Q+A: What is next for North Korea nuclear diplomacy?

SEOUL Fri May 7, 2010 6:52am EDT

SEOUL (Reuters) - North Korean leader Kim Jong-il gave assurances during a visit to China this week he wants to restart nuclear disarmament talks and remove nuclear weapons from the Korean peninsula, Xinhua news agency reported on Friday.

The following are questions and answers about what may come next for the six-way nuclear talks following Kim's trip.

WHEN WILL THE NUCLEAR TALKS RESUME?

The talks among the two Koreas, China, Japan, Russia and the United States will be on hold until Seoul finishes its investigation on whether the North sank one of its warships in March, killing 46 of its sailors. If the North is to blame, as is widely suspected in Seoul, the disarmament-for-aid talks will likely stay on hold.

South Korea, already angered by Kim receiving royal treatment in Beijing so soon after what may be one of the deadliest strikes since the end of the 1950-53 Korean War, will be even more irritated by any money flowing into the North.

But China, which hosts the talks, may still announce a date for the talks to resume, arguing the ship incident is a bilateral matter that should be settled away from the nuclear discussions.

IS THERE ANY CHANCE FOR PROGRESS?

North Korea, beholden to China for the money and goods that keep its staggering economy standing, may try to please Beijing by offering to reduce the security threat it poses to the North Asia, which makes up about one-sixth of the global economy.

North Korea is feeling the pinch from U.N. sanctions imposed after a nuclear test a year ago, a bungled currency move last year that sparked rare social unrest and funding an ambitious plans to reshape the economy by 2012. This makes it more likely Kim will back down from his military grandstanding.

WHAT ARE THE ACTUAL PROSPECTS?

Dim.

The United States and South Korea expect the North to at least resume where it left off in the nuclear deal by taking apart its plutonium-producing Yongbyon nuclear arms plant and allowing international inspectors back. They may block rewards promised to Pyongyang in the deal until they see progress, which would frustrate Kim and cause another breakdown.

Most analysts do not expect Kim to ever give up nuclear arms, seen in Pyongyang as worth the immense cost because they have deterred a feared U.S. invasion and are the most powerful symbol of Kim's military-first rule.

WHAT HAPPENS WHEN THE TALKS BREAK DOWN?

The three countries which favor putting pressure on North Korea -- the United States, Japan and South Korea -- can still keep the upper hand on Pyongyang by pushing for enforcement of existing U.N. sanctions while their own unilateral measures have added more trouble for the North's already wobbly economy.

But the North will try to force their hand through military escalation. It may resort to more firefights with the South, test fire ballistic missiles or conduct its third nuclear test.

WHAT ARE THE RISKS TO INVESTORS?

The North's escalation increases the chances of a widening conflict in Asia that could cripple the export-dependent economies in the region, including Japan.

South Korea, worried about the prospects for its rapidly recovering economy, has tried to calm investors by strongly suggesting its will not launch a revenge strike.

The North also wants to prevent a war, which military experts said it would quickly lose to superior U.S. and South Korean forces and bring an end to the Kim family dynasty that has ruled the country for more than 60 years.

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