Korea Nuclear Issues Key to Economy of Northeast Asia

The health of Northeast Asia’s economy depends on a satisfactory resolution to the Korean peninsula’s nuclear issues, according to John Endicott, director of the Center for International Strategy, Technology and Policy at the Sam Nunn School of International Affairs at Georgia Institute of Technology

Addressing the Korea Southeast United States Chamber of Commerce last week at the World Trade Center Atlanta, Dr. Endicott said failing to reach a resolution with North Korea on its nuclear program “would drag down Northeast Asia in a way that we don’t need at this time.”

However, Dr. Endicott, who is also the chamber’s president, said, “I am hopeful this administration will take up a more positive stance” than it did during the most recent negotiations in Beijing in June. Those negotiations were the third round of six-party talks that included China, Japan, Russia and South Korea.

“The sooner we finish with this particular problem and [North Korea] is on an even keel with South Korea, the better it is for Northeast Asia,” he said.

According to Dr. Endicott, the United States’ position during June’s negotiations included “the kinds of demands that are show stoppers.” The U.S.’s unyielding stance led North Korea, as well as the U.S.’s negotiation partners, to question the Bush administration’s commitment to resolving the dispute, he said.

“China has threatened to cease being a negotiator unless the U.S. negotiates in earnest,” said Dr. Endicott. Japan and South Korea are also pressing the U.S. to take a more moderate stance, he said.

Quoting from U.S. State Department position papers regarding the contentious U.S. demands, Dr. Endicott explained, “Even after dismantlement, a ‘wholly transformed relationship with the United States’ would follow only if DPRK (North Korea) ‘changes its behavior on human rights,’ addresses the ‘issues underlying’ its inclusion on the terrorist list, eliminates chemical and biological weapons programs, ‘puts an end to the proliferation of missiles and missile-related technology and adopts a less provocative conventional force disposition.’ ”

Dr. Endicott said South Korea also introduced a six-step proposal to end the nuclear crisis, which essentially asks North Korea to live up to its 1991 nuclear agreement. The South Korean proposal also holds open the possibility of North Korea operating one light-water nuclear reactor, which is considered less capable of producing weapons-grade plutonium than North Korea’s current graphite reactors, said Dr. Endicott.

The economic impact of North Korea’s stalled nuclear program on the region is significant, he said. North Korea has already spent $88 million on site preparation for a nuclear energy plant in Kumho, North Korea, and awarded $2.3 billion in contracts to South Korean companies, he said. Japan has also spent $400 million on the project.

Also, with all action on North Korea’s nuclear program suspended, 7,500 nuclear technicians trained for the project are in the international job market, he said.

To prevent a risk to international security, “It would be wise to get them busy,” Dr. Endicott said.

An additional risk to Northeast Asia is posed by Japan’s rearming, he said, which is a “fundamentally different” posture from that which has been taken since 1945.

“An arms race is always devastating to economies,” Dr. Endicott said, perhaps not to the arms industry, but certainly to most other segments of the economy.

For more information, contact Dr. Endicott at (404) 894-9451 or john.endicott@inta.gatech.edu. For more information on the Korea SEUS Chamber, go to www.KoreaSEUSChamber.com.