Geopolitical Diary: South Korea Following its Own Path on the North

Stratfor Morning Intelligence Brief, 23 Apr 07

South Korea and North Korea issued a 10-point statement on Sunday

at the conclusion of the 13th meeting of the Inter-Korean Economic

Cooperation Promotion Committee. The statement lays out a series of

steps for the two Koreas, including a May test run of the

inter-Korean rail lines, the delivery of 400,000 tons of rice to

North Korea, a swap of raw materials for North Korean light

industry in return for mineral resources from the North, and a

series of follow-on meetings. Like the recent six-party agreement,

the inter-Korean economic statement lays out specific dates for

many of these items, rather than leaving the implementation

ambiguous or the subject of future meetings.

In specifying dates, there is an unwritten sequence to the

subsequent elements of the overall deal. The delivery of rice, for

example, is contingent upon the test of the inter-Korean railway.

In this manner, unlike more general agreements, verifiable steps

must be taken before any additional progress can be made. This

system of deal-making with North Korea has its advantages --

locking in the North Korean action prior to offering Pyongyang a

reward. But it also has its problems, as seen in the current delay

by North Korea in shutting down the Yongbyon nuclear reactor due to

a series of delays in the U.S. release of North Korean funds at

Banco Delta Asia in Macao. Of course, as seen in the past, it is

just as easy for either side to walk away from the deal completely.

If there is any commitment to fulfillment, however, setting dates

seems at least a slightly more effective way of locking North Korea

into the negotiated framework.

On April 27-28, the two sides will meet to finalize preparations

for the inter-Korean rail test, with the actual tests to take place

May 17. Previous agreements to test the rail lines failed when

North Korea backed out at the last minute, stirring speculation in

the South of trouble in Pyongyang, where elements of the military

consider the rail crossing a potential breach of security and

defensive secrecy. However, this seems somewhat unlikely, given

that roads paralleling the rail lines already are in operation, and

there is extensive aerial and satellite surveillance of North

Korean defensive lines. Rather, it is more likely Pyongyang is

simply not yet prepared to deal with a more active rail link

between the two Koreas, finding the slow movement of tourist buses

and supply trucks more manageable.

For South Korea, the rail test is perhaps the most significant

element of the whole agreement. Seoul has been eager to develop a

land-link to China, Russia and beyond, ending its current status as

a near island and perhaps gaining new trade routes not dependent

upon the sea -- and therefore not vulnerable to competitors using

the same routes. A test of the train would also provide a tangible

example of inter-Korean cooperation, justifying the government's

efforts since the inter-Korean summit of 2000 to economically link

the two Koreas.

Meanwhile, on May 2-4, the two sides will meet to make final

arrangements for a swap of raw materials. South Korea will supply

materials for North Korean light industry, including shoe, clothing

and soap manufacturing, and in return North Korea will grant Seoul

access to North Korean magnesite and zinc deposits in South

Korean-financed mining operations. The material trade would begin

"sometime in June." This, and further items are all more ambiguous,

listing only a month rather than a date, as the first step -- the

rail test -- must be completed before any of these other processes

begin.

In early May, the two sides will meet to discuss ways to control

flooding in the Imjin River (of key concern to South Korean

agriculture near the border). Later in May, they will discuss

telecommunications and other improvements in the Kaesong industrial

complex. In June, they kick off discussions of joint natural

resource development in third countries, perhaps regarding minerals

or even natural gas, though few details are available. (North

Korea's rumored resumption of diplomatic ties with Myanmar, severed

after a North Korean bomber blew up Burmese officials in 1983 while

trying to assassinate South Korean officials, might hint at

Pyongyang's interest not only in closer relations with the

Association of Southeast Asian Nations, but also getting a piece of

Myanmar's gas reserves).

Also in June, the two sides will discuss a raft of bilateral

cooperation issues, ranging from natural disaster prevention to

fisheries to business arbitration and inter-Korean immigration

committees. And in July the Inter-Korean Economic Cooperation

Promotion Committee meets for its 14th session.

The very clear dates on the rail issue, and the more ambiguous

dates for all the rest, emphasize Seoul's view that the

inter-Korean railway is paramount in its North Korean policy. The

rail lines are the economic links, not only between the Koreas, but

between Seoul and the rest of Eurasia. It is a critical part of

South Korea's long-term plan to develop as the economic and trade

hub of East Asia, the point where sea and air traffic and land

transportation meet. And after being snubbed at least twice before,

Seoul will not allow another delay.

Conspicuously absent from the deal is any mention of North Korea's

nuclear program, or of Pyongyang's delay in implementing the

February six-party agreement. The issue did come up in discussions,

and triggered one of North Korea's expected tantrums, with the

North's negotiators reportedly storming out of the room when the

nuclear issue was raised. Of course Pyongyang came back, and Seoul

justified the lack of mention in the final document by letting the

media know the issue was discussed and that the rice aid to the

North would be "difficult" to deliver if Pyongyang does not move on

its commitments in the six-party talks.

While Seoul paid lip service to the nuclear issue, it, like

Pyongyang, to some degree views these economic bilateral deals as

separate from the nuclear issue entirely. South Korea has its own

short- and long-term goals in its North Korea policy, and nothing

Seoul does will be able to denuclearize North Korea. Rather, Seoul

sees the responsibility for the nuclear issue falling in the laps

of the United States and China. After all, they are nuclear powers

themselves, and they are the signatories to the 1953 armistice, not

South Korea. Seoul wants to see progress on the nuclear issue, but

is unwilling to let its own North Korean policy of gradual economic

integration be held hostage by a nuclear issue it has little

control over. Seoul likes its seat at the six-party table, but it

also wants to move on its own bilateral path with Pyongyang.