EAP PDAS STEPHENS' JUNE 1 MEETING WITH ASSISTANT

C O N F I D E N T I A L SEOUL 001836

SIPDIS

SIPDIS

NSC FOR CHA

E.O. 12958: DECL: AFTER KOREAN REUNIFICATION
TAGS: PREL MNUC MARR ECON KN KS
SUBJECT: EAP PDAS STEPHENS' JUNE 1 MEETING WITH ASSISTANT
MINISTER OF UNIFICATION PARK CHAN-BONG


Classified By: DCM Mark C. Minton. Reasons 1.4 (b, d).

SUMMARY
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1. (C) In a June 1 meeting with EAP PDAS Kathleen Stephens,
Assistant Minister of Unification Park Chan-bong stated that
the DPRK's latest display of uncooperative behavior in
inter-Korean dialogue led Seoul to question whether the DPRK
leadership was experiencing some new internal strife in its
policies toward inter-Korean relations. The ROK would demand
the resumption of the test-run of the inter-Korean railway at
the June 3-6 economic cooperation vice ministerial in Jeju.
Park and PDAS Stephens shared concern about the reports of
possible North Korean missile activity, with Stephens noting
that the DPRK's latest actions cast doubt on whether it truly
decided to denuclearize and appeared to be attempting to
divide the United States and the ROK. Park assured PDAS
Stephens that the ROK would not let that happen, and that
Seoul would continue to urge the DPRK to cooperate on the
nuclear issue in all inter-Korean dialogue. END SUMMARY.


2. (U) On June 1, EAP PDAS Kathleen Stephens met with
Assistant Minister Park Chan-bong, Ministry of Unification
(MOU),to discuss the ROKG's assessment of the DPRK's recent
behavior and inter-Korean dialogue. Park was accompanied by
Kim Jung-ro, MOU Director of International Cooperation.

PARK: EMPLOYING 100,000 KIC WORKERS BY 2007 "TOO AMBITIOUS"
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3. (C) Park updated PDAS Stephens on the current status of
the Kaesong Industrial Complex (KIC),explaining that 96
foreign ambassadors to the ROK would visit the KIC on June
12, accompanied by officials from MOU, the Ministry of
Foreign Affairs and Trade (MOFAT),the National Intelligence
Service (NIS),and other ROKG agencies involved in national
security and economic affairs. In total, approximately 130
people would participate in the visit to the KIC. The ROK
planned to employ up to 100,000 North Korean workers at the
KIC by next year. Park noted, however, that he personally
thought this was too ambitious since the DPRK might be
resistant to exposing such a large number of North Koreans to
South Korea's vastly superior pay and working conditions. He
also anticipated that, even with North Korea's approval, such
an increase in the number of North Korean workers would
inevitably result in increased labor conflicts.

DPRK'S UNCOOPERATIVE STANCE A SIGN OF NEW INTERNAL STRIFE?
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4, (C) Park said the DPRK's latest display of uncooperative
behavior in recent inter-Korean dialogue confounded the ROKG.
It had canceled the May 25 test-run of the inter-Korean
railway with only a day's notice, arguing that: (1) the ROK
did not foster an environment for inter-Korean peace, as
evinced by the burning of the DPRK flag by South Koreans and
the ROK's refusal to redraw the Northern Limit Line (NLL) in
the West Sea; (2) the ROK was using inter-Korean cooperation
and the late-June visit of former President Kim Dae-jung to
the DPRK for its own political gains; and (3) the ROK had set
up only a handful of "symbolic" factories at the KIC and was
not being sincere enough in its approach to developing the
KIC and inter-Korean economic cooperation in general. This,
combined with Pyongyang's rejection of the ROK's proposal for
a second inter-Korean defense ministerial during the May
17-19 inter-Korean general officer-level military talks, made
ROK officials wonder whether the DPRK had some new internal
conflict with respect to North-South engagement.

ROK TO URGE RESUMPTION OF RAILWAY TEST-RUN IN JEJU TALKS
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5. (C) Park stated that he could not determine whether
Pyongyang's new attitude was the result of the reported
division between its military hardliners and its bureaucrats
who favored economic reform, or whether Kim Jong-il himself
was orchestrating the apparent change in the DPRK's posture
vis-a-vis the ROK for political reasons. He opined that the
DPRK likely felt "cornered" by South Korean and international
media reports of Pyongyang's intransigence on the railroad

issue. Acknowledging that North Korea had taken a large step
backward in its engagement with Seoul and the international
community, Park underscored that the ROK would urge the DPRK
to resume the test-run of the inter-Korean railway at the
June 3-6 vice ministerial-level economic cooperation talks in
Jeju. He noted, however, that it was difficult to predict
whether the DPRK would be cooperative in light of the clear
differences between the two sides in their respective agenda
items for the talks.

DPRK EAGER FOR DEAL IN JEJU, ROK TO DEMAND TEST RUN
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6. (C) In response to PDAS Stephens' question on the ROK's
assessment of the economic and agricultural conditions in
North Korea, Park said he did not have updated information.
He pointed out, however, that the DPRK's dismal economic
conditions made it dependent on South Korean assistance even
during the best crop years. He noted that Pyongyang was
eager to conclude a deal at the economic cooperation vice
ministerial that would grant the ROK exclusive development
rights for North Korean mineral mines in exchange for ROK
provision of raw materials for garments, shoes and soap. As
such, the ROK would take advantage of the DPRK's needs and
leverage the deal on resuming the test-run for the
inter-Korean railway. Park stated there remained sufficient
time to conduct the test-run, as former President Kim
Dae-jung's visit was scheduled for June 27-30. Because Kim
had to travel with extensive medical equipment due to his
health conditions, the best way to travel was by rail.
Noting that ROK negotiators were working to arrange Kim's
travel overland with their DPRK counterparts, Park said
travel by car was a possibility. Such a trip would not,
however, be easy for Kim given his physical condition.

PDAS STEPHENS: WASHINGTON WOULD TAKE MISSILE TEST SERIOUSLY
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7. (C) PDAS Stephens affirmed U.S. concerns about reports of
North Korean activity portending a missile test. A missile
test by North Korea would be at odds with the Six Parties'
stated goals in the September 19 Joint Statement of
Principles. Underscoring that the United States was eager to
resume the Six Party Talks and implement the Joint Statement,
PDAS Stephens stressed that the DPRK's reluctance to return
to negotiations raised doubts about whether it had truly made
the strategic decision to denuclearize. Moreover, the DPRK's
behavior since the last round of the Six Party Talks seemed
aimed at dividing the United States and the ROK.

SEOUL WOULD NOT LET DPRK DIVIDE U.S. AND ROK
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8. (C) Park assured PDAS Stephens that Seoul would not allow
the DPRK to drive a wedge between the United States and South
Korea. The ROK was fully cognizant of Washington's concerns
and, as such, worked hard to inform the Embassy before and
after each session of North-South dialogue. The missile
issue was a concern for the ROK as well, especially its
potential impact on inter-Korean dialogue. Conducting a
missile test would, however, make it difficult for the DPRK
to conclude a favorable deal at the economic cooperation vice
ministerial. The ROK would maintain its position that the
DPRK must cooperate with South Korea and the international
community on the nuclear issue. Park, underscoring that the
ROK had strongly urged the DPRK to return to the Six Party
Talks during the April 21-24 inter-Korean ministerial, stated
that the ROK would continue to link inter-Korean economic
cooperation to progress in the DPRK nuclear issue.
VERSHBOW