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N Korea at crossroads

North Korea's demands for economic aid push South into a corner

South Korea is sending envoys to Pyongyang on Wednesday ahead of Moon-Kim summit

Kim and Moon at their second summit in Panmunjom in May.   © Reuters

SEOUL -- Pyongyang's push for economic aid from Seoul is forcing South Korean President Moon Jae-in to make some tough decisions ahead of a summit with Kim Jong Un later this month.

The U.S. opposes the provision of economic assistance until it sees North Korea taking concrete steps toward denuclearization. But Moon -- a self-styled mediator between the U.S. and North Korea -- is keen to avoid a collapse in the diplomatic process and a return to last year's tensions on the peninsula.

The urgency of the situation won't be lost on Moon's five special envoys, including National Security Adviser Chung Eui-yong, who are traveling to Pyongyang on Wednesday to fix the date and agenda of the third inter-Korean summit since April.

A planned trip by U.S. Secretary of State Mike Pompeo to North Korea last month was canceled by President Donald Trump at the last moment, as the two nations struggle to resolve differences on the denuclearization process. Washington is demanding that Pyongyang submits a list of its nuclear arms and facilities, while Kim's regime wants the U.S. to declare a formal end to the Korean War.

Kim's demands for financial assistance may also drive a deeper wedge between a pro-engagement Moon and a Trump administration that appears to be increasingly skeptical about a rapprochement with Pyongyang.

"North Korea may suggest that the South does two things -- one is to push the U.S. to declare the end of the Korean War, the other is to loosen sanctions," said Park Won-gon, an international relations professor at Handong Global University in Pohang, South Korea. "But it also knows that Seoul has no power to do so."

At their historic first meeting at the border village of Panmunjom, Moon and Kim agreed to launch joint projects such as connecting roads and railways from Seoul through to Sinuiju on North Korea's border with China. But little progress has been made because the U.S. is unwilling to lift sanctions.

"The North is expected to urge the South to take actions for improving inter-Korean relations and expanding economic cooperation," said Choi Kang, vice president of the Asan Institute for Policy Studies. Kim is likely to remind Moon this was agreed on at their first summit, he said.

The Rodong Sinmun, an official North Korean party newspaper, on Aug. 29 urged the South to comply with the Panmunjom Declaration.

"The North and the South should solve our reunification matters independently by cooperating as one nation," the newspaper said in a commentary article. "The U.S. announced additional sanctions on foreign companies using the excuse of 'illegal trade' with us."

Kim inspects a medical appliances factory.   © Reuters

In a speech on Aug. 15, Moon said: "Inter-Korean relations are not bound to North Korean nuclear issue."

Choi said this month's summit in Pyongyang will be a critical moment for Moon to decide whether to stay in line with U.S. sanctions on North Korea, or take an independent approach on denuclearization.

"If the South Korean government accepts the North's demands, they will agree on economic projects in detail in the summit, but it will violate sanctions on North Korea," he said. "If the South suspends economic cooperation and demands denuclearization actions, the North is highly likely to object to inter-Korean exchanges."

Robert Kelly, a political-science professor at Pusan National University, said Moon should pressure Kim to take visible actions toward denuclearization.

"North Korea needs to stop dancing around with mixed sporting events and musical numbers and that sorta film-flam, and finally offer something real -- giving up a warhead for inspection, blowtorching some missiles, closing a gulag, something," Kelly said. "Otherwise Moonshine will look like one-way appeasement, not a two-way detente."

Meanwhile, North Korea is set to hold a military parade in its capital on Sunday as part of celebrations to mark the 70th anniversary of the founding of the country.

Chinese President Xi Jinping had been expected to visit the country around that date, but South Korea's Yonhap News, citing sources in Beijing, reported Monday that he may not go.

"North Korea wants to escape from diplomatic isolation with the inter-Korean summit," said Handong Global University's Park. "Pyongyang is facing further isolation as even Xi Jinping is not likely to go to the country."

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