DEALING WITH PYONGYANG

Restrained optimism on all sides surrounds another session of the six-nation talks on North Korea’s nuclear weapons program, which opened yesterday in Beijing. It began with the positive sign that North Korea had agreed in principle to take a first step toward dismantling its nuclear programs.

A dispute over the relatively trivial sum of $24 million has been standing in the way of implementing an agreement reached in 2005, under which North Korea would dismantle its entire nuclear weapons program in return for economic and security concessions. The U.S. Treasury Department promptly accused a small bank in Macau of helping North Korea launder illegal and counterfeit funds. It forced the bank to block $24 million in deposits. Pyongyang reacted furiously and has refused to go forward with the 2005 agreement.

Word has spread in recent days that the White House, seeking a foreign-policy achievement, ordered Treasury to settle the dispute and open the way for progress in the talks this week by the two Koreas, the United States, China, Russia and Japan. Treasury and North Korean officials would screen the Macau bank’s deposits, separate the legal from the illegal, and free up as much as $13 million of the blocked funds.

The officials met in Beijing last week, with no clear outcome. Daniel Glaser, the Treasury negotiator, said that after they had gone through 50 accounts, the United States had been “vindicated” in accusing Pyongyang of using the bank for illegal activities.

Even a $13 million concession may not be enough to satisfy the North Koreans. U.S. Treasury officials had advised banks throughout the world to avoid doing business with North Korea. Some U.S. officials boasted of success toward strangling the North Korean economy.

The U.S. side is expected to promise further negotiations on the Macau bank matter and set a deadline of 30 or 60 days. If that dispute seems to be moving toward resolution, the talks may proceed toward a preliminary freeze of Pyongyang’s nukes and the specifics of energy and food aid by the United States and others of the Six.

If all goes well, concessions by North Korea and the United States can eventually lead toward the goal set in 2005 – complete denuclearization of the Korean Peninsula, reciprocal respect for each others’ sovereignty and security, and normal diplomatic and economic relations.

Such serious negotiations to dispose of the crisis over Pyongyang’s nukes would mean a 180-degree turn by the Bush administration. A question soon to be answered is the extent to which the administration holds onto the idea that military threats and economic pressure can force economic and political collapse of communist North Korea.

Events this week in Beijing could prove decisive.