No quick fix seen in US-N Korea financial talks

BEIJING, Dec 19 (Reuters) US Treasury officials met North Korean counterparts today to discuss the one issue Pyongyang says could break the logjam in parallel nuclear talks -- financial curbs that have crippled its foreign trade.

But analysts see little chance of an easy breakthrough in Beijing on the restrictions imposed by the United States more than a year ago.

At the centre of the U.S. Treasury Department curbs is a freeze on North Korean accounts at Macau's Banco Delta Asia, which it alleges was a ''willing pawn'' through which Pyongyang engaged in money-laundering and counterfeiting.

The move prompted a furious North Korea to pull out of six-party talks aimed at dismantling its nuclear arms programmes, negotiations that only resumed this week after more than a year's hiatus and with the North emboldened by its October 9 nuclear test.

North Korea says it will only make steps toward implementing a September 2005 accord, in which it agreed in principle to give up its nuclear arsenal in exchange for aid and security guarantees, if the financial restrictions are lifted.

But analysts say the parallel talks led by Daniel Glaser, a deputy assistant Treasury secretary, and O Kwang-chol, president of the Foreign Trade Bank of Korea -- the North's arm for foreign banking -- are unlikely to bring a breakthrough.

''It's unrealistic to think that the US would be lifting any sanctions this week or any time soon, but at least they're ready to sit down with the North Koreans to talk about what steps they need to take,'' said Peter Beck, a Korea analyst with the International Crisis Group.

North Korea came to this week's round of six-party talks, which group the two Koreas, China, the United States, Japan and Russia, with a laundry list of demands, and negotiators were downbeat on prospects for progress in that forum as well.

But some see the presence of the Treasury delegation as a sign that the beginnings of a compromise could be in the offing.

''We're at a point where both the North Koreans and the United States need something that they can take home politically, in some sense to save face,'' said Marcus Noland, an expert on North Korea's economy at the Institute for International Economics in Washington.

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