North Korean dictator Kim Jong Il on July 4 renewed diplomatic negotiations with the United States on his own terms, test-firing a jerry-rigged, two-stage rocket that can’t hit the U.S., can’t carry a nuclear weapon and, in the end, failed in its second flight.

The Dear Leader’s latest gambit is pathetic but still unacceptable, as Washington, Tokyo, Beijing and Moscow have all made clear to North Korea’s leaders in Pyongyang. But claims by the Bush administration that it has an anti-missile system that can shoot down an incoming threat are as useless as North Korea’s latest rocket technology. The hugely expensive anti-missile system built in Alaska is plagued by technical problems, schedule delays and cost overruns.

The last two tests of the system failed when operators could not get the interceptors to launch. At $10 billion per year, this system has drained resources from more vital defense needs while offering no protection from the real threats America faces.

Nor are threats of further economic and diplomatic sanctions by Japan and the United States likely to deter North Korea unless they are accompanied by a change in diplomacy by Washington. When challenged by such ruthless tyrants, it’s best to meet them face to face.

Case in point: When Secretary of State Condoleezza Rice subtly changed administration policy towards Pyongyang last year to allow direct, bilateral negotiation with the framework of the six-party talks, it produced immediate results. In September 2005 North Korea agreed for the first time in writing to abandon its nuclear program in exchange for economic assistance and security assurances. This is the “Libya model” that successfully ended the nuclear and chemical weapons programs of Muammar Gaddafi.

But the deal with North Korea was sabotaged almost immediately by administration hard liners who wanted to squeeze the North Koreans until they collapsed. Lead by Vice President Cheney, the U.S. brought pressure on international banks to cut of lines of credit to Pyongyang and suddenly raised years-old issues of North Korean counterfeiting as an issue that had to be resolved before further talks on the nuclear program.

The North Koreans responded by walking out of the talks. The deal that was so close to conclusion in September was dead in the water by January. The missile tests are North Korea’s way of breaking this stalemate.

President Bush has allowed this schizophrenic policy to paralyze his administration. The result: The United States has lost control of the negotiations and of events in the region. But North Korea’s failed missile test allows the president a chance to regain control of the situation. He must combine deserved international condemnation of the test with skillful diplomacy to coax North Korea back to the six-party talks.

Once those talks resume, the United States should make clear U.S. willingness to resume bilateral negotiations, which would allow both nations to cut to the chase. North Korea, in continual economic distress, needs the United States. By talking face to face with Pyongyang, Washington will be able to display American strength and resolve, demanding serious military confidence-building measures and progress in human rights and economic reform.

The Bush administration says it can’t reward North Korea with talks in the face of threats, but that’s the wrong tack. North Korea’s decrepit political economy is destined to fail, perhaps not as soon as we’d like, but soon enough. Rather than allow Kim to escalate his nuclear threats to ever more dangerous levels, it’s better to open up direct economic and diplomatic links between North Korea and the rest of the world — in turn undermining the very foundations of Kim’s regime.

Reforms and the complementary incentives offered in exchange could make the nuclear problem easier to resolve through the resolution of less contentious issues. A framework of reforms and incentives may at least enable the government of Kim Jong Il to see an alternate route to its survival besides weapons of mass destruction.

While the current regime is difficult and unpredictable, North Korea could act more rationally if presented with a road map that outlines intermediate steps and leads to an endgame where its survival is not at stake. Broader reforms could include:

  • Economic reforms that create opportunities for investment, particularly from South Korea;
  • Confidence-building measures regarding reductions in conventional weapons;
  • Human rights improvements and a verifiable commitment to shift resources from regime survival to what is good for the North Korean people;
  • International monitoring of food assistance to ensure its proper delivery to the civilian population; and
  • Resolution of issues related to state-sponsored terrorism, including further action regarding Japanese abductees.

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