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North Korea has been on the U.S. list of countries that sponsor terrorism since it was found to have been involved in the 1987 bombing of a South Korean airliner in which 115 passengers and crew were killed.
Countries on the list are banned from receiving U.S. economic aid and prevented from receiving funds from international lending institutions heavily influenced by the United States.
It was possible that the United States would have dropped North Korea from the list following a landmark agreement on ending Pyongyang's nuclear-weapons programs. Under a Feb. 13 aid-for-arms deal, the United States promised to "begin the process of removing the designation of the DPRK (North Korea) as a state-sponsor of terrorism" and start bilateral talks with Pyongyang "aimed at resolving pending bilateral issues and moving toward full diplomatic relations." Under the accord, the United States also pledged to "advance the process of terminating the application of the Trading with the Enemy Act with respect to the DPRK."
Since the agreement, North Korea has stepped up its call for the United States to remove Pyongyang from the terror sponsors list. After an initial two-way meeting with an American delegation in New York in early March, North Korea's nuclear negotiator Vice Foreign Minister Kim Kye Gwan said the United States had agreed to drop Pyongyang from the terror list.
Hoping to improve its image, the North restored diplomatic relations with Myanmar last week. Myanmar severed diplomatic ties with North Korea in 1983 after 17 high-ranking South Korean officials were killed by a bomb planted by North Korean agents at the Martyr's Mausoleum in Rangoon, presently called Yangon.
But Washington did not remove North Korea from the blacklist after the Feb. 13 disarmament agreement, which has been deadlocked due to a dispute over North Korean funds frozen in a Macao bank. North Korea missed an April 14 deadline to shut down its main nuclear reactor at Yongbyon and invite back U.N. nuclear inspectors under the Feb. 13 agreement, complaining the assets held by the Macao-based Banco Delta Asia have yet to be released.
Analysts say Tokyo's reminders of the North's past abductions of Japanese citizens were another factor behind Washington's decision not to remove the North from the list. Japan has refused to fund any nuclear deal until North Korea resolves the issue of its abduction of Japanese nationals -- an issue that was among agenda items at a summit last week between Japanese Prime Minister Shinzo Abe and U.S. President George W. Bush, according to diplomatic sources.
The Bush administration could not dismiss the demands made by Japan, Washington's key Asian ally, which is also seeking a US$30 billion deal to purchase U.S.-built F-22 stealth fighters, South Korean analysts say.
But officials and analysts add that North Korea will be removed from the blacklist only if it carries through with its nuclear obligations, because Washington notably eased its criticism on Pyongyang in its annual terror report in a bid to induce a change in the North's policy. Analysts say the U.S. move is aimed at using the terror-sponsors list as leverage to end the North's nuclear drive. When announcing the annual terror report, Frank Urbancic, acting coordinator for counter-terrorism at the State Department, said North Korea should follow in Libya's footsteps by giving up its nuclear ambitions to emerge from the blacklist.
"North Korea is urged to make substantial actions to resolve the nuclear standoff rather than just paying lip service," said Nam Sung-wook, a North Korea specialist at Korea University in Seoul.
Analysts argue that Pyongyang should recognize that everything is possible, if it would only give up the nukes.
