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Grain license may signal better relations with N. Korea

grain January 7, 1997
Web posted at: 7:45 a.m. EST (1245 GMT)

WASHINGTON (CNN) -- Just one day after North Korea apologized for its submarine incursion into South Korean waters, the U.S. government granted a Minneapolis grain company permission to sell food to the famine-struck communist country.

Cargill Inc. received the right to export 500,000 metric tons of wheat and rice to North Korea when the U.S. Treasury Department granted its first license in several years allowing trade with the North.

U.S. officials confirmed the license Monday, although it was apparently issued December 30, one day after the Stalinist state made its public apology for the submarine incident.

The grain license is seen by many observers as a sign that relations between North Korea and the U.S. are warming in the wake of the submarine flap. American officials, although declining to link it to the license, called the apology a "significant development."


"There is now a climate on the peninsula that we hope is conducive to discussions about peaceful resolution of differences that exist between North and South," said White House Press Secretary Mike McCurry.

Questionable deal

South Korean President Kim Young-sam, however, put a damper on the positive mood Tuesday when he described the North's public apology as not enough. Kim called on North Korea to follow up its words with actions.


And grain experts expressed skepticism about Cargill's prospects of striking an agreement with North Korea. At current U.S. market prices and shipping costs, the grain could cost the North $100 million -- no small problem for the cash-poor country.

Barter, always a risky business proposition, is believed to be North Korea's only solution. The isolated communist nation has metals, including graphite, copper and zinc, that might be of interest to Cargill, which also trades in metals.


In February 1996, the United States gave North Korea $2 million in food aid to help alleviate famine, a move aimed at persuading the country to rein in its suspected nuclear weapons program. In the wake of the submarine incident, the North has pledged to end its nuclear research.


North Korea has also agreed to sit down with the U.S., China and South Korea for talks on replacing the 40-year-old Korean War armistice with a permanent peace treaty.

"We hope very much that we can schedule a date and venue for a briefing on the four-party talks," said State Department Spokesman Nicholas Burns. "The North Koreans have agreed to that. We just need to schedule it."

But again, not everyone shares the U.S. government's optimism.

South Korea's Kim, discussing the North's commitment to the peace talks, said, "It is action, rather than words, that counts."

Correspondent Jill Dougherty and Reuters contributed to this report.


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