Which side is bluffing in N Korean standoff?

North Korea's nuclear test on Monday immediately produced a storm of denunciations from the United States and other countries. President Barack Obama stated that the US would seek new economic sanctions from the UN Security Council, and warned Pyongyang that the continued pursuit of nuclear weapons will 'only deepen its isolation'.

There are multiple indications that Kim Jong-il's regime views such warnings as impotent posturing. That assessment may well be right.

For years, the conventional wisdom in the US and most of the international community is that North Korea is using its nuclear programme as a bargaining chip to gain economic and diplomatic concessions. At some point, so the logic goes, Pyongyang will relinquish its nuclear ambitions for the right price. Indeed, the six-party talks have been built on that premise.

But there have been troubling signs throughout those talks that North Korea may merely be stalling for time while it continues to process plutonium and build nuclear weapons. Although Pyongyang agreed 'in principle' more than three years ago to give up its nuclear programme, subsequent sessions have failed to nail down meaningful details. Two months ago, North Korean leaders used an utterly toothless UN Security Council condemnation of a missile test as a pretext to withdraw from the six-party talks. And now there has been another nuclear test - the second in less than three years.

US leaders have always argued that North Korea faces a stark choice: abandon its quest for nuclear weapons and gradually become a normal member of the international community, or face ever greater isolation. Washington's threats of isolation ring rather hollow, though, in view of China's long-standing reluctance to endorse rigorous sanctions against its North Korean client.

Moreover, even beyond the protection against sanctions that China affords, Pyongyang may have concluded that it can have the best of both worlds - enjoy the status as a nuclear power and be the recipient of major diplomatic and economic concessions. Indeed, it would be a perfectly rational assumption that the possession of a nuclear arsenal would hasten, rather than preclude, such concessions.

Pyongyang is also aware that Washington has previously tried to use the isolation strategy against other 'breakout' nuclear powers with little success. The US sought to get India and Pakistan to reverse course following their nuclear tests and the deployment of arsenals in the late 1990s. Those measures seem like quaint memories today, as the US is busily establishing close ties with both countries.

North Korean leaders could legitimately speculate that, after initial fussing and fuming, the US (and other countries) would ultimately accept the new reality and fully normalise economic and diplomatic relations with the newest member of the global nuclear-weapons club.

Ted Galen Carpenter, vice-president for defence and foreign policy studies at the Cato Institute, is the author of eight books on international affairs