North Korea has refused to discuss reducing conventional arms and instead has demanded compensation for the delays (which North Korea is largely responsible for) in building the two nuclear power plants in the north. One of the major causes of economic distress in the north is the maintenance of a million man armed forces (out of a population of 22 million, equivalent to a 12 million man armed forces for the US.) Basically, the north is trying to extort some more money to keep it's police state going.