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Last Updated: Tuesday, 17 August, 2004, 07:01 GMT 08:01 UK
Canberra offers N Korea incentive
Australian Foreign Minister Alexander Downer gestures during a press conference in Beijing, 17 August 2004
Mr Downer held talks in Beijing before travelling to Pyongyang
Australian Foreign Minister Alexander Downer has said there will be great economic benefits for North Korea if it abandons its nuclear ambitions.

He said there would be a "substantial" increase in trade and other links.

He is going to Pyongyang after talks in Beijing on how to break the deadlock on North Korea's nuclear programme.

Australia is not in formal six-nation talks on North Korea's nuclear future but Mr Downer believes it can play a role in trying to solve the impasse.

Months of intermittent multinational talks have produced little progress, and correspondents say that Australia is indeed well placed to help, because it has diplomatic links with the key players of the US, North Korea and China.

"We already have some limited aid programmes in North Korea... and if North Korea were to abandon its nuclear programmes then obviously that would lead to a very substantial increase in Australia's engagement," Mr Downer told a news conference in Beijing.

He added that this engagement included broader trade and investment initiatives as well as aid programmes.

"There are great opportunities for the North Korean people if they abandon their nuclear programmes," Mr Downer said.

Commitments demanded

The dispute flared up in October 2002, when US officials accused North Korea of running a secret nuclear programme in violation of international agreements.

North Korean spent nuclear fuel rods in Yongbyon
The nuclear dispute has been raging for 22 months
Since then there have been a series of six-party talks between South Korea, China, Japan, Russia, the US and North Korea but a deal has yet to be reached.

North Korea has offered a nuclear freeze in return for economic aid, but says it is not getting the necessary US commitments in return.

The US wants Pyongyang to disclose all its nuclear activities and allow outside monitors into the country.

On Monday, North Korea said the US was "not interested in making the dialogue fruitful", and threatened to boycott a working meeting ahead of the next round of six-party talks.

The BBC's Charles Scanlon
"Chinese officials are working to keep the negotiations on track"

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