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Cablegate: Seoul - Press Bulletin; September 18, 2009

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UNCLAS SECTION 01 OF 05 SEOUL 001495

SIPDIS

E.O. 12958: N/A
TAGS: PREL PGOV MARR ECON KPAO KS US
SUBJECT: SEOUL - PRESS BULLETIN; September 18, 2009

TOP HEADLINES
-------------


Chosun Ilbo, Segye Ilbo, All TVs
2 Trillion Won in Microcredit Planned for Low-income Households

JoongAng Ilbo
11 Members of "Honor Society" Have "DNA for Donation"

Dong-a Ilbo
67 Government-funded Projects See Costs Triple

Hankook Ilbo, Seoul Shinmun
Finance Minister, Central Bank Governor Clash over Central Bank
Reform

Hankyoreh Shinmun
1.5 Trillion Won of Taxpayers' Money Spent to Make Up for Losses
from Privately-funded Construction Projects


DOMESTIC DEVELOPMENTS
---------------------

Seoul and Washington are working out a new strategy toward North
Korea in order not to repeat their past failures in negotiations
with North Korea and to end the North's cycle of provocations,
conciliatory gestures and stalling for time to win concessions.
(Chosun)

INTERNATIONAL NEWS
------------------

According to North Korea's Korean Central News Agency, Dai Bingguo,
special envoy of Chinese President Hu Jintao, met in Pyongyang
yesterday with the North's First Vice Foreign Minister Kang Sok-ju,
and they had a "candid and in-depth exchange of views" on bilateral,
regional and international issues. (Chosun, Dong-a, Hankook,
Hankyoreh, Segye, Seoul, all TVs)

The U.S. Congressional Research Service, in its latest report, said
that Washington may be able to provide six major economic incentives
to North Korea in return for its denuclearization: normalize
bilateral ties, lift sanctions, sign a trade treaty, allow the North
to join international financial institutions, provide energy and
food aid, and offer preferential tariffs on goods produced at the
Kaesong Industrial Complex. (JoongAng, Dong-a, Hankook, Hankyoreh,
Segye, Seoul)

Japan's new Foreign Minister Katsuya Okada told a press conference
yesterday that Japan will not negotiate with North Korea unless the
North takes action to resolve the issue of abductees. (Chosun)

MEDIA ANALYSIS
--------------

-N. Korea
----------

Conservative Chosun Ilbo ran an inside-page report entitled "Only
'Sticks,' Not 'Carrots,' Until N. Korea Dismantles Its Nuclear
Program." It said that Seoul and Washington are working out a new
strategy toward North Korea in order not to repeat their past
failures in negotiations with North Korea and to end the North's
cycle of provocations, conciliatory gestures and stalling for time
to win concessions.

As support for this report, Chosun quoted Foreign Minister Yu
Myung-hwan as telling lawmakers yesterday that even if talks with
North Korea resume the U.S. will continue to implement UN Security
Council sanctions against North Korea, unless the North takes
tangible steps toward denuclearization. Another senior ROKG

SEOUL 00001495 002 OF 005


official was also quoted: "There will be no compensation until North
Korea takes action to denuclearize."

Chosun editorialized: "The U.S. is saying that it will pursue
bilateral talks with North Korea within the context of the Six-Party
Talks. This means sharing the economic burden in providing
incentives to North Korea. The time is approaching for Seoul to
exercise high-level negotiating skills, given that the ROK has been
almost solely responsible for such incentives while being ignored by
the North."

Most ROK media gave attention to the U.S. Congressional Research
Service (CRS)'s latest report, in which the CRS said that Washington
may be able to provide six major economic incentives to North Korea
in return for its denuclearization: normalize bilateral ties, lift
sanctions, sign a trade treaty, allow the North to join
international financial institutions, provide energy and food aid
and preferential tariffs on goods produced at the Kaesong Industrial
Complex.

Most media also gave coverage to yesterday's meeting in Pyongyang
between Dai Bingguo, special envoy of Chinese President Hu Jintao,
and North Korea's First Vice Foreign Minister Kang Sok-ju.

Conservative Chosun Ilbo observed that the Chinese State Councilor
is in Pyongyang to prepare the schedule and agenda for Chinese
Premier Wen Jiabao's visit to the country slated for Oct. 4-6 but
that there is speculation that the North's nuclear program is also
under discussion, given that the delegation also includes Chinese
Chief Nuclear Negotiator Wu Dawei.

Conservative Dong-a Ilbo commented that it appears that China, by
sending a high-level envoy to North Korea, intends to maintain its
leadership role in the Six Party negotiations on denuclearizing the
Korean Peninsula.

Left-leaning Hankyoreh Shinmun headlined its story: "China Scrambles
to Mediate Behind the Scenes... It Seems to Have Persuaded N. Korea
to Return to Six-Party Talks"


- President Obama's Missile Defense Decision
-------------------------------------------

Most ROK media gave attention to President Barack Obama's decision
to scrap plans for a U.S. missile defense system in the Czech
Republic and Poland.

Newspapers carried the following headlines: "U.S. Shelves Eastern
Europe Missile Defense Program; Russia Welcomes It but Conservative
Circles, the Czech Republic and Poland Protest" (conservative Chosun
Ilbo); "Obama Seeks Improved Relations with Russia by Reversing a
Bush Administration Policy" (right-of-center JoongAng Ilbo); and
"U.S. Gives Up Eastern Europe MD Citing Reduced Iranian Missile
Threats... Change Expected in U.S. Global Defense Strategy"
(left-leaning Hankyoreh Shinmun.)

Opinions/Editorials
-------------------

N. Korea Should Not Get Anything Until It Denuclearizes
(Chosun Ilbo, September 18, 2009, Page 39)

U.S. Secretary of State Hillary Clinton on Tuesday said she intends
to explain to North Korea the incentives it can expect if it agrees
to dismantle its nuclear program, as well as the consequences if it
does not. In a recent report, the U.S. Congressional Research
Service named as possible incentives the normalization of diplomatic
relations, the lifting of sanctions, and energy and food aid. CRS
said the World Bank or the Asian Development Bank could set up a
special fund to support North Korea's economic transformation.

In previous negotiations with North Korea over nuclear
dismantlement, the U.S. made written promises, including a pledge to

SEOUL 00001495 003 OF 005


respect the sovereignty of the regime, and offered incentives such
as food aid and the construction of a light water reactor. Despite
all that, North Korea conducted a second nuclear test in May and
recently told the UN Security Council that it has reached the "final
stage" of enriching uranium for weapons purposes.

These mistakes must not be repeated. The U.S. must not fall into
North Korea's trap of slicing its nuclear dismantlement process into
many different phases, demanding incentives for each stage. In past
negotiations, North Korea lived up to only the first and second
stages of its pledge by freezing and disabling the reactor in
Yongbyon, and was lavishly rewarded each time. But it put up one
excuse after another when it came to actually dismantling its
nuclear program and later restarted the Yongbyon reactor. From now
on, it must be given incentives only when it irreversibly dismantles
its nuclear facilities.

The U.S. is saying that it will pursue bilateral talks with North
Korea within the context of the Six-Party Talks. This means sharing
the economic burden in providing incentives to North Korea. The
time is approaching for Seoul to exercise high-level negotiating
skills, given that the ROK has been almost solely responsible for
such incentives while being ignored by the North.

(This is a translation provided by the newspaper, and it is
identical to the Korean version.)

FEATURES
---------

Only "Sticks," Not "Carrots," Until N. Korea Dismantles Its Nuclear
Program
(Chosun Ilbo, September 18, 2009, Page 6)

By Reporter Ahn Yong-hyun

Seoul and Washington are working out a new strategy toward North
Korea in order not to repeat their past failures in the over 15-year
negotiations with North Korea and to end the North's cycle of
provocations, conciliatory gestures and stalling for time to win
concessions.

The two allies are apparently determined to maintain sanctions
against the North until it denuclearizes. They believe their
mistake in the past has been to use a piecemeal approach to
negotiations that immediately rewarded the North for every small,
reversible step.

Foreign Minister Yu Myung-hwan told the National Assembly's Foreign
Affairs, Trade and Unification Committee on Thursday, "Even if talks
with North Korea resume, the U.S. will continue to implement UN
Security Council sanctions against North Korea, unless the North
takes tangible steps toward denuclearization."

"This government too will maintain the existing policy of faithfully
implementing sanctions against the North until it takes verifiable
steps to end its nuclear program. At the same time, we'll keep the
dialogue door open to persuade the North to return to the Six-Party
Talks," he added.

A senior government official said, "There will be no compensation
until North Korea takes action to denuclearize." In other words, if
North Korea abandons its nuclear ambitions, it will be provided with
massive aid, but the aid will come only after the "irreversible
dismantlement of North Korea's nuclear programs." The official
stressed that there will be no rewards for a "reversible behavior"
or a simple "promise" to abandon nuclear programs.

All the signs are that Seoul and Washington are determined not to
fall again for the North's cycle of provocations, conciliatory
gestures and stalling for time to win concessions. As a senior
government official has suggested, the ROK and the U.S. need "basic
changes to the larger framework in their approach to the North
Korean nuclear issue."

SEOUL 00001495 004 OF 005

North Korea has often avoided sanctions by agreeing to dialogue,
slicing the denuclearization process into smaller stages, from
"shutdown," via "disablement" to "dismantlement," and pulling out
before the process is complete.

The senior ROKG official noted, "The 'comprehensive package' that
President Lee Myung-bak proposed to U.S. President Obama this past
June also came in the context of a fundamental change being needed
in an approach toward North Korea. However, the ROKG is concerned
that the term may be confused with the "package deal" from the
previous Kim Dae-jung Administration, thereby giving an impression
that North Korea is presented with a "bundle of gifts." Therefore,
the ROKG is considering using different terms, such as an
"irreversible deal."

In the September 19, 2005 Joint Statement, North Korea promised to
disable all its existing nuclear facilities in return for energy aid
equivalent to 1 million tons of heavy fuel oil. While adhering to
the "action-for-action" principle, North Korea earned rewards
whenever it switched off the outdated nuclear facilities at Yongbyon
one by one. So far, the North has been provided with energy aid
equivalent to 750,000 tons of heavy fuel aid. In June, 2008, after
blowing up a cooling tower at Yongbyon, the nation was removed from
the State Department's list of states that sponsor terrorism.
However, while engaging in belligerent moves this year, Pyongyang
retracted all its disablement steps at one stroke. The (North)
Korean Central News Agency reported on September 4, "Reprocessing of
spent fuel rods is at its final phase and extracted plutonium is
being weaponized." An ROKG foreign policy official said, "Does it
make sense to have negotiations under which our provision of heavy
fuel oil is irreversible but North Korea's nuclear disablement steps
are reversible at any time?"

A Blue House official said, "We won't engage in talks that might
result in stage-by-stage agreements like the statement of principles
in the fourth round of the Six-Party Talks in Sept. 19, 2005, or
talks that might lead to an agreement on disablement that is
reversible like the Feb. 13, 2007 deal."

Prof. Kim Sung-han of Korea University said Seoul and Washington
would "conduct talks to launch a North Korean version of the
Marshall Plan," the large-scale economic aid program for postwar
Europe, "as well as security guarantees if the North goes directly
to the stage of verifiable dismantlement and completely removes its
nuclear weapons, nuclear materials and nuclear facilities
overseas."

In addition, Japan's Asahi Shimbun carried a noteworthy report
quoting Six-Party Talks sources as saying that the ROK and U.S.
governments are reviewing a plan to officially recognize the current
North Korean regime led by Kim Jong-il in return for the North's
nuclear dismantlement. The newspaper also reported that there is a
possibility that the ROK and the U.S. governments may propose to
replace the current armistice agreement with a peace treaty and
provide massive economic assistance to Pyongyang.

The Congressional Research Service (CRS) has recently released a
report on "North Korea: Economic Leverage and Policy Analysis,"
which spells out six incentives the U.S. could provide to the North.
The incentives include normalizing diplomatic ties, signing a trade
treaty, lifting sanctions, allowing the North to join international
financial institutions, providing energy and food aid and giving
preferential treatment to goods produced at the Kaesong Industrial
Complex. U.S. Secretary of State Hillary Clinton said on September
15 that when U.S.-North Korea bilateral talks take place, the U.S.
will explain to North Korea the incentives it can get if it pursues
denuclearization and the consequences if it doesn't.

[This is a translation provided by the newspaper. We have compared
the English version on the website with the Korean version and added
some paragraphs to make them identical.]

SEOUL 00001495 005 OF 005


TOKOLA

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