UNIFICATION MINISTER PREVIEWS NORTH-SOUTH

C O N F I D E N T I A L SEOUL 000498

SIPDIS

SIPDIS

E.O. 12958: DECL: 02/20/2017
TAGS: PREL PGOV PARM KS KN
SUBJECT: UNIFICATION MINISTER PREVIEWS NORTH-SOUTH
MINISTERIAL

REF: A. SEOUL 359

B. SEOUL 457

Classified By: Amb. Alexander Vershbow. Reasons 1.4 (b/d)


1. (C) SUMMARY: In a one-on-one breakfast meeting on
February 20 with the Ambassador, Unification Minister Lee
Jae-joung stressed that the February 13 Beijing agreement on
"initial actions" was a good first step, but implementation
was now the key. He said that the ROKG at inter-Korean
ministerial talks February 27 - March 2 in Pyongyang would
urge the DPRK to make good on its obligations toward
denuclearization. He expected the North to request a
resumption in ROKG fertilizer, rice and light-industrial aid.
The ROKG probably would restart fertilizer assistance in
time for the spring planting season, but proceed more slowly
on food and other assistance pending further DPRK steps on
Six Party Talks and inter-Korean issues. Asked if he would
meet with Kim Jong-il or if an inter-Korean summit would be
on the agenda of the ministerial, Lee said he had no idea
about a meeting with Kim Jong-il, and that he did not intend
to raise the summit issue at this point. President Roh still
hoped to do a summit, however, but it would depend on the
North Koreans. He said the chance of a North-South summit in
2007 was a 50-50 proposition. END SUMMARY.


2. (C) During a February 20 breakfast meeting requested by
Unification Minister Lee Jae-joung, Lee told the Ambassador
that the ROKG saw the February 13 Beijing agreement on
"initial actions" as a solid first step but much work
remained to be done. The ROKG's long-term goal was Korean
denuclearization. In the meantime, Seoul wanted to
"normalize" North-South dialogue to get back to where it was
before the DPRK's provocative missile launches and nuclear
test last year. The South planned to achieve this in a
step-by-step manner, closely coordinating inter-Korean talks
and the Six Party Talks (6PT).

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NORTH-SOUTH MINISTERIAL FEBRUARY 27-MARCH 2
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3. (C) Lee explained that the focus of the 20th round of
inter-Korean ministerials, February 27 to March 2 in
Pyongyang, would be on restarting suspended inter-Korean
activities, and the South would seek to secure a DPRK
reaffirmation of the February 13 agreement. Lee expected the
DPRK to seek resumed fertilizer, rice and light-industrial
goods assistance. The ROK would press for inter-Korean
family reunions and cooperation on efforts to determine the
whereabouts of South Koreans missing since the end of the
Korean War (i.e. abductees and POWs),which was on the agenda
at the last round of the North-South ministerials in July
2006 in Busan. Lee said the ROKG would probably resume
fertilizer assistance in time for the planting season in late
March and early April, but proceed more slowly with food and
other assistance pending the North's fulfillment of initial
obligations under the February 13 agreement. Looking ahead,
Lee predicted that follow-on inter-Korean ministerials would
probably occur in late March and then again in May or June.
The ROKG, he said, would be unlikely to resume rice
assistance until inter-Korean economic talks, probably at the
level of the Economic Cooperation Promotion Committee (ECPC),
in April, but this would depend on North Korean
implementation of its commitments.


4. (C) Asked about potential USG concerns regarding resumed
inter-Korean dialogue, the Ambassador agreed on the
importance of the February 13 agreement, which he said was
just a first step. The USG and ROKG needed to coordinate to
maximize its leverage on the DPRK, not only for the first 60
days but also to get the DPRK to disable and declare its
nuclear programs and weapons in the next stage. These were
even more difficult tasks, representing the first real test
of whether the DPRK was serious about denuclearization. The
USG recognized the importance of North-South dialogue and
shared the ROKG's concern about the humanitarian situation in
North Korea. The USG was also exploring various options to
ensure that all sides met their February 13 commitments. It
would remain essential for the U.S. and ROK to coordinate
closely with one another. Washington would welcome Lee's
remarks about resuming aid in stages to keep the North's feet
to the fire and to calibrate promises of aid with the 6PT.

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ODDS FOR NORTH-SOUTH SUMMIT AT 50-50
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5. (C) Asked whether a possible North-South summit would be
on the agenda for the ministerial and if he expected to meet
with DPRK leader Kim Jong-il or Kim Yong-nam, president of
the Presidium of the DPRK Supreme People's Assembly, Lee said
that the South would not propose a summit at this time nor
did he know whether he would have a meeting with high-level
DPRK officials. Lee said a summit always depended on the
views of DPRK leaders, but also the South needed more
concrete progress toward a DPRK abandonment of its nuclear
programs, which would be the foundation of any Korean
Peninsula peace regime. The South also hoped to avoid
politicization of a potential inter-Korean summit. The
opposition Grand National Party had already made critical
comments about a possible summit. Lee reiterated that the
focus of this ministerial would be to resume suspended
activities and to normalize the North-South relationship
(COMMENT: Lee's reference to "normalization" implies getting
back to the relationship suspended since July 2006 vice
diplomatic normalization. END COMMENT).


6. (C) The Ambassador said that Washington did not have a
position on a possible North-South summit. Speaking
personally, he said that it would be good to proceed with
caution to see first whether the DPRK fulfilled its
obligations under the February 13 agreement. The Ambassador
noted that some South Korean media reports saw the
establishment of a peace regime as a deliverable for a
possible inter-Korean summit this year. In that regard, he
pointed out that the USG could begin discussions of a peace
regime with the DPRK, but, as called for in the September 19,
2005 Joint Statement, any conclusion of a peace regime could
only be in the context of DPRK denuclearization. As
President Bush had told President Roh, it would be difficult
to conceive of a peace regime with a nuclear-armed DPRK.


7. (C) Lee said that he understood the Ambassador's points
and emphasized that a summit would not be on the agenda for
the immediate ministerial meeting. Still, President Roh
remained interested in a summit, and there was a 50-50
possibility that there would be a summit in 2007. The key
was to implement the February 13 agreement. Furthermore, any
summit would need to give a clear impetus or define the
roadmap to denuclearization. A summit would also have to
contribute to regional security in Northeast Asia, something
Lee said was a particular point of emphasis for President
Roh.


8. (C) Lee noted that Seoul hoped that Washington could
welcome the resumption of inter-Korean dialogue. The
Ambassador said that he understood the point. To this end,
it might be helpful if Minister Lee would stress publicly
that ROKG aid would be restarted on a step-by-step basis and
in careful coordination with progress in the 6PT. Lee
responded that the ROKG would continue to coordinate closely
with the USG as the North-South process developed.

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KAESONG INDUSTRIAL COMPLEX
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9. (C) Lee remarked that should things go well in the 6PT
and inter-Korean dialogue, the ROKG would expect Hyundai
Asan, the South's leading investor in the Kaesong Industrial
Complex (KIC),to seek more investment from ROK businesses.
ROK companies, particularly small and medium enterprises,
were interested in the KIC as a low-wage place to relocate
production. As the project grows, the KIC could be a tool
for long-term economic change inside North Korea, he
insisted. Lee said he had no indication that the DPRK would
agree to relink inter-Korean railways at the talks in
February, but it was his understanding that the DPRK might
need improved railways to bring in workers to the KIC from
elsewhere in the DPRK. Still, progress at the 6PT was a
precondition for significant investment at the KIC. Lee
recalled that during his January 24 visit to the KIC, he told
Ju Dong-chan, Head of the Central Special Zone Development
Management Agency of North Korea, that the provision of ROKG
light-industrial assistance to the KIC needed to be
calibrated with progress at the 6PT (ref A).

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COMMENT
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10. (C) Lee's eagerness to meet with the Ambassador (Lee had
proposed meeting during the Lunar New Year holiday) clearly
represented part of a coordinated ROKG effort to send the
message that, despite speculation about a rush to resume
dialogue with the DPRK, Seoul would act in a prudent way and
in consultation with the USG. Lee delivered essentially the
same message as DNSA Yun Byung-se and ROKG 6PT representative
Ambassador Chun Yung-woo last week on the need for the DPRK
to implement the February 13 agreement (Septels-NOTAL). As
we noted in ref B, MOU officials on February 14 apologized
for not briefing the Embassy ahead of the announcement of the
resumption of working-level Korean talks at the KIC; in that
instance, DNSA Yun complained to MOU about the need for
improved consultations with the Embassy. END COMMENT.
VERSHBOW