On July 2, the U.S. government called off a State Department delegation’s visit to north Korea that had been planned for the following week. The next day south Korea’s Ministry of Agriculture said it would probably cancel a promised shipment of 300,000 tons of surplus rice to north Korea. The north still suffers from shortages of basic foods following a series of floods in the mid-to-late 1990s that disrupted agricultural production.

South Korean defense minister Kim Dong Shin proposed July 1 that the rules of engagement for Seoul’s naval forces be altered to officially clear the way for them to open fire on vessels from the north. "The current rules are too long and complicated," said a south Korean military spokesman.

Japanese prime minister Junichiro Koizumi "gave full support for our measures," said an advisor to south Korean president Kim Dae Jung on a trip to Tokyo.

South Korea’s defense minister had earlier discussed the policy changes with Gen. Leon LaPorte, the commander of the U.S. forces in Korea. Under the terms of a "mutual defense pact" dating from the end of the Korean War in 1953, changes in "strategic military rules" cannot be implemented without Washington’s say-so. At the time the south was occupied by a huge imperialist military force that had been fought to a standstill by the workers and peasants organized in the northern liberation forces.

On July 2 U.S. secretary of state Colin Powell alleged that the June 29 incident resulted from a "deliberate provocation" by north Korea. Pyongyang has denied responsibility, stating that the southern ships were the aggressors.

In the incident, patrol boats that were standing guard over fishing vessels exchanged rifle, machine gun, and rocket fire. Four sailors from the south were killed, 19 were wounded, and one man is missing, presumed dead.

Casualty figures for the north Korean combatants have not been released. Ahn Ki-seok, a Navy commodore with south Korea’s Joint Chiefs of Staff, said, "Our formation leader said he saw hundreds of rounds of ammunition flying toward a north Korean patrol boat and most of the north Korean sailors operating the ship’s guns being knocked down. We think the North’s casualties number more than 30." One north Korean vessel was towed away, billowing smoke.  
 
Disputed fishing waters
This was the most serious confrontation in the border area since June 1999, when south Korean naval vessels sank a north Korean torpedo boat, killing at least 20 sailors on board.

The area of the Yellow Sea where the clash occurred is a fertile fishing ground claimed by Seoul to be part of its territory. Thousands of fishermen from both countries depend for their livelihoods on the crabs and blue flower fish that populate the area.

The south Korean government’s refusal to give boats from the north the right to fish these waters has caused disputes going back to the end of the Korean War, when the U.S.-dominated United Nations unilaterally declared the area to be part of the south.

The boundary imposed at the time, reported the New York Times, "curves northward to protect islands that have long been held by South Korea, even though they are much closer to the northern mainland." The government in the north has never accepted the border.

In spite of its aggressive stance during and after the incident, the south Korean government expressed unease at the Bush administration’s cancellation of the announced visit to north Korea. "Talks between the United States and North Korea are a very important part of our policy toward North Korea," said a government spokesman.

The White House had made clear its intention to focus the meeting on U.S. opposition to the north’s nuclear power plants and military policies, including both its conventional defensive forces and its alleged research into offensive missile and nuclear technology. In January U.S. president Bush named north Korea, Iraq, and Iran as members of an "axis of evil" of nations claimed by Washington to have developed "weapons of mass destruction."

Meanwhile, officials in Taiwan alleged on July 2 that north Korean naval vessels have helped to supply local drug smugglers with heroin. Presenting the assertions as proven facts, the government prosecutor said, "We cannot say for sure that this is the action of the north Korean government. It could be some vessels of their navy acting on their own." Citing the words of an "informant," the Taiwanese prosecutor offered no evidence to back up his claim.

The charges fit in with long-standing allegations by "western analysts and north Korean defectors [that] the Pyongyang regime is implicated in the production and sales of heroin and amphetamines, as well as other criminal operations," reported the Financial Times.  
 
 
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