America needs to negotiate with N Korea

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I was in Moscow when North Korea conducted its underground nuclear test, brazenly announcing to the world that it now had the bomb. The Russians I spoke to that day – high-level government officials and business leaders – were appalled, just as I was. “Sanctions”, however, was not the first word on their lips. “Negotiation” was. But not a continuation of the failed six-party talks, in which they have long been a participant. Yes, the Russians voted for trade sanctions at the United Nations Security Council, but in private they will tell you the best way to handle North Korea and Kim Jong-il, its isolated despot, is through direct bilateral talks with the US.

I agree. Two-way negotiations offer the best hope for bringing this prickly situation to a peaceful conclusion. Consider what Mr Kim has done: in the face of international condemnation, he chose to detonate his atomic device. His act was like that of a child crying out for attention – in this case, attention from the ultimate daddy state, the US. As Robert Gallucci, America’s former top negotiator with North Korea, recently said: “I think the North Koreans in their hearts still see the United States as nine feet tall.”

The Chinese, who were as surprised and irritated as anyone by Mr Kim’s nuclear adventure, will no doubt do their part to make sure bilateral talks bear fruit. They desperately want a nuclear-free Korean peninsula. The prospect of North Korea, South Korea and Japan locked in a deadly arms race is a nightmare scenario for Beijing and the rest of the world. So is the prospect of political instability across China’s 880-mile border with North Korea. The last thing Beijing needs to deal with is the gaping power vacuum that would follow the disintegration of Mr Kim’s government.

That is why, when the US, Japan, Britain, Australia and other key allies vowed to press ahead with trade ­sanctions, limiting Mr Kim’s access to ­everything from fine wines to finely tuned weapons systems, China demurred somewhat, saying it would not engage in stopping and searching North Korean cargo ships at sea. Maybe that annoys Washington, but for China, the implications of a destabilised North Korea are grim.

China is not interested in regime change in North Korea. Behaviour change is what Beijing wants. China already has its hands full trying to raise living standards for its 1.3bn ­citizens – some 150m of whom struggle with poverty every day. A political meltdown in North Korea, where an estimated 2.5m people starved to death in the 1990s, would most likely touch off a humanitarian crisis, with a flood of impoverished North Koreans pouring into China. (Imagine Washington countenancing a Security Council resolution that caused illegal immigration from Mexico to quadruple overnight.) No wonder China supplies more food aid to North Korea each year than any other nation.

Oil supplies, however, are another story. China, which accounts for most of North Korea’s oil – and outside trade and investment, for that matter – has reportedly threatened to shut off the petroleum spigot to North Korea. A very gutsy step, given the potentially destabilising consequences. And a very effective one. If anything is going to compel a change in Mr Kim’s behaviour, oil deprivation will. As a Korean war veteran, I can tell you it gets mighty cold over there in ­winter.

Clearly, the key to a negotiated solution to the North Korean crisis lies in applying China’s enormous leverage while simultaneously conducting an honest, hard-nosed dialogue directly between North Korea and the US. There are plenty of creative ways this can be done – such as quietly holding two-way discussions on the margin of the six-party talks in Beijing – but doing anything less will only prolong and deepen the crisis.

Negotiations, of course, do not mean concessions. But they do require the US to be more pragmatic and less sanctimonious. After all, it is easy for America to make tall demands of ­others when the problem is not in its own backyard. Listening is never a sign of weakness – as a matter of fact, a little humility can be a superpower’s most useful tool.

We can always turn the screws tighter on Mr Kim if talks stall. At that point, the world community, including China, will surely ­follow suit knowing that the diplomatic route has been exhausted. But it is not exhausted yet. To avoid a broader ­crisis, the time to act is now.

The writer, former chairman of the US-Korea Business Council and former chairman and chief executive officer of AIG, is chairman and CEO of CV Starr & Co, the global investment company

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