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The final curtain has not yet fallen on the East-West conflict in the Korean peninsula. The heavily armed forces of North and South Korea are still at a stand-off, with almost two million soldiers, supported by 37,000 US troops on the South Korean side. Since the end of the Korean War in 1953, which led to the partition of Korea, both countries find themselves technically still at war. So far, there has merely been a cease-fire in force. While South Korea has since developed into a stable democracy and one of the most economically advanced nations in Asia, the Stalinist rule in the DPRK (Democratic People’s Republic of Korea) is threatening to disintegrate. The economic situation there deteriorated drastically during the 1990s due to economic mismanagement and a number of natural disasters. Despite this worsening economic plight, North Korea possesses the world’s fifth largest army, with almost 1.2 million soldiers, and spends 25-33 % of its GNP on military defence (South Korea spends approx. 3 %). This fuels the fear that the Communist regime in the DPRK could very soon collapse. Given the degree to which both sides are heavily armed and the conflicting structures of their social systems, the danger inherent in this is that such a process of transformation could provoke military conflict. In response to this, South Korean President Kim Daejung launched his Sunshine Policy in 1998 inspired by the European policy of détente. For one thing he is seeking to support the forces for economic reform in Pyongyang with economic aid and reduce the cost of reunifying Korea. For another he is trying to set in motion a process of military confidence building and arms control, so as to create a more stable framework in terms of security policy for the forthcoming transition period. It should make it easier to relieve military tensions and reinforce war prevention. This policy was consistently supported by the US government under President Clinton. In parallel to North Korean-American rapprochement in limiting long-range missiles, great progress was made in 2000 when North Korean leader Kim Jong-il and Kim Daejung met for the first time in Pyongyang, followed shortly afterwards by a meeting of both defence ministers in South Korea. The first family reunions since the war were arranged, economic and food aid was increased and plans were made to reopen a cross-border road and rail link. The beginning of bilateral military confidence building was also agreed on a general level. However, this process came to a standstill when US President Bush entered the White House. He was not willing to take over the results of negotiations to date under the Clinton government and ordered a thorough review of the North Korea policy. In spite of the new “comprehensive approach” announced in summer 2001 there is still no consensus in the American administration between the powers in the State Department, National Security Council and Democratic Party willing to engage in dialogue on the one side, and the conservative unilateralists in the Department of Defense, the White House, National Security Council, State Department’s Arms Control Agency and the Republican Party on II the other. The term “axis of evil” used by Bush in his State of the Union Address on 29 January 2002 to describe the three countries Iraq, Iran and North Korea once again illustrated this vividly. The hard-liners were more interested in a confrontation with North Korea, so as to justify their armament measures and in particular their missile defence programme, as well as unilaterally terminate the ABM Treaty, rather than in a dialogue. They have to date blocked any further progress in the South Korean policy of détente. Against this backdrop this report investigates two key issues. On the political level, clarification is needed of how the conservative unilateralists in the United States will allow themselves to become involved in a dialogue-based approach and whether Pyongyang will then be prepared to accept this approach to negotiation, or whether a prolonged period of confrontation is set to break out. On the level of arms control policy the report examines the tools with which the process of military confidence building can be initiated in spite of the existing military differences and the prevailing level of deep mistrust. On the political level, after US President Bush’s trip to Asia in mid February 2002, in which the American president invited North Korea to engage in dialogue at the highest level and asked China for its support, and especially after the visit of Kim Dae-jung’s personal foreign policy adviser to Pyongyang in April, the dialogue-based approach finally appears to be going ahead. At the end of April 2002 Pyongyang declared itself willing to reopen dialogue. Care is called for, however, as Bush at the same time expressed his continuing scepticism with regard to the North Korean leader Kim Jong-il and his criticism of North Korea’s system of rule during his visit to Asia. In so doing, the credibility of his offer of dialogue was cast into doubt for the time being. Nonetheless the new US government and the South Korean president have agreed on initial topics (nuclear weapons of mass destruction and missiles) for discussion with Pyongyang. Differences in opinion persist with regard to many details however. With the agreement over initial joint topics Kim Dae-jung had begun to involve American unilateralists in the dialogue-based approach, and had bought North Korea a way out of the “axis of evil”. The North Korean willingness to engage in dialogue forced the hard-liners and supporters of dialogue in Washington finally to come to an agreement about a joint but obviously still very contentious “flexible” strategy for dialogue. Kim Dae-jung remains in office only until February 2003, and Washington already appears to be waiting for this change in president. The conservative Grand National Party opposition leader, Lee Hoi-chang, currently has the greatest prospects, beside Roh Moohyun of the Millennium Democratic Party, of winning the presidential elections. He is much closer to the opinions in the Bush government than the present holder of this office, and it should be easier to reach an agreement over the details of a future offer of talks to North Korea with him. Significant progress seems unlikely until then. Since that may substantially increase the costs of cooperation for the DPRK, the North Korean government is attempting on the one hand to intensify its contacts with conservative forces in South Korea. On the other, it is trying at the same time to back the III election of the presidential candidate Roh Moo-hyun, who supports the continuation of the Sunshine Policy, by re-entering into the inter-Korean dialogue. It continues to remain open whether the political leadership there will for its part wait for the outcome of the next presidential elections in the USA at the end of 2004. Notwithstanding, the future of the North Korean moratorium on missile testing is to be decided in 2003, and closely linked to this the hesitations that have meanwhile crept in over the construction of two light-water reactors in North Korea are to be newly regulated at KEDO (Korean Peninsula Energy Development Organisation). The outcome of the mid-term elections to the US Congress due to take place at the end of this year as well as the continued action by the US government against Iraq and Iran will have a lasting effect on North Korean foreign policy. As far as the European Union is concerned during this transition period, the important thing is to continue to offer sustained support to the forces in the US government willing to engage in dialogue and the détente politicians in Seoul, to help the dialogue make a political break-through. The EU is helped in this by the fact that Japan, China, Russia and many other countries in North-east Asia are likewise backing the dialogue-based approach. The European Commission has already successfully encouraged Pyongyang to exercise restraint in the past and therefore strengthened the pragmatics in Washington and the position of the détente politicians in Seoul. Support for economic reformers in North Korea may furthermore improve the internal political requirements there for cooperation with western countries. At the same time Europe should lend its support in Pyongyang to the fact that within the framework of humanitarian dialogue Kim Jong-il is drawing closer to the South Korean détente politicians, especially on the issue of family reunions so important to domestic policy. It must however gently be made clear to the North Korean government that a return to the Clinton government’s policy is a pipe-dream. Pyongyang will pay a higher price for reopening the dialogue with Washington. This will be especially true if Bush is elected for a second term in office at the end of 2004. Brussels can make it easier to accept dialogue by offering additional economic incentives. Since China and Russia also harbour considerable interest in economic reforms in the DPRK, it would remain to be seen whether the EU cooperates better with these countries and comes to an arangement. The rail links through North Korea backed by Beijing and Moscow also suit European trade interests at the end of the day. Japan should likewise take part in this dialogue on economic policy. Germany, which maintains good relations with North and South Korea, is able to lend its permanent support to an improvement in relations since it opened diplomatic relations with Pyongyang in March last year. Both Koreas are not only pursuing economic interests but also aim to learn from the reunification of Germany, even if their motivation is different. Unlike Washington, Berlin has no power ambitions in Korea and can therefore much more credibly offer its services to both sides. The bilateral process of passing on information about military confidence building with North and South Korea that has been set in motion in the interim should definitely be continued. It offers the chance of a trilateral discussion process, or can at least offer it background support. Unlike large IV sections of the Bush administration, German foreign policy backs cooperation and not confrontation. Military confidence building and arms control measures will get another chance only once a stable and permanent dialogue has been reopened between the USA and North Korea. On the level of arms control a plea will be made first of all for confidence and security building measures (CSBMs), as these can be implemented independently of differences in social systems, military doctrines and military capacities, observing the principle of reciprocity. Transparency will constitute the main problem here for North Korea because of their system. To make it easier for the forces in the DPRK to accept transparency, reciprocal and voluntary measures will be approved initially for exchanging information, announcing manoeuvres, inviting observers to manoeuvres and setting up an operational hotline between both defence ministries. The USA should participate in this from the outset. For this reason Pyongyang will have to acknowledge the presence of American forces in South Korea in some way, otherwise they will not be able to be integrated into the CSBMs. The interest of the North Korean army in confidence building measures may grow, as the military superiority of the USA continues to increase.

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