Christopher Hill’s Outpost : The BDA Problem (Part I)

Christopher Hill’s lively memoir, Outpost: Life on the Frontlines of American Diplomacy, is a good read. Like all memoirs, it necessarily shows its protagonist in the best light. But it is nonetheless honest—and caustic—about the challenges that come with diplomacy, including sheer tedium. Hill also shows that those challenges stem not only from our adversaries but from within our own ranks. Indeed, the domestic politics of diplomacy—including the bureaucratic politics--was consistently the most compelling part of the book.

In addition to interesting background on his youth (son of a diplomat with time in Yugoslavia; a stint in the Peace Corps in Africa), the book is framed around three substantial chunks of service: in Europe (the Balkans working with Richard Holbrooke on the collapse of Yugoslavia; Macedonia; Kosovo; and a stint as ambassador to Poland); in East Asia (as ambassador to South Korea and as Assistant Secretary for East Asia and the Pacific, including his Six Party Talk responsibilities) and at the end of his career as Ambassador to Iraq. We divide our review into two parts: the efforts to restart the Six Party Talks from 2005-2007, which centered in no small measure on the Banco Delta Asia problem; and 2008, when things fell apart.

The effort to restart the Six Party Talks in 2005 reflected shifts in the second Bush administration and Condeleeza Rice’s doubts about the first administration’s “get tough” strategy (we review her memoir on this period here). Closing down the Agreed Framework had long been an openly-stated objective of hawks within the administration; John Bolton was particularly blunt on this score. But achieving this objective hardly resulted in what Prime Minister Netanyahu has called a "better deal." To the contrary, unilateral US demands during the first Bush administration had little effect as the talks stalled out and reprocessing visibly continued. Hill also notes the strains in the US-ROK relationship caused by the near-complete disconnect between the Bush and Roh administrations, although he had his own reservations about the open-ended engagement pursued by Seoul (for example, p. 206).

Hill walks through the negotiation of the Joint Statement of September 2005, still a pivotal document, including what now appear as the somewhat silly constraints placed on if and when the US could met with the North Koreans one-on-one or even hoist a toast at a banquet.

However, the most interesting part of the story is the disconnect between Treasury’s efforts to bring North Korean illicit activities to heel and the dynamics of the talks. In our review of Juan Zarate's Treasury's War, we noted that he tended to downplay—and show little understanding—of the nuances of the nuclear talks; Zarate was focused on a new and potentially useful financial tool and was less than clear about how it would be used to generate leverage given the process actually in train.

But Hill pulls no punches on the fact that the efforts of Treasury were manna to skeptics of the talks, running from hawkish staff in both Treasury and the NSC right up to the Vice President (whom Hill skewers at several points). For those out to kill the talks, the timing could not have been more perfect, and indeed could have well been orchestrated. Just as the Joint Statement was being rolled out, Hill was put in the position of having to announce that the US would simultaneously be pursuing action on illicit activities that the North Koreans would with absolute certainty view as sanctions.

Hill is completely clear that the North Koreans were guilty; that was never in question. Nor was it true that Hill wanted to negotiate for the sake of negotiating; he recognized both then and in his memoir that success was far from assured. But the issue was how to exploit the leverage that the designation of BDA and a host of other factors (Chinese pressure, broader Six Party consensus) had yielded. Hill repeatedly returns to the fact that $25 million was a pittance to pay for a nuclear deal, although his frustration was at least to some extent misplaced. The problem was not simply Treasury but the fact that once the designation was made it was extremely difficult to reverse. From the perspective of Treasury, that was precisely the advantage of the BDA designation. Hill walks through the incredibly complicated financial diplomacy required to route the $25 million back into Korean hands, for Hill a lengthy and time-consuming detour that finally opened up a path to the operational agreements of February and October of 2007. These proved the high point of the Six Party Talks process; in the next post, we take up the issue of how and why things fell apart.

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