A Roadmap for EU North Korea Relations

Based on existent EU relations with Vietnam and Cambodia

Francesc Pont Casellas Mster Oficial en Integraci Europea Universitat Autnoma de Barcelona

Contents
CONTENTS ............................................................................................................................................. 1 INTRODUCTION ..................................................................................................................................... 2 WHY VIETNAM AND CAMBODIA? .......................................................................................................... 4 BACKGROUND INFORMATION: VIETNAM ............................................................................................................ 4 BACKGROUND INFORMATION: CAMBODIA ......................................................................................................... 5 BACKGROUND INFORMATION: NORTH KOREA..................................................................................................... 6 SIMILARITIES AND DIFFERENCES........................................................................................................................ 7 THE THREE COUNTRIES AT A GLANCE ................................................................................................................. 8 CURRENT AND RECENT EU NORTH KOREA RELATIONS ........................................................................ 9 THE RELATIONSHIP WITH VIETNAM AND CAMBODIA .......................................................................... 10 BASIC FRAMEWORK ..................................................................................................................................... 10 TRADE RELATIONS ....................................................................................................................................... 12 DEVELOPMENT COOPERATION ....................................................................................................................... 14 HUMANITARIAN AID .................................................................................................................................... 18 POLITICAL DIALOGUE.................................................................................................................................... 19 Bilateral dialogue ............................................................................................................................... 19 Multilateral dialogue ......................................................................................................................... 21 DEMOCRACY AND HUMAN RIGHTS PROMOTION ................................................................................................ 22 A PROPOSAL FOR NORTH KOREA ......................................................................................................... 24 FIRST PHASE ............................................................................................................................................... 24 SECOND PHASE ........................................................................................................................................... 26 CONCLUSIONS...................................................................................................................................... 32 REFERENCES ......................................................................................................................................... 33 NORTH KOREA ........................................................................................................................................... 33 VIETNAM................................................................................................................................................... 33 CAMBODIA ................................................................................................................................................ 34 EU FOREIGN ACTION FINANCIAL INSTRUMENTS ................................................................................................ 35 THEMATIC PROGRAMMES OF THE DCI ............................................................................................................. 35 TRADE POLICY ............................................................................................................................................ 36 REGIONAL COOPERATION ............................................................................................................................. 36 OTHER REFERENCE SITES ............................................................................................................................... 36

Introduction
This paper focuses on a hypothetical case study that requires a notable change of the current state of affairs to take place. Nowadays, international cooperation with North Korea is, at best, a very tense affair: broken rounds of talks for nuclear disarmament, condemnation of violent attacks, negligible trade relations (excluding arms trafficking and military know-how transfers to some countries), etc. North Koreas menace-based diplomacy and isolated, autarchic economy makes it impossible for international actors such as the European Union to improve their ties with the Hermit Kingdom. However, amidst the overall confusion surrounding the Kim regime, there is a new, bright light it the sky, as the official propaganda puts it: the future ascent to power of Kim Jong-ils youngest son, Kim Jong-un, probably by 2012. To make the transition smoother, the young, Western-educated Jong-un will probably be surrounded by Kim Jong-il's sister Kim Kyong-hui and her husband Jang Song-taek. How this triumvirate will lead the country starting on the year marking the 100th birthday of eternal leader Kim Il-sung, whereupon the North Korean government has pledged to convert the country into a prosperous and modern one, remains a mystery. However, leadership changes in reclusive Communist countries are usually catalysts for change: China in 1978, the USSR in 1985 or, more recently, Cuba are fine examples of aggressive reform agendas being applied by new leaders leading up to a progressive or radical opening of the economies and the political system. What should the European Union do, therefore, if the new North Korean regime shows signs of openness and a real willingness to negotiate with international actors in order to modernize and open up its economy and progressively adopt measures to change the political scene of the country? We could easily imagine a smooth transition to a socialist-based market economy with a strong, one party leadership, along the lines of China or Vietnam. In what would be the best possible short term scenario avoiding a sudden collapse of the regime and the humanitarian crisis it would unleash , the EU should be ready to step in and make its voice heard in the region, along with those of China, South Korea, the US, Japan or Russia.

The European Union has many decades of experience in building bridges with third countries, and it also possesses several political and economic instruments to make such relationships effective. The question is which instruments and methods should be applied in this hypothetical case. This comparative analysis aims to be a possible answer to that question: by studying the current framework of the EUs relations with two countries that share several characteristics with North Korea, we can put forward a set of proposals for future relations with a more cooperative Kim regime. Vietnam and Cambodia, two former Communist countries Vietnam still is one, at least in name , both situated in South East Asia and consumed by long, deadly wars during the last third of the 20th century, were the countries chosen for the analysis. Being under the direct sphere of influence of the Chinese giant, they have opted for multipolar diplomacy and integration in the world economy as a way to reinforce their independent status and the best path to progressively raise income and welfare levels for their citizens. As we will see, the EU has comprehensive relations with both these countries: from trade-related cooperation to development cooperation, from political dialogue to good governance and democracy promotion. A deep and comprehensive analysis of the relations between the EU and these two countries will let us single out exportable structures and instruments while also realizing their weaknesses , but also detect and take into consideration key differences that will give a unique personality to any future cooperation framework between the EU and North Korea. Those successful examples of deepening relations will help devise a basic strategy for North Korea, based both on the similarities between the three countries and the particularities of the North Korean case.

Why Vietnam and Cambodia?

As we argued in the introduction, the selection of these two Southeast Asian countries for this comparative study is not a random one. Although stark differences between themselves and between them and North Korea are obvious enough, no other two countries could have as much in common with North Korea.

Background information: Vietnam

Although Vietnam declared independence after World War II, France continued to rule until 1954, when it was defeated by local Communist forces under Ho Chi Minh. Vietnam was divided into the Communist North and anti-Communist South. After a 20year war between both countries, in which US forces were heavily involved, North Vietnamese forces overran the South, reuniting the country under Communist rule. Despite the return of peace, the country experienced little economic growth because of conservative policies, the persecution and mass exodus of dissidents and growing international isolation. Although Communist leaders maintain control on political expression, running a one party regime with a questionable human rights record, the enactment of Vietnam's doi moi (renovation) policy in 1986 meant increased economic liberalization and structural reforms to modernize the economy. Vietnam is a densely-populated developing country that has had to recover from a long war, the loss of the Soviet Bloc and the rigidities of a centrally-planned socialist economy. Vietnamese authorities have reaffirmed their commitment to economic liberalization and, with valuable support by the European Union, Vietnam joined the WTO in January 2007, securing its entry into the global market and reinforcing the domestic economic reform process. Agricultural share of economic output is shrinking, with exports making up more than 60% of GDP. Deep poverty has declined significantly and a labor force that is growing by more than one million people every year fuels the 7% annual average GDP growth rate achieved during the last decade.

Background information: Cambodia

After suffering Japanese occupation in World War II, Cambodia gained independence from France in 1953. In April 1975, after a five-year civil war, Communist Khmer Rouge forces captured the capital, Phnom Penh, and evacuated all cities and towns. At least 1.5 million people died from execution, forced hardships or starvation during the Pol Pot regime. In 1978, a Vietnamese invasion began a 10-year occupation period. The 1991 Paris Peace Accords mandated democratic elections finally held in 1993 and a ceasefire, not fully respected by the Khmer Rouge. The coalition government that arose from the 1993 elections ended in 1997, but political stability was restored just a year later, after national elections led to the formation of another coalition government. The remaining Khmer Rouge surrendered in 1999; some of the surviving leaders have been tried or are awaiting trial for crimes against humanity by a hybrid UN-Cambodian tribunal. Elections were held again in 2003, already with EU observers, but it took one year of negotiations before a coalition government was formed. In 2004, King Norodom Sihanouk abdicated and his son, Prince Norodom Sihamoni, was crowned as his successor. The latest national elections, held in July 2008, resulted in Mr. Hun Sen keeping his long-standing post as Prime Minister. From 2004 to 2007, the economy grew about 10% per year, driven by an expansion in the clothing, construction, agriculture and tourism sectors. GDP contracted in 2009 as a result of the global economic slowdown, but climbed again in 2010. The textile industry currently employs more than 280,000 people about 5% of the work force and generates more than 70% of Cambodia's exports. In 2005, oil was found beneath Cambodia's territorial waters; mining also is attracting significant investor interest, particularly in the north of the country. The tourism industry has continued to grow rapidly, with more than 2 million visitors annually. However, the long-term development of the economy is still a big challenge. The Cambodian government cooperates with bilateral and multilateral donors to address the country's many needs, including education and infrastructures. Cambodia needs to create an economic environment in which the private sector can create enough jobs absorb the growing work force: more than 50% of Cambodians are 25 years old, and many lack education and productive skills, particularly in the countryside.

Background information: North Korea

Korea was occupied by Japan until the end of World War II, when it was split, the northern half coming under Communist control. After the 1950-53 war against the USbacked South, North Korea, under its founder President Kim Il-sung, adopted a policy of diplomatic and economic autarky, structuring political, economic and military policies around the eventual unification of Korea under Pyongyang's control. The current ruler Kim Jong-il was officially designated as his father's successor in 1980, assuming a growing role until the elder Kims death in 1994. North Korea's history of military provocations, nuclear programs, proliferation and massive conventional armed forces impede any hint of normal relationships with the international community. North Korea's economy declined sharply in the 1990s with the disintegration of the Soviet Union and the dissolution of the former socialist bloc. North Korea experienced a severe famine in the summer of 1995 and continues to suffer from chronic food shortages and malnutrition. Since then, it relies heavily on international aid to feed its population. GNP per capita fell by about one-third between 1990 and 2002. Although the economy has since stabilized and grown modestly, output and living standards remain far below 1990 levels. North Korean industry operates at well less than full capacity due to the lack of fuel, spare parts and raw materials. Agricultural output has not recovered to early 1990 levels, either; the infrastructure is generally poor and outdated, and the energy sector has collapsed.

Similarities and differences

What unites and differentiates North Korea and these two Southeast Asian countries? As previously stated, there is no country that can be compared to North Korea. However, both Vietnam and Cambodia share several historical, political, geographical and economic characteristics with the DPRK: Both Vietnams and Cambodias economies are formerly Communist systems transitioning to market economies and, therefore, a mirror into which The three of them are low-income countries, although Vietnams economy is growing faster and its population enjoys a higher GDP. Vietnam is also a one-party state, with the Communist party firmly in hold. Cambodia is, however, a democracy. They are geographically located in East Asia, although North Korea is not part of the same sub-region in which Vietnam and Cambodia are located. Although different in number and structure, Cambodian and North Korean populations enjoy a very similar life expectancy, while Vietnamese citizens live longer. The three countries share a number of environmental challenges, such as increasing floods and droughts and severe deforestation. However, differences also abound: Both Cambodia and Vietnam are already functioning members of the world economy, as attested by their WTO membership. Moreover, both show dynamic and sustained growth rates, while North Koreas economy has sharply receded in the last two decades. Cambodia and Vietnam were ravaged by long wars in the last third of the 20th century, while the Korean War finished almost 60 years ago. Therefore, both Southeast Asian countries are in a rebuilding process, with no infrastructure left after the wars, while North Korea has infrastructures in place, although outdated, underused and in disrepair. Vietnams and Cambodias populations are much younger than Koreas, also in part due to the long wars. Moreover, North Koreas population is mainly urban, while Vietnams and Cambodias remains predominantly rural. While 37% of North Koreans still work in the agricultural sector, the percentage reaches 52% in Vietnam and 68% in Cambodia.
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The three countries at a glance

Vietnam
Political system Single Communist implementing market economy Population as % of total Median age of the labor force Life expectancy purchasing power parity Cumulative GDP 74% growth 2002-2009 WTO member Recent periods Past dependency Former relationship EU countries with colony (until 1954) Yes (2007) war 1955-1975 72 years 27.4 years 90 million

Cambodia
party, Monarchy democratic a elections 15 million 22% 22.6 years 68% 62 years $2,000

North Korea
with Single Communist party,

23 million 63% 33.9 years 37% 64 years $1,800

Urban population 28%

Agricultural share 52%

Per capita GDP at $2,900

63% Yes (2004) 1970-1975 1978-1988 French Former

10% No 1950 - 1953 French None

colony (until 1954)

Source: The CIA World Factbook

Current and recent EU North Korea relations

Humanitarian aid, assistance programs and cooperation activities, coupled with sanctions and condemnations, have defined the relations between the European Union and North Korea in the last two decades. The EU has been active in North Korea since its planned economy started to crumble following the dissolution of the Soviet bloc and the disastrous floods and resulting famine of 1994-95. Since then, more than 366 million have been provided as food and medical aid, support for agricultural programs and water sanitation projects. While food and medical aid and water sanitation projects were funded by the DG ECHO, agriculture-related activities have been funded under the Food Security Thematic Programme of the Development Cooperation Instrument. After establishing diplomatic relations in 2001, the CE/EU has also conducted regular political dialogues with the DPRK, focused on the topics of non-proliferation and human rights, while also fostering modest knowledge-sharing activities on issues such as the modernization of the Korean economy. Multilateral political dialogue involving the DPRK is done through the United Nations, where the EU has sponsored and supported several resolutions on North Korea. The European Union had already envisaged a more integral cooperation with the Korean regime, adopting a Country Strategy Paper for the period encompassing 20012004. In it, the Commission detailed its priorities, focused in three main areas complementing existing food security activities: institutional support and capacity building, sustainable management and use of natural and energy resources and reliable and sustainable transport. However, the strategy was never implemented and there are currently no plans to prepare a new one. In fact, while there are still some minor aid and cooperation programs in place, the Council of the European Union recently adopted a decision to renew and expand the lists of persons and entities from the DPRK subject to restrictive measures (namely visa bans and asset freezes).

The relationship with Vietnam and Cambodia

Basic framework
The relationship with both Vietnam and Cambodia is structured around the goals defined in the respective Country Strategy Papers for the period 2007-2013, which work within the frame set up by the respective Cooperation Agreements. In the multilateral sphere, relations are shaped around the 1980 EC-ASEAN Cooperation Agreement, which allows all parties to be involved in regional cooperation activities Vietnams diplomatic relations with the EU were established in 1990. After the signature of a limited commercial agreement covering textiles in 1992, the EU-Vietnam Framework Cooperation Agreement (FCA) was signed in 1995, entering into force in June 1996. A good example of a third generation Cooperation Agreement, it already provides for the inclusion of development cooperation, although its main focus and level of detail remains in the economic sphere, aiming to promote trade and investment, support Vietnam's economic development and its transition to a market economy. Based upon Articles 113 and 130y of the Maastricht EC Treaty after Lisbon, Articles 207 and 208 of the Treaty on the Functioning of the European Union, together with the first sentence of Article 228(2) and the first subparagraph of Article 228(3) of that Treaty, this agreement was valid for an initial period of 5 years and automatically renewable on a yearly basis. In line with other contemporary agreements including Cambodia's FCA , it also includes political conditionality clauses, both negative with the possible suspension of the Agreement in case of breaching the principles of democracy and human rights, considered an essential 1 part of thereof and positive it contains a clause on cooperation in the fields of human rights and democracy, now financed via the European Instrument for Democracy and Human Rights. Moreover, it also provides for comprehensive political dialogue between the actors. However, with the EU-Vietnam agenda diversifying towards increased political and economic cooperation, negotiations of a new Partnership and Cooperation Agreement equivalent to an Association Agreement, which will probably be of Mixed nature
1

The precise use of terminology is very important here, as the word 'essential' has, under the 1969 Vienna Convention, legal implications in International Law, while other synonym expressions, such as vital or key, dont.

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because of the variety of subject matters (up to 60) affected were launched in 2007. Eight rounds have already been completed with notable progress achieved, but the final signature of the Agreement is being delayed due to severe discrepancies in the fields of human rights and the rule of law between the two parties 2. Its relationship with Cambodia framed around development assistance, support to democracy and a commitment to open markets and free trade, the EU signed a Framework Cooperation Agreement with the Kingdom of Cambodia on April 1997. This Agreement, which came into force on 1 November 1999, focuses basically on trade and financial relations, economic cooperation and development cooperation activities, while also covering other areas such as environmental and regional cooperation, science and technology, intellectual property, human resources, communication or culture. As is the case with Vietnam, respect for and recognition of democratic principles and human rights also constitute an essential and binding element of the Agreement. Also to be found in the Vietnam Agreement, the future developments clause in Article 15 allows for the expansion of the scope of the Agreement by mutual consent. Both Agreements, being almost contemporary in time and sharing the overall scope and target region, have much in common, also including a most favored nation clause. However, subtle differences can be found, both in the order 3 and content of the articles and the emphasis on certain aspects, like the encouragement of and support towards resettlement of refugees returning to Vietnam the readmission of citizens is only mentioned in Annex II of the Cambodia FCA , the explicit wording used in the clause regarding intellectual property rights in the Cambodia FCA or the differences in the provisions drug abuse control, more developed in the case of Vietnam. Environmental and political cooperation are also included in both Agreements, although the clauses are not linked to the Generalised System of Preferences, of which both Cambodia and Vietnam are beneficiaries. Such positive conditionality, in the form of the so-called Special Incentive arrangement for sustainable development and good governance, can usually be found in more modern FCAs. Therefore, any future proposal for North Korea should include this element.

In fact, after a few years of progressive but controlled opening of the political sphere, Vietnam has cracked down on protests and opposition after the global crisis hit the country in 2008, a situation that worries the EU, as stated in its 2010 Mid Term Review of the Vietnam Country Strategy. 3 For instance, it cannot be overlooked that development cooperation (Article 3) appears even before trade cooperation (Article 4) in the Cambodia Agreement, while it stays well behind (Article 9) in the Vietnam FCA.

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Trade relations
Trade relations are the key element of the relationship between the EU and these two Southeast Asian countries. Although growth rates have averaged 6-7% in recent years, Cambodia and Vietnam still face daunting challenges before becoming middle income countries, including improving the education level of a growing working force and reducing the number of people living below the poverty line 4. Both Cambodia and Vietnam are export-oriented developing economies, with an exports-to-GDP ratio of 45% and 60% respectively (source: IMF). Their trade with the EU concentrates on the export of garments and footwear 5 (and also seafood in the case of Vietnam), while importing modest amounts of hi-tech goods, automobiles, airplanes and machinery. Therefore, trade imbalances in favor of both developing countries, equaling more than 50% of the total annual worth, are commonplace. The structure of their trade relations with the EU is, however, not identical. Cambodia is clearly the less developed country of the two: with a PPP-adjusted per capita GDP of just $2,000 (compared to $2,900 in Vietnam), problems related to poverty, lack of infrastructure and deficient access to education are more acute. This explains why the EU has granted regional accumulation to Cambodia, a tweak of the GSP rules of origin that allows unfinished textiles imported from other ASEAN countries to be considered of Cambodian origin and, therefore, easily exportable to the EU. Rules of origin under the GSP regime have also been amended recently by Regulation (EU) 1063/2010), the changes having entered into force on January 1, 2011. Moreover, the EU has included Cambodia in its Everything But Arms (EBA) program, aimed at least developed countries (LDCs). In 2001, the Council adopted Regulation (EC) 416/2001 later incorporated in the GSP regulation (EC) No 2501/2001 , offering duty-free access to imports of all products from LDCs, except arms and ammunitions (as well as bananas, sugar and rice for a limited period), without any quantitative restrictions. Of course, in case North Korea decided to abandon its aggressive, uncooperative stance, it would be granted LDC status by the UN and,

4 For instance, according to the latest Blue Book for Cambodia (2010 edition), 5 million Cambodians live with less than 1 dollar a day, and an additional 6 million have between 1 and 2 dollars per day. 5 This explains why one of the first agreements between the CE and Vietnam was a Textile Trade Agreement, already signed in 1992; Cambodia's followed in 1999.

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therefore, be eligible for the Everything But Arms program an ironical proposition for a country whose exports currently focus on arms and weapons. Cambodia is also a beneficiary of trade-related technical assistance, structured under an integrated sector-wide approach detailed in the EUs Cooperation Strategy with Cambodia for 2007-2013. Such cooperation focuses on trade and economic reforms, capacity building to meet WTO obligations and regulatory aspects. For its part, Vietnam, as a developing country, is a beneficiary of the Generalised System of Preferences, which offers preferential access to the European market in the form of reduced tariffs for goods. Still not granted Market Economy Status 6 by the EU, its admission to the World Trade Organization in 2007 has to be partially credited to the EU, which negotiated a Market Access Agreement lifting restrictions on Vietnamese textiles from January 1, 2005 7, and also offered help via its MUTRAP assistance programme, both during the accession process and the implementation period. It must be noted that current agreements, both under the GSP and the Everything But Arms programs, only cover trade in goods, but does neither include trade in services nor trade-related aspects of intellectual property rights. Those aspects of trade have to be regulated under Mixed Agreements, signed by all EU member states, as for the restrictive interpretation of the EU trade policy arising from the well-known ECJ's Opinion 1/94 on the WTO. This is precisely one of the reasons behind current ongoing negotiations with Vietnam, both to create a Free Trade Area (FTA) and to sign a new Partnership and Cooperation Agreement (PCA) that would make bilateral relations more comprehensive, both in the political and the trade fields. The FTA negotiations with Vietnam and other individual ASEAN countries were started after talks to reach a wider EU ASEAN FTA stalled due to the differences in development levels among ASEAN countries. With a growing service sector and a thriving industrial complex specialized in low-cost products, the Vietnamese market is, therefore, increasingly attractive for the EU. However, obstacles lay ahead in the European Parliament, both for its protectionist sentiments and humanrights concerns.
6 According to the Vietnam - EC Strategy Paper for 2007-2013: In spite of impressive achievements, Vietnams process of transition to a market economy is still on-going. State-owned enterprises still represent a substantial part (about 40%) of the economy. 7 In exchange for a further opening of the Vietnamese market to EU firms.

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Also related to that, another goal of the Framework Cooperation agreements is facilitating the business climate for European companies willing to invest in Cambodia and Vietnam. Under the header Economic Cooperation (and also with a dedicated article on Investment in the Vietnam FCA), the EU defines, almost unilaterally, the fields of action of such cooperation, which the ultimate goals of creating a better economic environment and business climate, generating synergies between companies in the private sector and facilitating investment. In the context of globalization, this should be in the best interest of both parties, as Europe is looking for business and delocalization opportunities for its companies which, in turn, would create jobs and generate revenue in the beneficiary third countries.

Development cooperation
Development cooperation is a key element of the EU relationship with both Cambodia and Vietnam. The successful implementation of applicable EU cooperation instruments, which were rationalized in 2006-2007, shows the true level of commitment the European Union has with the development agenda of the third countries. Development cooperation goals and focal sectors are detailed in the respective Country Strategy Papers (currently for the period 2007-2013), its progresses analyzed in Mid Term Reviews (published in 2010) and its per-country implementation in regards to DCI (the Development Cooperation Instrument) detailed in Multi-Annual Indicative Programmes (latest edition: 2007-2010). Although the legal basis for such development cooperation actions, as specified in the relevant FCAs, is the Council Regulation (EEC) 443/92 of 25 February 1992 on financial and technical assistance to, and economic cooperation with, the developing countries in Asia and Latin America, the European Union looks for an ever closer cooperation with the beneficiary nations, in line with the 2005 Paris Declaration and the 2006 EU Roadmap for Increased Aid Effectiveness, which highlight the importance of ownership, harmonization, alignment, results and mutual accountability. Therefore, the EU strives to align its development cooperation strategy with third country national plans, in this case Vietnams Socio-economic Development Plan 2006-2010 8 and
8

The 2011-2015 Socio-economic Development Plan should be published shortly. For now, all information the Government has made available through official media is that the main goals of the plan are maintaining the GDP

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Cambodia's National Strategic Development Plan 2006-2010 9, both also guided by the UNs Millennium Development Goals and based on the IMF scheme of Poverty Reduction Strategy Papers. Nowadays, EC Country Strategies look to reduce the number of focal sectors, selecting areas in which the European Union has a competitive advantage and/or additional know-how compared to other donors, and Vietnams and Cambodias are no exception to that trend. In both cases, we find just two focal sectors and two sets of additional actions, the only difference being the second focal sector chosen for each case. So, while the focal sectors for Vietnam are supporting the Socio-economic Development Plan (with the aim to reduce poverty in a sustainable manner via the World Banks Poverty Reduction Support Credit) and supporting the health sector, Cambodias include supporting its Strategic Development plan as well as basic education. Additional actions focus, in both cases, on trade-related assistance and support to political dialogue and cooperation, with governance and human rights, the environment and gender issues identified as key cross-cutting issues that should be positively affected by EU policies and actions. The main instrument the EU has to implement development cooperation programs is the DCI, which covers three components: geographic programmes (focusing on 47 developing countries and 5 regions worldwide), thematic programmes (benefiting all developing countries) and a programme of accompanying measures for the Sugar Protocol countries (that does not apply to Asian partners). Of the total budget for the period 2007-2013, 16.9 billion, roughly 10.1 billion are allocated to geographic programmes (both country and regional programmes), while 5.6 billion will go to thematic programmes. Under the multi-annual indicative programme, which allocates funds corresponding to country programmes, Vietnam was set to receive 160 million from 2007 to 2010, and 144 million from 2011 to 2013, for a grand total of 304 (roughly 3% of the total available budget). Cambodia, for its part, was allocated 77 million for 2007-2010 and 75 million for 2011-2013, totaling 152 million (or about 1.5% of the total available budget). While the per capita allotment to Cambodia is much higher that Vietnams 10, we should also take into account that the 304 million that the EU is set to disburse in 7 years (or
growth rate of 7-8% per year and attaining an annual reduction of 2-3% in the number of poor families while completing the transition to a fully functioning and stable market economy. 9 Revised in 2008 and now valid until 2013.

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about 43 million a year) surpass the 299 million it offered from 1989 to 2006. Moreover, it must be noted that, under Regulation (EC) No 1905/2006, EU measures funded with the DCI can be used to co-finance programs and are eligible for cofinancing from Member States or other donors, including international and private organizations, as well as non-state actors and partner countries. Therefore, their potential for relevance is dramatically increased by creating synergies with other actors in the field, even if the overall number is small 11. Also under the financing umbrella of the Development Cooperation Instrument and complementing national assistance programmes are a series of regional cooperation programmes for Asia, of which both Cambodia and Vietnam (and also North Korea) are beneficiaries. Such regional programmes are structured around three intervention priorities: support to regional integration through regional organizations and fora (such as ASEAN or ASEM), thematic policy and know-how based cooperation (including topics such as higher education or the environment) and support to displaced people. Vietnam and Cambodia benefit from Asia-wide thematic programmes for regional cooperation in the fields of higher education (Erasmus Mundus), the environment (both the green growth SWITCH and the sustainable forest management FLEGT programmes) or food security (in the case of Cambodia 12), while also profiting from ASEAN regional integration cooperation programmes. While we dont have any exact data from Cambodia, Vietnam received about 40 million per annum between 2002 and 2005 under such regional programmes. Given that the budget allocated for Asia (excluding Central Asia) for 2007-2013 reaches 775 million, we can expect a similar or even higher contribution to these two countries. In what the EU terms thematic programmes, we can also identify a series of instruments, also available to both countries, that focus on the promotion of democracy and human rights, as well as the development of a strong civil society. Those are funded under the EIDHR instrument and the NSA/LA thematic program of the DCI, and will be analyzed independently.
10 Cambodia will receive half the amount Vietnam has been assigned, but its population is just 1/6 of Vietnam's, so it will indeed be granted about 10 per person for the whole period, compared to less than 3.5 per person in the case of Vietnam. 11 Donor countries and institutions pledged $8 billion, or roughly 6 billion, to Vietnam in 2008. 12 In what is fresh news and an excellent demonstration of this versatile and useful instrument in action, the EU announced on January 20 that it was providing 2.6 million to two food security projects run by the FAO and the Danish NGO ADDA.

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Another important but often overlooked instrument of trade-related development cooperation, the WTO's Aid for Trade program, has been used by the EU to help Vietnamese businesses become more competitive and develop trading links with the EU. Financed through the regular EU budget and the European Development Fund (EDF), the Commission has pledged to contribute 1 billion annually (with an extra 1 billion coming from Member States) on a global scale. There is no doubt that this program, both in its Trade Related Assistance and wider agenda categories, could be hypothetically applied in North Korea if it decided to take progressive steps towards creating market-oriented economy. As a complement to all these instruments, Vietnam also receives loans from the European Investment Bank. Under EU mandate ALA IV, covering the period 20072013, the EIB can lend up to 1 billion to support and complement EU cooperation strategies, programmes and instruments. In this sense, the EIB reached an agreement with the Government of Vietnam for a loan of 100 million to fund climate change adaptation investments, as well as another agreement to loan 73 million for the construction of a subway line in Hanoi. We are, therefore, talking about very relevant figures, substantially higher than the yearly combined allocation the EU pledges to the country in development cooperation. In conclusion, while plain numbers might not seem staggering, the EU, when put together with its Member States, which co-fund many of its projects, is the biggest partner in development assistance for Cambodia (pledging approx. 200 million per year) and the third biggest for Vietnam (pledging around 900 million per year), and must strive to play a similarly important role in the future, both in these Southeast Asian Countries and, when the time comes, also in North Korea. Finally, it must be noted that effectiveness in the implementation of development cooperation programs is greatly enhanced by decentralized management, i.e. when implementation is managed from the local European Union Delegation. This aspect, which is already a given in all EU-operations in Vietnam and Cambodia will, however, be a key point in any future strategy for North Korea, which currently lacks an EU Delegation.

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Humanitarian aid
Humanitarian aid also plays an important role in EU relations with its Southeast Asian Partners and, obviously enough, also with North Korea. The European Commissions Humanitarian Aid and Civil Protection department, ECHO, offers substantial aid to both Cambodia and Vietnam. Cambodia, a country still struggling with the legacy of wars, environmental degradation caused by deforestation and the changes of weather patterns due to the global climate change a set of problems which North Korea also shares has received 73 million since 1994. Vietnam, for its part, mostly struggles with floods and typhoons, netting up to 27 million in aid since 1994. Moreover, ECHOs Disaster Preparedness programme, DIPECHO, has also been active in the area, mainly focusing on projects to reduce the impact of typhoons and floods in Vietnam (having invested 9.5 million since 1998) and the impact of floods and drought caused by deforestation in Cambodia (investing between 8 and 9 million over the same period). Although remarkable, EU aid is maybe not such a big factor for change in Vietnam and Cambodia as development cooperation is, chiefly in a fast-developing nation such as Vietnam, where both the government and the peoples capacity to respond to natural disasters is already high. In fact, although the EU (including its Member States) is the world's largest provider of funds for humanitarian aid operations, the particular cases of these two Southeast Asian countries is not fully representative of its potential. However, any future intervention in North Korea should no doubt build upon existing humanitarian aid programmes, so the role of ECHO/DIPECHO programs in any plans for that country should be very much taken into account.

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Political dialogue
As provided by the relevant bilateral agreements, both Cambodia and Vietnam enjoy several channels of political, technical and sectorial dialogue with the EU, both bilaterally and multilaterally.

Bilateral dialogue

Both Cambodias and Vietnams FCAs provide for regular political consultation and bilateral dialogue via a Joint Commission (Vietnam) or Joint Committee (Cambodia), a forum for high-level discussions on political and economic issues of common interest, which is held every two years, alternating Brussels and the capital city of the relevant third country as the venue. However, such meetings can also be exceptionally held on a more regular basis, as has been the case with the EC-Cambodia Joint Committee, which met in 2010, 2009 and 2007. Cambodia, a parliamentary democracy, also receives the regular although not systematic visits by the European Parliament Delegation for Relations with Southeast Asia and ASEAN, thus enjoying another useful channel of political dialogue that shows the active involvement of the European Parliament with democracy promotion around the world. EU electoral observers were also sent on Observation Missions to elections in Cambodia in 2008, 2003 and 2001. In the case of Vietnam, meetings at the highest level have already been held and will probably increase in number. A standout event was the visit of Prime Minister Nguyen Tan Dung to the European Commission in October 2010, a trip he used to emphasize the interest of his country in signing a Partnership and Cooperation Agreement that would substitute the current FCA and thus expand the common agenda for bilateral cooperation, both in local and global challenges. As stated in the respective agreements, the Joint Commission/Committee can have several working groups and subgroups, one of them of vital importance for EU relations with the respective countries, as it allows articulation of an important part of the EU cooperation strategy. It is the subgroup on Cooperation in the areas of institution building and administrative reform, governance and human rights, whose work is used
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to identify the areas of interest for technical cooperation actions and side events funded by the EU under its cooperation strategy. As shown by the graphic on the right, the funding allocated to this particular additional action, influenced by the decisions taken by this subgroup, under the 2007-2013 Vietnam Strategy Paper is remarkable enough. However, in the following table, showing the estimated allocations for the period 20112013, we can see that just 2% of the cooperation budget for this second half of the current Strategy will be allocated to governance support which focuses on legal and judicial reform and strategic dialogue. This could easily be seen as a direct result of the slowdown on political aperture and the growing power of conservative leaders in Vietnams power spheres as an after effect of the world financial crisis. It looks like the EU, instead of fighting to defend its core values of democracy, rule of law and human rights 13, is lifting its foot off the pedal to appease an important trade and strategic partner, willing to hedge against excessive Chinese influence in South East Asia and also in the final stages of the negotiation of a comprehensive Partnership and Cooperation Agreement with the EU.
70 Million 56 Million 15 Million

Focal Sector 1

Support to Vietnams Poverty Reduction Strategies

48,50%

Focal Sector 2 Additional Action 1 Additional Action 2

Support to the Health Sector

39,00%

Trade-Related Assistance

10,50%

Support to Governance and to the EU-Vietnam Strategic Dialogue 3 Million 144 Million

2,00%

Total

100%

13 Also in spite of the continued existence of a human rights dialogue mechanism between the EU Heads of Missions in Hanoi and the Government of Vietnam, created in 2001 and holding meetings twice a year.

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Cambodias statistics, however, show an opposite trend. A less important trading partner for the EU and also a minor geopolitical actor in the region, Cambodia is already a democracy, although a young and relatively unstable one. After the celebration of general parliamentary elections in July 2008, observers from the EU said that, although improvements over the 2003 elections were undeniable, they still fell short of international standards. If we look at the budget allocation data for the Multiannual Indicative Programme 20112013, we see the clear possibility of a remarkable increase in the funding of the Support to Cooperation and Dialogue in Governance and Human Rights item, which could receive up to 20% of all available funds, or up to 15 million. Therefore, we can only conclude that, although the EU takes democracy and human rights dialogue seriously in Southeast Asia, the intensity and outcomes of such elements of the political dialogue depends on many other namely economic and geostrategic calculations.

Multilateral dialogue

The Association of Southeast Asian Nations (ASEAN), an increasingly successful regional organization encompassing 10 countries which include Vietnam and Cambodia - is the ideal forum for multilateral political and economic dialogue between the EU and these two countries. The first EU-ASEAN summit of Heads of Government took place in 2007, while the ASEAN-EU Meeting of Foreign Affairs Ministers takes place regularly, the latest being held in Phnom Penh, Cambodia, in 2009. Moreover, the EU is an ASEAN dialogue partner, which allows participation in a limited number of ASEAN meetings. The Asia-Europe Meeting is another important forum for multilateral political dialogue. Summits gathering Heads of States and of Governments of forty-six Asian 14 and European countries plus the President of the European Council and the President of the European Commission are held every 2 years, with over 50 ministerial and officials meetings in between. Dialogue topics are wide in range and scope, covering from finance and trade to disaster preparedness and climate change, and from food security and development to global governance.
14

Not including the Peoples Democratic Republic of Korea.

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Democracy and human rights promotion

As of 2006, the EU has a specific instrument for the promotion of democracy and human rights: the EIDHR (European Instrument for Democracy and Human Rights). This instrument, successor to the European Initiative of 2000-2006, is used to grant aid where no established development cooperation channels exist, and can also do it without the agreement of third country governments, a key element in hostile setups such as one-party autocracies. Aimed at enhancing respect for human rights and strengthening the role of civil society, it can support groups or individuals, but also intergovernmental organizations. With a total budget of 1.1 billion for the period 20072013 (or roughly 1/10 of the global DCI budget for the same timeframe), disbursement of its funds in a given country is considered a good indicator of the EUs compromise with democracy and human rights in the given country or the wider region. In Cambodia, the program is specially active with local and international NGOs, having pledged 13.5 million since 2003 in grants to support democracy and human rights, normally calling for new proposals once or twice a year. In the resolution of the latest call for proposals, eight new projects (out of 23 candidates) were awarded 1.6 million, to be disbursed starting in 2011 15. As for Vietnam, no up-to-date information on this particular program is currently available from the EU Delegation website. However, the presence in the country of the current instrument and even of its predecessor, the European Initiative for Democracy and Human Rights, seems clear. Documentation related to calls for proposals for initiatives in Vietnam is readily available through online sources and a clear reference to the successful implementation of both the EIDHR and the NSA programmes in the Vietnam Strategy Paper 2007-2013, which are labeled the main channel for funding NGOs in Vietnam. Moreover, a quick glance at the list of projects currently being funded or co-funded by the EU and coordinated by the EU Delegation in Hanoi shows a remarkable number of projects dealing with governance, democracy, human rights and institutional reforms, with objectives such as building social accountability, empowering workers and trade unions and encouraging democratic participation and social dialogue within companies.
15

http://ec.europa.eu/delegations/cambodia/press_corner/all_news/news/2011/20110118_01_en.htm

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All these undeniable efforts have to be complemented with the budget allocations to support political dialogue on governance and human rights. As already mentioned in the previous sections, the relevant Country Strategy Papers set out two additional actions that should complement the two focal sectors of the EU's development cooperation activities in Cambodia and Vietnam, one of them dealing with political dialogue and cooperation. In the case of Cambodia, the Strategy Paper clearly details such dialogue and cooperation will take place in the field of governance and human rights, while using the more general term "strategic dialogue" for the single party regime of Vietnam. However, emphasis is also put in the subgroup on Cooperation in institution building, administrative reform, governance and human rights of the EC-Vietnam Joint Commission. In conclusion, the EU is rather active in the promotion of democracy and human rights in the region, using the relevant tools to fund active NGOs that, in turn, help create a stronger civil society in the receiving countries. Although the EU is not ready to sacrifice other interests on behalf of democracy and human rights as shown by the deepening ties with Vietnam, which remains a one-party state, despite its recent crackdowns on dissidents and human rights abuses , positive actions are taking place in both countries, mainly at grassroots level but also at the highest administrative spheres, including the judiciary.

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A proposal for North Korea

Building upon the stated goals for EU relations with another one-party, Communist state such as Vietnam, we can easily devise a basic framework for EU North Korea relations. They should, therefore, aim at supporting the sustainable economic development of North Korea, encouraging its integration in the world economy, assisting in North Korea's transition to an open society and raising the profile of the EU in Northeast Asia. However, progress should be attained gradually, as the starting point would be a ruined, isolated economy coupled with an alienated society which should start gradually integrating in a globalized world. Therefore, our relationship building plan would be divided in two separate phases: an institution and confidence building initial phase and a cooperation establishment phase.

First phase
The first stage of development in EU North Korea relations should be based on mutual confidence building. While the EU should be ready to step in and gradually increase its involvement in North Korea, the Communist regime should be pressed to make positive steps towards a progressive opening that, in turn, should generate mutual trust and greater freedom to operate. Institution and capacity building from the Korean side should be a must. Progressive legislation reforms in the model of Vietnams doi moi policy should be undertaken, together with the definition of a comprehensive national strategy aimed at improving overall living standards and promoting sustainable growth, in the line of Cambodia's National Strategic Development Plan and Vietnam's Socio-economic Development Plan and based on the IMFs Poverty Reduction Strategy Papers. As the EU gradually increases its positive involvement in North Korea, the Korean regime should be able to demonstrate greater transparency and accountability through progressive project ownership. However, the EU should also take several measures to succeed in this first phase, the first building block being the aperture of an European Union Delegation in Pyongyang.
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Given their long-time diplomatic and aid-related relationship with North Korea, Sweden would be the ideal Member State to head the delegation and implement and coordinate all measures and programs in the field. This first phase could probably imply the use of the Instrument for Stability, whose stated goal is providing financial aid that would guarantee stable conditions for human and economic development. With a total budget of over 2 billion for the period 20072013, any hypothetical decision to gradually open up North Korea from 2012 would still coincide with the current validity period of said instrument. Hoping that the power transition goes smoothly, the Instrument for Stability could still be implemented in the form of aid in a stable context on the grounds of further implementation of EU cooperation policies, in case there is a sudden and not unthinkable by any means, given the sorry situation of the country crisis threatening the law and order or the security of individuals, or affecting critical infrastructure or the public health. In other words, it could serve as a curative springboard for further cooperation projects in the second phase, once the situation in the now isolated country is further stabilized. Humanitarian aid in the form of medical aid and water sanitation projects, already in place in the last decade, should be resumed, once again with funds from the DG ECHO. Meanwhile, the Development Cooperation Instrument should also be used in this initial phase to address food insecurity and scarcity and build competences in agriculturerelated activities, using funding from the Food Security Thematic Programme, while also offering help in the area of sustainable development and environmental protection under the Thematic programme for the environment and the sustainable management of natural resources. Finally, DIPECHO programs should also be readily implemented in order to help farmers cope with environmental degradation caused by acute deforestation and the effects of changes in weather patterns, including droughts and floods. In this sense, Cambodia, a country sharing these same threats, is a very valid reference. As stated before in this paper, the European Union had already adopted a Strategy Paper for North Korea in 2002. Taking a look at the identified priorities, they do not seem too far away from the lines drawn by the Commission almost ten years ago: food security
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activities, institutional support and capacity building and sustainable management and use of natural and energy resources are all there, while the third priority area earmarked a decade ago reliable and sustainable transport does not seem a maximum priority, specially in this first phase of rapprochement.

Second phase
Building upon a successful first phase, which could span three or more years, always according to developments on the North Korean side and also to the international environment and reaction to such apertures, the European Union should proceed in an intensification of political and economic ties with North Korea. Key to that would be the signature of a new generation Cooperation Agreement. Of course, North Korea should also be asked to abandon its nuclear program and sign the NPT before any agreements are signed. We should expect strong pressure from the European Parliament in that sense. However, it might well be that the new regime is not ready to surrender its nuclear deterrent but desires a progressive opening anyway, also wishing to make concessions in the other values and core interests of the European Union, as defined in Article 3.5 of the Treaty. Therefore, we should not rule out that a nuclear North Korea could sign a Framework Cooperation Agreement with the European Union, in the line of that signed with Pakistan in 2004. If such hurdles are bypassed, the EU should be ready to offer a basic but attractive Cooperation Agreement, whose legal basis should be found in Articles 207, 208 and 352 of the Treaty on the Functioning of the European Union, to North Korea. The preferred model, in line with recent agreements, would be a mixed agreement, meaning that all EU countries should approve and sign it. Although this could clearly difficult and slow down the ratification process, measures could be taken to partially implement the agreement in its commercial policy aspects, which are an exclusive competence of the European Commission. The main reason for choosing a mixed agreement would be the desirable inclusion of services and property-rights related trade issues. Obviously enough, China would swiftly take advantage of a hypothetical aperture of the North Korean economy, both by delocalizing low-cost and highly polluting factories and by flooding the market with
26

cheap Chinese goods. Most European firms would be in no position to compete in a very immature market, with an extremely reduced elite enjoying enough purchasing power to opt for EU products. However, entering the service sector absolutely underdeveloped and with no local know-how or expertise whatsoever would be a very attractive opportunity for many European firms, including those in the banking and insurance sectors. European service sector firms enjoy, moreover, a remarkable competitive advantage in terms of expertise, know-how and service quality and variety when compared to their Asian counterparts, so any possibility to enter and develop a fresh market should not be passed up. However, the EU should also be ready to understand that North Korea might not be ready to open its service market 16, even partially. Even if the regime is open for change, aperture would be gradual and not without a relative degree of wariness, thus making it hard for the North Korean elite to accept the aperture of a sector in which no local firms would be in a position to compete, even if other additional and conditional incentives are enticing. Should that be the case, the EU should be ready to accept a basic Framework Cooperation Agreement, signed on a bilateral basis and following the lines of Vietnam's and Cambodia's 17. More precisely, said Cooperation Agreement could use the EC-Vietnam's FCA as a basis to introduce a democracy and human rights conditionality clause: Vietnam, also a single party Communist regime with a suspect human rights track record, but that has not deprived it from signing a Cooperation Agreement with the EU. Namely Democratic (a Peoples Democracy), the North Korean regime should make some concessions in the name of a progressive democratization and respect for the rule of law and human rights, including freedom of speech and information, based on international standards. Moreover, a positive conditionality clause on cooperation in the fields of human rights and democracy should also be included in the Agreement. This should appease the European Parliament and, coupled with the promise of a generous aid and cooperation package for the underdeveloped nation (including democracy and human

Also in line with neighboring Asian countries including Japan , all of them extremely protectionist with the national service sectors. 17 Although more recent Cooperation Agreements exist, such as the one for Pakistan (signed in 2004), the evolution of such agreements has not been much remarkable over the years, in stark comparison with the new generation Association / Partnership and Cooperation Agreements, which have become much more detailed and comprehensive than their older counterparts.

16

27

rights promotion programmes), be enough to fend off attempts to exercise veto power over the signature of the Agreement. Also in line with Vietnams, this Framework Cooperation Agreement should include a clear reference to North Koreas economy transitory status towards a market one, with the EU ready to step in and offer technical cooperation towards that goal. North Korea should also be granted beneficiary status of the Generalised System of Preferences, although with no regional accumulation measures in order to avoid covert dumping procedures from Chinese manufacturers. Conditional on its designation as a Less Developed Nation by the United Nations, and also pending on the regime's acceptance of non-proliferation measures for both small arms and WMDs, North Korea could also be offered participation in the Everything But Arms program, a measure that would surely be welcome by the regime as it tries to modernize and integrate its economy in the world markets. It must be noted, however, that such an offering would also have the intrinsic risk of benefiting Chinese outsourcers, who would then be able to produce cheaper goods in Korea and export them to the European market paying no tariffs. Therefore, rules of origin should be strictly enforced and special provisions might be in order in order for such trade arrangements to be beneficial for both North Korea and the European Union. The FCA should also focus on the following aspects: Environmental cooperation, including a conditionality clause linked to the beneficiary status of the Generalised System of Preferences. Such positive conditionality, called the Special Incentive arrangement for sustainable development and good governance, can usually be found in modern FCAs. Cooperation in the science and technology fields, which would be very welcome by the North Korean government. Although very aware of the consequences the current isolation, the government is already taking controlled steps to have access to modern knowledge via limited and supervised Internet access. One of the chief goals of a progressive aperture of the regime would clearly be the acquisition and exchange of scientific and technological know-how and expertise, so participation in EU-funded programs would be an offer North Korean negotiators would be very ready to embrace.
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Human resource development would also be a key offering for North Korea, which would badly need to retrain and adapt its workforce for a successful accession into the globalized world economy. At the same time, cooperation in this field would also prove beneficial for EU companies starting business activities in North Korea in the future.

Drug trafficking, human trafficking and money laundering provisions should also be included in the Agreement. North Korea is currently a focus for such criminal activities in Northeast Asia and the European Union should, in line with its European Security Strategy, take steps towards mitigating such treats on a global basis.

Institutional aspects and political dialogue mechanisms should also be detailed, in line with Vietnams and Cambodias agreements and including the setting up of a Joint Commission and relevant specialized subgroups. Moreover, assuming North Korea is included in ASEM, multilateral dialogue through this channel should also be emphasized.

In line with the Agreement, a competent strategy for development cooperation should be devised. This would mean shifting focus from humanitarian aid (namely ECHO and DIPECHO projects) towards development cooperation, chiefly in the shape of DCI country allocations, but also making sure North Korea benefits from regional programs, both in the framework provided by EU-ASEM regional integration plans and for Asiawide thematic programmes. The allocation of funds from the DCI should, of course, be based on a Country Strategy Paper, which should in any case be prepared in 2014 or later (and, therefore, be valid until 2020 if the current 7-year planning system is maintained). In line with the need to mainstream and integrate development cooperation operations, and also taking as a basis the current Vietnam and Cambodia strategies, focus should be narrowed into two main focal points, which should be complemented by two sets of additional actions. Making sure close coordination and synergies are created with other hypothetical donors, including the UNDP, China, South Korea, the U.S. and Japan, as well as NGOs and other European aid agencies 18, the European Union should focus on:
Which will probably be led by SIDA, the Swedish Governments Development Cooperation Agency, with a long history of cooperation and aid activities in North Korea based upon successful diplomatic relations between the two countries.
18

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Focal point 1: Support for North Koreas Poverty Reduction Strategy Paper which could prove quite similar to Cambodia's National Strategic Development Plan Focal point 2: Support for the Health Sector 19 Additional actions: Trade-related Assistance and Support to the EU-North Korea Cooperation and Dialogue in the field of Governance and Human Rights Funds allocated to development cooperation programmes cannot be detailed in advance, but we could foresee per capita yearly allocations in the line of Cambodias (i.e. 3 times those of Vietnam's). Moreover, all 5 lines of the DCI thematic programmes would be of special interest for the Democratic Peoples Republic of Korea: The Non-state Actors and Local Authorities programme should be used to assist in the progressive building of a functioning civil society. Also in line with current activities in Cambodia, North Korea should benefit of the two main lines of the Environment and sustainable management thematic programme, namely the green growth SWITCH and the sustainable forest management FLEGT programmes. Food security will also keep being a problem in North Korea for the years to come, so cooperation under this thematic program should also be a must. The Investing in people thematic programme, with its focus in the Erasmus Mundus student exchange programme, would also be very beneficial for both the educational and the cultural development of the future North Korean economic and political elite and for the European Union, whose perceptions and awareness levels in the area would surely improve. Migration and asylum could also prove a problem for a more open North Korean regime, as many people would seek refuge in China and/or South Korea. Selfevidently, the main aim of an orderly transition, desired by both China and South Korea, would serve to mitigate this risk, but the EU should be ready to help in case important migratory movements take place.

19 As in the case of Vietnam, assistance in the basic education sector is not a very pressing need for North Korea, which enjoys a 99% literacy rate and whose higher education system is still functional. Moreover, educational assistance should and would surely be provided by South Korea, an advanced nation itself with a top-notch educational system which, moreover, shares the vehicular language with its northern neighbors.

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This second phase would also see the introduction of the EIDHR instrument in North Korea. Although not advisable at the outset of reform - due to the intrinsic instability of such aperture processes in a Communist, autarkic society , improved and expanded relations with the country should also be accompanied by a strong commitment with grassroots democracy, human rights promotion and civil society fostering. In that sense, much should be done in North Korea, an extremely reclusive country for the last 60 years; adding to that will be the overwhelming influence of its Chinese neighbors, whose government is well known for its reluctance towards such developments. Therefore, allocation of EIDHR grants as well as grants from the NSA/LA DCI thematic programme for projects in this country should be given priority. Finally, ECHO and DIPECHO actions in North Korea should not be discontinued in the short- to mid-term, as the country will surely maintain its underdeveloped status and, therefore, its fragility to sustain natural disasters such as floods and severe droughts.

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Conclusions

No country with a functioning government is more unpredictable than North Korea. A bizarre combination of isolationism and aggressive diplomacy, the world community awaits an elusive aperture of the regime. However, the pending power transfer raises the stakes once again. Will the transition be smooth? Will the new leader(s) take the chance to modernize the economy and improve the living conditions of their long-suffering population? If that is the case, the EU must be ready to step in. Having a clear strategy for a progressive deepening of ties with the DPRK can help hedge Chinas influence in the region, while also making its name heard amongst other players in the area, such as South Korea, the United States, Japan or Russia. The European Union has the right set of tools namely comprehensive cooperation agreements and financial instruments to make a difference for the North Korean population, while also benefiting the European economy, promoting the EU core principles and helping attain the goals detailed both in the Treaties and the European Security Strategy. The examples of Vietnam and Cambodia, with their respective Development Plans guiding the highly focalized EU strategies, can be very useful for the hypothetical North Korean model, also at the political dialogue and trade levels. By leveraging its experience in those Southeast Asian countries and applying it to the particular characteristics of North Korea, while also providing for the use of different tools in the short- and mid-term such as humanitarian aid and, if necessary, the Instrument for Stability , the European Union will cement its position and raise its profile in Asia in an effective and efficient manner.

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References
North Korea
Strategy Paper 2001-2004 http://eeas.europa.eu/korea_north/docs/01_04_en.pdf Evaluation of ECHOs actions in the DPRK 2004-2007 http://ec.europa.eu/echo/files/policies/evaluation/2008/dprk.pdf EEAS page on North Korea http://eeas.europa.eu/korea_north/index_en.htm U.S. Department of State page on North Korea http://www.state.gov/r/pa/ei/bgn/2792.htm BBC North Korea Country Profile http://news.bbc.co.uk/2/hi/country_profiles/1131421.stm

Vietnam
Delegation of the EU http://www.delvnm.ec.europa.eu/index.html Framework Cooperation Agreement http://ec.europa.eu/world/agreements/downloadFile.do?fullText=yes&treatyTransId=81 4 Strategy Paper 2007-2013 http://www.delvnm.ec.europa.eu/eu_vn_relations/development_coo/pdf_file/VIETNA M_DS_2007_2013_EN.pdf Multi-Annual Indicative Programme 2007-2010 http://www.delvnm.ec.europa.eu/eu_vn_relations/development_coo/pdf_file/Multiannu al_Indicative_Programme_0710.pdf
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Mid Term Review http://eeas.europa.eu/vietnam/csp/07_13_mtr_annex_en.pdf Vietnam Blue Book 2010 http://www.delvnm.ec.europa.eu/eu_vn_relations/bluebook2010/EU_Bluebook22.9.201 0.pdf Humanitarian Aid in Vietnam http://ec.europa.eu/echo/aid/asia/vietnam_en.htm Vietnams main economic indicators http://trade.ec.europa.eu/doclib/docs/2006/september/tradoc_113463.pdf

Cambodia
Delegation of the EU http://ec.europa.eu/delegations/cambodia/index_en.htm Framework Cooperation Agreement http://ec.europa.eu/world/agreements/downloadFile.do?fullText=yes&treatyTransId=78 2 Strategy Paper 2007-2013 http://www.eeas.europa.eu/cambodia/csp/07_13_en.pdf Multi-Annual Indicative Programme 2011-2013 http://ec.europa.eu/delegations/cambodia/documents/eu_cambodia/mip_2011_2013_en. pdf Cambodia Blue Book 2010 http://ec.europa.eu/delegations/cambodia/documents/eu_cambodia/eu_bluebook_2010_ en.pdf Humanitarian Aid in Cambodia http://ec.europa.eu/echo/aid/asia/cambodia_en.htm Cambodias main economic indicators http://trade.ec.europa.eu/doclib/docs/2006/september/tradoc_113362.pdf
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EU Foreign Action Financial Instruments

Instrument for Development Cooperation (DCI) http://europa.eu/legislation_summaries/development/general_development_framework/l 14173_en.htm Instrument for Democracy and Human Rights (EIDHR) http://europa.eu/legislation_summaries/development/sectoral_development_policies/l14 172_en.htm Instrument for Stability http://europa.eu/legislation_summaries/development/general_development_framework/l 14171_en.htm

Thematic programmes of the DCI

Non-state Actors and Local Authorities http://europa.eu/legislation_summaries/development/general_development_framework/r 12554_en.htm Environment and sustainable management of natural resources http://europa.eu/legislation_summaries/development/sectoral_development_policies/l28 173_en.htm Food security http://europa.eu/legislation_summaries/development/general_development_framework/r 12546_en.htm Investing in people http://europa.eu/legislation_summaries/development/general_development_framework/r 12547_en.htm Migration and asylum http://europa.eu/legislation_summaries/development/general_development_framework/l 14510_en.htm

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Trade Policy
Generalised System of Preferences http://ec.europa.eu/trade/wider-agenda/development/generalised-system-of-preferences/ http://trade.ec.europa.eu/doclib/docs/2008/july/tradoc_139988.pdf Everything But Arms http://ec.europa.eu/trade/wider-agenda/development/generalised-system-ofpreferences/everything-but-arms/ Aid for Trade in developing countries http://europa.eu/legislation_summaries/development/sectoral_development_policies/dv 0006_en.htm http://ec.europa.eu/trade/wider-agenda/development/aid-for-trade/

Regional Cooperation
http://ec.europa.eu/europeaid/where/asia/regional-cooperation/index_en.htm http://www.eeas.europa.eu/asia/rsp/mip_0710_en.pdf http://ec.europa.eu/europeaid/where/asia/regionalcooperation/documents/rsp_0713_en.pdf

Other reference sites

EuropeAid Development and Cooperation http://ec.europa.eu/europeaid/where/asia/country-cooperation/index_en.htm The European Union @ United Nations http://www.eu-un.europa.eu/home/index_es.htm

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EU Treaties Office Database http://ec.europa.eu/world/agreements/default.home.do Eurostat http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/ EEAS page on the ASEM http://eeas.europa.eu/asem/index_en.htm Asia EurPoverty Reduction Strategy Papers http://www.imf.org/external/np/prsp/prsp.aspx The CIA World Factbook https://www.cia.gov/library/publications/the-world-factbook/ Index Mundi http://www.indexmundi.com/

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