The United States began to apply the Trading With the Enemy Act to North Korea in 1950. The act authorizes the U.S. Department of the Treasury to impose a comprehensive ban on trade and financial transactions with North Korea and to freeze North Korea's assets in the United States. After it designated North Korea as a state sponsor of terrorism in 1988, the United States started to introduced restrictions on trade with North Korea and prevent international institutions from providing assistance to the country in accordance with its Foreign Assistance Act, International Financial Institutions Act and other legislations.

Washington's decision to relax its economic control over Pyongyang has important implications for the country's economic development. The U.S. embargo has long been one of the major obstacles to North Korea's foreign trade development. Theoretically, once it is removed from the U.S. Government's list of state sponsors of terrorism, North Korea will have no major political barriers to acquiring assistance from the International Monetary Fund and the World Bank. As the United States stops applying the Trading With the Enemy Act, North Korea will be able to trade with U.S. financial institutions and ask the United States to return its frozen assets.

These moves are also politically significant in that they help the two countries build political mutual trust-a process that is indispensable to North Korea's complete denuclearization. Although there may be other laws in the United States restricting its exports and assistance to North Korea, they are unlikely to have a severe impact on the North Korean economy because they do not involve international institutions or third countries. As the United States scraps its designation of North Korea as an enemy, these restrictions will eventually be lifted. Likewise, UN Security Council Resolution 1718 adopted in 2006 to impose sanctions on North Korea is mainly concerned with weapons of mass destruction and does little to constrain the development of its national economy.

Keep talking

Although the United States and North Korea have made a crucial step forward, the path to a nuclear-free Korean Peninsular is still bumpy. Enmity, doubt and the conflicts of partisan interests in the United States and other countries concerned will be the major factors influencing the denuclearization process. The political antagonism between the United States and North Korea resulting from their different ideologies and political systems can give rise to social enmity. In this context, both parties are reluctant to trust each other and make compromises, an attitude that will hinder the progress of North Korea's denuclearization.

North Korea showed its determination when it blasted the cooling tower at its Yongbyon nuclear reactor. Despite this, many analysts have expressed their doubt about the country's sincerity in U.S., Japanese and South Korean media.

Critics claim that North Korea, which they believe has no intention to abandon its nuclear programs, is trying to mount pressure on the six-party talks. In fact, it has been made clear in the Statement by the Chair of the Six-Party Talks that the parties agreed that "the declaration will be subject