"The key of our North Korean policy is helping North Korea adopt market mechanisms," he said.

Because of Korean policies that encourage domestic purchases, the United States recorded practically no sales in South Korea.

Certainly, there is room for some differentiation in South Korean and American policies toward the North.

Meyers states that Anti-Americanism is the cornerstone of North Korean foreign policy.

Mr. Kono added that Japan welcomed and fully supported the South Korean policy.

President Kim had already said this week that he would review all South Korean policies toward the North after the submarine incident.

A small committee of State and Treasury Department officials plus General Arnold was set up to advise on Korean policy.

South Korean policy in favor of its movie industry is another example of how cultural exception is used to protect the audiovisual market.

But the South later decided that the group could go, provided members did not participate in opening or closing exercises or endorse North Korean policy.

The Administration can return to these questions now because of a recent change in South Korean policies toward the North.