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Clinton Administration Eases N. Korea Trade Sanctions : Diplomacy: Direct phone calls, credit-card transactions are among concessions called for by nuclear treaty.

TIMES STAFF WRITER

The Clinton Administration on Friday eased the 45-year-old U.S. trade embargo against North Korea, clearing the way for direct phone calls between the two countries and credit-card transactions by Americans traveling in North Korea.

In addition, the Administration said the two countries will permit American and North Korean news organizations to open offices in each others’ capital cities. And the United States will allow American banks to clear a small number of financial transactions involving North Korean entities.

The steps, announced by the State Department, were not unexpected. Under the nuclear agreement the Clinton Administration signed with North Korea on Oct. 21, the United States was specifically required to ease barriers to “telecommunications and financial services” within three months. The Administration acted less than a day before the deadline.

“These are relatively limited, relatively modest first steps,” said a State Department official who spoke on condition of anonymity.

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Nevertheless, in practical terms, the package will have considerable impact. The steps represent the first move toward easing the trade sanctions imposed against North Korea in 1950 at the beginning of the Korean War.

North Korea was apparently the last nation to have no direct telephone links with the United States. Some Korean-Americans had been able to phone relatives in North Korea by making connections through other countries, but soon they will be able to call directly.

Setting up phone links could take several weeks.

State Department officials said American telecommunications firms first will have to approach the North Korean government and establish the ties that will permit direct calls from this country. The same process was followed when the United States opened the way for phone calls to Cuba, U.S. officials said.

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Under the nuclear deal, North Korea agreed to freeze its nuclear program immediately, to permit unlimited international inspections of all its nuclear facilities and waste sites within about five years, and to dismantle all the nuclear installations over the course of about a decade.

In exchange, the Clinton Administration agreed to supply North Korea with new energy supplies--both regular shipments of fuel oil and two new light-water nuclear reactors that will make it much more difficult to produce the fuel for nuclear weapons.

In addition, the Administration promised to take steps toward normal relations between the United States and North Korea, including an easing of the trade embargo.

A State Department official said any further easing of the trade embargo will depend on how North Korea performs in carrying out the nuclear deal.

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“The North Koreans are much more eager than the United States is” to have the sanctions lifted, the official said. “Obviously, U.S. business does not see North Korea as a bonanza.”

The package announced Friday will allow American travelers to use credit cards for “personal travel and other travel-related transactions” in North Korea. Officials said the United States will also lift limits on how much money American visitors to North Korea may spend, now $400 per day.

Acting on the behest of American steel companies, the Administration opened the way for U.S. firms to import magnesite from North Korea. Magnesite is used to coat the inside of blast furnaces.

State Department officials estimated that U.S. firms may import about $5 million to $10 million a year in magnesite from North Korea.

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