As is its wont, North Korea has substituted vitriol for cooperation with the Republic of Korea (ROK). Last Friday, Pyongyang announced that it had nullified all of its political and military agreements with the South. Some observers fear that armed conflict could break out.

In fact, the apparent bad news may be a well-disguised blessing. Seoul and the United States now have an opportunity to put relations with the North on a more normal basis, rewarding positive behavior while punishing new attempts at extortion.

Probably the globe's most isolated state, the Democratic People's Republic of Korea (DPRK) has implemented a bizarre form of monarchical communism, with Dear Leader Kim Jong-il having succeeded his father Great Leader Kim Il-Sung. After Kim Jong-il's apparent stroke in August, rumors swirled on the likelihood of one of his three sons or his brother-in-law following him.

Often denounced as mad, Kim is anything but. He has made the best of running a desperately poor nation, which under normal conditions would matter not at all to the rest of the world. By being predictably unpredictable, routinely threatening to loose death and destruction upon the South, and developing nuclear weapons, he has driven his neighbors and the United States to distraction and won attention, food, cash, economic investment and other aid.

Kim's policy appeared to work particularly well under the last two South Korean administrations, which implemented the "Sunshine Policy." Seoul's understandable desire to lessen hostilities led to almost frantic efforts to buy Pyongyang's friendship. Even as the DPRK fulminated and broke agreements, Seoul paid for a summit between Kim and South Korean President Kim Dae-jung, shipped food northward and invested in Pyongyang. For years North Korean bluster seemed to render the South Korean government even more compliant.

U.S. policy was little better. The collapse of communism led to the opening of relations between both China and Russia and the ROK, but Washington made no diplomatic move to the North. Pyongyang received no benefits during its periods of relative quiescence. Causing enormous agitation, however-in ostentatiously proclaiming its nuclear plans-was followed by negotiation and aid. The Kim regime quickly learned that the way to trigger wailing and gnashing of teeth in Seoul, Tokyo and Washington was to take yet another unilateral nuclear step. Only threats yielded aid and respect.

The Bush administration first refused to even talk to the DPRK, during which time the latter reprocessed enough fuel to make several more nuclear weapons. Then Washington emphasized the six-party talks, which involved Pyongyang's neighbors. Unfortunately, the administration seemed to have an almost charmingly naïve view of the likelihood of success despite the North's habit of upsetting the chess board when it didn't like the game. The DPRK recently announced that it will preserve its nuclear capability as long as it fears the United States.

But South Korean President Lee Myung-bak, elected in late 2007, has taken a very different approach than his predecessors. Although not interested in confrontation with Pyongyang, he ended the prevailing "anything goes" view of inter-Korean relations. After taking office last February, he announced that there would be no more unconditional aid, and that economic relations, including business investment and tourist operations, would depend on the North's cooperation in abandoning its nuclear weapons program. His stance pushed the Kim regime into a typical paroxysm of rage. Relations went from bad to worse after Seoul criticized the North for the latter's behavior when a security guard shot and killed a South Korean tourist.

In the succeeding months Pyongyang halted government-to-government contacts, suspended tourism projects, tightened border controls and cut the freight-train line. The DPRK expelled hundreds of South Korean managers and government officials from the Kaesong industrial park and subsequently limited the ROK's presence in the North.

But President Lee has been undeterred. Two weeks ago he appointed Hyun In-taek as unification minister. Hyun was the hard-line scholar who helped develop Lee's tough policy towards the North.

Pyongyang called the appointment an "open provocation." A North Korean army official threatened to destroy "the puppet war hawks in the South." The Kim regime announced that the agreement accepting the disputed maritime boundary in the Yellow Sea was "nullified" and that "Our revolutionary armed forces are compelled to take an all-out confrontational posture to shatter" the South Korean navy.

Pyongyang then further ratcheted up its inimitable rhetoric. "The group of traitors has already reduced all the agreements reached between the North and the South in the past to dead documents," opined the official Korean Central News Agency. "Our guns and bayonets" are aimed the throats of "the Lee Myung-bak group." Relations between the two Koreas had reached "the brink of war."

In a masterful example of understatement, State Department spokesman Robert Wood said that "This type of rhetoric is distinctly not helpful," as if being helpful was Pyongyang's goal. So far President Lee has downplayed the collapse in relations. "I hope North Korea understands that [the South] has affection toward the North." He doubted there was any value in sending an envoy northward, explaining: "South-North relations should be at a starting point where they can trust, respect and talk to each other."

In fact, relations between both South Korea and the United States and Pyongyang should be viewed as being at "a starting point." The DPRK has set the stage by rushing into its isolated usual corner. Seoul and Washington should do nothing while the North is breathing fire and threatening military action. Most important, they should be, and act, unconcerned, rather than allow an impoverished dictatorship to dictate allied actions. South Korea and the U.S. should calmly indicate that they are interested in talking-and more-but only after North Korea demonstrates its willingness to respond positively.

Both the America and the ROK should offer solid benefits, including diplomatic relations, the end of economic sanctions and aid, in return for substantive steps on the North's part. If Pyongyang further retreats, allied offers should cease. Of course, there is no guarantee that the DPRK is serious about making the sacrifices necessary to join the international community. Even if North Korea is inclined to negotiate, the process is likely to be both tortuous and torturous. But it is in the West's interest to persevere in an attempt to redirect incentives, which for too long have rewarded the North for being irresponsible.

Finally, the United States should begin disengaging militarily from the peninsula. The South is far stronger than Pyongyang and well able to defend itself. While unnecessary for the ROK's defense, America's forces are vulnerable to North Korean attack. Indeed, but for the sizable U.S. presence in South Korea, which provides the DPRK with thousands of nuclear hostages, Washington could treat the North's nuclear program as a regional issue of greatest interest to Pyongyang's neighbors. They should take the lead in securing regional security.

North Korea's latest fulminations reflect a negotiating style that treats brinkmanship as routine. Conflict is unlikely: War would be suicidal and Kim Jong-il prefers his pleasures in this life. Both Seoul and Washington should use the current contretemps as an opportunity to transform negotiations with the North. The situation on the Korean peninsula will become normal only if Pyongyang learns that it can no longer dictate events and win rewards with threats.

 

Doug Bandow is a senior fellow at the Cato Institute. A former special assistant to President Ronald Reagan, he is the author of Foreign Follies: America's New Global Empire (Xulon).