Inter Press Network

Tuesday, September 06, 2005

The Fourth Round of Six-Party Talks

Drafted By: Todd M. Walters

On July 26, 2005, the United States, Japan, China, Russia, South Korea, and North Korea convened the fourth round of Six-Party Talks in Beijing after a thirteen-month hiatus. Pyongyang's refusal to continue negotiations after the previous round of talks had left observers increasingly pessimistic about the prospects for reaching an agreement that would provide North Korea with security assurances and economic assistance in exchange for dismantlement of its nuclear programs. Contributing to this pessimism was Pyongyang's continuing nuclear brinksmanship, which included an official declaration that it possessed nuclear weapons in February 2005 and the shut down of its Yongbyon nuclear reactor -- a first step toward reprocessing spent fuel rods for plutonium extraction -- in April.

The Kim Jong-il regime in North Korea has declared that nuclear weapons are vital to ensure its security in light of what it sees as Washington's "hostile policy" towards it (a perception due in part to the Bush administration's characterization of North Korea as an "outpost of tyranny" and as a member of the "axis of evil"). While the United States is concerned with Pyongyang's human rights record and its threatening conventional force posture, among other issues, Washington's most immediate goal is preventing horizontal proliferation of fissile materials, nuclear technologies, and viable nuclear weapons from North Korea to other rogue states and terrorist groups.

Getting Pyongyang Back to the Table

Despite the tension between Washington and Pyongyang that seemed to skyrocket in the first half of 2005, the weeks leading up to the fourth round of talks saw subtle yet important shifts in the Bush administration's otherwise hard-line tactics, and a concurrent abatement in North Korean provocations. From the U.S. side, high-level government officials affirmed that there was no intention to invade North Korea, acknowledged its sovereignty, and committed to bilateral talks within the framework of the six-party process. President George W. Bush even began referring to the North Korean leader as "Mr. Kim," a small concession that was met with a remarkable degree of satisfaction in Pyongyang.

While these developments in U.S.-North Korea relations were crucial for reviving the Six-Party Talks, the respective roles of other parties -- particularly South Korea and China -- should not be overlooked. Seoul urged its northern neighbor to return to the talks during high-level meetings between the two Koreas in late June 2005 in which the parties agreed to seek a "peaceful resolution" to the nuclear crisis. Furthermore, in mid-July, Seoul put forth a specific proposal for economic aid -- including the provision of 2,000 megawatts of electricity and 500,000 tons of rice -- if Pyongyang agreed to dismantle its nuclear weapons programs.

For its part, China's commitment to a Korean peninsula free of nuclear weapons and to the six-party process itself is evident, as U.S. officials have acknowledged that Beijing applied pressure on its North Korean ally to get the Six-Party Talks back on track. In addition to its robust trade relationship with North Korea, Beijing also supplies it with substantial energy and food aid in order to preclude collapse of the reigning regime and the inevitable refugee crisis China would face should that occur. Ironically, while China's role in urging North Korea back to the talks has been encouraged by Washington, its motives for doing so include a desire to bolster the existing regime in Pyongyang to stave off greater U.S. influence on the Korean peninsula, in addition to its interest in being seen as an increasingly powerful political and diplomatic actor in Asia.

Even though Pyongyang's long-delayed return to the negotiating table was welcomed enthusiastically by the other five parties, the sanguinity would prove to be fleeting amid the persistence of competing interests, differing threat perceptions, and conflicting positions that were encountered as the fourth round of Six-Party Talks commenced.

The Return to Beijing

In the days before the talks formally began, several bilateral sessions were held among the parties, a meeting format that would dominate this round where large and unwieldy plenary sessions had been the norm in the past. On July 25, U.S. delegation chief Christopher Hill met with his North Korean counterpart Kim Kye Gwan in the first of what would be as many as nine hours of direct U.S.-North Korea face time. These bilateral sessions represent something of a middle ground between the two countries' previously opposed positions on the appropriate format for the talks.

Pyongyang has been calling for direct bilateral negotiations with Washington since the 1970s, when it sought a formal U.S.-North Korea peace treaty to replace the 1953 armistice that ended the Korean War. A bilateral forum with the United States, in the eyes of the Kim regime, would bolster North Korea's legitimacy on the world stage. The Bush administration has opposed bilateral negotiations with Pyongyang, opting instead to work within a multilateral framework that ensures the participation and assistance -- in both diplomatic and financial terms -- of other major players in Asia with a direct interest in the future of the Korean peninsula.

On July 26, the first official day of negotiations, each country presented its initial position. The U.S. delegation asserted that the proposal set forth during the third round of talks in June 2004 was still on the table. The terms of the offer would have Pyongyang first commit to dismantling all of its nuclear programs, followed by agreement on an implementation plan. There would then be a three-month preparatory period during which time Pyongyang would (1) freeze operations of all nuclear programs and provide a complete list of nuclear activities, (2) allow all existing fissile material to be secured and fuel rods to be monitored, and (3) permit open disclosure and dismantlement of all nuclear weapons, components, and centrifuge parts. These steps would have to include North Korea's declared plutonium programs in addition to its suspected uranium enrichment activities.

In return, the other five parties would (1) grant North Korea a provisional multilateral security assurance, (2) begin an investigation into its energy requirements, and (3) initiate discussions on lifting economic sanctions and removing North Korea from the U.S. List of State Sponsors of Terrorism. Furthermore, the June 2004 proposal stated that "non-U.S. parties would provide heavy fuel oil to [North Korea]" after agreement on the overall approach.

The North Korean delegation has repeatedly declared that this proposal requires them to make too many up-front concessions without comparable actions from the other five parties. While it remains unclear, it is likely that many of Pyongyang's objections to the specific terms of the U.S. offer remain unresolved. However, other fundamental discrepancies surfaced during the latest round of negotiations.

While the Six-Party Talks are focused on North Korea's nuclear programs, there are a host of other issues that persistently occlude agreement between Pyongyang and the other five parties, but also among the five parties themselves. Perhaps the most salient of these is the human rights record of the Kim Jong-il regime. International human rights groups have consistently cited the North Korean government as one of the most repressive and abusive in the world, and the passage of the North Korean Human Rights Act in 2004 demonstrated Washington's concern. But while the Bush administration has made clear that Pyongyang's failure to improve its human rights record would be a show-stopper toward full normalization of relations, it would not impede an agreement on the nuclear question.

Tokyo's preoccupation with the abduction of Japanese citizens by North Korean operatives in the 1970s and 1980s aligns it with Washington on human rights. However, Russia, China, and South Korea are adamantly opposed to introducing human rights in general, and the abduction issue in particular, into the Six-Party Talks. Thus, when Japan raised the abduction issue during the first few days in Beijing, attention was diverted away from North Korea's nuclear programs, and the fault lines that have traditionally pitted the United States and Japan against China, Russia, and South Korea since the beginning of the six-party endeavor were exposed.

These fault lines were further evinced by disagreement over North Korea's demand to maintain a peaceful nuclear energy program. Washington and Tokyo were fervently opposed to allowing Pyongyang to maintain such a program, considering its past record of diverting civilian nuclear technology to weapons and the fact that it withdrew from the Nuclear Non-Proliferation Treaty (N.P.T.) in January 2003. Having a peaceful nuclear program, even with international inspectors on the ground, would make it easier for North Korea to divert that program to build nuclear weapons.

Beijing, Moscow, and Seoul, on the other hand, agreed with Pyongyang that it should be allowed to operate a peaceful nuclear program. This point of contention seems to have been the primary obstacle to reaching agreement on the joint statement of principles proposed by China. Unique to the fourth round of talks, the aim of the joint statement is to establish general principles that all six parties can agree on as a first step toward a final agreement. It was reported that all parties except North Korea had agreed to the fourth and final draft put forth by Beijing.

After failing to reach agreement on the joint statement, the fourth round of Six-Party Talks adjourned for a recess, with plans for the delegations to return home for consultations. The talks were scheduled to resume August 29, but continuing disagreements during the recess have pushed that deadline back.

The Recess

In the weeks since the fourth round of talks adjourned, there have been developments that indicate progress is being made, and others that give cause for concern. On the negative side, Pyongyang has criticized the joint U.S.-South Korea military exercises focusing on Korean peninsula contingencies that began on August 22. While these annual exercises certainly do not strengthen Kim Jong-il's sense of security, his criticisms of them have become perfunctory, and thus do not signify a major setback for the Six-Party Talks.

Pyongyang has also denounced the Bush administration's appointment of Jay Lefkowitz as special envoy on human rights in North Korea. Even though Pyongyang sees this appointment as threatening, the establishment of a distinct government post focused on the issue should send a message to Pyongyang that the Six-Party Talks and the U.S. concern over human rights are ultimately separate matters.

Despite these difficulties, there are signs of a potential future agreement. Numerous meetings have occurred among the parties during the recess, including one between Washington and Seoul where an agreement "in principle" was reached on North Korea's right to peaceful nuclear energy. South Korean officials have stated that they will accept a peaceful nuclear energy program in North Korea at some time in the future, but only after Pyongyang completely dismantles its existing nuclear materials and facilities, rejoins the N.P.T., and accepts inspectors from the International Atomic Energy Agency.

While it remains unclear, there have been hints that Washington may be willing to accept this position when the Six-Party Talks reconvene. Most notably, Christopher Hill has indicated that North Korea's right to peaceful nuclear energy is a "theoretical, downstream" issue that will not be a stumbling block to an agreement. The final sticking point may revolve around the existing nuclear reactor at Yongbyon. North Korea could argue that this facility should be frozen, rather than completely dismantled, if it will have a right to peaceful nuclear energy in the future.


The latest reports suggest that the fourth round of Six-Party Talks will resume in mid-September, roughly three weeks later than originally planned. The disagreements over peaceful nuclear energy and other matters have persisted during the recess, even as the lines of communication were kept open between and among all parties. It remains to be seen whether a joint statement of principles -- let alone a final agreement on nuclear dismantlement -- can be reached in Beijing, but the next series of discussions should reveal clues as to whether North Korea has made a strategic decision to abandon nuclear weapons, or if its return to the talks was a tactic designed to appease the other parties and buy time for further nuclear development.

Economic Brief: U.S.-Canada Softwood Lumber Dispute

Drafted By: Dr. Michael A. Weinstein

The persistence of protectionism in a period of a supposed drive for global free trade is nowhere better illustrated than by the chronic and increasingly bitter dispute between Ottawa and Washington over U.S. restrictions on imports of Canadian softwood lumber. While the conflict has had little visibility in the U.S. outside directly concerned interest groups, it has become a major issue for the broad Canadian public, awakening anti-U.S. attitudes and spurring sentiments of economic nationalism.

As, respectively, the largest producer and consumer of softwood lumber in the world, Canada and the U.S. have a natural symbiotic trading relationship in the product. Over the last ten years, Canada has claimed one-third of the U.S. softwood lumber market, with the exception of the period in 1995 and 1996, when there were no U.S. import restrictions and the share rose to 36 percent. Due to the boom in housing construction in the U.S., exports of Canadian softwood lumber to the U.S. rose from 18,698 million feet in 2000 to 20,950 million feet in 2004, and are on the way to setting a new record in 2005. Canada receives US$7.5 billion from the trade, accounting for 2.4 percent of its total exports of US$316 billion, of which energy and auto parts have the greatest share.

In Canada, there is a predictable unanimous judgment that there should be no restrictions on trade in lumber since there are no countervailing interests to contest that view. The picture is different in the U.S., where lumber importers, retailers and home builders form a coalition in favor of unrestricted trade, and higher cost U.S. lumber companies fight for continued protection.

The core of the dispute is the U.S. lumber companies' argument -- rejected by the Canadians -- that Canada unfairly subsidizes its lumber industry. In the U.S., most harvesting of timber is done on privately owned land, whereas, in Canada, 90 percent of the cutting takes place on public land. U.S. companies contend that the Canadian provinces subsidize their producers by charging artificially low cutting fees. With the support of members of the U.S. Congress from lumber producing states, particularly in the southeast and northwest, the Bush administration responded to industry pressure in 2002 by imposing tariffs averaging 20 percent on Canadian lumber. Ottawa retaliated by filing two dozen suits in trade arbitration bodies seeking judgments that the tariffs should be repealed and their accumulated proceeds be returned to Canadian companies.

Canada's Institutional Strategy Ends in Stalemate

Ottawa's shotgun strategy of pressing its case for relief through the maze of regional and international trade bodies that has proliferated since the fall of the Soviet Union took it into the dispute resolution mechanisms of the North American Free Trade Agreement (N.A.F.T.A.), the World Trade Organization (W.T.O.), the U.S. International Trade Commission (U.S.I.T.C.) and now the U.S. Court of International Trade (U.S.C.I.T.). For the most part, Ottawa won its legal battles, as Washington appealed rulings adverse to it along the line and refused to budge.

Ottawa suffered a blow in 2004 when the U.S.I.T.C., ruling in favor of Washington, accepted the U.S. lumber producers' argument that Canadian subsidies to its softwood lumber industry threatened to damage the U.S. industry. Continuing its fight, Ottawa won a major victory on August 10, 2005 when a N.A.F.T.A. panel -- the final court of appeal -- ruled that Canadian practices did not threaten U.S. lumber producers. To the consternation of Ottawa, Washington simply ignored the N.A.F.T.A. judgment and continued to fight its case in the W.T.O. Ottawa then broke off ongoing negotiations with Washington on the dispute.

The W.T.O. had previously ruled against Washington on the softwood lumber tariffs, saying that the U.S.I.T.C. decision "could not have been reached by an objective and unbiased investigating authority." On August 29, after receiving new evidence from Washington, the W.T.O. issued a preliminary ruling reversing its earlier judgment. Surprised and stalemated by the new W.T.O. ruling, Ottawa expressed its determination to appeal and to take its case to the U.S.C.I.T., which functions to settle discrepancies between N.A.F.T.A. and W.T.O. rulings. Meanwhile, Washington called for Ottawa to return to bilateral negotiations, which Washington hopes would lead to a stable agreement on managed trade such as the kind of quota system that had been tried in the past.

Canada Assesses its Options

The wrangling between Ottawa and Washington over softwood lumber would just be a normal localized trade dispute were it not for the imbalance between the great salience that it has in Canadian politics and its negligible importance in U.S. politics.

Traditionally dependent on the export of primary products for their prosperity, Canadians place trade issues high on their political agenda and their politicians respond to that priority. Washington's refusal to honor the N.A.F.T.A. panel's decision fueled growing anti-U.S. sentiment in the Canadian public and its political class, with parties across the ideological spectrum backing a hard line from Ottawa. The W.T.O. ruling provoked shock, opened up divisions among interests and precipitated a rethinking of the institutional strategy and a consideration of a wide range of other options.

Despairing of a victory for Ottawa, lumber interests in the Canadian west, which represent efficient producers, began to move toward the fallback position of managed trade, whereas less efficient eastern producers continued to call for a hard line. Ottawa promised to pursue its institutional strategy to the bitter end, as nationalist sentiment rose and calls came for retaliatory tariffs on California wine and Florida orange juice, the imposition of a tax on energy exports to the U.S. that would recoup the US$5 billion paid on the softwood tariffs, and outright Canadian withdrawal from N.A.F.T.A.

The Bottom Line

With 86 percent of Canada's total exports going to the U.S., the reconsideration of managed trade by the country's western lumber interests and the expected spike in demand for softwood lumber from rebuilding projects on the U.S. Gulf Coast in the wake of hurricane Katrina, it is unlikely at present that Ottawa will pursue its more drastic options and risk a trade war.

Yet Washington, which would like to contain and isolate the dispute, is now faced with the possibility that nationalist sentiment in Canada will provide an environment for escalating the dispute beyond its directly interested parties. Although they are currently superficial, the softwood lumber dispute has revealed cracks in Washington's primary trading bloc that will deepen unless they are patched.