostile policies." "After the shutdown, then we will discuss the economic sanctions lifting and removal from the terrorism list," Mr. Kim said.

Other key issues, say Korean analysts, will be a formal peace treaty ending the Korean War, replacing the armistice signed in 1953.

"They will talk about peace talks," says Kim Tae Woo at the Korea Institute of Defense Analyses. "Next they will talk about withdrawal of US forces" – which now total 29,000 troops.

Mr. Kim sees the North's moves as based in part on trying to influence the outcome of the South Korean presidential election in December. North Korea has repeatedly denounced conservative candidates. Both North and South Korea, he notes, are pursuing an inter-Korean summit between President Roh Moo Hyun and North Korea's leader, Kim Jong Il.

It was the June 2000 summit between Roh's predecessor, Kim Dae Jung, and Kim Jong Il that led to significant rapprochement, including reunions of 14,000 members of some 10 million families divided by the Korean War.

Suh Jae Jin, of the Korea Institute of National Unification, predicts that North Korea will demand the light-water energy reactors that were to have been built under terms of the 1994 agreement.

"The major problem in North Korea is shortage of electric power," he says. The February agreement calls for shipment of another 950,000 tons of heavy fuel oil but says nothing about the reactors. "North Korea will raise the price as high as possible. In the next US administration, North Korea will start negotiations again."