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Partially True Confessions: How Big is the North Korea Deal?

by Marcus Noland, Peterson Institute for International Economics

Op-ed in Newsweek
July 7, 2008

© Newsweek

North Korea's recent nuclear confession and the quick response from US President George W. Bush bring us closer to the denuclearization of the Korean Peninsula. But there are many more steps left. North Korea's disclosure was conspicuous for what it omitted: bombs. It laid out some details of Pyongyang's plutonium-based weapons program, but much of that information is not new. The Koreans admitted that they had moved spent fuel rods and reprocessed them into fissile material, which we knew—but we still don't know how much they have. North Korea has an unknown number of weapons, and the statement shed no light on those. Pyongyang did invite foreign news organizations to film the demolition of the Yongbyon reactor's cooling tower for a fee. But this was a publicity stunt.

The declaration also did not cover Pyongyang's alleged uranium-enrichment program and its various foreign weapons deals, including suspected assistance for Syria.

This might explain why President Bush's response was fast but also hesitant. He lifted restrictions on commerce with North Korea and told Congress he planned to remove Pyongyang from the list of terrorism sponsors. But the White House hedged by preserving some existing sanctions and saying the rewards would be reversed if Pyongyang's confession turns out to be inaccurate.

Lifting the trade restrictions will have a minimal impact. North Korea will remain one of a few countries that does not have normal trade relations with the United States, meaning its exports will continue to be subjected to punitive tariffs of up to 90 percent.

Removing North Korea from the terrorism list means that Washington can now legally support it for membership in international financial organizations such as the World Bank. But the White House is under no obligation to actually do so. North Korea also remains excluded from US government programs that encourage trade and investment.

North Korea's declaration will trigger a reconvening of the Six-Party Talks, which includes China, South Korea, Japan, and Russia. The inadequate nature of the declaration guarantees there will be yet another round of negotiations in which North Korea will reveal a bit more in return for further concessions. It is no accident that up to 50,000 metric tons of US food aid is expected to arrive in North Korea early this month.


Policy Brief 15-24: An Assessment of the Korea-China Free Trade Agreement December 2015

Book: Witness to Transformation: Refugee Insights into North Korea January 2011

Peterson Perspective: North Korea's Immunity to Outside Pressure: Part I December 12, 2012

Policy Brief 10-1: The Winter of Their Discontent: Pyongyang Attacks the Market January 2010

Working Paper 10-2: Economic Crime and Punishment in North Korea March 2010

Paper: FTAs and the Future of US-Korean Trade Relations November 2009

Paper: Implementing the KORUS FTA: Key Challenges and Policy Proposals February 2008

Policy Brief 08-6: North Korea on the Precipice of Famine May 2008

Policy Brief 07-7: The Korea-US Free Trade Agreement: A Summary Assessment August 2007

Policy Brief 06-4: Negotiating the Korea–United States Free Trade Agreement June 2006

Working Paper 07-7: North Korea’s External Economic Relations August 2007

Book: Avoiding the Apocalypse: The Future of the Two Koreas June 2000

Book: Free Trade Between Korea and the United States? April 2001

Working Paper 08-4: Migration Experiences of North Korean Refugees: Survey Evidence from China March 2008