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Proliferation would remain a U.S. concern, but could be met by telling Pyongyang that any hint of a transfer to a non-state actor would be a casus belli. In fact, American ally Pakistan has proved to be a far greater proliferation problem than the DPRK likely would be, since Kim Jong-il appears to want his virgins in the here-and-now rather than in paradise.
At the same time, Washington should continue squeezing the North's sources of hard currency while privately indicating that it is prepared to enter into bilateral discussions over lifting trade restrictions and providing diplomatic recognition -- but only if Pyongyang is evidently committed to an improved international climate. Should the North move ahead with the six-party nuclear talks as well as bilateral discussions with Seoul and Japan, the U.S. would be happy to advance the process as well. Negotiations seem unlikely to resolve the crisis, but there's no reason not to offer the possibility.
Dealing with North Korea will never be easy, but America need not take the lead in dealing with the DPRK. In the absence of U.S. troops in the South, the Kim regime would matter far less to America. Washington should allow North Korea's neighbors to take over responsibility for confronting it.