[OUTLOOK]An escrow account for the North

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[OUTLOOK]An escrow account for the North

About 40 days have passed since the six-party nuclear talks ended. But it is not sure yet when the multilateral talks will resume. Even if representatives from the six countries hold dozen rounds of meetings with a goal of denuclearization of the Korean Peninsula, it will not be easy to find a constructive solution if they repeat their assertions and positions only.
In the six-way talks, North Korea hoped to receive economic assistance and regime security, whereas the United States put priority on its abandonment of nuclear weapons and missile programs, nuclear inspections or verification and prevention of weapons distribution. North Korea pictured the worst scenario in which, although it gives up its nuclear program, the North regime cannot receive any economic support and its regime is suppressed by military force. On the other hand, the United States is worried about the possible recurrence of the situation in which according to the 1994 Geneva agreement, North Korea received aid funds but continued developing nuclear arms and distributed weapons of mass destruction. North Korea advocates the principle of simultaneous action instead of first declaring nuclear abandonment, while the United States sets forth the principle of reciprocity with a provision of openness, documentation, and multi-party assurance. After all, the obstacle to the six-party talks is mistrust and uncertainty.
To induce a nuclear solution from North Korea, a bad credit holder in terms of nuclear arms in the international community, the first thing the six-way talks should handle is to build a system that can create trust, even if artificial. One way worth considering is escrow, which is used in starting a new transaction between countries which don’t know or cannot trust each other.
Escrow is a kind of protection service for sales, originally used in commercial transactions, whose advantage is to minimize the risk and legal defects. For example, if “A” buys a company from “B”, a third party like a lawyer or bank is selected as an escrow agent. The payment for sales is kept in the escrow account before being directly delivered to “B”, and the escrow holder thoroughly examines the credit and state of the sale. If it can’t find any defects, the escrow holder delivers the payment to “B”. But if the escrow finds any defects, “A” and “B” negotiate again or the payment kept in the escrow holder’s account is returned to “A” and the contract becomes null and void.
When the United States and Soviet Union negotiated on ballistic missile reductions, the concept of strategic escrow was used. And when advanced countries provided economic support to African or Asian countries, the World Bank or the Asian Development Bank was often used as an escrow agent. Suppose escrow were used to resolve the North Korean nuclear problem: North Korea should implement the disposal or reduction of nuclear arms or weapons of mass destruction according to the agreement, which contains the objective of a nuclear-free Korean Peninsula; five countries should share the expenses for economic aid to North Korea; and international financial institutes such as ADB or the World Bank should serve as an escrow agent.
To do so, we need a practical agreement which expressly prescribes meticulous terms and conditions for mutual implementation, not a symbolic one like the Geneva Agreement, and a clear role should be given to each party. First, the five countries should deposit an agreed amount of money or goods in the escrow account. Then, if North Korea passes the nuclear inspection or verification, the deposits will be used for its economic development fund. But if the inspection is refused or any problem arises, the agreement will be nullified and the deposits will be withdrawn from the account. If related countries are allowed to withdraw the principal they deposited for North Korea’s economic development fund, they can avoid the controversy over lavish spending on North Korea, unlike the “sunshine policy” or heavy oil support to North Korea.
As in the memorandum of understanding on Ukraine denuclearization, if a clause is included to protect North Korea from nuclear attack from other countries while the contract is being enforced, the problem of regime security or non-aggression, about which North Korea is concerned, will be solved as well. At the same time, escrow will be a shortcut to making North Korea become a responsible member in the international society by providing it with a chance to recover its credit.
If the six-party talks wish to resolve the North Korean nuclear problem peacefully and nonviolently, they should not persist in empty talks or brinkmanship diplomacy but establish a system no one can evade. In Winston Churchill’s words, “Talk, talk is better than fight, fight.” But isn’t the North Korean nuclear crisis too urgent to do so?

* The writer is a professor emeritus of international politics at Sejong University. Translation by the JoongAng Daily staff.


by Kim Jung-won
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