By Paul Eckert
WASHINGTON (Reuters) - The United States and South Korea vowed on Tuesday to keep up their guard and not reward bad behavior by North Korea, which President Barack Obama said had won no benefits or prestige from recent war threats.
"If Pyongyang thought its recent threats would drive a wedge between South Korea and the United States or somehow garner the North international respect, today is further evidence that North Korea has failed again," Obama said at a joint news conference with South Korean President Park Geun-hye.
"President Park and myself very much share the view that we are going to maintain a strong deterrent, we're not going to reward provocative behavior, but we remain open to the prospect of North Korea taking a peaceful path," he said.
Obama's meeting with Park, South Korea's first female president, comes after signs of what a Pentagon spokesman called "provocation pause" by Pyongyang after nearly months of threats to attack the United States and South Korea.
U.S. officials told Reuters on Monday that North Korea had taken two medium-range Musudan missiles off launch-ready status and moved them from the country's east coast.
The move, which followed a relative toning down of bellicose rhetoric from North Korean state media, could easily be reversed because the Musudan are mobile missiles, U.S. and South Korean officials cautioned.
Park, 61, said North Korea's isolation made it difficult to figure out whether and why Pyongyang had changed tack.
"Why is North Korea appearing to de-escalate its threats and provocations? There is no knowing for sure," she said through a translator.
U.S. Defense Secretary Chuck Hagel, taking a cautious approach when asked about an apparent reduction in tensions, said the United States remained prepared for "any contingency."
"We would hope that the leadership in North Korea understands that the wiser course of action is to participate in a process toward peace," Hagel told a Pentagon news briefing.
Park, who took office in February just after North Korea conducted its third nuclear weapons test and began a 10-week campaign of near-daily treats to attack the South and U.S. territory with nuclear weapons.
Daniel Russel, the senior director for Asian affairs at the National Security Council, told reporters that Washington and Seoul were serious about deterring North Korea provocations and on holding Pyongyang to a denuclearization agreement.
"We both support incremental engagement and are prepared to support the North if they make the right decision and take steps to abide by their international obligations," he said on Monday.
TRADE PACT LAUDED
North Korea agreed under a 2005 pact signed with the United States, China, Japan, South Korea and Russia to abandon all of its nuclear weapons programs in exchange for economic aid, energy supplies and an end to diplomatic isolation.
That deal unraveled after Pyongyang staged a series of nuclear tests in 2006, 2009 and last February.
Obama and Park said the door remained open to returning to diplomacy, but the onus was on North Korea.
"So far, at least, we haven't seen actions on the part of the North Koreans that would indicate they're prepared to move in a different direction," Obama said.
While North Korea loomed over Park's meeting with Obama, her visit also highlighted the 60th anniversary of a security alliance formed during the 1950-53 Korean War and South Korea's rise from poverty to become a wealthy democracy.
"Korea is very proud that it's the only example so far of a nation that used to receive U.S. Peace Corps volunteers and now sends Korean volunteers out to help other developing countries," said a senior U.S. State Department official.
Obama drew laughter from Park and her entourage with a nod to South Korea's growing soft power and cultural export prowess, marketed as the "Korean Wave" and embodied by rapper PSY and his quirky 2012 video and dance hit "Gangnam Style."
"Around the world, people are being swept up by Korean culture, 'the Korean Wave,'" he said. "And, as I've mentioned to President Park, my daughters have taught me a pretty good 'Gangnam style.'"
Obama also noted that a bilateral free trade agreement between the counties signed by his predecessor George W. Bush but implemented a year ago, had started to boost trade.
"On our side, we're selling more exports to Korea, more manufactured goods, more services, more agricultural products," said Obama. He added: "Even as we have a long way to go, our automobile exports are up nearly 50 percent."
Critics, notably in the U.S. auto and steel sectors, however, say the trade deal has not removed South Korean barriers to manufactured goods and the increase in car sales is from a low base.
Alan Tonelson of the U.S. Business and Industry Council, a critic of such trade pacts, says a U.S. merchandise trade deficit with South Korea that rose 135.75 percent in the year to March 2013 shows that the bilateral FTA "has slowed the already feeble U.S. recovery and undoubtedly reduced hiring."
Park on Monday visited the Korean War Memorial in Washington honoring the 36,000 Americans killed in that conflict. On Wednesday, she will give a speech at a joint session of Congress and then have lunch with American executives from the U.S. Chamber of Commerce.
(Additional reporting by Mark Felsenthal and Steve Holland; Editing by Philip Barbara and Paul Simao)