What Happens Now on North Korea?

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The Bush Administration is struggling to downplay North Korea's refusal to honor its agreement to shut down its Yongbyon nuclear reactor, which is producing plutonium that the regime has used to make nuclear weapons. "You know, we have a plan," a senior State Department official told reporters almost plaintively, after Pyongyang missed the 60-day deadline that ran out Saturday. "We're just a little delayed in the timing here and we're going to try to work with the partners in the next few days to get it back on track."

But in Beijing, U.S. negotiator Christopher Hill — intercepted by reporters on his way to his hotel room to pack his bags, catch a few hours sleep and depart for Washington — didn't sound so optimistic.

"A number of things were supposed to happen in 60 days, and those things have not happened," Hill said. "We don't have Yongbyon nuclear facilities shut down; we don't have them monitored with international observers. We do not have any fuel oil delivered to [North Korea]." South Korea was standing by, Hill said, to deliver 50,000 tons of heavy fuel oil to Pyongyang, the agreed-upon reward for decommissioning the reactor, in preparation for the second, more ambitious phase of the disarmament deal. If the Kim Jong Il regime makes good on its word to dismantle its weapons program completely, it is slated receive 1 million tons of fuel oil or its equivalent in economic and humanitarian assistance, plus security guarantees.

North Korea wants to get its hands on $25 million in funds that was frozen by Macau banking authorities after U.S. investigators linked the money to counterfeiting and other illicit activities conducted by members of the North Korean elite. But critics of the Bush Administration's policy contend that the regime has used the fund freeze to stall because it simply doesn't want to lose its nuclear threat and become just another desperately poor country.

Former U.S. Ambassador to the U.N. Bill Richardson, who had just returned from Pyongyang late last week after securing the return of remains of U.S. soldiers killed in the Korean war, said on ABC's Sunday talk show, This Week that "the nuclear card is their biggest asset so they're going to play it to the hilt." But Richardson also said he believed that the North Koreans have "made the strategic decision" to abandon their weapons program.

Hill didn't sound so sure about that. Macau has unfrozen the funds in dispute, so if that's really the reason for the North's delay, Hill said, "if it's going to get resolved, then it certainly can be resolved very soon." Which leaves open the possibility that it won't be resolved because that's not in Pyongyang's interest. As Hill put it, "The ball is in the North Koreans' court."

However, since Beijing is the only nation that exercises real economic leverage over Pyongyang, the ball is really in China's court.

"I think the Chinese wanted us to show some patience for a couple more days," Hill said. "I think there is a sense that the communication lines are open and that the North Koreans understand the fact that these accounts, or these funds, are accessible to them. So, I think that's what we'll do for the next couple of days. I'm going to be going back to Washington, though."

Robert Einhorn, who spent nearly three decades at the State Department working on the North Korean nuclear issue, argues that at this point, quiet diplomacy, through China, is the Bush Administration's only option. "The North Koreans don't seem to realize that it is not in their interest to keep undermining and embarrassing those in the Bush Administration who want to find a negotiated solution," says Einhorn, now a senior adviser at the Center for Strategic and International Studies. "In for a penny, in for a pound. The Administration has no choice at this stage but to be patient a few days longer and see if the North Koreans will comply."

But China has also been embarrassed by the North's nuclear and missile tests. And China has seen that the U.S. was willing to go "more than the extra mile," says Einhorn, to resolve the Macau banking dispute. "The Chinese will now be more inclined," he predicts, "to come down hard on the North Koreans for further foot-dragging."