The stakes are certainly high. The launch could dramatically escalate tensions in the region. Or it could, like North Koreas nuclear test in 2006, provide a bracing reminder of the importance of diplomacy and compromise.

1. How Can North Koreas Rocket be Both a Satellite and a Missile?
The rocket that puts a satellite into orbit is indistinguishable from a long-range missile. Only the nose cone and the trajectory are different. In 1998, North Korea also declared its rocket a satellite launch vehicle while the United States and other countries called the rocket a missile. Some time after the launch, however, even the Pentagon agreed that North Korea had tried and failed to put a satellite into orbit. This years launch, on a modified rocket, followed the same pattern.

North Korea has signed the appropriate international protocols governing satellites and given the proper notification. The UN resolution sanctioning North Korea after its 2006 nuclear test does not explicitly forbid satellite launches.

Regardless of the ultimate reasons behind the rocket launch, North Koreas missile program isnt exactly world class. Its 1998 test failed. Its 2006 test failed. Early reports suggest that the payload this time fell into the Pacific Ocean. So, it is 0 for 3. Given its battered economy and the global recession, Pyongyang isnt likely to get a robust program in place any time soon.

2. What Does North Korea Hope to Gain With Its Launch?
A satellite would be an important feather in the cap of the Kim Jong Il regime in Pyongyang. Getting a satellite in orbit would make North Korea only the 12th country in the world to do so. North Koreas leadership doesnt have very much to point to in terms of successes. Relations with South Korea have soured no package of aid from Japan is coming in the near term and ties with China are strained because Pyongyang rarely listens to Beijings lectures. The North Korean economy is in dismal shape, and the food situation continues to be precarious. Finally, the current political leadership doesnt evoke the kind of adulation that founder Kim Il Sung inspired. The satellite, like near-membership in the nuclear club, helps the government keep a crisis of legitimacy at arms length.

North Korea also knows that the West views its satellite launch as a missile. It can therefore send a signal, if the launch is successful, that it is that much closer to being able to deliver a weapon of mass destruction. Thus, it strengthens its position at the bargaining table. Indeed, like the nuclear test in 2006, it can dramatically increase the stakes and give more urgency to the discussions, possibly extracting a better deal. At the poker table, it once held only one hole card the other players couldnt see, namely its nuclear program. With a missile program, particularly one of unknown dimensions and accuracy, its developing a second hole card.

Finally, on a more mundane level, a rocket launch is the equivalent of a war in the sense of showing off the goods to potential buyers. North Korea hasnt been in a war for half a century. Potential buyers of its missiles get only rare glimpses of North Koreas wares in action and so will carefully scrutinize this rocket launch.

3. Can This Lead to War?
The Obama administration wisely chose not to test its missile defense system and shoot down North Koreas rocket. For one thing, North Korea indicated that it would treat such behavior as an act of war. For another, the missile defense system might have failed, which would have been yet another embarrassment in a string of miss-hits for the Pentagon.

Tokyo vowed to shoot down anything that encroached on its territory, whether targeted missile, errant rocket, or debris. Fortunately, no debris ultimately fell on Japan. And North Korea did not follow through on its threat to shoot down any U.S. surveillance planes that encroach on its airspace.
Still, there are reasons for concern. As a result of the launch, South Korea has opted to join the Proliferation Security Initiative, a multilateral grouping formed during the George W. Bush administration. North Korea has declared South Korean membership an act of war as well.

While war can happen for the most inadvertent of reasons, no one in Northeast Asia is itching for a fight.

4. Will This Derail the Six Party Talks?
The Six Party Talks have been stalled since December. Theres disagreement over the terms of verifying the information that North Korea provided on its nuclear program over the summer of 2008. Washington still harbors suspicions about a possible second nuclear program, this one based on uranium enrichment rather than plutonium, as well as ties between North Korea and Syria. North Korea, meanwhile, has been unhappy about the action-for-action response by the United States and others. Some sanctions against Pyongyang have been lifted, but many remain in place. Pyongyang has also complained about the pace of the energy shipments—a million tons of heavy fuel oil—that are supposed to correspond to the dismantlement of its nuclear facilities.

The Six Party Talks have gone through several cycles of crisis and cooperation. The current disputes, rocket launch notwithstanding, arent unsolvable. The verification issue is largely technical and requires a hard-nosed compromise between North Koreas fears of a breach of its military security and U.S. anxiety about being hoodwinked. The two sides negotiated a secret memorandum over the summer covering the uranium enrichment program and proliferation concerns, so theyre at least broaching these questions. Calibrating energy shipments and dismantlement is more a logistical problem than a political one—though delays on the Japanese and South Korean side have a political flavor. Still, if the parties reach agreement on the other outstanding disputes, the energy/dismantlement roadblock can be cleared.

It was widely assumed that North Koreas nuclear test in October 2006 would drive a stake through the heart of the six-party process. Instead, after a significant reversal of Bush administration policies, the negotiators were able to hammer out the February 13, 2007 agreement, which still today provides a roadmap for a peaceful, non-nuclear Korean peninsula.

5. Has U.S. Policy Diverged From Japanese and South Korean Approaches?
Under President Lee Myung-bak, South Korea has taken a harder line against its northern neighbor on the peninsula. Inter-Korean relations have subsequently taken a nosedive. Japanese policy, influenced by the issue of North Koreas abduction of more than a dozen Japanese citizens in the 1970s and 1980s, has been consistently obdurate. Ironically, it was the Bush administration, which lumped North Korea in the axis of evil in 2002 and subsequently refused to negotiate seriously with Pyongyang, that created an opening for progress in negotiations in the last couple years.

The Obama administration hasnt fully developed its North Korea policy yet, in part because many of the key appointments are only now being made. While all three countries make ritual obeisance to the principle of trilateral coordination, they each have different priorities. Japan is transfixed by the abduction issue South Korea has focused more on economic cooperation and the conventional military threat from the North and the United States has cared above all about North Koreas nuclear program.
The challenge for the Obama administration will be to guide its allies through the current rough patch without allowing the conflict to escalate. President Barack Obama must acknowledge the concerns of Japan and South Korea, and then move quickly to pick up where the Bush administration left off.

6. What should Washington do?
The United States has pledged to bring the issue of the launch to the UN Security Council where its allies South Korea and Japan promise to push for new sanctions against the North. But China and Russia wont back new sanctions. With a lack of consensus among the countries in the Six Party Talks, the United States should play it cool and look for a diplomatic opening in the new future. North Korea has indicated to a number of recent delegations that its eager to talk to representatives of the Obama administration.

The United States should be looking at technical compromises that can break the deadlock over verification. At the same time, it should push forward with the larger engagement package, which includes a peace treaty to replace the Korean War armistice, concrete steps toward normalization, and a roadmap that Pyongyang can follow to become integrated in the global economy. A side deal on North Koreas missile program, which was on the table at the end of the Clinton administration, might also go a long way toward allaying both Japanese and South Korean concerns. A narrow focus on non-proliferation, however, is a recipe for prolonged, fitful, and probably fruitless negotiations. Only by expanding the number of options on the table can the Obama administration make headway.

The Obama administration has several things going for it. The president has emphasized the importance of diplomacy and sitting down with countries with which the United States disagrees. It can take advantage of political appointments like Stephen Bosworth as special representative for North Korea policy and long-serving experts like Sung Kim who will handle the Six Party Talks negotiations, both of whom have considerable experience in the field.
First, though, Obama must resist the temptation to act out of frustration and anger. Adopting new sanctions, issuing harsh condemnations, and pulling out of negotiations with North Korea have yielded few results in the past. When the Bush administration went down this road, it turned out to be a six-year detour. Obama can save time and a great deal of nail-biting by taking the path of diplomacy.