U.S.-North Korea Nuclear Deal: Who Wins?

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Bush insisted that Pyongyang would have to demonstrate that it's winding down its nuclear programs, and his national security adviser, Stephen Hadley, said that if Pyongyang failed to fulfill its obligations, Washington could reimpose sanctions or push for new ones. The U.S. won't lift financial sanctions designed to thwart North Korean money laundering, illicit financing activities, and weapons proliferation, U.S. officials said. "This isn't the end of the process," Bush said. "This is the beginning of the process."

Some critics think Bush, plagued by an unpopular war in Iraq and a nuclear standoff with Iran, rushed an accord to salvage his foreign policy. It's also possible that he may have wanted to take the pressure off fellow Republicans in the runup to the November Presidential elections (BusinessWeek.com, 9/14/07). Some observers question whether he gained enough from the pact. "This is a big shame," says John Bolton, a former U.S. envoy to the U.N. under Bush. "This is an agreement that almost entirely benefits North Korea. They've gained enormous international political legitimacy."

Overnight Changes Aren't Likely

That's not to say that talking isn't productive. One day after submitting its declaration, North Korea blew up the cooling tower of its plutonium-producing reactor at Yongbyon, 60 miles north of Pyongyang. The U.S., Japan, South Korea, Russia, and China are expected to discuss more assistance for Pyongyang, on top of promises to provide 1 million tons of fuel oil, or its equivalent, as well as diplomatic and security guarantees (BusinessWeek, 10/22/07). More aid could come from South Korea and Japan if Pyongyang makes good on its promises.

Experts caution against too much optimism. "It took Vietnam five years before it concluded a trade pact with the U.S. even after the two countries normalized diplomatic ties," says Lee Young Hoon, an expert on North Korea at the Bank of Korea. "It definitely will be years before North Korea starts enjoying substantial benefits from the U.S."

Moon is BusinessWeek's Seoul bureau chief.