U.S. Secretary of State Hillary Clinton kept her promise and showed up at the first ASEAN Regional Forum (ARF) Ministerial Meeting to take place on her watch and, also as promised, signed ASEAN’s Treaty of Amity and Cooperation (TAC) on behalf of the United States. Unfortunately, North Korean “Dear Leader” Kim Jong-il also kept his promises: to ignore all UN Security Council resolutions, to shoot more missiles, and to never, ever (or at least not this past quarter) return to the Six-Party Talks. In response, Washington pledged to continue its full-court press on enforcing UN-imposed sanctions despite a few “good-will gestures” from Pyongyang. U.S. President Barack Obama also kept his promise to take significant steps toward global disarmament, chairing a UN Security Council session to underscore his commitment to this ideal. Meanwhile signs of the promised recovery of the global economy were in evidence this past quarter, with Asia leading the way.

Pyongyang reacts to UNSCR 1874

As documented last quarter, North Korea was quick to show its disdain for the “vile product of the U.S.-led offensive of international pressure aimed at undermining the DPRK’s ideology and its system chosen by its people by disarming the DPRK and suffocating its economy,” which others refer to more simply as UN Security Council Resolution (UNSCR) 1874. As the quarter began, Pyongyang demonstrated its rejection of the resolution by firing a number of short- and medium-range ballistic missiles into the Sea of Japan (East Sea) on America’s birthday, prompting yet another UNSC statement condemning the North’s provocative behavior.

Pyongyang’s threatened “countermeasures” to UNSCR 1874 included a pledge that “the whole amount of the newly extracted plutonium will be weaponized” and that “the process of uranium enrichment will be commenced.” It warned that any attempted blockade “will be regarded as an act of war and met with a decisive military response,” while stating that “It has become an absolutely impossible option for the DPRK to even think about giving up its nuclear weapons.”

To underscore these points, the DPRK’s permanent representative to the UN sent a letter to the UNSC president on Sept. 4 reminding that esteemed institution that “The DPRK totally rejects the UNSC Resolution 1874 which was unfairly orchestrated in June 13 in wanton violation of the DPRK’s sovereignty and dignity and that the DPRK will never be bound by this resolution.”

Had the UNSC “not made an issue of the DPRK’s peaceful satellite launch” (by issuing a “President’s Statement” condemning the April 5, 2009 launch and calling for strict enforcement of earlier UNSC resolutions prohibiting such ballistic missile activity), “it would not have compelled the DPRK to take strong counteraction such as its 2nd nuclear test.” Having thus established that the nuclear test was all the UNSC’s fault, the letter pointed out that the proper response would be for the UNSC to apologize for “violating the legitimate right of a member state of the UN,” rather than pursuing a sanctions resolution “which was framed up in the same way as the thief turning on the victim with a club over the DPRK’s self-defensive steps.”

Pyongyang’s letter to the UNSC president followed up on its earlier countermeasures threat by informing the UNSC that “reprocessing of spent fuel rods is at its final phase and extracted plutonium is being weaponized” and that “experimental uranium enrichment has successfully been conducted to enter into completion phase.” It is impossible to declare with any certainty just what Pyongyang has been doing at its nuclear facilities at Yongbyon (and elsewhere) or what kind or how advanced its uranium enrichment program is. The above DPRK references to uranium enrichment have been interpreted by many as an admission that Pyongyang has pursued a parallel highly enriched uranium (HEU) weapons program (in addition to the plutonium-based effort involving Yongbyon) – recall it was Pyongyang’s private “admission,” subsequently recanted and publicly denied, that it had an HEU program that caused the original 1994 Agreed Framework process to begin to crumble in October 2002 – although the statements are sufficiently vague that Pyongyang could offer some alternative interpretation if disarmament dialogue is ever resumed.

Has denuclearization been ruled out?

It is important to note that Pyongyang has been careful in its assertions not to completely rule out future prospects for denuclearization – after all, the “Great Leader” Kim Il-sung, Kim Jong-il’s father and the DPRK’s founder, had said denuclearization was the goal and his word is still gospel in North Korea. Instead, the North has tried to change the terms of reference by rejecting the venue and by talking not about Korean Peninsula disarmament – Pyongyang continues to accuse the U.S. of having nuclear weapons in the South – but about global disarmament. As its letter to the UN asserts, “We have never objected to the denuclearization of the Korean Peninsula and of the world itself. What we objected to is the structure of the six way talks which had been used to violate outrageously the DPRK’s sovereignty and its right to peaceful development.”

Through both public statements and private discussions with North Korean interlocutors it is becoming increasingly clear that what Pyongyang seems to be saying is that it is prepared to enter into global nuclear disarmament talks on an equal footing with the U.S., Russia, China, and the other recognized nuclear weapons states but will no longer discuss denuclearization only in a North Korean or Korean Peninsula context. The chance of this happening is (and should be) significantly less than zero, making any resumption of serious negotiations unlikely at this point, despite what others see as “goodwill gestures” or signals of an openness to a resumption of talks, perhaps even in the six-party format, emanating from Pyongyang.

Pyongyang’s “charm offensive”

The goodwill gestures included the highly publicized release of two American journalists, Laura Ling and Euna Lee, who had been convicted of illegally entering the North along the Yalu River while investigating a story for Current TV on North Korean refugees. The North’s “reward” for this magnanimous gesture – the two women had been sentenced to 12 years of hard labor for illegal entry and “hostile acts” before they were pardoned by Kim Jong-il – was a visit to Pyongyang by former U.S. President Bill Clinton who did (according to Pyongyang) or did not (according to Washington) apologize on behalf of the U.S. for the young ladies’ transgressions. The Obama administration was reportedly prepared to send former Vice President (and Current TV co-founder) Al Gore; it was Pyongyang that insisted upon Clinton.

While some have criticized the Clinton visit as “legitimizing” Kim Jong-il, it seems a small price to pay to remove two potential pawns from the larger equation and had some residual benefits as well. Clinton was able to give a personal assessment of Kim Jong-il’s health – he found the dear leader to be “unexpectedly spry” – and helped end speculation about the fate of two DPRK officials associated with nuclear negotiations, Six-Party Talks negotiator Kim Gye-gwan and First Vice Foreign Minister Kang Sok-ju, both of whom showed up for meetings with Clinton, dispelling rumors that they had fallen out of favor. While the State Department went through great pains to describe Clinton’s trip as a “private humanitarian mission” and insisted he carried no message from President Obama, one hopes the former U.S. president expressed his “private view” that the U.S. would never legitimize North Korea’s status as a nuclear weapon state or deal with Pyongyang on that premise.

The Clinton visit was followed by the visit of two New York-based North Korean diplomats to Sante Fe to meet with one of their favorite interlocutors, New Mexico Governor (and former UN Ambassador) Bill Richardson, who as a congressman traveled to Pyongyang in ther mid-1990s to negotiate the release of Americans held there. Richardson told CNN after the meeting that the North Koreans believed they were “owed” bilateral talks with Washington as a result of the reporters’ pardon: “They feel, the North Koreans, that by giving us the two American journalists, that they’ve made an important gesture, and now they’re saying the ball’s in our court.” The Obama administration firmly disagreed, saying the Six-Party Talks was still the proper venue for such a dialogue, while stressing that Richardson was not negotiating on the president’s behalf. A State Department spokesman noted, wisely, in our view, that it is “too early to say if the troubled relationship is beginning to thaw,” while stressing further that “the goal of U.S. policy continues to be the denuclearization of the Korean peninsula, and a return by Pyongyang to the Six-Party Talks.”

As documented more fully in the North-South Korea chapter, Pyongyang also made a number of “conciliatory gestures” toward Seoul. In August, Kim Jong-il met with Hyun Jung-eun, the chairwoman of Hyundai Group, the South Korean conglomerate that is the largest investor in the North, and agreed to restart several tourism ventures, which allow people from the South to visit the North. Pyongyang subsequently released a Kaesong Industrial Complex worker who had been detained (contrary to established protocols) for allegedly criticizing the dear leader and the North’s political system, and subsequently lifted restrictions on ROK cross-border traffic to Kaesong and settled a wage dispute there (accepting a 5 percent pay hike after demanding 400 percent). The North also agreed to allow reunions of Korean families divided since the 1950-53 war to resume.

Excuse us if we seem insufficiently grateful for these gestures but each served Pyongyang’s political and economic interest and reflected behavior that, if performed by any other state, would have been considered business as usual. One suspects that the on-again, off-again charm offensive will prove in the final analysis to be far less charming and much more offensive than depicted, given that Pyongyang’s basic going-in position – that it be treated as a nuclear weapons state and enter into bilateral negotiations on this basis – does not appear to have changed. As a result, the continued U.S. emphasis on the need for Pyongyang to honor its past agreements (for which it has already been rewarded) and return to the Six-Party Talks, and for the international community to fully observe UNSCR 1874 and earlier resolutions appears to be the right approach and one that its other Six-Party Talks partners have thus far supported.

The big question is: will the current consensus hold? As we went to press, Chinese Premier Wen Jiabao was visiting Pyongyang amid reports that the North was “willing to attend multilateral talks, including the six-party talks.” Of course, this was predicated on “progress” in bilateral negotiations – a KCNA account of the discussion noted that the North “expressed our readiness to hold multilateral talks, depending on the outcome of the DPRK-U.S. talks” [emphasis added] making it clear which was to come first – indicating that there was less change than meets the eye. Stay tuned!

The ARF: different venue, same debate!

The dispute between Pyongyang and the U.S. also played itself out this quarter along the sidelines and at the annual ASEAN Regional Forum (ARF) meeting in Thailand. Regrettably (and uncharacteristically, given the Obama administration’s attempts to remain on the moral high road), Secretary of State Hillary Clinton fired the first shot, when she complained about North Korea’s “constant demand for attention” in an interview that aired on Good Morning America just before her ARF trip. Unfortunately, she embellished her observation by stating that “maybe it’s the mother in me or the experience that I’ve had with small children and unruly teenagers and people who are demanding attention – don’t give it to them, they don’t deserve it, they are acting out.” This was quickly shorted into “Clinton Accuses North Korea of Acting like ‘Unruly Children,’” and the game was on.

As Clinton was arriving in Phuket for the ARF meeting, North Korea returned the broadside, describing Mrs. Clinton as “vulgar and “by no means intelligent,” and noting that “sometimes she looks like a primary schoolgirl and sometimes a pensioner going shopping.” Needless to say, there was no exchange of pleasantries or direct U.S.-DPRK dialogue at the ARF meeting.

At her press conference immediately after the ARF session, Secretary Clinton noted (considerably more diplomatically) that “unfortunately, the North Korean delegation offered only an insistent refusal to recognize that North Korea has been on the wrong course. In their presentation today, they evinced no willingness to pursue the path of denuclearization. And that was troubling not only to the U.S., but to the region and the international community.” In this regard she was “gratified by how many countries from throughout the region spoke up and expressed directly to the North Korean delegation their concerns over the provocative behavior we have seen these past few months.”

In truth, the ARF Chairman’s Statement merely noted that “Ministers of several countries condemned the recent nuclear test and missile launches” and it was this (unspecified) grouping that “supported the early resumption of the Six-Party Talks.” It also noted that the DPRK “did not recognize and totally rejected the UNSC Resolution 1874 which has been adopted at the instigation of the United States.” To underscore this point, a spokesman for the DPRK Foreign Ministry issued an ARF follow-on statement asserting that “Any attempt to side with those who claim the resumption of the Six-Party Talks without grasping the essence of the matter will not help ease tension; on the contrary, it may lay a fifth wheel to the resolution of the problem.”

ARF Vision Statement announced

Other than this sideshow, it was pretty much business as usual at the ARF, with the Chairman’s Statement including its usual calls for peace and stability in the Middle East and Afghanistan, its support for nuclear disarmament and counter-proliferation efforts, support for combating terrorism/extremism  – the bombings in Jakarta and Mumbai were specifically condemned – cooperation in combating poverty and disease in general and the H1N1 virus in particular, and “the continued exercise of self-restraint” by all South China Sea territorial claimants.

They welcomed the first-ever live field exercise in the ARF – the Voluntary Demonstration of Response on Disaster Relief in the Philippines on May 4-8, 2009 (discussed in last quarter’s overview) – which was seen as (and actually was) a major step forward in disaster relief cooperation. The ministers adopted an ARF Work Plan on Disaster Relief and recommended a follow-on exercise. Most welcomed was its call for the Myanmar/Burmese government “to make concrete and credible progress on the path of democratization.” In this connection, the ministers encouraged the junta “to hold free, fair and inclusive elections in 2010, thereby laying down a good foundation for future social and economic development.”

Responding to a recommendation made last year by the track-two Council for Security Cooperation in the Asia Pacific (CSCAP), the ARF ministers considered and adopted an ARF Vision Statement, charting a vision for the ARF by 2020 and its place in the region. They tasked senior officials to develop a plan of action to realize the goals and objectives set out in the ARF Vision Statement, for consideration at the 2010 ARF.

The Vision Statement did not appear to break much new ground, committing “to move the ARF at a pace comfortable to all Participants in its evolution from the stage of confidence-building measures to the development of preventive diplomacy, while bearing in mind the ultimate stage where we can elaborate approaches to conflict resolution.”  They did pledge to make the ARF “an action-oriented mechanism that develops concrete and effective responses to the common challenges confronting the Asia-Pacific region” but did not lay out how they planned to accomplish this goal. Hopefully this will be laid out in next year’s Action Plan.

Finally, the ministers welcomed the recent accession to the TAC by the U.S., which opens the door for Washington’s participation in the annual East Asia Summit (EAS), although there was no indication that Washington planned to take this next step any time soon. Nonetheless, Secretary Clinton’s signing of the TAC fulfilled a promise and demonstrated an increased commitment to improving ties with ASEAN, with the next step being the planned summit between President Obama and ASEAN leaders along the sidelines of the November 2009 Asia Pacific Economic Cooperation (APEC) Leaders Meeting.

Dissolving the nuclear shadow

Just before we went to print, President Barack Obama was awarded the Nobel Peace Prize for his “extraordinary efforts to strengthen international diplomacy and cooperation between peoples.” The Nobel committee “attached special importance to Obama’s vision of and work for a world without nuclear weapons.” While there will be ample (and vociferous) debate over whether the president deserved the prize, there is no mistaking his administration’s commitment to shifting the terms of the global debate on nuclear weapons.

A renewed commitment to a world free of nuclear weapons has been a pillar of this administration’s foreign policy. That was evident in Obama’s April 5 speech in Prague in which he pledged that his administration would take “concrete steps toward a world without nuclear weapons.” Among those steps is progress toward a follow-on to the Strategic Arms Reduction Treaty (START) with Russia. The original START I agreement, signed in July 1991 by U.S. President George H. W. Bush and Soviet President Mikhail Gorbachev, led to the largest bilateral reductions of nuclear weapons in history. It is set to expire in December 2009 and reaching a new agreement has been high on the Obama administration’s agenda. Moscow and Washington appear to be moving toward a deal; even if one can’t be concluded by the end of this year, an agreement will be reached by 2010.

That effort has been matched by progress at the Conference on Disarmament, which agreed on a work program, and at preparatory meetings for the 2010 Nuclear Nonproliferation Treaty (NPT) Review Conference. On Sept. 24, Obama chaired the United Nations Security Council, the first U.S. president to do so. The “nuclear summit” was the first UNSC heads of state meeting to address issues of nuclear disarmament and nonproliferation, and yielded UNSCR 1887, which calls for the elimination of nuclear weapons.

Unfortunately, movement in global negotiations has not been matched by similar progress in regional discussions.

North Korea. North Korea’s response to the Obama-led UN session and resolution was very much to our earlier point. Pyongyang called UNSCR 1887 a “double-standards document,” rejecting in particular its call for North Korea to return to the NPT and give up its nuclear ambitions: “The DPRK’ dismantlement of nuclear weapons is unthinkable even in a dream as long as there exist the sources that compelled it to have access to nukes [read: the U.S. nuclear arsenal]. “The DPRK Foreign Ministry official ended his commentary by noting that the DPRK would still “make efforts to denuclearize the peninsula” but only “in the context of the building of a world free from nuclear weapons”; to expect Pyongyang to honor its previous commitments and unilaterally give up its nuclear weapons was now “unimaginable.”

Iran. Dealing with Iran has been equally irksome. There was, until quarter’s end, no progress in those discussions. Western governments are increasingly frustrated with the lack of movement and they have been pushing for bigger sticks to deploy against Iran. Unfortunately, the governments in Moscow and Beijing strongly oppose the use of sanctions, for a variety of reasons, commercial (Russia has business deals it doesn’t want to upset, and China wants oil), philosophical (China almost invariably opposes the use of coercion in such negotiations), and diplomatic (both don’t mind Iran as a thorn in the U.S. side and want to exploit their leverage with Washington).

The biggest news this quarter was the announcement that Tehran was building facilities that had not been declared to the International Atomic Energy Agency (IAEA) as required by the terms of the Additional Protocol. (Tehran disputes that it is in violation of its obligations, insisting that it modified the terms of the agreement with the IAEA and therefore its failure to inform the agency of the facilities wasn’t a problem; the IAEA counters – and most observers agree – that no country can unilaterally modify the terms of its agreement.)  At the end of the quarter, there were signs of a breakthrough at multilateral talks that included for the first time the U.S. in a prominent role (maybe the Nobel Committee was on to something). Tehran agreed to let international inspectors see the suspect facilities and agreed “in principle” to allow its uranium to be sent to Russia for further processing. U.S. officials were cautious about characterizing the developments. It is a good sign, but they continue to demand concrete steps from Iran and significant progress.

Missile defense. Some see the Iranian negotiations as payoff for another U.S. move. In September, Obama announced that he was scrapping the Bush administration decision to deploy missile a defense system in Eastern Europe, which would consist of a sophisticated radar system in the Czech Republic and 10 ground-based interceptors in Poland. Instead, he would use smaller missiles, first on ships, and then later on land, to counter the Iranian missile threat.

The Bush administration decision infuriated Russia, which insisted the deployment threatened to neutralize its nuclear deterrent, a charge consistently denied by the U.S. (Moscow was probably most concerned by the prospect of the integration of the two countries more deeply into the U.S. defense system, which would undercut Russian influence over them.) Obama insisted that the new plans had nothing to do with Russian opposition. Rather, the new deployments were intended to counter a newly reassessed Iranian threat.  “This new approach will provide capabilities sooner, build on proven systems and offer greater defenses against the threat of missile attack than the 2007 European missile defense program.”

Most observers weren’t buying. The chief question now isn’t whether the Iranian “breakthrough” is proof that the cynics were right, but whether the gamble paid off. Time will tell. The missile defense decision also demonstrated the need for the U.S. to think globally about strategic issues. Russia isn’t the only big power worried about missile defense; Beijing is equally discomfited by the program. China may see the U.S. redeployment in Europe as proof that its own complaints might yield a similar shift in Asia. That would be a mistake. America’s Asian allies need to know that U.S. decisions will reflect both partners’ perspectives, and that their missile defense program is not a bargaining chip in some other relationship.

This anxiety reflects a broader range of concerns. Despite its longstanding commitment to disarmament, Tokyo fears that a U.S. commitment to reducing its nuclear stockpile might undermine Japan’s own security. Strategists worry about China’s growing nuclear weapons capability and the impact that deep reductions in the U.S. arsenal would have on its extended deterrent. They fear a drastic reduction in the U.S. nuclear arsenal (to 1,000 or fewer warheads) could tempt Beijing to start growing its nuclear arsenal in an attempt to achieve nuclear parity and the condition of “mutually assured destruction” enjoyed by the Soviet Union during the height of the Cold War. This could have a chilling effect on America’s extended deterrent capability, and cause Tokyo to question the reliability of the U.S. nuclear umbrella. It is imperative therefore that the U.S. move on such questions carefully, fully engaging allies, soliciting their views and hearing their concerns. To its credit, the administration appears to be doing that. Talks at the assistant secretary-level are taking place and the drafters of the Nuclear Posture Review, which is due at the end of the year, are aware of the need for allied input.

Amano at the IAEA

A key player as these situations unfold will be Amano Yukiya, who was selected in September to succeed Mohamed ElBaradai as director general of the International Atomic Energy Agency. It took two elections for Amano, a career diplomat, to claim the post. In March, he squared off against South African Abdul Minty, but neither won the support of two-thirds of the IAEA board, which is needed to claim the directorship. In a subsequent vote in July, Amano prevailed. During his four-year term, he will be deeply involved in the efforts to cap Iranian and North Korean nuclear programs, as well as update the global nonproliferation regime to better respond to new proliferation threats and challenges.

His predecessor ElBaradei had a stormy 12-year tenure at the IAEA, crossing swords with the U.S. and other governments on a host of issues. But the director general’s job is a tough one at the best of times: like the UN secretary general, his authority is strictly limited and his mandate tightly controlled by the members of the Board of Governors for whom he works. Making all the members happy is virtually impossible. Amano will require all of his substantial diplomatic skills in the years ahead.

Green shoots put down roots?

The “green shoots” of economic recovery that emerged last spring appear to be turning into saplings. This quarter, the International Monetary Fund (IMF) upgraded its forecast for the global economy, anticipating a 3.1 percent expansion next year, up from the 2.5 percent forecast in April. More immediately, the IMF estimates the global economy will shrink 1.1 percent this year. Troubling though that is, it is a slight improvement over the 1.4 percent decline expected in April. Asia is leading the way: The latest IMF World Economic Outlook, released in early October, projected Asian growth at 2.8 percent this year and 5.8 percent in 2010: the rest of the world lags considerably behind.

Those forecasts reinforced optimism among G20 officials who convened a couple of times last quarter – finance officials gathered in London and heads of state later caucused in Pittsburgh. Signs of recovery are shifting the terms of the G20 debate. There is growing focus on the need to sop up the trillions of dollars that were injected into national economies to compensate for evaporating demand. Now, there is concern that those funds could spark inflation; at a minimum, policymakers fret over deteriorating national account balances. But the priority remains ensuring that the recovery is solid and enduring.

Other issues figured on the G20 agenda: climate change, restarting the stalled round of global trade talks, controlling executive pay, and better regulation of financial institutions. Hanging over all the talks is the need for renovation of the architecture for international economic decisionmaking. It seems clear that the eclipse of the G8 is complete; this year’s summit was held in Italy in July and the most notable development was the decision of Chinese President Hu Jintao – an invited guest – to cancel at the last minute as a result of unrest in Xinjiang.

Accordingly, the September G20 summit spent a good deal of its time discussing institutional modernization. After concluding that their “forceful response helped stop the dangerous, sharp decline in global activity and stabilize financial markets,” the leaders claimed the G20 would become the “premier forum” for economic cooperation. This reflects recognition of the vital role played by developing economies in regulating and stabilizing the global economy and of Asia’s role in that process. Six Asian nations are in the G20; only Japan is a member of the G8. A key component of the modernization effort is changing voting rights in the IMF and other international financial institutions. China, in particular, wants more say. In Pittsburgh, the G20 committed to a shift of at least 5 percent in the IMF quota share to dynamic emerging market and developing countries.

Even more important to the long-term stabilization of the global economy is a rebalancing of global accounts. The postwar model, in which the West, and the U.S., provided markets of final demand for goods produced elsewhere – Asia, in particular – is dangerously unstable. A world in which some countries run huge and enduring deficits and others maintain equally large surpluses is unsustainable. Asia, and (once again) China, must stimulate domestic demand to ease the burden on the U.S. to keep the global economy humming. For its part, the U.S. has to improve its savings rate. The G20 recognized that basic fact and called for adjustment. The G20’s survival – at least as a credible forum for international leadership – depends on delivering.

Other elements of institutional rebalancing will be harder to accomplish than the reapportioning of voting shares. One of the most important enablers of the persistent U.S. imbalances is the dollar’s status as the international reserve currency. Increasing numbers of countries – do we have to say China again? – are pushing for new settlement options. Unfortunately for them, creation of a viable alternative requires intermediate steps that they are not willing to take – most significantly, increasing the convertibility and availability of those currencies. That means relinquishing national control, and governments like Beijing are uncomfortable with that idea. So, the dollar remains the currency of choice, and hopes of diminishing U.S. influence remain just that – hopes.