Prospects for peace on the Korean Peninsula appear more uncertain following a recent deadly naval clash between North and South Korean ships in the Yellow Sea over border intrusions and fishing rights. North Korea's Stalinist regime often provokes the South and resists entering talks with Seoul on reunification issues despite receiving large amounts of international aid and support. When President Bill Clinton welcomes South Korean President Kim Dae Jung to a summit in Washington, D.C., on July 2, the Administration will have an opportunity to focus on new policy initiatives that link any future "rewards" for North Korea to clear concessions from Pyongyang that will lead to peace.

The Korean Peninsula--the most heavily militarized spot on earth--is the only place where an outbreak of war would result in the swift and heavy loss of American lives. The $419 million in aid that the United States has sent to North Korea since 1995 has not reduced the threat of conflict on the Peninsula. Despite a tattered economy and rampant starvation, North Korea maintains one of the world's largest standing armies. Its forward-deployed forces require the continued presence of 37,000 U.S. troops in South Korea at a cost to the American taxpayer of about $3 billion per year. And the tension surrounding the June 14 incident in the Yellow Sea, in which a North Korean boat was sunk and 30 soldiers from the North may have died, caused the United States to reinforce its military forces in South Korea with aircraft and submarines.

The North is not a willing partner in achieving peace. Stories about North Koreans' infiltrating the South and even attacking the South's government officials have been reported for decades, and several serious North Korean provocations have occurred in the past two years. Moreover, Pyongyang is rapidly developing intercontinental ballistic missiles (ICBMs) that may soon be capable of reaching the United States, and it continues to sell long-range missile technology to rogue regimes like Iran. The North, in effect, uses the threat posed by its nuclear weapons and long-range missile development program to extort U.S. and international assistance.

Despite such belligerence, the Clinton Administration generally submits to the North's bribery diplomacy. The occasional concessions the Administration extracts from North Korea come at a great price. For example, Pyongyang recently allowed the United States to inspect a suspected nuclear weapons site after the Administration promised to provide $200 million worth of grain. But this and other concessions failed to promote the paramount U.S. goal of tension reduction on the Peninsula. In fact, the North's military threat has grown in recent years, even as Pyongyang has become one of the largest recipients of U.S. foreign aid. Since 1995, the Administration has spent nearly half a billion dollars on the North in the form of humanitarian food assistance, money for the right to search for the remains of U.S. soldiers lost in the North during the Korean War, and energy assistance required under the 1994 U.S.-North Korea nuclear deal known as the Agreed Framework.

The Administration's current policy toward North Korea has failed. The North continues to threaten South Korea, refuses to engage in meaningful dialogue with the South, and continues to build dangerous missiles. Members of Congress understandably are increasingly frustrated with Administration policies that give aid to Pyongyang and produce no results. The July 2 summit offers the Administration an important opportunity to change these policies by considering steps to:

• Promote discussions with South Korea, Japan, and other allies on a substantial package of trade and aid offers to North Korea.
  This package should be based on a consensus of the donors, and the aid should be targeted to North Korea's real needs. For example, assistance to Pyongyang for light-water nuclear reactors should be reconsidered and perhaps spent instead on conventional power plants and upgraded power transmission lines.
  
  
• Make future aid to North Korea dependent on real concessions.
  A substantial package of trade and aid offers to the North must be linked directly to Pyongyang's efforts to reduce military tensions, abandon its ICBM program, and resume peace talks with the South. Future North Korean missiles could reach the United States, and Pyongyang's trafficking in missile technology is allowing rogue states like Iran to pose a growing threat to Israel.
  
  
• Consider forming a "peace corps" for North Korea.
  Such an organization would ensure that future international assistance gets to the North Korean people who most need it.
  
  
• Appoint a senior U.S. negotiator as a special envoy to Pyongyang to oversee these policy adjustments and to coordinate policy with all concerned countries.
  This official would provide consistent U.S. policy leadership in North Korea and work with U.S. allies to coordinate a united approach toward Pyongyang.

Daryl M. Plunk is a former Senior Fellow in the Asian Studies Center at The Heritage Foundation.