NORTHEAST ASIA PEACE AND SECURITY NETWORK
***** SPECIAL REPORT *****
***** NAUTILUS POLICY FORUM ONLINE (#00-02) *****

ENGAGING NORTH KOREA

"A New Initiative in Australia-North Korea Relations"
By James Cotton
March 29, 2000

The NAPSNet contributions to the Nautilus Policy Forum Online are
intended to provide expert analysis of contemporary peace and
security issues in Northeast Asia, and an opportunity to
participate in discussion of the analysis. The Forum is open to
all participants of the Northeast Asia Peace and Security Network
(NAPSNet).

A world wide web version of this report can be found at:
http://www.nautilus.org/fora/security/0002D_Cotton.html

As always, Nautilus invites your responses to this report.
Please see "Nautilus Invites Your Responses," below, and send
your responses to the NAPSNet Coordinator at:
napsnet@nautilus.org.

Copyright (c) 1998 Nautilus of America / The Nautilus Institute

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Contents:
I. Introduction
II. Essay by James Cotton
III. Nautilus Invites Your Responses

I. Introduction

The Following article is by James Cotton, Professor of Politics,
Australian Defence Force Academy, University of New South Wales. Cotton
reviews the recent developments in Australian-DPRK relations, and the
possibilities of resumption of full relations. He says that Australia is
seeking to move away from isolation of the DPRK and to support US and ROK
engagement efforts. For its part, the DPRK seeks more Australian trade
and investment, and to improve relations with those nations that
contributed to the UN force that intervened in the Korean War.

II. Essay by James Cotton

A new initiative in Australia-North Korea relations
James Cotton
ADFA, UNSW

The visit of a party of Canberra-based senior officials from the
Department of Foreign Affairs and Trade to Pyongyang on 22-26 February
raised the prospect of improved ties between Australia and the Democratic
People's Republic of Korea (DPRK - North Korea). Though Australia
recognizes the DPRK, relations were "interrupted" after the abrupt and
still unexplained withdrawal of Pyongyang's embassy in Canberra in 1975,
after a short stay of 11 months. In the context of other improvements in
North Korea's diplomatic standing, there is an opportunity to place
relations with Australia on a surer footing. But there are still some
issues in bilateral relations that will need to be addressed before this
can occur.

In recent years Australia has had intermittent official contacts with
North Korea. In February 1998 Pyongyang's Ambassador to Indonesia
visited Canberra and held talks with officials. Further bilateral talks
were held in Bangkok in June 1999, and in September 1999 Foreign Minister
Alexander Downer met his counterpart from the DPRK, Paek Nam-sun, in New
York. On the North Korean side the greatest concern was attracting new
Australian trade and investment. The Australian interlocutors used these
occasions to remind North Korea of its responsibilities to take steps to
mitigate tensions on the Korean peninsula and to respond to concerns
regarding weapons proliferation. The present invitation from Pyongyang
may also have been prompted by developments elsewhere in the region.
Australia's role in assembling the INTERFET force in East Timor was
surely noticed in North Korea, where the possibility of international
intervention remains a fear of the regime. The invitation was timed to
coincide with an energetic campaign to diversify North Korea's foreign
contacts, which resulted in North Korea initiating formal diplomatic
relations with Italy.

Australia's interest in North Korea stems from several sources. Concern
with weapons proliferation and North Korea's reluctance to comply with
the Nuclear Non-Proliferation Treaty led Australia to support the Korea
Peninsula Development Organisation (KEDO). KEDO, formed after an
agreement between Washington and Pyongyang in October 1994 under which
North Korea is freezing its nuclear weapons program, is constructing
nuclear power plants in the country, at an estimated cost to the
international consortium concerned of US$4.5billion. So far Australia
has contributed A$14.8million to KEDO. Australia's close relationship
with South Korea has been an important factor in support for a policy
which reduces the likelihood of conflict between the two Korean states.
The famine in North Korea that has cost the country perhaps as many as 1
million lives has also prompted Australia to offer humanitarian
assistance. In May 1999 Australia donated A$10 million in famine relief,
and on 16 February 2000 a further A$6million was pledged mostly to the
World Food Program to assist with agricultural rehabilitation.

Bilateral trade remains small, at about A$9million per annum. But there
has been some quiet encouragement for North Korea's experiments with a
more open economic policy. Training for DPRK trade officials in
international commercial practices and business law has been conducted in
Australia, and members of the Committee for the Promotion of External
Economic Cooperation in Pyongyang have been permitted to visit in an
attempt to stimulate inward investment.

These efforts to improve relations should be seen also in a wider
international context. After consultation with Japan and South Korea,
the United States released the "Perry Report" in September 1999 which
outlined a step-by-step strategy of improving relations between the two
countries. If North Korea would cease missile exports and allow greater
transparency in its weapons programs, the US would ease economic
sanctions and ultimately implement full diplomatic contacts. As an
initial step, a number of obstacles to US trade with and investment in
North Korea were removed at that time. In the progressive pursuit of
this policy, a high level delegation from North Korea will be making an
official visit to Washington very shortly. Elsewhere North Korea has
been improving its national profile, discussing with the Philippines the
exchange of diplomatic representatives and sending envoys to Europe and
elsewhere. Meanwhile in South Korea the administration of Kim Dae-jung
has been following a 'sunshine policy' of improved trade and attempts at
mutual confidence building, a policy that has survived military tensions
including a naval clash last year in the Yellow Sea.

In Australian policy making circles, the view has emerged that the time
has passed when quarantine was an effective instrument in dealing with
the suspicious and embattled regime in Pyongyang. Keeping North Korea
isolated has done little to improve its behaviour. It also threatens the
programs of internationally funded reconstruction that the agricultural
sector now desperately needs if the country is ever to be able to feed
its own people. Further, North Korea membership of the ASEAN Regional
Forum would be a contribution to regional confidence building and might
prompt greater North Korean interest in other regional institutions.

The outcome of the February visit appeared to be positive. Two days of
talks were held with the delegation's counterparts in the North Korean
Foreign Affairs Ministry, and the group also was received by Vice-Foreign
Minister Pak Kil-yon. Bilateral, regional and global issues were
discussed, including the question of North Korea's compliance with the
transparency provisions of the 1994 Agreed Framework and that of
continuing restraint in the programs of long-range missile development
and export. The Australian position was expressed that the humanitarian
issue would only be successfully addressed with extensive reconstruction
of agriculture and industry.

Australia has agreed to receive a North Korean delegation in the second
half of 2000. This will be the first such visit since 1991 when the
(then) Secretary of the International Department of the Central Committee
of the Korean Workers' Party, Kim Yong-sun, led a delegation to Canberra
in response to an invitation from the Australian Labor Party (then in
government). Throughout the sporadic contacts of the last few years,
while trade, aid and investment have been perennial matters on the
agenda, North Korea has consistently been seeking to resume full
diplomatic relations. On the Australian side this would probably entail
a non-resident ambassador, most likely (as in 1974-75) Beijing based.
But it is clear that a deterioration in the slowly improving security
climate on the Korean peninsula would prejudice further steps in that
direction. Australian spokesmen have been clear, however, that this
development is not predicated on any specific performance on the part of
North Korea, including their adherence or otherwise to the details of the
proposed "Perry package."

Nevertheless, there are some particular concerns that Australia is bound
to raise as the atmosphere improves. In the early 1970s North Korea
embarked upon a program of advanced technology imports from the West
including Australia, financed by international loans. When the world
prices of the raw materials the country relied upon for exports in order
to gain foreign currency collapsed, North Korea reneged on its debt
obligations. An attempt to reschedule payments was abandoned in the
early 1980s. Ever since, a consortium of Australian creditors, chaired
by the ANZ Bank, has been pursuing a portfolio of unredeemed loans
totaling around A$62million. Repayment of this money would undoubtedly
help build confidence in business links with North Korea, though the sum
involved is only a fraction of the amounts still owed in Scandinavian
countries. Further, Australia at some point may seek an explanation for
North Korea's puzzling conduct in 1975, when its diplomatic staff
abandoned their post in Canberra and expelled the three-person Australian
mission in Pyongyang. For their part, the North Koreans are seeking
assurances that temporary consular staff will be allowed into Australia
for the duration of the 2000 Olympics.

The question remains of what return North Korea might gain from full
relations, given that this goal has been so doggedly pursued. Currently
Australia-South Korea relations are close (as was apparent during Kim
Dae-jung's official visit in September 1999) and the two countries are
important in the trading activities of each other. Pyongyang may
consider that a small triumph at this point may serve as part of a more
general assertion of its separate identity. But there is also a
significant historical legacy at stake. Australia, like Italy, is one of
the sixteen countries to contribute forces to the UN command during the
Korean War, and as such is one of the signatories of the July 1953
Declaration that committed those countries to action again if hostilities
recurred. While this commitment is largely forgotten in Australia, its
symbolism is still a matter of some importance for Pyongyang. North
Korea has never accepted its responsibility for the war, and may view
bilateral relations as an indicator that this commitment is at an end.
>From this perspective, it is no accident that contacts are being sought
with the Philippines, and North Korean officials have visited Canada, two
further members of the sixteen.

III. Nautilus Invites Your Responses

The Northeast Asia Peace and Security Network invites your
responses either to these comments or to the original essay.
Please send responses to:
napsnet@nautilus.org (preferably using "response to forum #00-02"
as the subject). Responses will be considered for redistribution
to the network only if they include the author's name,
affiliation, and explicit consent.

********************

Produced by:

The Nautilus Institute for Security and Sustainable Development

Timothy L. Savage, NAPSNet Coordinator
Wade L. Huntley, Asia/Pacific Security Program Director
Gee Gee Wong, Security Program Assistant