Published: December 17 2002 20:42 in The Financial Times

Preoccupied with the possibility of war with Iraq, the US administration now finds itself with a first-class mess in Asia. In the space of a few short weeks, North Korea has reminded the world of the danger it poses - and it is clear that the US lacks a well conceived strategy for dealing with it.

Contrast the US administration's muscular, official statements about interdiction and pre-emption with its embarrassing about-turn on the North Korean ship delivering Scud missiles to Yemen. Consider the apparent lack of a plan for countering Pyongyang's threats to reopen its nuclear facilities that have been shut down since 1994 - a possibility about which experts have been warning for months.

To its credit, the US has not hit the panic button. But we are clearly in a cycle of escalation reminiscent of the 1993-94 crisis that brought Asia dangerously close to a full-scale war. Against that background, Washington's confrontational policies have hardly helped.

For example, had the US and North Korea established a negotiating forum over the past two years, the task of persuading Pyongyang that it has much to lose by continuing its weapons programme and missile sales might have been somewhat easier. Had President George W. Bush not pursued his "axis of evil" approach to North Korea since entering the White House, Pyongyang might have felt less threatened and therefore found it less difficult to reverse course when confronted with firm opposition.

Furthermore, had the Bush administration displayed more sensitivity to South Korean concerns relating to North Korea, Washington would be in a better position now to form a united front with its Asian allies. As things stand, South Korea is in the midst of presidential elections in which anti-Americanism has featured heavily.

For these reasons, Britain and the rest of Europe may have an important role to play in the coming weeks. Unlike the US, Britain and most other European Union countries have diplomatic representatives in Pyongyang and established channels of communications with the North Koreans. The EU should let the North Koreans know that this is not a US-North Korea dispute but that virtually the entire world believes that Pyongyang should abide by its commitments to eschew nuclear arms.

Europe should also make sure that North Korea understands that the trade, investment and economic assistance needed to save the country from economic collapse will be forthcoming only if Pyongyang abandons, once and for all, its nuclear ambitions.

Tony Blair, UK prime minister, should use his special access to Mr Bush to convey the message that North Korea is unlikely to back down unless it receives ass urances that the US will deal with its concerns. These anxieties have been multiplied by talk of a new US strategy of pre-emption; just because it is a disreputable state governed by a thuggish regime does not mean that North Korea has no genuine concerns. Facing a probable conflict with Iraq, Mr Bush may welcome the intervention of third parties to help defuse the crisis.

In the meantime, we should avoid assuming the worst. North Korea has a long history of walking up to the brink only to back away again. And other North Korean actions in recent months - its halting efforts at economic reform; its quasi-apology for a naval clash with the South; its surprise admission of a secret nuclear weapons programme; the even more surprising acknowledgment that Kim Il-sung, North Korea's deceased god-king and the father of the current ruler, made a mistake in permitting the kidnapping of Japanese civilians during the cold war - should remind us that Pyongyang is capable of stunning policy reversals.

North Korea has not yet threatened to begin reprocessing the 8,000 spent fuel rods it now has, which would enable it quickly to add new weapons to its current modest arsenal and would immediately raise the temperature on the peninsula. Indeed, one gets the sense that Pyongyang, for all its provocative behaviour, is still intent on keeping tensions in check.

But time is slipping away. If North Korea began to turn its spent nuclear fuel into weapons-grade plutonium, it would place us in a far more serious situation. Mr Bush would then have a rude reminder that he cannot count on crises coming only at convenient times.

The writer is director of the Asia programme at the Woodrow Wilson International Centre for Scholars in Washington