North Korea May Offer Concessions on Nuclear Weapons After Medvedev Talks

Russian President Dmitry Medvedev proposed gas, electricity and railway projects during talks with North Korea that may lead to concessions on Kim Jong Il’s nuclear weapons program.

A return to six-party talks aimed at dismantling the communist nation’s nuclear weapons program may lead North Korea to declare a moratorium on the development of missiles and atomic bombs, Medvedev’s spokeswoman, Natalia Timakova, said after the two leaders met yesterday.

“I have a very positive impression of the meeting,” Medvedev told reporters following the talks at military base near Ulan-Ude in Siberia. “It was candid, substantive and covered a lot of different ground.”

Medvedev is seeking to boost Russia’s global image as a mediator and to help end a three-year hiatus in the six-party negotiations that include his nation, the U.S., China, Japan, South Korea and North Korea. Kim may need to offer more concessions to get the U.S. and South Korea back to the negotiating table.

Welcome but Insufficient

“If in fact they are willing to refrain from nuclear testing and missile launches, this would be welcome but it would be insufficient,” U.S. State Department spokeswoman Victoria Nuland told reporters in Washington. The U.S. won’t return to talks until North Koreans are ready to meet all of the conditions laid out, she said.

North Korea’s intentions on its nuclear program remain unclear, Shin Maeng Ho, a spokesman for the South Korean Foreign Ministry, said today. The government in Seoul views the potential pipeline proposed by Russia positively, he said.

The official Korean Central News Agency in Pyongyang said the six-party negotiations “should be resumed without any precondition” and didn’t mention the possible moratorium referred to by Medvedev’s spokeswoman.

North Korea may agree to the construction of a pipeline from Russia that would carry as much as 10 billion cubic meters of gas a year, Medvedev told reporters, adding that the countries will establish a joint commission to study the project.

The president ordered Alexei Miller, chief executive officer of Russian gas-export monopoly OAO Gazprom, to “closely” oversee the initiative.

Power Grid

Russia is in separate talks with companies from North Korea and South Korea to build a natural-gas pipeline to supply the fuel to both countries, Foreign Minister Sergei Lavrov said on Aug. 8. Russia may also build a power grid along the route.

South Korean President Lee Myung Bak today held talks with Kazakh President Nursultan Nazarbayev on issues that included the regional outlook at a meeting in the Central Asian state’s capital, Astana. The two sides discussed nuclear non- proliferation and the situation on the Korean peninsula, Nazarbayev told reporters at a joint briefing with his Korean counterpart, without giving details.

“Russia wants to come out with an initiative to resolve the Korean peninsula problem through massive economic cooperation with North and South Korea,” said Alexander Lukin, an Asia expert at the Moscow State Institute of International Relations. Total investment may exceed $100 billion, he said.

South Korean Foreign Minister Kim Sung Hwan said on Aug. 12 that North Korea would earn cash from transit revenue, while South Korea would get access to cheaper imports of gas.

Armored Train

Kim crossed into Russia in an armored train on Aug. 20 in his first trip since 2002, when he met then-President Vladimir Putin in Vladivostok. His train left Ulan-Ude for North Korea last night, RIA Novosti reported, citing an unidentified local Russian official.

“I’m having a really good trip thanks to the care and attention from your side, Mr. President,” Kim said at the meeting at a hotel, in comments translated from Korean into Russian. The North Korean leader, who is afraid of air travel, thanked Medvedev for flying to attend the talks in Siberia.

Russia has also proposed a railway project that would connect the Trans-Siberian Railway to South Korea via North Korea, opening up an “Iron Silk Road” that would cut shipping costs of South Korean companies to Europe.

Last week Russia said it would send as much as 50,000 metric tons of wheat to North Korea as aid, after recent flooding in the country, which has suffered famine in the past.

‘New Factor’

The gas pipeline project could provide “a new factor that may change the atmosphere” between the two Koreas, said Fyodor Lukyanov, an analyst at the Council on Foreign and Defense Policy in Moscow.

Even so, Russia should be realistic about its ability to wring concessions while advancing cooperation with North Korea, Lukin said.

“You can’t conclude any agreements with this regime,” he said. “They will restart their program even if somehow they announce today that they are ready to stop it.”

North Korea and South Korea on July 22 agreed to try to revive the six-party forum on North Korea’s nuclear-weapons program. Wu Dawei, China’s chief envoy to the forum, met with his South Korean counterpart Wi Sung Lac and exchanged views today, according to a statement posted on the website of China’s foreign affairs ministry.

The group last convened in December 2008. In April 2009, North Korea said it would restore its main reactor for making weapons-grade plutonium at Yongbyon, which had been disabled under a February 2007 accord.

The Kim-Medvedev meeting comes after North Korea threatened Aug. 18 to bolster its nuclear deterrent “both in quality and quantity” after the U.S. and South Korea began two weeks of military exercises. South and North Korea remain technically at war after their 1950-1953 conflict ended in a cease-fire.

To contact the reporters on this story: Ilya Arkhipov in Moscow at iarkhipov@bloomberg.net; Henry Meyer in Moscow at hmeyer4@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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