Ending the North Korean Nuclear Crisis

Foreword
On March 1, 2003, the Task Force on U.S. Korea Policy published a detailed, 32-page report that analyzed recent developments in both North Korea and South Korea and discussed U.S. policy options in the Korean peninsula against the background of broader U.S. regional interests in Northeast Asia. The report presented recommendations embracing a wide range of key issues, including the resolution of the nuclear crisis with North Korea, the resumption of negotiations to limit or end North Korean missile development and the replacement of the 1953 Korean War Armistice with a peace treaty.

This second report focuses solely on the nuclear issue, updating and enlarging upon the earlier
recommendations made by the Task Force.

The Task Force met three times in connection with the formulation of the first report (November 20 and December 5, 2002, and January 9, 2003) and reconvened in a day-long meeting on May 28, 2004, initiating a process of consultation and debate that continued until a final consensus was reached on November 10, 2004.

The Task Force is co-sponsored by the Center for International Policy and the Center for East Asian Studies of the University of Chicago. Funding for the second report was provided by the
Ford Foundation and the Center for East Asian Studies of the University of Chicago.

Task Force on U.S. Korea Policy
Selig S. Harrison, Chairman
David Albright
Edward J. Baker
Ted Galen Carpenter
Adm. William J. Crowe, Jr.
Ellsworth Culver
Bruce Cumings
Col. John Endicott
Carter J. Eckert
Amb. James E. Goodby
Brig. Gen. James F. Grant
Amb. Donald P. Gregg
Peter Hayes
Amb. James T. Laney
Katharine H.S. Moon
Don Oberdorfer
Han S. Park
Clyde V. Prestowitz, Jr.
Amb. Charles L. Pritchard
C. Kenneth Quinones
Leon V. Sigal
David I. Steinberg
John D. Steinbruner
Joel S. Wit
David Wolff
Meredith Woo-Cumings

Key Findings and Recommendations

The Greater Urgency of the Plutonium Threat
“The central issue that has emerged in the negotiations to date is whether to focus initially on what is, demonstrably, an already-existent plutonium program that is actively producing fissile material or to address at the outset both the known plutonium program and a suspected
program for enriching uranium about which little is known.”

“The Task Force recommends that the United States should give priority to dealing with the clear and present threat posed by the plutonium program.” (p. 8)

Does a Weapons-Grade Uranium Enrichment Program Exist?
“No evidence has yet been presented publicly to justify the conclusion that facilities capable of producing high-enriched, weapons-grade uranium exist in North Korea. No such evidence has been made available to the U.S. Congress or to other states participating in the sixnation negotiations. At the same time, the Task Force finds that the evidence so far available does suggest the existence of a pilot or experimental program…”

“Given the greater urgency of the threat posed by the plutonium program, the start of the negotiation process should no longer be delayed by the continuation of the stalemate that has resulted from attempting to compel North Korean acknowledgement of a weapons-grade uranium enrichment program…Whether a weapons-grade program exists…would be difficult to determine without North Korean cooperation as part of an agreed denuclearization process with intrusive inspections. The Task Force recommends, therefore, that the United States should give priority to dealing with the clear and present threat posed by the plutonium program and confront the uranium issue in the final stages of the process after greater trust has been developed through step-by-step mutual concessions.” (p.8)

Getting the Plutonium Out of North Korea

The Task Force recommends a four-step proposal designed to achieve the complete, verifiable
and irreversible denuclearization of North Korea, starting with a freeze of its plutonium
program accompanied by additional measures that reflect a “recognition of the urgency of
the threat posed by its possession of significant quantities of weapons-usable plutonium that
could be transferred to third parties.”

Calling for “the complete removal of all of this plutonium from North Korea in the first phase of denuclearization,” the Task Force declared, “In order to get North Korea to take the extraordinary step of giving up its plutonium the United States, Japan, South Korea, China, and Russia should be prepared to offer significant economic and political incentives,” including, “substantial bilateral and multilateral programs of assistance…valued collectively in accordance with an agreed price per kilogram” of plutonium. The Task Force pointed out that the 1994 nuclear freeze agreement with North Korea, known as the Agreed Framework, deferred the complete removal of the plutonium until the final phase of the denuclearization process. (p. 13)

THE FOUR-STEP DENUCLEARIZATION PROCESS

Preparatory Phase
Declaration of Denuclearization
North Korea would commit itself to the complete elimination of its “nuclear weapons
programs,” without the specific reference to its uranium enrichment facilities required in
the June 24, 2004 U.S. denuclearization proposal.
The United States would pledge to respect North Korean sovereignty and commit itself
to the goal of normalized relations and a tripartite peace treaty ending the Korean War (the
United States, South Korea and North Korea.)
Conditional Security Assurances
North Korea would pledge not to initiate a military attack against the United States and
would reaffirm its 1991 commitment not to attack South Korea…
The United States would pledge not to initiate a military attack against North Korea or
to seek to undermine its government…
Step One: Eliminating the Post-1994 North Korean Plutonium Inventory
North Korea would permit the inspection access necessary for the International Atomic
Energy Agency to determine how much plutonium has been reprocessed since the expulsion
of the inspectors following the breakdown of the Agreed Framework in December,
2002; the sequestering of this plutonium and any spent fuel under international controls,
and the shutdown of the Yongbyon reactor and reprocessing plant under international
controls.

If North Korea agrees to surrender all of the plutonium found through the inspection process
for shipment out of the country, the United States, South Korea, China, Japan and Russia
would reciprocate with:
The resumption of shipments of the 500,000 tons of oil per year delivered under the
Agreed Framework, which were cut off in December, 2002.
The exchange of liaison offices with North Korea by the United States and Japan as the
first step toward fully normalized relations.
Bilateral and multilateral programs of assistance for the economic and social development
of North Korea valued collectively in accordance with an agreed price per kilogram
of the plutonium surrendered.
The Task Force does not specify how much should be offered in payment per kilogram. However, for illustrative purposes, it points out that if the plutonium inventory totals 40 kilograms, and if a price of $25 million per kilogram were agreed upon, the funds available for these assistance programs would total $1 billion. The Task Force also notes that South Korea and Japan had agreed to provide $4 billion and $1 billion respectively to construct light water reactors under the Agreed Framework, and that the United States spent $405,106,000 from 1995 through 2003 for oil shipments and for administrativesupport of the light water reactor project.

Upon conclusion of the proposed aid agreement, North Korea would initiate steps to rejoin the Nuclear Non-Proliferation Treaty and permit the resumption of the IAEA inspection access cut off in December, 2002.

Step Two: Plutonium Cleanout

North Korea would agree to surrender the remainder of its plutonium inventory, including
pre-1994 plutonium reprocessed prior to the Agreed Framework.
The United States would end the remaining U.S. economic sanctions against Pyongyang
and would encourage the World Bank and the Asian Development Bank to move toward
North Korean membership in these institutions. This would require the removal of North
Korea from the U.S. List of State Sponsors of Terrorism.

Step Three: Eliminating the Plutonium Weapons Infrastructure
North Korea would open previously-barred waste and storage sites and other plutonium-
related facilities to a level of inspection acceptable to the IAEA.
The United States would initiate talks with North Korea to set the stage for the elevation
of their liaison offices in Pyongyang and Washington to the status of embassies.
The United States would declare its readiness to keep open the option of completing one
or both of the two light water reactors promised under the Agreed Framework, as South
Korea and Japan have urged.

Step Four: Elimination of Weapons-Grade Uranium Enrichment

If North Korea permits the unimpeded inspection access necessary to determine what, if any,
weapons-grade uranium enrichment facilities exist, and takes the comprehensive measures
necessary to eliminate any such facilities, the United States would:
Establish full diplomatic relations, upgrading its liaison office in Pyongyang to an
Embassy.
Authorize Exxon-Mobil to pursue a natural gas pipeline to South Korea that would
cross North Korea.
Open negotiations on a tripartite peace treaty ending the Korean War.

Contents
Page
I. Foreword 2
II. The Nuclear Crisis 7
III. The U.S. Proposal 9
IV. The North Korean Proposal 11
V. The South Korean Proposal 12
VI. Recommendations 13
Step One: Eliminating the Post-1994 North Korean Plutonium Inventory
Step Two: Plutonium Cleanout
Step Three: Eliminating the Plutonium Nuclear Weapons Infrastructure
Step Four: Elimination of Weapons-Grade Uranium Enrichment
VII. The South Korean Nuclear Program 18
VIII. Beyond the Nuclear Issue 18
IX. Notes of Dissent 19
X. Members of the Task Force 21
XI. Notes 23

The nuclear crisis with North Korea has become progressively more serious since the Task Force on U.S. Korea Policy published its first report in March, 2003.1 Six-party negotiations in Beijing (the United States, South Korea, North Korea, Japan, China and Russia) have so far failed to stop North Korea from moving ahead with its effort to develop nuclear weapons. The Task Force has decided, therefore, to assess the key issues that have emerged in the negotiations and to present detailed recommendations for a comprehensive settlement with North Korea designed to
end its nuclear weapons program completely, verifiably and irreversibly.

The Hecker visit underlined the central issue that has emerged in the negotiations to date:
whether to focus initially on what is, demonstrably, an already-existent plutonium program
that is actively producing fissile material or to address at the outset both the known
North Korean plutonium program and a suspected program for enriching uranium about
which little is known.

Despite its denials that such a program exists, there is clear evidence that North Korea has
attempted to purchase key components needed for uranium enrichment to weapons-grade.
However, it is unclear in most cases whether these purchases have materialized and, if so,
in what quantities.3 No evidence has yet been presented publicly to justify the conclusion
that facilities capable of producing highenriched, weapons-grade uranium exist in
North Korea. No such evidence has been made available to the U.S. Congress or to other
states participating in the six-nation negotiations.

At the same time, the Task Force finds that the evidence so far available does suggest the existence of a pilot or experimental enrichment program and strong North Korean interest
in obtaining enrichment technology.

The assumption that North Korea does have a secret program to develop uranium-based nuclear weapons rests primarily on intelligence findings pointing to possible Pakistan- North Korean nuclear cooperation. Recent revelations of the nuclear black market activities of the ousted director of Pakistan’s nuclear program, Dr. A.Q. Khan, have reinforced suspicions of such cooperation. However, how much technology and equipment, if any, has been supplied, and the level of sophistication involved, remain unclear. Dr. Khan has not discussed the facts publicly, and no foreign access to Dr. Khan has been permitted. China, which has been briefed by Pakistani officials and has its own information sources, has publicly expressed skepticism that a weaponsgrade
enrichment program exists.

Whether a weapons-grade enrichment program does exist—and if so, how close it is to producing weapons-grade fissile material in significant quantities—would be difficult to determine without North Korean cooperation as part of an agreed denuclearization process with intrusive inspections. The Task Force recommends, therefore, that the United States should give priority to dealing with the clear and present threat posed by the plutoniumprogram and confront the uranium issue in the final stages of the process after greater trust has been developed through step-by-step mutual concessions.

The denuclearization process should be structured to establish definitively whether a weapons-grade uranium enrichment program exists and, if so, to eliminate it. The declared goals of the process should be formulated at the outset in a way that implicitly embraces the uranium issue and leaves adequate scope for dealing with it effectively. Given the greater urgency of the threat posed by the plutonium program, however, the start of the process should no longer be delayed by a continuation of the stalemate that has resulted from attempting to compel North Korean
acknowledgment of a weapons-grade uranium enrichment program.

1.The DPRK would make a unilateral declaration pledging to “dismantle all of its nuclear programs”

2.”Upon acceptance of the DPRK declaration, the parties would:
a. provide provisional multilateral security assurances, which would become more enduring as the
process proceeded
b. begin a study to determine the energy requirements of the DPRK and how to meet them
by non-nuclear energy programs
c. begin a discussion of steps necessary to lift remaining economic sanctions on the DPRK, and
on the steps necessary for the removal of the DPRK from the List of State Sponsors of Terrorism.”

3. Based on the DPRK declaration, “the parties would then conclude a detailed implementation
agreement providing for the supervised disabling, dismantling, and elimination” of all DPRK
nuclear programs, the removal of all nuclear weapons and weapons components, centrifuge and
other nuclear parts, fissile material and fuel rods; and a long-term monitoring program.

“To be credible, and for the programs to get underway,” the declaration and the agreement would
have to include “the uranium enrichment program, and existing weapons, as well as the plutonium
program.”

4. Upon conclusion of this agreement, “non-U.S. parties would provide heavy fuel oil to the DPRK.”

6. After the dismantlement is completed, “lasting benefits to the DPRK” would result from the energy survey and the discussions on ending sanctions and the removal of the DPRK from the terrorist list.

Even after dismantlement, however, a “wholly transformed relationship with the United States”
would follow only if the DPRK “changes its behavior on human rights,” addresses the “issues underlying” its inclusion on the terrorist list, eliminates chemical and biological weapons programs, “puts an end to the proliferation of missiles and missilerelated technology, and adopts a less provocative conventional force disposition.”

The Task Force welcomes the June 24 initiative as a starting point for negotiations but feels
that the U.S. proposal in its present form does not provide a realistic basis for successful
negotiations. The proposal fails to take into account the deep distrust existing between the
United States and North Korea and thus the need for simultaneous steps in which the two
sides, in tandem, each make concessions of sufficient importance to the other to reduce
distrust and facilitate compromise. In its present form, the proposal places the
burden on North Korea to make major concessions first without a corresponding assurance
of reciprocity by the United States.

The U.S. Proposal

For example, Stage One envisages a unilateral North Korean declaration, pledging complete
denuclearization, that would set the stage for conclusion of a detailed agreement in Stage
Three providing for the “supervised disabling, dismantling, and elimination of all nuclear
programs,” including the suspected uranium enrichment program.

To get North Korea to make a denuclearization pledge, the Task Force believes, the declaration
should be more symmetrical, coupling a pledge by North Korea to eliminate nuclear
weapons programs and fissile material with a simultaneous pledge by the other powers concerned
that affirms respect for North Korea’s sovereignty and explicitly rules out a military
first strike or an economic embargo. The Task Force agrees that an acceptable settlement
with North Korea must eventually bring about all of the detailed denuclearization
measures spelled out in Stage Three, including the elimination of weapons-grade
uranium enrichment capabilities if they exist.

However, given the existing level of distrust between Washington and Pyongyang, North
Korea is unlikely to commit itself to these measures in advance without reciprocal commitments
by the other parties to the settlement. It must be induced to take them in the
step-by-step fashion outlined in this report, with quid pro quos along the way. Moreover,
in contrast to the precision and magnitude of the North Korean concessions detailed in the
proposed agreement, the rewards offered in return would be minimal: an undefined provisional
security assurance; “discussions” on long-term energy assistance and removal from
the terrorist list, with no hint of possible action; and short-term oil shipments of
unspecified size, primarily from South Korea and other “non-U.S. parties.”

The fact that the United States would not participate in the oil shipments offered in Stage
Four signals to North Korea that a nuclear settlement would not in itself lead to normalized
relations. Yet it is the promise of normalization and of an end to a perceived U.S. threat to
its survival that make a settlement attractive to North Korea. North Korea is not likely to
move toward complete denuclearization, the Task Force believes, unless the United States is
prepared to match North Korean concessions with reciprocal steps toward the normalization
of political and economic relations and toward a tripartite peace treaty ending the Korean War (the United States, North Korea and South Korea). The June 24 U.S. proposal
holds out the hope for a “wholly transformed relationship” with the United States only if
North Korea “changes its behavior on human rights,” eliminates chemical and biological
weapons programs, puts an end to the proliferation of “missiles and missile-related technology,”
and adopts a “less provocative conventional force disposition.”

The Task Force agrees that human rights, chemical and biological weapons, missiles and
conventional arms control are all issues that should be on the negotiating agenda with
North Korea. But progress on these issues should not be a precondition for normalization.
On the contrary, they are more likely to be resolved in a climate of improved relations
than in one dominated by mutual suspicion. South Korea accepted this view in a proposal
of its own spelled out most fully on June 24, in which the normalization of U.S. and Japanese
relations with North Korea would take place once the nuclear issue is resolved.

To integrate the negotiations on a nuclear settlement with broader movement toward
improved relations, the Task Force urges that separate bilateral negotiations between the
United States and North Korea should be broadened and further developed in conjunction
with the existing multilateral negotiating format. Beijing, Tokyo, Moscow and Seoul
have all made clear that they would welcome a bilateral U.S.-North Korean dialogue and
that they favor a step-by-step approach to a settlement addressed initially to plutonium.

The U.S. proposal contrasted sharply with the more limited and loosely-defined North
Korean offer to freeze its plutonium program, made behind closed doors in the August, 2003,
and June, 2004 rounds of six-party negotiations and spelled out publicly most fully in
discussions with the Task Force Chairman5 and with Task Force member Donald P. Gregg during
their visits to Pyongyang in April and July, 2004, respectively.

In its opening offer at the six-party talks, North Korea defined a freeze as limited to the
shutdown of the five-megawatt reactor and reprocessing plant at Yongbyon under international
inspection. However, depending on what the United States is prepared to do in return, Vice Foreign Minister Kim Gye Gwan told the Task Force Chairman that North Korea might also permit the inspections necessary to determine how much plutonium has been reprocessed from the 8,000 fuel rods removed from storage in December, 2002 and the sequestering of this plutonium and any spent fuel under international controls, in addition to the shutdown of the Yongbyon reactor and reprocessing plant under international inspection. This would be the “first step” in a continuing process that would lead to denuclearization in stages, keyed to progress toward improved relations with the United States. The period of the freeze, and the nature and timing of these subsequent stages, have not been specified.

Among the U.S. quid pro quos suggested by North Korea for the shutdown of the reactor
and reprocessing plant are the resumption of oil shipments and energy aid sufficient to
compensate for the 2000 megawatts of electric power capacity promised in the Agreed
Framework.

The North Korean Proposal

The U.S. and North Korean proposals both call for a freeze of the production of new weaponsusable plutonium during the initial preparatory phase of the denuclearization process. But the U.S. proposal goes beyond a freeze during a three-month preparatory period. It provides
not only for the sequestering of existing plutonium under international controls but, more
important, for the “supervised disablement” of all North Korean nuclear weapons and
weapons components, including any centrifuge facilities related to the suspected
weapons-grade enrichment program.

By contrast, the South Korean proposal allows a preparatory period of six months, not three
months, that would be limited to a freeze, without the additional “disablement” proviso.
Like the U.S. proposal, it calls for a North Korean pledge, prior to the start of the freeze,
to dismantle “all” nuclear weapons-related programs, and for unspecified measures to
begin dismantlement within the preparatory period. But it would not require North Korea
to acknowledge or reveal its suspected weapons-grade uranium capabilities during
the preparatory phase.

Significantly, the South Korean proposal would not restrict energy aid to non-nuclear
energy programs, as the U.S. proposal does, thus leaving the door open for a continuation
of the suspended Korean Energy Development Organization (KEDO) program to build the two civilian light water reactors envisaged in the Agreed Framework. A more fundamental difference between the South Korean and U.S. proposals is that the South Korean proposal would reward North Korea for denuclearization by stepping up progress toward the normalization of U.S. and Japanese relations with Pyongyang, while the U.S. proposal would specifically condition normalization on further North Korean concessions unrelated to denuclearization.

Deputy Foreign Minister Lee Soo Hyuck outlined six steps in an unpublished “Concept Paper” presented at the start of negotiations on June 24:

1. North Korea would make a declaration pledging to “dismantle all nuclear programs in a thorough and transparent manner subject to international verification.”
2. As the first step toward dismantlement, North Korea and the other parties in the Beijing
Negotiations would negotiate an agreement providing for a six month freeze of its nuclear programs. During this six month period, it would “declare all of its nuclear programs, cease operation of these programs, seal nuclear materials and facilities and put them under international verification.” The dismantlement would begin “within the six months of the freeze.”
3. At the beginning of the freeze, the other parties would give North Korea security assurances,
affirming that they “have no intention to attack, invade or seek regime change,” and that they would provide “more enduring” assurances once the dismantlement is completed.
4. During the freeze period, the other parties would provide heavy fuel oil and increased humanitarian assistance to North Korea and would “launch a study project to determine its energy requirements.”
5. The United States and North Korea would begin a dialogue “soon” on terrorism and economic sanctions “for the purpose of eventually lifting the sanctions.”
6. The parties would agree to “make efforts to remove obstacles on the way toward normalization
of diplomatic relations and significantly improve the environment for economic cooperation between
North Korea and the international community.”

The South Korean Proposal

The Task Force believes that the South Korean proposal offers a realistic basis for successfully pursuing renewed negotiations with North Korea. As a minimum objective, the new Administration should seek to initiate a denuclearization process based on the South Korean proposal that would start with a freeze.

At the same time, the group believes that greater recognition should be given to the urgency of the threat posed by North Korea’s possession of significant quantities of weapons-usable plutonium that could be transferred to third parties. The group urges the adoption of a more ambitious, sharply-focused strategy designed to achieve the complete removal of all of this plutonium from North Korea in the first phase of denuclearization. The achievement of this goal, which would greatly enhance U.S. security, was deferred in the Agreed Framework until the final phase of the process.

In order to get North Korea to take the extraordinary step of giving up its plutonium, the United States, Japan, South Korea, China and Russia should be prepared to offer significant economic and political incentives going beyond the unspecified amount of heavy fuel oil and “increased humanitarian assistance” that would be provided under the South Korean freeze proposal.

The group proposes a phased, four-step process, detailed below, that would lead to complete denuclearization, including the dismantlement of any weapons-grade uranium enrichment facilities.
Preparatory Phase

The four-step proposal would be presented in full at the outset of negotiations. However, the steps would be negotiated one at a time. Before negotiating on Step One, the United States and North Korea would join in a Declaration of Denuclearization.

North Korea would commit itself to the goal of the complete elimination of its “nuclear weapons programs,” including all fissile material in whatever form. If North Korea is unwilling to accept more explicit language that specifically refers to weapons-grade enrichment facilities, the United States, along with the others in the six-party talks, would make publicly clear their understanding that such facilities are covered.

The United States would declare its respect for North Korean sovereignty and commit itself in the Declaration to the goal of normalized relations and a tripartite peace treaty ending the Korean War (the United States, South Korea and North Korea.)

Each side would provide the other with an explicit conditional security assurance. The United States would pledge not to initiate a military attack against North Korea or to seek to undermine its government. This pledge would remain effective both during negotiations on the four steps and thereafter, provided that North Korea abides by the terms of the agreements negotiated.

North Korea would pledge not to initiate a military attack against the United States. This pledge would remain effective both during negotiations on the four steps and thereafter, provided that the United States abides by the terms of the agreements negotiated. In addition, North Korea would reaffirm its 1991 commitment not to attack South Korea, and would pledge not to transfer fissile material to third parties under any circumstances, with immediate effect during the period of transition to complete denuclearization proposed in Steps Two, Three and Four.

Following the exchange of conditional security assurances, negotiations would begin on Step One.
Recommendations

Step One:

Eliminating the Post-1994 North Korean Plutonium Inventory

The extent of the plutonium already reprocessed by North Korea both before the conclusion of the Agreed Framework in 1994 and subsequent to its breakdown in 2002 is a subject of dispute among nuclear scientists and intelligence agencies. However, there is a general consensus that the total amount of weapons-usable plutonium in North Korea’s possession does not exceed 40 kilograms, i.e. enough for five, or at most, six fission -type (as distinct from fusion) nuclear weapons, depending on the grade of plutonium, the weapon design and the desired explosive yield.

Step One would deal with what is by far the largest portion of this accumulation, the plutonium
reprocessed since the breakdown of the Agreed Framework in December, 2002.
North Korea would be required to permit the inspection access necessary for the IAEA to
determine how much plutonium has been reprocessed from the 8,000 fuel rods; the
sequestering of this plutonium and any spent fuel under international controls, and the
shutdown of the Yongbyon reactor and reprocessing plant under international controls.
Based upon the quantum of the post-1994 plutonium stockpile, the United States, Japan,
South Korea, China and Russia would provide substantial economic and political incentives
to North Korea if it is willing to surrender all of this plutonium for disposal out of the country:

First, the resumption of shipments of the 500,000 tons of oil per year promised in the
Agreed Framework, which were cut off in December, 2002.

Second, the establishment of liaison offices in Pyongyang and Washington, and Pyongyang
and Tokyo, as the first step toward fully normalized relations.

Third, based on the quantum of the stockpile surrendered, the five parties would compensate
North Korea with substantial bilateral and multilateral programs of assistance for its
economic and social development valued collectively in accordance with an agreed price
per kilogram. For example, assuming 40 kilograms at $25 million per kilogram, the funds
available for these programs would be $1 billion. No direct cash payments to North Korea
would be involved.

(The Task Force does not specify how much would be offered in payment per kilogram. However, it notes that South Korea and Japan had agreed to provide $4 billion and $1 billion respectively to construct light water reactors under the 1994 Agreed Framework, and that the United States did spend $405,106,000 from 1995 through 2003 for oil shipments and administrative support of KEDO in return for the freeze.)

North Korea would decide on the priorities in this assistance package. As examples of the assistance programs envisaged by the Task Force, such aid could relate to:
Long-term food security
Irrigation and agricultural modernization
Short-term energy security, including continued heavy oil shipments and the integration
of the North Korean electricity grid with South Korean and/or Chinese and
Russian electricity networks
Long-term energy security, including oil and gas prospecting and natural gas pipeline links with Russia
Rehabilitation of hospitals, clinics, and other public health facilities
Modernization of the economic infrastructure, including harbors, ports, railroads and the electrical grid

An agreement fixing the valuation of the aid package, the timetable for resumption of the
oil shipments and their duration, and the establishment of liaison offices would be established prior to the surrender of the plutonium by North Korea.

North Korea would make a formal pledge in this agreement not to transfer any fissile material
out of North Korea pending the implementation of Steps One, Two, Three and Four,
and would initiate steps to rejoin the Non-Proliferation Treaty (NPT) and permit the
resumption of International Atomic Energy Agency (IAEA) inspection access.

The specific content of the aid package, the valuation of specific programs and how they
would be administered would be negotiated subsequently with North Korea. In the case of
energy aid, the Korean Energy Development Organization (KEDO) would be a possible
conduit for external funds and the administrator of agreed programs. No funds would be
made available directly to North Korea to avoid possible diversion to military purposes.
The destination of the plutonium for storage or destruction would be decided by the five
parties. Russia would be a possibility, given the U.S. involvement in monitoring Russian
nuclear facilities as part of the Nunn-Lugar program.

* * * * *

If the incentives are sufficient and are responsive to North Korea’s priorities as it defines
them, the Task Force believes that Pyongyang may prove willing to surrender all of the post-
1994 plutonium in Step One. However, the United States should consider a fallback position
in the event that North Korea should balk at giving up all of it.

A significant proposal considered seriously but not adopted by the Task Force would be to
offer cash payment for the plutonium surrendered on a sliding scale, with the compensation
per kilogram increasing in accordance with the amount surrendered, as an incentive
to North Korea to offer as much up front as possible. Supporters of this proposal cited a
precedent in the 1994 deal with Russia in which the United States agreed to pay Moscow $10 billion to convert 500 tons of high-enriched uranium to low-enriched uranium for use in U.S. light water reactors. Many members objected that cash payments could be diverted to military purposes. In another version of this proposal, the funds generated would be used for aid programs on the same basis as in the Step One proposal above that the Task Force did adopt. Although the group did not reach a consensus in support of either version of the “buyout” approach, the Task Force recommends that it be given consideration in the event of an impasse with Pyongyang.

Step Two:

Plutonium Cleanout

North Korea would agree to eliminate the remainder of its plutonium inventory not covered
in Step One. This would include plutonium reprocessed prior to the Agreed Framework; additional plutonium contained in unreprocessed fuel rods that has accumulated in the five megawatt reactor at Yongbyon since the breakdown of the Agreed Framework; any other plutonium in unreprocessed fuel rods from previous reactor operations, and plutonium that exists in any other potentially weapons-usable form.

For safety reasons, it would be desirable to have North Korea reprocess the fuel rods under international inspection and surrender the plutonium for shipment by the United States, rather than have the fuel rods themselves shipped. Compensation would be provided for this plutonium on the same basis as in Step One and the five parties to the accord would share the cost of reprocessing.

In tandem with North Korea’s verifiable fulfillment of its obligations under Step Two, the
United States would reciprocate in two ways. First, it would end remaining economic sanctions
against Pyongyang. Second, it would encourage the World Bank and the Asian Development Bank to move toward North Korean membership in these institutions. This would require the removal of North Korea from the U.S. List of State Sponsors of Terrorism.

North Korea would provide the United States and/or the International Atomic Energy
Agency (IAEA) with all necessary records and access to its plutonium facilities—including
previously-barred waste and storage sites—to verify that all plutonium is eliminated and
that all facilities have been identified so they can be decommissioned and decontaminated.

Step Three:

Eliminating the Plutonium Nuclear Weapons Infrastructure

This step requires very stringent and intrusive monitoring and on-site inspection and, therefore,
must have full cooperation from North Korea.
The five parties would jointly fund the safe, secure, and environmentally acceptable elimination
of the North Korean plutonium infrastructure.
The elimination of the infrastructure would be conducted under IAEA inspection and be
open to future on-site international monitoring.
David Albright, president of the Institute of Science and International Security and a
Task Force member, has made detailed proposals for appropriate verification that the
Task Force endorsed (http://www.isisonline.org/dprkverification.html).

To reciprocate for North Korea’s cooperation in Step Three, especially for opening previously-
barred waste and storage sites to a level of inspection acceptable to the IAEA, the United
States would take two steps. First, it would initiate talks with North Korea to set the stage for
the elevation of its liaison office in Pyongyang to the status of an Embassy. Second, it would
declare its readiness to keep open the option of completing one or both of the two light
water reactors promised under the Agreed Framework, by supporting action in KEDO
that would continue the suspension of the reactor project, in place of the previous U.S.
efforts to cancel it.

Upon the completion of Step Three, North Korea would have fulfilled many of the same
obligations it accepted under the Agreed Framework, which provided for dismantlement
of its plutonium infrastructure. The United States, South Korea and Japan, however,
would not have completed the construction of the two light water reactors for North
Korea, which had been envisaged in return for freezing its nuclear plutonium program.
South Korea has spent $800 million on preparing the site for the two reactors at Kumho, and
South Korean companies have been awarded $2.3 billion in contracts for completion of the
project. Japan has spent $400 million. Construction work was suspended by KEDO
until December 1, 2004, when the future of the project was scheduled to be reveiwed.

The Task Force recommends that KEDO should continue to suspend, not discontinue,
the reactor project, so that it can be periodically reassessed in the context of progress in the
denuclearization process and of changes in North Korea-U.S. and North Korea-South
Korea relations. Meanwhile, to make use of the infrastructure already developed at the
Kumho site, a non-nuclear thermal power plant could be built there. When and if a light
water reactor is built, external assistance should be provided only if North Korea agrees
to conditions that would preclude its use for nuclear weapons. These conditions would
include a commitment to lease its nuclear fuel from commercial nuclear suppliers and to rule out capabilities for plutonium reprocessing and uranium enrichment to weapons-grade.

For Pyongyang, getting at least one of the reactors up and running is a political priority, if
only because the Agreed Framework bore the personal imprint of Kim Il Sung and Kim Jong
Il. Equally important, since Japan and South Korea both have large civilian nuclear programs,
North Korea regards nuclear power as a technological status symbol. Like Tokyo and
Seoul, Pyongyang wants nuclear power in its energy mix to reduce dependence on petroleum.
Still another factor is that North Korea has a force of 7,500 nuclear personnel, many of
them trained in Russia, who have been in a state of limbo since the 1994 accord and are
awaiting new jobs when the KEDO nuclear complex at Kumho is completed.

Step Four:

Elimination of Weapons-Grade Uranium Enrichment

Finally, the United States would open negotiations with North Korea and South Korea on a tripartite peace treaty ending the Korean War, which Pyongyang regards as an inseparable accompaniment to a meaningful normalization of relations.

These steps would be taken side by side with North Korean actions to share its records and
open up any related facilities not yet inspected for intrusive inspection. Together, North
Korea, the United States and the IAEA would design a long-term monitoring/verification
regime designed to provide the transparency and cooperation required to verify the absence
of undeclared nuclear materials and weapons activities of any kind. This step would require
the full application of the IAEA Additional Protocol.6 It would require trust and full cooperation
from the host country. Such trust will exist at this stage, most members of the Task
Force agree, if all of the U.S. compensatory measures recommended in Steps One through
Four have been taken.

Given greater trust, the Task Force points out, the United States would find it easier than in
earlier years to negotiate an agreement with North Korea that would end its development
of long-range missiles capable of delivering nuclear, chemical or biological weapons to
U.S. territory. Similarly, Japan and South Korea would find it easier to negotiate agreements
with Pyongyang that would head off the escalating competitive development of
short-range and medium-range missiles. The Clinton Administration made significant
progress toward negotiating an agreement to end missile exports and long-range missile
development. These negotiations should be resumed on the basis of the recommendations
in the initial Task Force report.

The South Korean Nuclear Program

The importance of the Additional Protocol, with its newly-stringent inspection requirements,
was graphically demonstrated by the revelations in September, 2004, that South
Korea had conducted secret experiments relating to uranium enrichment and plutonium
reprocessing, some as recently as four years ago. It was South Korea’s decision to become
one of the first states to accept the Additional Protocol that led to these revelations.
The fact that Seoul had conducted a shortlived covert plutonium-based nuclear
weapons program during the Park Chung Hee military regime has long been known. Since
the termination of this program under U.S. pressure in 1975, South Korea has been a trusted
adherent of the global non-proliferation regime. The recent revelations of secret experiments,
in violation of the 1991 North-South Agreement and of IAEA commitments, suggest
that latent support for a nuclear weapons option persists within the South Korean
nuclear establishment. However limited these experiments were, they have vitiated confidence
in South Korea’s non-proliferation bona fides both in North Korea and in the broader
international community, and have underscored the inseparability of non-proliferation
enforcement efforts embracing North Korea and South Korea alike.

South Korea is to be commended for its decision to make a clean breast of its failure to live
up to all of its IAEA obligations and for its continuing cooperation with enforcement of the
Additional Protocol. The Task Force emphasizes that North Korea, too, will have to be
brought under the discipline of the Additional Protocol, but not until the final stages of the
denuclearization process.

South Korea accepts full transparency as partof a broader pattern of normal relations with
the international community. North Korea can be held to the same standard only when its
relations with the international community are normalized in conjunction with the denuclearization
process.

Beyond the Nuclear Issue While focusing on the nuclear crisis, the Task Force notes that significant economic reforms have been initiated in North Korea since its last report. The group emphasized that the continuation of the reform process would gradually loosen up North Korea’s rigid, totalitarian system, setting in motion a long-term process of political liberalization in which human rights abuses would be reduced.

Against this background, economic assistance and the normalization of relations between Washington and Pyongyang, including a peace treaty, would not only be critical to a resolution of the nuclear crisis but would also promote peaceful, evolutionary progress toward a more open society in North Korea. Policies designed to pressure and isolate the Kim Jong Il regime would, conversely, strengthen hard-line elements opposed to reform and would reinforce repression.

James E. Goodby

I support the main thrust of the Task Force report. However, a better approach than seeking a formal agreement at the outset would be to agree on a statement of common goals and to adopt the model the Bush administration relied on to eliminate Libya’s nuclear programs. The administration has favorably cited this model as a basis for making diplomatic progress in North Korea.

The essence of the Libya model is to proceed through “reciprocal unilateral measures”-independent
actions taken by parties to the negotiations to reach their shared objectives. A formal agreement
is not a requirement. This process leaves to each participant some discretion in what it actually
does. It is the model the Bush administration preferred in the case of Russia, as well as Libya. North Korea’s nuclear programs are more advanced than Libya’s and piecemeal dismantlement may be the only practical way to proceed.

What reciprocal unilateral measures might be involved? The discussions in the six-party talks suggest the following steps, over time:

South Korea would: 1) implement the economic assistance it has promised to North Korea for ending its nuclear programs; 2) initiate confidence- building measures to lower tensions on
the peninsula.

Japan would: 1) provide North Korea with promised reparations; 2) take actions to foster economic development in North Korea. China and Russia could undertake additional
measures in response to North Korea’s decision to dismantle its nuclear facilities.

If a denuclearized Korean Peninsula is accepted as a common strategic objective, Kim Jong Il should be able to begin the process by taking some significant action, while reciprocal unilateral actions by other participants would keep the ball rolling toward achievement of the goal. By forming a permanent oversight group at the earliest possible date, the parties would maintain pressure and help build momentum for the negotiations.

James F. Grant

I support the Task Force’s recommendations for negotiations as a way to further probe and test
Pyongyang’s intentions. However, this paper and its proposed negotiating strategy are based on the
assumption, which I question, that North Korea can be convinced to negotiate in earnest concerning its nuclear weapons capability at this time if we approach them in a reassuring manner, and provide them with sufficient material incentives and security pledges.

I do not believe that Pyongyang presently is willing to negotiate away a nuclear “posture” (declaratory or real) that has given them their only real leverage in dealing with the outside world and provides them with the possibility of a “poison pill” that in their minds might ward off invasion by the US and others. My assessment is that North Korean leaders will continue to present us with a “neither confirm nor deny stance” concerning their nuclear posture.

They may make some small tactical moves to gain some material benefits and split the forces arrayed against them. However, ultimately I believe they will frustrate our efforts and avoid clear resolution of this issue any time in the foreseeable future.

Notes of Dissent

We need to continue to search for ways to engage North Korea in serious negotiations, while maintaining a strong military posture in North East Asia as well. While we might conceivably make progress in getting North Korea to agree to conditions related to non-proliferation/non-export of weapons of mass destruction, I think we need to be prepared for an extended period without
clear resolution of the fundamental issue of North Korean possession of a nuclear weapons
capability.

Katharine H.S. Moon

Regarding Step One, I firmly agree that the United States and the four other parties to the
six-party process must be ready and willing to offer significant economic and humanitarian
assistance in recognition of and response to North Korea’s steps to relinquish its post-1994
stockpile of plutonium. However, I object to the price per/kilogram of plutonium scheme that
would match assistance funds for the plutonium surrendered for the following reasons:
1. It could be construed by North Korea as an opportunity to haggle, stretch out the bargaining
process, and engage in tit-for-tat tactics.
2. It would set an undesirable precedent for other states with active nuclear ambitions.
3. It would be subject to severe criticism within the U.S. public that North Korea’s violation of
the Agreed Framework is being rewarded systematically, and therefore would not be politically
viable.
4. It would conflate and confuse payment for illicit goods with economic assistance that meets
real human needs, such as those mentioned on page 15. For the same reasons, I object to the
explicit buyout suggestions.

Ambassador Donald P. Gregg and Joel S. Wit endorsed this statement.

Amb. Charles L. Pritchard

I join with Katharine Moon’s Note of Dissent in objecting to an explicit monetary buy out of
North Korea’s post-1994 stockpile of plutonium.

The Task Force on U.S.-Korea Policy Members

SELIG S. HARRISON, Chairman of the Task Force, is Director of the Asia Program at the Center for International Policy and a Senior Scholar of the Woodrow Wilson International Center for Scholars. He is author of Korean Endgame: A Strategy for Reunification and U.S. Disengagement and has visited North Korea eight times. He served as a Senior Associate of the Carnegie Endowment for International Peace for 22 years.

DAVID ALBRIGHT, President of the Institute for Science and International Security, is the author of Solving the North Korean Nuclear Puzzle. As a consultant to the International Atomic Energy Agency Action Team from 1992 to 1997, he served as the first non-governmental inspector of the Iraqi nuclear program.

EDWARD J. BAKER, Associate Director of the Harvard Yenching Institute, has been a member of the board of directors of Asia Watch since its founding in 1985 and a leading U.S. supporter of South Korean human rights organizations. He served with the Peace Corps in South Korea for five years and has visited North Korea.

TED GALEN CARPENTER is Vice President for Defense and Foreign Policy Studies of the Cato Institute. He is author of Peace and Freedom: A Foreign Policy for A Constitutional Republic; A Search for Enemies: America’s Alliances After the Cold War, and co-author with Doug Bandow of The U.S.-South Korean Alliance: Time for a Change.

ADMIRAL WILLIAM J. CROWE, JR. (USN, Ret.), former Chairman of the Joint Chiefs of Staff under President Ronald Reagan, has served as Commander, U.S. Pacific Command, Chairman of the Foreign Intelligence Advisory Board and Ambassador to the United Kingdom.

ELLSWORTH CULVER is Co-Founder and Senior Vice President of Mercy Corps International, one of the most active U.S.-based humanitarian aid organizations operating in North Korea and in adjacent border areas of China. He has made 17 trips to North Korea and chaired the U.S. Private Voluntary Organizations Consortium that monitored over 305,000 tons of U.S. government food aid to North Korea.

BRUCE CUMINGS is the Norma and Edna Freehling Professor of History and Director of the Korea Program, Center for East Asian Studies, University of Chicago. He is author of The Origins of the Korean War (2 vols.), Korea’s Place in the Sun: A Modern History and Parallax Visions: Making Sense of American-East Asian Relations.

CARTER J. ECKERT is Professor of Korean History and Director of the Korea Institute at Harvard University. He is the author of Korea Old and New: A History, and Offspring of Empire: The Colonial Origins of Korean Capitalism, which won the John K. Fairbank Prize in East Asian History of the American Historical Association. He is former Chairman of the Committee on Korean Studies of the Association for Asian Studies.

COL. JOHN ENDICOTT (USAF Ret.) is the Director of the Center for International Strategy, Technology and Policy at the Sam Nunn School, Georgia Institute of Technology. He formerly served as Director of the Institute for National Strategic Studies at the National Defense University and as Director of Target Planning for the Fifth Air Force. He is the author of Japan’s Nuclear Option.

AMBASSADOR JAMES E. GOODBY served in a variety of senior arms control positions during 37 years in the Foreign Service, including Vice Chairman of the U.S. delegation to the Strategic Arms Reduction Talks (START). As Chief U.S. Negotiator for the Safe and Secure Dismantlement of Nuclear Weapons, he negotiated 30 agreements with former Soviet republics. He is the author of several studies of conventional arms control issues in Korea.

BRIGADIER GENERAL JAMES F. GRANT (USAF, Ret.), Executive Vice-President of Zel
Technologies, served as Assistant Chief of Staff for Intelligence (J-2), U.S. Forces, South Korea, Deputy Chief of Staff for Intelligence (C-2) of the US-ROK Combined Forces Command and Assistant Chief of Staff for Intelligence, Pacific Air Forces.

AMBASSADOR DONALD P. GREGG, President of the Korea Society, served as Ambassador to the
Republic of Korea from 1989 to 1993. He served in the Central Intelligence Agency from 1951 to 1982 and subsequently in the White House as National Security Adviser to George H.W. Bush during his tenure as Vice-President.

PETER HAYES, Executive Director of the Nautilus Institute for Security and Sustainable
Development, is a consultant to the U.N. Environment Program and the Asian Development Bank. He has visited North Korea six times in connection with environmental and energy assistance projects. He is the author of Pacific Powderkeg: American Nuclear Dilemmas in Korea.

AMBASSADOR JAMES T. LANEY served as Ambassador to the Republic of Korea from 1993 to
1997. He was President of Emory University for 16 years and currently serves as Co-Chairman on the Council on Foreign Relations Task Force of Korea.

KATHARINE H.S. MOON is the Jane Bishop Professor of Political Science and Chairperson of the
Political Science Department at Wellesley College. She is a non-resident Fellow at the Sigur Center for East Asian Studies, George Washington University, and is the author of Sex Among Allies: Military Prostitution in U.S.-Korea Relations.

DON OBERDORFER, Journalist-in-Residence at the School of Advanced International Studies, Johns
Hopkins University, is the author of The Two Koreas: A Contemporary History. A former Diplomatic Correspondent and Northeast Asia Bureau Chief of The Washington Post, he has visited North Korea three times.

HAN S. PARK, is University Professor of International Affairs and director of the Center for Global Issues at University of Georgia. He has visited North Korea 40 times and has organized numerous high level “track two” exchanges, bringing together North Korean officials with retired U.S. officials and members of Congress.

CLYDE V. PRESTOWITZ JR. is President of the Economic Strategy Institute and former Counselor to the Secretary of Commerce. He is the author of Trading Places: How We Allowed Japan to Take the Lead and Rogue Nation (Basic Books, May, 2003).

AMBASSADOR CHARLES L. PRITCHARD, a Visiting Fellow at the Brookings Institution, has
served as U.S. Ambassador and Special Envoy for Negotiations with North Korea and as Senior
Director for Asian Affairs in the National Security Council. He is the author of The North Korean
Nuclear Crisis and Beyond.

C. KENNETH QUINONES, author of Understanding North Korea, served for 18 years in a variety of U.S. Foreign Service assignments relating to Northeast Asia, including Desk Officer for North Korea in the State Department. He lived and worked at the Yongbyon Nuclear Research Center in North Korea for eight months between 1995 and 1998 as a member of the U.S. Nuclear Spent Fuel Team that monitored the 1994 nuclear freeze with North Korea.

LEON V. SIGAL is Director of the Northeast Asia Cooperative Security Project of the Social Science Research Council. His book, Disarming Strangers: Nuclear Diplomacy With North Korea, won the 1998 book award of the American Academy of Diplomacy. He served on the editorial board of The New York Times and was a professor of government at Wesleyan University.

JOHN D. STEINBRUNER is Professor of Public Policy and Director of the Center for International and Security Studies at the University of Maryland. He is Chairman of the Board of the Arms Control Association and served as Director of Foreign Policy Studies at the Brookings Institution for 18 years. He is the author of Principles of Global Security and co-author with William J. Perry and Ashton B. Carter of A New Concept of Cooperative Security.

DAVID I. STEINBERG is a Distinguished Professor and Director of Asian Studies at the School of Foreign Service, Georgetown University. He served as Representative of the Asia Foundation in South Korea from 1963 to 1968 and 1994 to 1997. his 12 books include Stone Mirror: Reflections on Contemporary Korea; The Republic of Korea: Economic Transformation and Social Change and Korean Attitudes Toward the United States: Changing Dynamics.

JOEL S. WIT, a Senior Fellow at the Center for Strategic and International Studies, is co-author with Robert L. Gallucci and Daniel Poneman of Going Critical: The First North Korean Nuclear Crisis. During 15 years in the State Department he served in a variety of arms control and non-proliferation assignments, including Senior Advisor to Ambassador Gallucci during negotiations on the 1994 Agreed Framework and subsequently as Coordinator for implementation of the agreement.

DAVID WOLFF, a Senior Scholar of the Cold War International History Project of the Woodrow Wilson International Center for Scholars, has specialized in Russian relations with Northeast Asia. A former Assistant Professor of Sociology at Princeton, he is the author of To the Harbin Station: The Liberal Alternative in Russian Manchuria, 1898-1914 and co-editor with Stephen Kotkin of Rediscovering Russia in Asia.

MEREDITH WOO-CUMINGS is Professor of Political Science at the University of Michigan. Her works include Race to the Swift: The State and Finance in Korean Development and The Developmental State. She is a consultant to the Asian Development Bank Institute and served on the White House Commission on U.S.-Asia Pacific Trade.

Siegfried Hecker, former Director of the Los Alamos National Laboratory, participated in the Task Force discussions as a consultant

Notes
1. Turning Point in Korea: New Dangers and New Opportunities for the United States, published by the Center for International Policy and the Center for East Asian Studies, University of Chicago, 35 pp.
2. Siegfried S. Hecker, testimony before the Senate Foreign Relations Committee, January 21, 2004
3. For the most authoritative publicly available discussions of the intelligence findings related to North Korea’s suspected weapons-grade uranium enrichment facility, see North Korea’s Weapons Programmes: A Net Assessment, International Institute for Strategic Studies, London, January, 2004, and Jonathan Pollack, “The United States, North Korea and the End of the Agreed Framework,” Naval War College Review, Summer, 2003
4. “Dealing with North Korea’s Nuclear Programs,” Statement by James A. Kelly, Assistant Secretary of State for East Asian and Pacific Affairs, Senate Foreign Relations Committee, July 15, 2004
5. The Financial Times, May 4, 2004, pp. 1 and 3.
6. South Korea signed the Additional Protocol on June 21, 1999.
The major provisions of the Protocol were summarized by the U.S. State Department as follows:

“The Model Additional Protocol requires states to declare to the IAEA a number of nuclear and nuclear-related materials, and activities that, while they could be part of a peaceful nuclear program, would be required for a covert nuclear weapons program.

Specifically, the Protocol requires states to report exports of nuclear-related items controlled by the Nuclear Suppliers Group, confirm imports of such items, and report domestic manufacturing of key items. It also requires states to report exports, imports, and stockpiles of raw uranium and thorium that could be used as feed material for a covert nuclear program, and also report information related to uranium mines, uranium and thorium concentration camps, uses of buildings on the sites of safeguarded nuclear facilities, construction of new nuclear facilities, and certain nuclear-related research and development work not involving nuclear material…”

(U.S.-IAEA Additional Protocol, Susan F. Burk, Assistant Secretary for Nonproliferation, Acting, Testimony Before the Senate Foreign Relations Committee, Washington D.C., January 29, 2004)