ROKG BIDING ITS TIME ON SOUTH-NORTH RELATIONS

C O N F I D E N T I A L SEOUL 001719

SIPDIS

E.O. 12958: DECL: 08/29/2018
TAGS: KS KN PGOV PREL
SUBJECT: ROKG BIDING ITS TIME ON SOUTH-NORTH RELATIONS

Classified By: POL M/C Joseph Yun. Reasons 1.4 (b/d).

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SUMMARY
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1. (C) -- Six months into the Lee Myung-bak Administration,
the ROKG appears increasingly resigned to having no dialogue
with North Korea this year, expecting the North to come to
the table sometime in 2009.

-- Minister of Unification (MOU) Kim Ha-joong, who helped
launch "Sunshine Policy," is determined that South-North
relations be reframed on the basis of reciprocity and has
gained President Lee Myung-bak's confidence, according to
Blue House and MOU officials.

-- South-North relations have soured because of the DPRK's
reaction to Lee's call for reciprocity and attention to
denuclearization; the spate of hostile rhetoric and ad
hominem attacks on Lee from the North that followed; the
impasse following the July 11 Mt. Kumgang shooting of a South
Korean tourist; and, more fundamentally, the North's
insistence that discussions be based on the June 15, 2000 and
October 4, 2007 summit agreements without regard for the
1991-1992 Basic and Denuclearization agreements.

END SUMMARY.

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MOU MINISTER PATIENT, FOCUSED ON RECIPROCITY
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2. (C) Minister of Unification Kim Ha-joong helped develop
and implement Sunshine Policy when he was National Security
Advisor (2000-2001) under then-President Kim Dae-jung. Kim
believed in the initial intent of the policy, which was to
begin transforming North Korea by reaching out, according to
Yu Joon-ha, Assistant Secretary to the President for
Unification Policy, but grew disenchanted when no changes in
the North resulted, while the South continued to "beg" for
more contact. Kim was now determined to change that
approach.


3. (C) Yu said that Kim remains patient about resuming
dialogue with the North, but at the same is totally focused
on his portfolio: he works seven days a week, and told Yu
that he prays two hours per day, including for the welfare of
the North Korean people. Asked whether Kim's religious views
meant that he saw North Korea's regime as too evil to
negotiate with, Yu said that, on the contrary, Kim is ready
to have pragmatic discussions with the North, and that Kim's
religious leanings line up with President Lee's. Yu said
that when Lee took office, the MOU was sidelined (after being
threatened with elimination) and MOFAT began playing a
dominant role in inter-Korean policy. But Kim had now gained
Lee's ear, gradually raising MOU's influence again.


4. (C) MOU and MOFAT officials echoed this description of a
patient ROKG inter-Korean policy. MOFAT's North Korea
Nuclear Policy Division Director Ham Sang-wook said on August
28 that there was "no rush" to reestablish contact with the
North generally, though Nuclear Negotiation Division Director
Kim Gunn said that Six-Party and energy discussions continue
through the reliable Beijing channel (DPRK Embassy).


5. (C) MOU Policy Planning Officer Kim Jong-ro also used the
term "no rush" in describing his Ministry's approach to North
Korea. He and colleagues said that MOU is now busy on the
policy analysis side, preparing for eventual discussions with
the North, whereas last year at this time they were preparing
full speed for the October 2007 summit between President Roh
Moo-hyun and Kim Jong-il. Another MOU official, Director of
Inter-Korean Social Exchanges and Cooperation Park Kwang-ho,
told us that his office is busy rejecting requests from South
Korean Democratic Party legislators, teacher's union members
and other groups that want to travel to North Korea for the
Arirang Festival, citing negative ROK public opinion as the
justification.

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NO DIALOGUE LIKELY THIS YEAR, BUT PROBABLY NEXT YEAR
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6. (C) ROKG officials also cite negative public "emotion"
toward the North, in the wake of the July 11 Mt. Kumgang
shooting of a South Korean female tourist, as a reason for
refusing, so far, the World Food Program's (WFP) appeal for
food aid for the North. Yu cited MOU polling date (not
published) indicating that only 40 percent of the public
supported providing food aid to the North before the July 11
shooting, but that such support had dropped to 17 percent
afterward. The left-leaning Hankyoreh newspaper has
published three editorial in the past three months calling
for aid through the WFP and a return to unconditional
humanitarian aid directly to the North, arguing that it is
unreasonable for the ROKG to insist on a request for food aid
from the DPRK. But otherwise, even Hankyoreh's editorials
generally support the ROKG's firm stance.


7. (C) Our assessment is that the ROKG would like to get past
the Mt. Kumgang incident, rather than have it stand in the
way of a resumption of dialogue, but both sides have dug in:
the South insisting on an investigation of the death and the
North not only rejecting that but calling on the South to
apologize for allowing a tourist to stray. Hoona Kim, Deputy
Director of MOU's Trade Support Division, who oversees the
Mt. Kumgang tourism project, shook her head when asked on
August 27 whether there was any movement on the case, saying
that the North's insistence on an apology precluded any
discussions. One possible way out is to have the two sides'
Red Cross organizations open discussions, but Kim Jong-ro
thought that the North would reject such an approach. Press
reports on August 28 said that Hyundai Asan CEO Yoon Man-joon
had resigned, perhaps because of his failure to make headway
on the shooting during a July 12-14 visit to Pyongyang to
discuss the case.


8. (C) Asked why the ROKG expects the DPRK to come to the
table during 2009, Blue House official Yu reminded us that
the past two ROK Administrations, Kim Dae-jung's and Roh
Moo-hyun's, took about a year to start dialogue with the
North, as both sides adjusted to the other. He added that
the ROKG view is that the DPRK does not face a food emergency
now, with the fall rice harvest expected to begin in
September, but that 2009's food situation would likely be
worse, because the DPRK had not received its customary
300,000-to-400,000 metric tons of fertilizer from the ROK.
Yu also assessed that the DPRK is waiting for a new U.S.
administration to take office, and react to North Korea,
before deciding whether to engage with the ROKG.

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GROUNDRULES FOR DISCUSSIONS NEEDED
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9. (C) The South-North atmosphere is frosty because of the
North's vehement rejection of Lee's "denuclearization,
openness, USD 3000" proposal, the North's ad hominem attacks
calling Lee a traitor and charlatan, and the unresolved Mt.
Kumgang shooting. But neither side has tried to shut all the
doors: the Kaesong Industrial Complex continues to operate,
employs over 30,000 North Korean workers, a number that
operating company Hyundai Asan told us could double by the
end of the year, and daily tours to Kaesong City are
continuing. Similarly, the DPRK continues to welcome ROK
NGOs providing agricultural, medical and other assistance.
The two sides will have to find a way to get past the Mt.
Kumgang shooting and forget the North's hostile rhetoric
before they sit down, but they have managed to overcome
similar situations in the past. MOU officials believe that
many DPRK officials formerly involved in South-North talks
have been purged, after corruption or other charges, adding
to the difficulty of resuming dialogue.


10. (C) President Lee Myung-bak has repeatedly signaled ROKG
desire for reopening dialogue. In his August 15 National Day
speech, he cited the "regrettable shooting death" at Mt.
Kumgang but then immediately added, "Despite that, I have
expectations that Pyongyang will come forward for
comprehensive dialogue and economic cooperation because now
is the most opportune time for the North to change." Let's
get past this impasse, Lee seemed to be saying.


11. (C) The major impediment to the two sides agreeing to sit
down is the status of past agreements. ROKG officials say
that the ROKG is prepared to be flexible in discussions with
the North, but is determined to uphold the principle that
discussions be based on all four major past South-North
agreements:

-- the "Agreement on Reconciliation, Nonaggression and
Exchanges and Cooperation between South and North," which
took effect in February 1992, commonly referred to as the
"Basic Agreement";

-- the "Joint Declaration of the Denuclearization of the
Korean Peninsula," article 1 of which says "The South and
North shall not test, manufacture, produce, receive, possess,
store, deploy or use nuclear weapons";

-- the June 2000 "South-North Joint Declaration"; and,

-- the October 2007 "DPRK-ROK Summit Joint Declaration."


12. (C) The DPRK, however, has called for only "fully
implementing the June 15 (2000) joint declaration and the
October 4 (2007) declaration." The June 2000 declaration in
particular is praised as a "milestone for independent
national reunification," implying that the DPRK sees it as
grounds for rejecting U.S. involvement on the Peninsula. The
October 2007 agreement, meanwhile, is clearly attractive to
the DPRK because it contains 50-100 billion of dollars in
economic projects, according to ROKG estimates. But the DPRK
has never agreed to talk in detail about the Basic Agreement,
which calls for exchanges and cooperation in various areas.
More important, the DPRK rejects the Denuclearization
agreement, bristling at any ROKG mention of the need to
denuclearize. Getting past these fundamental disagreements
will be a test of Lee's pragmatism. Beyond the substantive
concerns, according to South Korean experts, Pyongyang has
put the two recent agreements above all else because Kim
Jong-il negotiated and concluded them; the earlier agreements
were reached under the auspices of Kim Il-sung.
VERSHBOW