In the second term, the Barack Obama administration will face a daunting task of setting a realistic goal in dealing with North Korea, working shoulder-to-shoulder with South Korea's new government, an expert here said Sunday.

"Denuclearization as a credible U.S. policy objective is dead," long-time Korea specialist Larry Niksch told Yonhap News Agency.

"The test for the Obama Administration is whether it will formulate a new strategy toward North Korea to replace denuclearization and whether it could coordinate a new strategy with South Korea."

Niksch, a senior associate at the Washington-based Center for Strategic and International Studies (CSIS), pointed out that the outcome of South Korea's presidential elections on Dec. 19 will affect Washington's efforts to work together with Seoul in handling Pyongyang.

The race has come down to a two-way competition between Park Geun-hye of the conservative ruling Saenuri Party and Moon Jae-in of the liberal opposition Democratic United Party after Ahn Chul-soo, a former entrepreneur, gave up his bid.

Both Park and Moon signaled a push for engaging North Korea to ease sharp tensions on the peninsula.

If Moon is elected, Seoul is widely expected to renew the "sunshine policy" of providing the impoverished communist neighbor with food and other assistance.

In that case, the U.S.-South Korea alliance could suffer again, said Niksch.

Furthermore, the two sides should square away several bilateral issues that may sour their ties.

Seoul and Washington brace for tough talks on sharing costs for the stationing of American troops on the peninsula. No progress has been reported in negotiations on South Korea's request for the right to re-process spent fuel and enrich uranium for non-military purposes.

Some conservatives in South Korea still call for a delay in the transfer of wartime operational control of South Korean troops to Seoul, currently set for 2015.

Niksch said South Korea-Japan relations could be a bigger problem for the United States in 2013 and beyond. 

"The Obama Administration, Congress and Korea experts sympathize with many of the South Korean history grievances toward Japan; but they are often appalled by South Korean confrontational tactics toward Japan," he claimed. "It would not surprise me to see the Obama Administration get more involved in these history-territorial issues if South Korean-Japanese relations continue to deteriorate."

Niksch has studied Korea and other Asian affairs in the nonpartisan Congressional Research Service for four decades. (Yonhap News)