The Korean peninsula simultaneously offers dramatically contrasting opportunities for and dangers to U.S. interests in Northeast Asia.

On the one hand, a democratic and free market–oriented South Korea has developed enhanced military capacity and political clout and an expanded set of shared interests with the United States. This enables more active cooperation with the United States to respond to North Korea's nuclear challenge and promote regional and global stability and prosperity. On the other hand, a secretive and totalitarian North Korea has expanded its capacity to threaten regional and global stability through continued development of fissile materials and missile delivery capabilities, and has directly challenged the global nonproliferation regime and U.S. leadership.

The challenge posed by North Korea's nuclear development effort has global, regional, and bilateral dimensions. An internationally coordinated response must take all facets of the challenge into account. This Task Force report identifies three essential elements: first, denuclearization of the Korean peninsula and an approach that attempts to resolve rather than simply manage the issue; second, regional cohesion, enabled by close U.S.-South Korea relations; and, third, China's cooperation and active engagement.

Given the high level of mistrust between the United States and North Korea, the United States will not be able to change the situation by itself. It will need cooperation from counterparts in Asia who have already affirmed their support—through the Six Party Joint Statement of September 19, 2005—for the objectives of denuclearization, improved bilateral relations in the region, regional economic development, and the establishment of peace on the Korean peninsula. The United States, China, Russia, South Korea, Japan, and North Korea have all signed on to this statement. The goal of the Obama administration should be to work with its partners to pursue its full implementation.

The United States and its partners have divergent interests and priorities regarding the North Korean challenge. China is more narrowly focused on the regional dimension and prioritizes stability. South Korea and Russia support denuclearization but want to achieve that objective by peaceful means. For Japan, the issue of how to deal with Japanese citizens abducted by North Korea in the 1970s has been a higher priority than denuclearization. The United States is understandably concerned about the global implications of Korea's nuclear program, the consequences for the global nonproliferation regime, and the potential spread of weapons, materials, and know-how to rogue states, terrorist groups, or others—especially in the Middle East. These different approaches and priorities were highlighted in the early responses to the March 2010 sinking of the South Korean warship Cheonan; the United States and South Korea implicated North Korea and have taken a tough approach designed to punish the North Korean regime, while China—worried about further escalation—has downplayed the incident.

A strong U.S.-South Korea alliance remains the foundation for coordination of policy toward North Korea. Both U.S. president Barack Obama and South Korean president Lee Myung-bak have agreed that their top policy objective vis-à-vis North Korea is its complete denuclearization.

Their common goal is to promote a regional strategy that constrains North Korea's destabilizing activities and counters the risks resulting from its nuclear and missile activities. In the wake of the ship sinking, the two administrations have worked particularly closely to forge bilateral and multilateral responses designed to strengthen deterrence and ensure that Nuorth Korea cannot engage in such provocations with impunity.

Productive Sino-U.S. consultations on North Korea have been lauded in recent years as evidence that the United States and China can work together to address common security challenges. Conversely, the failure to collaborate to achieve North Korea's denuclearization will represent a setback and an obstacle to other areas of U.S.-China security cooperation. For this reason, it is essential for the United States and China to develop a clear understanding regarding how to deal with North Korea, thereby establishing a framework for lasting stability on a nonnuclear Korean peninsula and in Northeast Asia.

There is widespread pessimism that North Korea will voluntarily give up its nuclear capabilities through negotiations alone, and China, Japan, and South Korea are reluctant to pursue tougher, coercive steps due to fears of instability. The rollback of North Korea's nuclear program will not be easy, especially given that no state that has conducted a nuclear test has subsequently reversed course without a change in political leadership. The Task Force notes, however, that despite the difficulty of the challenge, the danger posed by North Korea is sufficiently severe, and the costs of inaction and acquiescence so high, that the United States and its partners must continue to press for denuclearization.

Although the six-party process remains the preferred framework, the United States and its partners may in the end find it necessary to apply nondiplomatic tools such as sanctions or even military measures, especially if North Korea conducts further nuclear or long-range missile tests or proliferates nuclear materials or technologies to other states or to nonstate actors. Specifically, the Task Force calls for the establishment of a dialogue with China about the future of the Korean peninsula, for bilateral talks with North Korea regarding missile development, and for the continuation of close consultations with allies South Korea and Japan.

The Task Force finds that the Obama administration should deal with North Korea's policy challenges in the following order: prevent nuclear exports to others (horizontal proliferation), stop further development of North Korea nuclear capability (vertical proliferation), roll back Korea's nuclear program, plan for potential North Korean instability, integrate North Korea into the international community, and help the people of North Korea.

The report takes stock of the North Korean threat and the Obama administration's responses thus far, and considers the four major policy courses available to the United States. It then explores the motivations and interests of the other parties in the Six Party Talks and underscores the importance of a regional approach anchored by U.S.-South Korea cooperation and by Chinese action. The report then looks beyond the nuclear problem to take account of important items on the agenda with North Korea and the valuable bilateral relationship with South Korea.