This is a partial transcript from "The Journal Editorial Report," October 14, 2006, that has been edited for clarity.

PAUL GIGOT, HOST: North Korea's claim that it tested a nuclear weapon this week sparked global outrage, but no decisive action from the world community. President Bush pledged to work with North Korea's neighbors to bring tough sanctions against Kim Jong-Il's regime.

China and South Korea have agreed to support sanctions, but the nations have yet to agree on a framework for how and when sanctions should be imposed. So where do we go from here?

Joining me now is the Henry Wynn Scholar in Political Economy at the American Enterprise Institute, Nick Eberstadt.

Welcome, Nick.

NICK EBERSTADT, POLITICAL ECONOMY SCHOLAR, AMERICAN ENTERPRISE INSTITUTE: Thank you, Paul.

GIGOT: You have written that the main goal here, the strategic goal of Kim Jong-Il is to divide the U.S.-South Korean strategic partnership. Why don't you explain that to our viewers?

EBERSTADT: Sure.

GIGOT: And is he succeeding?

EBERSTADT: Sure. Well, we've talked about the DPRK as being a rogue regime or being a terrorist state. But I think we should really consider it a revisionist state. It's a government that is implacably dissatisfied with the international security order that it faces in its region.

Its big grievances are three.

It doesn't like the capitalist world economy because it thinks that what they call ideological and cultural infiltration will possibly undo their regime.

It's got a big problem with the Pax Americana in Northeast Asia, which is to say, with the military alliance structure that its super power enemy, the U.S., has established in the area.

And it has a really big problem with the continuing existence and survival of the Republic of Korea, of the South Korean democratic state on the Korean Peninsula, since the Kim family thinks that they should own the whole place.

Nukes and long-range missiles are the DPRK's instruments for trying to break the U.S. security architecture in Northeast Asia. Because threatening the United States homeland with nuclear weapons launched by long-range ballistic missiles is a way of undermining and challenging the credibility of the U.S.-South Korean military bonds.

GIGOT: But can it really do that? You're talking about a state that is isolated. It's very, very poor. And you're talking about across the border a South Korean regime that has both legitimacy with its own people and a formidable military in its own right.

I mean, isn't this more saber rattling than anything else? How can he really break that alliance?

EBERSTADT: The path certainly has been towards undermining and weakening the alliance over the last decade. There are problems in the alliance already that I don't think I need to explain to you. We see it every day on the news.

The nuclear threat against the United States would be another way of putting a punch on a bruise in an already somewhat troubled alliance.

It sounds preposterous to sensible, enlightened people in the modern world to think that a government like Kim Jong-Il's could entertain the ambition of absorbing a bigger, richer, more powerful state like South Korea.

But in a different time, in a different place, there was this funny little Austrian guy that wrote this book.

(LAUGHING)

And people, who were sophisticated at the time, said could this ridiculous little Austrian possibly mean what he said. And he did.

GIGOT: Well, China and South Korea — some people think that the United States government should talk to them privately, saying that maybe this nuclear test is an opportunity diplomatically. Because maybe, finally, it will awaken China and South Korea to say, look, we can't live with this rogue regime. Now, we have to get tough on sanctions. Now, we have to really put enough pressure on the regime to make a change.

Do you see any prospect of that happening in the wake of this test?

EBERSTADT: Well, if we were out in outer space looking at the national interests of the Chinese state and the South Korean state, we would certainly say that their interests would be served by working with the U.S. to punish and penalize the DPRK for its nuclear provocations.

But governments don't always follow their own obvious interests. Governments miscalculate at times.

To get back to our ridiculous little Austrian friend in an earlier era, we saw in Europe, in an earlier period, unending conference diplomacy as more seemingly civilized states dithered and wished to talk as the revisionist state continued relentlessly to arm.

GIGOT: All right. So if you are the United States right now, what do you do? What policies should you press?

EBERSTADT: The United States has to penalize the DPRK for its nuclear transgressions.

Economic penalties are, of course, the first sorts of penalties that come to mind. To enact economic penalties, we probably would most easily want to cooperate with South Korea and China, which are the North Korean state's lifelines.

I think as a tactical matter, we'd have to have some greater cohesion with South Korea first. And then, after greater cohesion with South Korea, come to China and talk to China about penalties.

GIGOT: All right, Nick Eberstadt, thanks for those thoughts. And we'll be watching. Thanks for being here.

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