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5th Round (Stage 1) Talks

Outline

Outline
Time and Place Nov. 9~Nov. 11, 2005 (Beijing, China)
Representatives
  • Song Min-soon Deputy Minister of Foreign Affairs and Trade
  • Kim Gye-gwan Vice-Minister of Foreign Affairs
  • Christopher Hill Assistant State Secretary for East Asian and Pacific Affairs
  • Wu Dawei Vice-Minister of Foreign Affairs
  • Sasae Genichiro Deputy Director-General of Asian and Oceanian Affairs
  • Alexander Alexeyev Deputy Minister of Foreign Affairs

Outcomes

The six parties adopted a chairman’s statement but did not set the date for the second session of the talks. The statement described how to discuss the implementation of the joint statement agreed at the fourth round of the talks in September:

Chairman’s Statement Text

The six parties reaffirmed the principles and goals of the joint statement and agreed on how to discuss its implementation. No specific date was set for the second session of the talks’ fifth round but they did agree to hold it “at the earliest possible date.” 1. The parties reaffirmed the principles and goals of the joint statement: To fully implement the joint statement in line with the principle of “'commitment for commitment, action for action”; To realize the verifiable denuclearization of the Korean Peninsula at an early date; To contribute to lasting peace and stability of the Korean Peninsula and Northeast Asia. 2. The parties also agreed: to implement the joint statement through confidence building; to commence and conclude the process in a timely and coordinated manner; to achieve balanced interests and mutually beneficial results through cooperation.

Development

The first session of the talks’ fifth round was on how to implement the joint statement. Before the session started, however, North Korea cast a dark cloud over the talks by raising its opposition to U.S. financial sanctions. Though worry rose that the first phase would prove fruitless, the meeting concluded with the chairman’s statement reconfirming each party’s position and opinion on how to implement the joint statement.

Proposals

  • China: Working Group Chief Chinese negotiator Wu Dawei said the main task was to outline details, ways and procedures for the implementation of the joint statement. He proposed that each of the negotiators draft a general plan for the statement’s implementation, the setup of working groups to finalize details and review of the results.
  • S. Korea: Groundwork Preparation Deputy Foreign Minister Song Min-soon presented a general plan for implementation of the joint statement and listed specific measures for each party to take to lay the groundwork. He refrained from giving a timeline or an order to avoid misunderstanding until the parties were ready to discuss details.
  • North Korea: 5-Step Roadmap North Korea’s chief delegate Kim Gye-kwan presented a five-step roadmap calling for the North to 1) halt all nuclear tests 2) bar the transfer of nuclear technology or materials to other nations 3) stop producing more nuclear weapons 4) suspend and later dismantle its nuclear program subject to verification 5) rejoin the Nuclear Non-Proliferation Treaty and maintain safeguards of the International Atomic Energy Agency.
  • Others The United States, Japan and Russia made no specific comments on the joint statement’s implementation. Japan’s chief negotiator, however, proposed a three-track format for bilateral negotiations on denuclearization, normalizing diplomatic relations and economic aid.

Main Issues

  • Building Trust Though analysts believed the fifth round of the six-way talks would focus on the light-water reactor project, the main points of contention were trust-building measures such as the U.S. demand for the shutdown of the North’s Yongbyon nuclear reactor and the North’s demand for the lifting of American financial sanctions.
  • Yongbyon Reactor In-depth discussions took place in bilateral consultations between the two Koreas, South Korea and the United States, and the United States and North Korea. Chief U.S. negotiator Christopher Hill urged the North to shut down its five- megawatt nuclear plant in Yongbyon, saying smoke still came out of the plant even after the joint statement was signed. He said that since the shutdown was a prerequisite for implementing the joint statement, Washington would withhold compensation. South Korea urged a compromise of North Korea deactivating the reactor and the United States providing compensation.
  • U.S. Sanctions on N. Korea North Korea said U.S. sanctions on its companies violated the principle of the joint statement. It demanded an explanation why the United States “falsely” accused North Korean firms of counterfeiting, money laundering and other illicit activities and urged prevention of a recurrence.

U.S. Financial Sanctions

Outline

The U.S. Treasury Department tracked several North Korean firms suspected of abetting the proliferation of weapons of mass destruction and froze their assets in the United States. The department also barred transactions between American financial institutions and Chinese banks in Macao over alleged counterfeiting and money laundering.

- On June 29, U.S. President George W. Bush imposed an executive order to freeze the assets of three North Korean firms found to have helped proliferate WMDs: Korea Ryongbong General and Korea Mining Development.
- On September 16, the U.S. Treasury Department named Banco Delta Asia as a "primary money laundering concern." Washington then banned American firms from conducting transactions with the Macau-based bank after U.S. authorities said it helped to circulate counterfeit currency and launder drug money.
- On October 21, Washington froze U.S.-based assets of eight more North Korean companies that were implicated in the proliferation of WMDs. The eight were Korea Kwangsong Trading, Hesong Trading, Korea Complex Equipment Import, Korea International Chemical Joint Venture, Korea Pugang Trading, Korea Ryongwang Trading, Korea Ryonha Machinery Joint Venture and Tosong Technology Trading.

Conflicting Points

△Whether North Korean firms printed and circulated counterfeit currencies
△Whether the North Korean government was involved in the illicit activities Pyongyang says U.S. sanctions violate the joint statement and has demanded an explanation from Washington and a pledge against a recurrence. Washington has balked at the demand, saying the sanctions have nothing to do with the six-party talks and are legal proceedings of the Treasury Department.

Implications

The two sides are apparently displaying a show of strength before discussing specific measures to implement the joint statement.
Experts said U.S. sanctions are meant to exert pressure on North Korea and reinforce the importance of trust-building measures before the second session of the fifth round of the six-way talks.
North Korea has its back to the wall because its primary source of foreign currency is blocked and must take higher ground in the talks on how to implement the joint statement.

Prospects and Tasks

  • Building trust between Washington and Pyongyang holds the key to success in the six-way talks. Above all, the two sides must resolve their dispute over the Yongbyon reactor and initial compensation for the North. A difficult task lies ahead, however, given the tremendous effect of the two sides’ relations when discussing how to implement the joint statement.
  • Timeline and Order In the first session, the parties gave proposals and listed necessary measures for each to take. Thus the second session will arrange the measures in a progressive and chronological order. The outcome of the talks will largely depend on if Washington takes a conservative or moderate position on human rights and the North’s illegal activities.
  • North Korea could hamper the six-party talks if it links U.S. sanctions with the meeting. The United States will maintain its hard-line stance on the North’s money laundering, weapons proliferation and counterfeiting. Thus mediation between the two sides will prove extremely difficult.
  • During the recess between the first and second sessions of the fifth round of the talks, the parties must hold bilateral consultations to narrow differences. Each must specify its position on implementing the joint statement and consult other parties. Most importantly, the United States and North Korea need to find a middle ground while South Korea must take on a mediating role.