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While North and South Korea are moving dramatically toward rapprochement as a result of the inter-Korean summit in June, Japanese and North Korean officials are set to meet again next month to discuss ways to normalize relations. Establishing diplomatic ties with Pyongyang, along with settling the territorial dispute with Russia, is the most important postwar issue for Japan.

Basically, two things need to be done to bring the normalization talks to a successful conclusion. First, leaders of the two nations should embrace the principle of proactive engagement in a common endeavor to create a new order in Northeast Asia. Second, they should make bold political decisions to coordinate divergent interests at home and abroad.

In the last round of talks held in August in Tokyo, the two sides remained at odds over two key issues — the alleged abduction of Japanese civilians by North Korean agents and North Korea’s missile development and deployment program.

On the central issue of “liquidating the past” — the Korean demand that Japan compensate for its past wrongdoings — Japan offered to settle it in the form of “economic cooperation,” citing the 1965 Japan-South Korea normalization of relations as an example. The normalization talks with Seoul, which lasted 14 years, ended with a Japanese commitment to provide $300 million in grants and $200 million in easy-term loans.

Regarding the abduction issue, Japan reiterated its basic position, calling for a package settlement of the “liquidating the past” issue and the kidnapping case. As Ambassador Kojiro Takano put it, “A settlement acceptable to the Japanese people is indispensable to the successful conclusion of the (normalization) talks.”

North Korea, for its part, repeated its demand that Japan apologize and compensate for its 1910-1945 colonization of Korea. Pyongyang maintains that Japanese apologies and compensation are essential to the “liquidation of the past.” However, it did agree to explore “points of agreement” concerning the Japanese proposal for “economic cooperation.”

The August talks made one thing clear: North Korea is taking a “pragmatic” approach. In other words, it is trying to normalize relations with Japan as soon as possible in order to secure international support for its efforts toward economic reconstruction.

During the negotiations, Pyongyang reportedly sounded out Tokyo on the prospects for the resumption of trade insurance that has been suspended for the past 20 years and for North Korea’s entry to the Asian Development Bank.

Perhaps North Korea is seeking large-scale economic assistance from Japan. But such assistance is conditional on the normalization of relations. And in order to normalize relations, it is necessary to work out a “package deal” acceptable to the Japanese people. The key question is whether North Korea will deal sincerely with the abduction issue.

North Korean leader Kim Jong Il, in a meeting with representatives of the South Korean media, took a tough stance on the compensation issue. “Japan must compensate (for its colonial rule),” he was quoted as saying. “I will never agree to normalize relations with Japan at the sacrifice of our honor and pride as a sovereign state.”

Meanwhile, Park Jiewon, the South Korean minister of culture and tourism and Kim Dae Jung’s right-hand man, spoke of Kim Jong Il at a Tokyo press conference. “President Kim regards General Secretary Kim as an understanding man,” Park said. “My impression is that General Secretary Kim has excellent political sense.”

The normalization talks will require high-level political judgment, particularly in their final stages. As far as North Korea is concerned, Kim Jong Il is probably the only person that can make that kind of judgment.

Masao Okonogi, a Keio University professor well-versed in Korean affairs, believes that North Korea has “made a strategic change in favor of dialogue with South Korea in order to protect its ruling system.” In a recent lecture to the Japan National Press Club, he also expressed his belief that the abduction issue can be resolved if a way is found to save face for Kim Jong Il.

Okonogi also offered this analysis: Pyongyang needs massive economic assistance. Seoul expects Japan to provide the money. What Japan needs is progress on the abduction and missile issues. So, if North Korea is willing to make political concessions, “triangular trade” via South Korea will become reality.

Japan should clarify its intention of liquidating the past. As regards this issue, Okonogi said that Japan should respond in positive ways, including providing official development assistance for inter-Korean economic-cooperation projects. He also proposed “linkage” between inter-Korean economic cooperation and Japan-North Korea normalization, saying that this would demonstrate Japan’s willingness to play a positive role in Korean unification.

Beyond that, I believe, it is essential to maintain the existing system of trilateral cooperation among Japan, the United States and South Korea. Such cooperation is also needed to induce North Korea to make concessions. The participation of Russia and China is also necessary to create a new order of peace and stability in East Asia.

Russian President Vladimir Putin, in a meeting with Prime Minister Yoshiro Mori earlier this month, said he was encouraged by moves to improve Japan-North Korea relations, adding, “It is very important that North Korea is allowed into the international system.” Meanwhile, Chinese President Jiang Zemin, meeting Mori on the sidelines of the U.N. Millennium Summit in New York, expressed support for Japanese and North Korean moves toward normalization.

Yet it is premature to conclude that the normalization talks will proceed steadily. It is unclear, for example, how the outcome of the U.S. presidential election will affect the situation in the Asia-Pacific region, particularly U.S.-North Korea relations. For all the positive symbolism of the Inter-Korean summit, it is uncertain how relations between North and South Korea will develop.

But there is no doubt that moves revolving around the Korean Peninsula will pick up momentum in the weeks and months ahead. The South Korean president will visit here later this month, while the Chinese premier is scheduled to come next month. It appears that the Korean Peninsula is about to be integrated into the comprehensive scheme of international relations that includes Japan, China, the U.S. and Russia as well as North and South Korea — a process that, hopefully, will lead to the formation of a new order of peace and stability in Northeast Asia.

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