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[Senate Hearing 109-919]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 109-919
 
                    NORTH KOREA: U.S. POLICY OPTIONS

=======================================================================

                                HEARING

                               BEFORE THE

                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 20, 2006

                               __________

       Printed for the use of the Committee on Foreign Relations

  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                               index.html

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                     COMMITTEE ON FOREIGN RELATIONS

                  RICHARD G. LUGAR, Indiana, Chairman

CHUCK HAGEL, Nebraska                JOSEPH R. BIDEN, Jr., Delaware
LINCOLN CHAFEE, Rhode Island         PAUL S. SARBANES, Maryland
GEORGE ALLEN, Virginia               CHRISTOPHER J. DODD, Connecticut
NORM COLEMAN, Minnesota              JOHN F. KERRY, Massachusetts
GEORGE V. VOINOVICH, Ohio            RUSSELL D. FEINGOLD, Wisconsin
LAMAR ALEXANDER, Tennessee           BARBARA BOXER, California
JOHN E. SUNUNU, New Hampshire        BILL NELSON, Florida
LISA MURKOWSKI, Alaska               BARACK OBAMA, Illinois
MEL MARTINEZ, Florida
                 Kenneth A. Myers, Jr., Staff Director
              Antony J. Blinken, Democratic Staff Director

                                  (ii)

                            C O N T E N T S

                              ----------                              
                                                                   Page

Abramowitz, Hon. Morton, senior fellow, The Century Foundation, 
  Washington, DC.................................................    43
    Prepared statement...........................................    46
Alexander, Hon. Lamar, U.S. Senator from Tennessee...............    35
Allen, Hon. George, U.S. Senator from Virginia...................    19
Chaffee, Hon. Lincoln, U.S. Senator from Rhode Island............    13
Dodd, Hon. Christopher J., U.S. Senator from Connecticut.........    22
Feingold, Hon. Russell D., U.S. Senator from Wisconsin...........    29
Hagel, Hon. Chuck, U.S. Senator from Nebraska....................     9
Hill, Hon. Christopher R., Assistant Secretary for East Asian and 
  Pacific Affairs, U.S. Department of State, Washington, DC......     3
    Prepared statement...........................................     4
    Responses to questions submitted by Senator Biden............    56
Kanter, Hon. Arnold, principal member, The Snowcroft Group, 
  Washington, DC.................................................    39
    Prepared statement...........................................    41
Lugar, Hon. Richard, U.S. Senator from Indiana, opening statement     1
Murkowski, Hon. Lisa, U.S. Senator from Alaska...................    32
Sarbanes, Hon. Paul R., U.S. Senator from Maryland...............    16
Voinovich, Hon. George V., U.S. Senator from Ohio................    26

                                 (iii)

  

                    NORTH KOREA: U.S. POLICY OPTIONS

                              ----------                              

                        THURSDAY, JULY 20, 2006

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:33 a.m., in 
room SD-419, Dirksen Senate Office Building, Hon. Richard G. 
Lugar (chairman of the committee) presiding.
    Present: Senators Lugar, Hagel, Chafee, Allen, Coleman, 
Voinovich, Alexander, Murkowski, Sarbanes, Dodd, and Feingold.

  OPENING STATEMENT OF HON. RICHARD LUGAR, U.S. SENATOR FROM 
                            INDIANA

    The Chairman. This hearing of the Senate Foreign Relations 
Committee is called to order. The committee meets today to 
review matters related to North Korea. On July 11, the 
committee received a classified briefing on North Korea from 
Director of National Intelligence John Negroponte and 
Ambassador Joseph Detrani. We look forward to continuing our 
inquiry in open session today.
    On July 4, North Korea test fired a long-range missile with 
the theoretical capability of reaching the United States, as 
well as several shorter-range missiles. All landed in the Sea 
of Japan. These missile launches by North Korea were 
particularly sobering because the timing and quantity of the 
launches appeared to be designed to intensify their provocative 
nature and because they occurred despite significant external 
pressure to refrain from such a launch.
    The North Korean regime's drive to build missiles, North 
Korean nuclear weapons, and other weapons of mass destruction, 
continues to pose a grave threat to the Pacific region and to 
the United States. We also are concerned about the transfer of 
North Korean weapons, materials, and technology to other 
countries or terrorist groups. Although the launches must be 
seen as a setback for regional dialog, they do provide 
additional clarity that could be useful in moving other states 
in the region toward a more unified position on dealing with 
North Korea.
    Up to this point China has attempted to facilitate 
discussions on North Korea while continuing to supply and 
manage key energy lifelines into North Korea. It has endeavored 
to preserve a historic alliance with Pyongyang while 
discouraging military options or other destabilizing activities 
by either side. Beijing has been particularly concerned with 
preventing actions by North Korea or its neighbors that might 
stimulate the flow of North Korean refugees into China.
    This strategy, however, has led to severe problems for the 
Chinese. The North Korean missile tests demonstrated that 
China's influence over its ally is limited. China had appealed 
directly to the North Korean Government to suspend the missile 
tests, but Kim Jong-Il's regime disregarded these appeals.
    Now, the missile launches underscored that North Korea has 
its own agenda distinct from Beijing's long-term interest. 
China wants to avoid instability on its borders, but few acts 
could have been more destabilizing than the missile tests. If 
North Korea continues on the provocative path of missile and 
nuclear development, Japan, the United States, and perhaps 
other nations may be compelled to reassess their military 
posture in East Asia.
    China has made huge economic and political investments in 
the world economy because it is depending on high economic 
growth rates to advance living standards and to preserve 
internal political stability. To achieve these growth rates, it 
needs markets for Chinese goods, investment and technology for 
its industries, and energy sources to feed the growing appetite 
of its populace for automobiles, air conditioning, and other 
energy-intensive conveniences.
    But Beijing's ability to secure these benefits of the 
global marketplace will depend on continued cooperation with 
the West and military stability in East Asia. To the extent 
that the United States, Japan, and other nations view the East 
Asian region through the lens of the unique security conundrum 
created by North Korea, Chinese aspirations are likely to be 
set back.
    This is why Beijing is encouraged to reassess its regional 
priorities. The United States should be working diligently with 
China to develop options for peacefully resolving the North 
Korean dilemma. These options should start with an attempt to 
reinvigorate the Six Party Talks. But we should be mindful that 
thus far this format has not produced lasting results.
    Last week's U.N. Security Council resolution condemning the 
multiple missile launches by North Korea was a significant 
action. It is also important to note that individual leaders of 
countries outside of the Six Party Talks are attempting to be 
helpful with the North Korean challenge. For example, 
Indonesian President Yudhoyono has recently sent a special 
envoy to encourage resumption of the talks. The President may 
follow up with his own visit to Pyongyang.
    North Korea's missile launches must not distract from the 
ongoing challenges faced by North Korean refugees making their 
way into China, often in the hope of eventually reaching South 
Korea. The Foreign Relations Committee reiterates its concern 
that North Korean refugees in China be treated compassionately 
and that the Chinese Government allow the UNHCR to actively 
assist these North Korean refugees.
    We are joined, fortunately, today by Christopher Hill, 
Assistant Secretary of State for East Asian and Pacific 
Affairs, who will report on his recent trip to the region. 
Secretary Hill will comment on the stalled Six Party Talks as 
well as the United States' response to the July missile 
launches and our ongoing dialog with China.
    On our second panel we will hear from Dr. Arnold Kanter, 
Principal Member of the Scowcroft Group, and Ambassador Morton 
Abramowitz, Senior Fellow at the Century Foundation. Dr. Kanter 
and Ambassador Abramowitz will provide their assessments of 
United States policy options toward North Korea. They have been 
frequent visitors to our committee and we are grateful once 
again to greet them today.
    Indeed, we welcome all of our witnesses. We look forward to 
their insights on this very important and timely subject.
    Let me now turn to our first witness, Ambassador Hill. We 
are very grateful to hear you and have appreciated your 
testimony on confidence on occasion. We are especially pleased 
that you can testify today in public so that the Congress and 
the public can hear you. Will you please proceed.

STATEMENT OF HON. CHRISTOPHER R. HILL, ASSISTANT SECRETARY FOR 
   EAST ASIAN AND PACIFIC AFFAIRS, U.S. DEPARTMENT OF STATE, 
                         WASHINGTON, DC

    Ambassador Hill. Thank you very much, Mr. Chairman. I have 
some prepared remarks that I would like to enter into the 
record.
    The Chairman. They will be placed in the record in full.
    Ambassador Hill. Thank you. So I will now proceed with the 
summary, and then I am available to any and all of your 
questions. Thank you very much.
    I want to thank you for this very timely opportunity to 
update the committee on recent developments on the United 
States' policy with respect to the DPRK, or North Korea. I will 
focus my opening remarks on what we believe has been a very 
strong and unanimous response of the U.N. Secretary Council on 
July 15 to North Korea's July 4th-July 5th missile launches and 
their ongoing nuclear programs. I will then be prepared to 
address your questions on any of the many issues that we have 
with North Korea.
    The 15 members of the United Nations Security Council took 
swift action to pass unanimously on July 15, a strong and 
binding resolution, Resolution 1695, in response to North 
Korea's launches just 10 days earlier of a barrage of ballistic 
missiles, including a failed long-range missile. Resolution 
1695 is the first U.N. Security Council resolution on North 
Korea since 1993. That, in fact, reflects the gravity with 
which the world views North Korea's missile and nuclear 
programs, as well as the determination of the Council to speak 
with one voice in condemning them.
    The resolution condemns the multiple launches by the DPRK 
of ballistic missiles. It demands the DPRK suspend all 
activities on its ballistic missile program and return to its 
missile launch moratorium, and it requires all member states, 
in accordance with their national legal authorities and 
consistent with international law, to prevent missile and 
missile-related items, material, goods, and technology from 
being transferred to North Korea's missile or WMD programs, the 
procurement of such items from the DPRK and the transfer of any 
financial resources in relation to the DPRK missile or WMD 
programs.
    In passing Resolution 1695, the U.N. Security Council 
stated it was acting under its special responsibility for 
international peace and security. The DPRK must now comply with 
the terms of the resolution.
    The administration is looking at moving forward with a 
number of additional economic, counterproliferation, and 
diplomatic measures in response to the launch and pursuant to 
the resolution. I hope to be able to share details with you.
    We will continue to step up our efforts under the 
Proliferation Security Initiative to stop the movement of goods 
and materials related to weapons of mass destruction. The 
resolution stressed the importance of implementation of the 
Joint Statement adopted September 19, 2005, by all six parties. 
Resolution 1695 welcomed efforts by council members and other 
states to facilitate a peaceful and comprehensive solution 
through dialog, which the United States, Japan, South Korea, 
China, and Russia are pursuing through the Six Party Talks. The 
resolution strongly urged the DPRK to return immediately to the 
Six Party Talks without precondition.
    Resolution 1695 offers the DPRK a clear choice of two 
paths. One will bring the DPRK under increasing international 
pressure and isolation. The other offers a peaceful and 
diplomatic solution that will benefit all parties--from the 
DPRK, the elimination of all of its nuclear weapons and 
existing nuclear programs; from the other parties, energy and 
economic cooperation with the DPRK, security provisions, and 
steps toward normalization of relations subject to bilateral 
policies.
    We have in place the right approach with the right partners 
to give the DPRK the basis to choose the path we believe firmly 
is in its interests, the path to a better future for the North 
Korean people and to a new relationship with the United States 
and the entire international community. We are working with 
those partners now to schedule meetings of the Six Party Talks 
as soon as possible.
    Those conclude my opening remarks and I look forward to 
your questions. Thank you.
    [The prepared statement of Ambassador Hill follows:]

 Prepared Statement of Hon. Christopher Hill, Assistant Secretary for 
 East Asian and Pacific Affairs, U.S. Department of State, Washington, 
                                   DC

    Thank you, Mr. Chairman, for this timely opportunity to update the 
committee on recent developments on United States policy with respect 
to the Democratic People's Republic of Korea (DPRK). My prepared 
remarks today will focus on the strong and unanimous response of the 
United Nations Security Council on July 15 to North Korea's missile 
launches and to the North's ongoing nuclear weapons programs, United 
States enforcement action against North Korea's illicit activities, and 
what we are doing to ease the plight of North Koreans in and out of 
North Korea.
                  the u.n. security council resolution
    The 15 members of United Nations Security Council took swift action 
to pass unanimously on July 15 a strong and binding resolution in 
response to the DPRK's launches just 10 days earlier of a barrage of 
ballistic missiles, including a failed launch, which could have been a 
long range missile or an attempted satellite launch.
    U.N. Security Council Resolution 1695:

   Condemns the multiple launches by the DPRK of ballistic 
        missiles;
   Demands the DPRK suspend all activity on its ballistic 
        missile program and return to its missile-launch moratorium; 
        and
   Requires all member states, in accordance with their 
        national legal authorities and consistent with international 
        law, to prevent missile and missile-related items, materials 
        goods and technology from being transferred to DPRK missile or 
        WMD programs; the procurement of such items from DPRK; and, the 
        transfer of any financial resources in relation to the DPRK's 
        missile or WMD programs.

    In passing Resolution 1695, the U.N. Security Council stated it was 
acting under its special responsibility for maintenance of 
international peace and security. That is a reference to the Council's 
unique authorities under chapter VII of the U.N. Charter, to take steps 
necessary for peace and security, which provides the authority for the 
Council to adopt binding resolutions. The DPRK must now comply with the 
terms of the resolution.
    The administration is looking at moving forward with a number of 
additional economic, counterproliferation, and diplomatic measures in 
response to the launch. I hope soon to be able to share details with 
you.
    We will continue to step up our efforts under the Proliferation 
Security Initiative to stop the movement of goods and materials related 
to weapons of mass destruction.
    The resolution stressed the importance of implementation of the 
Joint Statement adopted September 19, 2005, by all six parties. 
Resolution 1695 welcomed efforts by Council members and other states to 
facilitate a peaceful and comprehensive solution through dialog, which 
the United States, Japan, South Korea, China, and Russia are pursuing 
through the Six Party Talks. It strongly urged the DPRK to return 
immediately to the Six Party Talks without precondition.
    Resolution 1695 is the first U.N. Security Council resolution on 
the DPRK since 1993. Its unanimous adoption reflects the gravity with 
which the world views the DPRK's missile and nuclear programs, as well 
as the determination of the Council to speak with one voice in 
condemning them.
    In contrast, following the DPRK's launch of a long-range missile in 
1998, the UNSC a month later issued a presidential press statement, 
which simply expressed its concern over the launch and noted harm to 
the fishing and shipping activities in the region. Following the DPRK's 
launch of a Nodong missile in 1993, there was no response from the 
international community.
    The UNSC response this time was fast, strong, and unanimous. It 
unambiguously reflects the common will of the international community 
to confront the DPRK on its nuclear and missile programs.
    Resolution 1695 offers the DPRK a clear choice of two paths. One 
will bring the DPRK under increasing international pressure and further 
economic and political isolation from the community of nations. The 
other offers a peaceful and diplomatic solution that will benefit all 
parties: From North Korea, the elimination of all of its nuclear 
weapons and existing nuclear programs; from the other parties, energy 
and economic cooperation, security provisions, and steps toward 
normalization subject to bilateral policies.
    We have in place the right approach with the right partners to give 
the DPRK the basis to choose the path we believe is firmly in its 
interest, the path to a better future for the North Korean people and 
to a new relationship with the United States and the entire 
international community. We are working with those partners now to 
schedule a meeting of the Six Party Talks as soon as possible.
                           illicit activities
    North Korea has engaged in illicit activities for decades. The DPRK 
calls U.S. law enforcement and financial regulatory measures 
``sanctions'' and asserts they are blocking progress in the Six Party 
Talks. The United States will continue to take law enforcement actions 
to protect our currency and our citizens from illicit activities. The 
measures we have taken are targeted at specific behavior. Contrary to 
North Korean assertions, these actions are not related to the Six Party 
Talks.
    We had offered, at the last round of talks in November 2005, to 
explain to the DPRK about the regulatory actions to protect the U.S. 
financial system from abuse, but it did not respond to our offer until 
February 2006. On March 7 in New York, a Treasury-led interagency team 
met with DPRK officials.
    The team described the reasons for the September 2005 designation 
by the United States of a bank in Macau, Banco Delta Asia (BDA), under 
section 311 of the Patriot Act as a financial institution of ``primary 
money laundering concern.'' The team discussed our ongoing efforts with 
authorities in Macau to resolve the issues that led to that 
designation.
    As stated in the Notice of Finding published in the Federal 
Register on September 20, 2005, BDA had been providing financial 
services for many years, with little oversight or control, to a number 
of North Korean entities engaged in illicit activities, including drug 
trafficking, smuggling counterfeit tobacco products, and distributing 
counterfeit United States currency.
    Our designation of BDA--which warns our financial institutions 
about doing business with the bank--is producing encouraging results. 
Macau has adopted new anti-money laundering legislation and compelled 
the bank to institute more effective internal controls. United States 
law enforcement and regulatory agencies are working with Macanese 
authorities to resolve the concerns that led to the designation.
    U.S. regulatory and law enforcement measures to protect our 
financial system from abuse are not subject to negotiation. We will 
continue to guard our financial system in accordance with U.S. law.
    The September 19, 2005, Joint Statement of the six parties 
contemplates, in the context of DPRK denuclearization, discussions on a 
broad range of issues, including trade and investment cooperation and 
steps toward normalization.
    The North Korean accounts frozen by the Macao Monetary Authority 
total roughly $24 million. The DPRK's use of the Macanese action as a 
pretext not to return to the talks--where benefits would dwarf what 
we're talking about with BDA--raises questions about how serious the 
DPRK is at this point about its commitment to implement the September 
19 Joint Statement and its willingness to denuclearize.
                                refugees
    The United States is deeply concerned over the grave humanitarian 
and human rights situation that exists within North Korea and over the 
plight of North Korean refugees who have fled the country.
    In concert with other countries and international organizations, we 
seek to promote human rights in the DPRK. Additionally, we seek to 
improve protection and assistance for refugees from the DPRK and are 
mindful of the important role of the ROK in this regard.
    We have been working with other governments and organizations to 
find ways to respond to cases of individual North Korean asylum 
seekers.
    We have recently resettled some North Korean refugees in the United 
States. Under U.S. law and policy, in order to protect the applicants, 
their families, and the integrity of the program, we do not comment on 
individual asylum or refugee cases. Procedures to consider North Korean 
nationals for resettlement are the same as for nationals from other 
countries. We will consider any North Korean brought to our attention 
by the United Nations High Commissioner for Refugees (UNHCR), United 
States Embassies and Consulates, and reputable nongovernmental 
organizations. In all cases, host government concurrence is required 
for refugee processing on foreign territory. We will continue to work 
closely with the Congress and with the subcommittee as we pursue this 
important initiative.
                              human rights
    The Department has worked to identify concrete ways to address the 
North's human rights abuses.
    In August 2005, the President appointed the Special Envoy on Human 
Rights in North Korea, Mr. Jay Lefkowitz. Since his appointment, 
Special Envoy Lefkowitz has taken numerous actions to build 
international consensus for improved human rights in North Korea and to 
increase North Korean access to outside information.
    Currently, the State Department and other agencies are compiling a 
plan to expend funds to protect refugees and promote the freedom of 
North Koreans--as called for in the North Korean Human Rights Act of 
2004.
    For the past 3 years, the United States has cosponsored resolutions 
condemning North Korea's human rights abuses at the U.N. Commission on 
Human Rights. In 2005, the United States cosponsored an European Union-
tabled resolution on DPRK human rights at the U.N. General Assembly, 
marking the first time the issue had been addressed by the body. The 
United States also provided $2 million to the NGO Freedom House, an 
international campaign to raise awareness of the human rights situation 
in North Korea. The United States has provided a grant to the National 
Endowment for Democracy to support groups that monitor North Korean 
human rights abuses.
    In November 2005, the Secretary designated North Korea a country of 
particular concern under the International Religious Freedom Act for 
its systematic, ongoing, and egregious violations of religious freedom.
    The United States has made clear to North Korea that discussion of 
its human rights record will be part of any future normalization 
process.
    That concludes my remarks, Mr. Chairman, and I look forward to your 
questions.

    The Chairman. Thank you very much, Secretary Hill. Some in 
the United States Government have reservations about conducting 
negotiations to the ultimate degree with officials of the 
present North Korean Government. They suggest that perhaps we 
should wait for a change of regime in that situation, that that 
would be a more promising background for this.
    What comment do you have on the regime change idea, whether 
that is in the cards in any foreseeable future, and whether, in 
fact, the suggestion of that publicly, which I hesitate to 
make, is one reason for the intransigence of the North Korean 
parties to begin with?
    Ambassador Hill. Well, Mr. Chairman, we are not seeking 
regime change. We are seeking a change in this regime's 
behavior. Ultimately, what regime North Korea has will be 
determined by the North Korean people. It is not for us to 
determine.
    There is an argument--I have heard it too--that somehow 
with a different regime, with a benign regime, with a friendly 
regime, we would have an easier time negotiating this. Perhaps 
that is true, but we have the regime that we have and we have 
to deal with them.
    We have made very clear that we have no problems dealing 
bilaterally. What we are not prepared to do, however, is 
torpedo or push aside the Six Party process. The Six Party 
process is one where all the countries that are relevant are at 
the table. We cannot have a situation where the United States 
somehow tries to solve this bilaterally where important 
countries, such as South Korea, are left to wait in the waiting 
room to see what happens, because at the end of the day when we 
do reach an agreement we will have a number of countries coming 
forward and playing a role in that agreement.
    For example, Russia has a lot of experience in dismantling 
nuclear programs. Sir, I certainly do not need to tell you 
about the efforts that we have had with Russia over the years 
to do that. So we would look forward to Russia playing a very 
important role in a post-settlement.
    North Korea desperately needs energy and any conceivable 
energy solution is going to require South Korea's major 
participation. So the idea that the United States can somehow 
do this bilaterally is simply not true.
    I would make one other point, that this barrage of 
missiles, these seven missiles that were launched, that also 
validates the Six Party process. Only one of those missiles 
could conceivably reach the United States. Frankly, it did not 
get very far. But a number of those missiles were ones that 
could conceivably reach Japan and some of those missiles could 
only reach South Korea. In short, Mr. Chairman, there was a 
missile there for everybody. I think just the missile launch 
itself validates the process we have.
    Now, of course process is not enough. You have to have 
progress. But the notion that somehow we can make progress 
without the Six Party process I do not think is a notion that 
really can be validated or proven. I have had many bilateral 
meetings with the North Koreans. I have met them in formal 
rooms, I have met them in informal rooms. I have met them in 
restaurants. I have met them in many different places.
    The problem is not a lack of communication. The problem is 
that they do not want to come to the process and make the 
fundamental decision to implement the September accords. When 
they do, we will have as many bilateral meetings as they want. 
It is not a problem of bilateral process.
    Thank you.
    The Chairman. Well, some have suggested that in order for 
the Six Party Talks to progress, one of two things would have 
to occur, maybe both. That is, that there would have to be 
pressure, principally by the Chinese, who reportedly provide a 
very large percentage of the nutrition and energy needs of the 
country. This at least is reputed to be very substantial 
leverage. Without those increments, obviously the North Korean 
people would suffer. Perhaps the regime would, too. You would 
be in a better position, having been closer to the scene, to 
estimate that.
    On the other hand, others have suggested that a package 
similar to the one offered to Iran, for example, by the 
European powers and the United States would be a way of 
approaching this--that there are incentives in such an idea, 
both in terms of economic betterment as well as some rapport 
with the rest of the world, some regularization.
    What do you have to say about either of those routes, and 
what is likely to be the course of activity on either of those 
situations?
    Ambassador Hill. Well, first of all, we have a package and 
it is the Statement of Principles from September 2005. This 
lays out an entire agreement. First of all, it envisions 
denuclearization, that is getting rid of their weapons, but 
also very importantly, getting rid of all their nuclear 
programs. We are not interested in having arguments with the 
North Koreans over what is a nuclear weapons program and what 
is some sort of nuclear health care program. We are interested 
in getting rid of all of their nuclear programs, all their 
existing nuclear programs, and they agreed to that.
    The Chairman. Presumably, this requires some verification, 
maybe international inspection.
    Ambassador Hill. Absolutely.
    The Chairman. And some idea that that has occurred.
    Ambassador Hill. Absolutely, and that will be the rub. I 
mean, when we get to finally implementing this we have to have 
a verification mechanism that really works, and that is where I 
mentioned earlier we think the Russians can play a very helpful 
role in that with all the experience they have in this.
    So we have got the package. The problem is we need to get 
the North Koreans to implement the package. Clearly China is a 
key--is an absolutely key player here. I spent--I was there 
twice in the last week in connection with the U.N. Security 
Council resolution. The Chinese sent a pretty senior delegation 
up to Pyongyang and they waited and waited to see if they could 
get a meeting with Chairman Kim Jong-Il, and it never happened.
    I cannot speak for the Chinese, but I think the Chinese 
were a little bothered by that. Indeed, I think they are 
bothered by the fact that China has given North Korea a lot of 
assistance. They have helped them with fuel, they have helped 
them with food, they have helped clothe North Koreans in the 
winter. Indeed, when there is a North Korean delegation coming 
to China, China gives gifts to North Korea. When a Chinese 
delegation goes to North Korea, China gives gifts to North 
Korea.
    China has been extremely generous to North Korea and they 
asked for one simple thing, which was, do not fire those 
missiles, and the North Koreans ignored them. So I think there 
is a bit of an issue today going on between China and North 
Korea.
    You know, China, the Chinese, make the point that you can 
choose a lot in life, but you cannot choose your neighbors. So 
I mean, we do have to be respectful of the fact that North 
Korea is a neighbor. But I think there is a process going on in 
China today to look at where they stand with this, because 
clearly, clearly China has no interest in North Korea 
developing missiles or in developing nuclear technology. They 
are clearly concerned about what this could mean to the region.
    So I think the silver lining to this rather difficult 
situation we have is an opportunity to work more closely with 
China and an opportunity to work closely on our overall 
interest for northeast Asia. So we are doing just that.
    The Chairman. The Chinese were perhaps surprised by the 
reaction of the Japanese to the missiles. The Japanese response 
was very strong, and relations with Japan and China, as you 
take a look at the six parties you have around the table there 
with you, have been more and more fractious in the process. 
Surely the Chinese are sensitive to the Japanese reaction, 
which is more existential than any of the rest of us with 
regard to this, plus the announcement yesterday of an 11 
percent growth rate in China, with the whole future of the 
country riding on the regularization of trade, which I 
mentioned in my opening statement.
    Is it your impression that the Chinese are sensitive to all 
of the above?
    Ambassador Hill. They are absolutely sensitive to all of 
the above. Regrettably, North Korea does not appear to be 
sensitive to any of the above. Certainly, from the point of 
view of Japan, North Korea setting up missiles, several of 
which could hit Japan, when Japan has its own self-limiting 
rules about what kind of military it has, how much it spends on 
the military, what kind of systems it should have, this entire 
North Korean missile barrage began--or made more public--a 
debate in Japan about whether they have enough forces to deal 
with these kinds of threats to their homeland.
    This in turn caused concerns in China and caused concerns 
as well in South Korea. But rather than focus on the Japanese 
reaction or the South Korean reaction to the Japanese reaction, 
I think we should focus on what started this dance, and that is 
the North Koreans. They are truly reckless. They are reckless 
from a number of vantage points, and the region--how the region 
works together is one such vantage point.
    North Korea does not seem to understand that this is a 
region with great potential and they could join in it or they 
could be isolated.
    The Chairman. Thank you very much.
    I now want to recognize Senator Hagel.

   STATEMENT OF HON. CHUCK HAGEL, U.S. SENATOR FROM NEBRASKA

    Senator Hagel. Mr. Chairman, thank you.
    Secretary Hill, welcome. Secretary Hill, what do you 
believe the North Koreans want? What is the objective?
    Ambassador Hill. The North Koreans pride themselves on 
being opaque and not sort of letting us understand their 
thinking. I mean, often what goes on in North Korea stays in 
North Korea. But the best we can tell is the North Koreans 
believe that this missile launch demonstrates a certain 
military prowess, it demonstrates a certain strength, and that 
somehow by demonstrating this kind of strength we will be 
inclined to be more concerned, more worried, and inclined to 
give more concessions.
    So it could be in this case a sort of misplaced sense of 
how to enhance their position at the bargaining table.
    Senator Hagel. But what do they want? What do they hope to 
gain? What is the objective?
    Ambassador Hill. Again, they have not shared that with us, 
so we are left to speculate. But certainly when one looks 
through the public statements that are made there, when one 
analyzes what they're up to, it appears that North Korea would 
like to establish itself as a nuclear power and to get us to 
deal with them as a nuclear power, and to try to work with them 
as a nuclear power through arms control agreements and the 
like.
    Senator Hagel. So in light of what you have said during the 
last exchange with Chairman Lugar, where do we go from here?
    Ambassador Hill. Well, I think we need to make it clear 
that when we say that it is unacceptable to be a nuclear power 
that we really mean it. There are just too many consequences in 
the region. So we know that North Korea becoming a nuclear 
power is unacceptable, not only to us but to the other players 
in the region, including China. So where we have to go from 
here I think is to, using this resolution as a very strong--
this U.N. Security Council resolution as a very strong sign of 
international resolve, I think we need to work more closely 
with partners, and as we move closely with the partners and as 
we try to revive a diplomatic process and as North Korea does 
not respond to that, I think we need to work closely with the 
partners on additional steps.
    Now, we are looking at economic measures, but I think we 
need to be realistic about whether our economic measures can 
really get us where we want to go, because we have already 
taken a number of measures. We do not have a robust trading 
relationship with North Korea which we can somehow suspend and 
then compel them to a different behavior. But some countries 
have much more of a relationship, namely China. So I think it 
is very important to work with China on a diplomatic process 
such that if we do not get there we can have a common 
understanding of what we do next.
    We do feel that we have a common understanding that North 
Korea's development of missiles and nuclear programs is 
unacceptable to the Chinese and to the other Six Party 
participants.
    Senator Hagel. When you note additional steps--consider 
additional steps--what might those additional steps be?
    Ambassador Hill. Well, again, I think North Korea resists 
any type of pressure. But frankly, the other approach to North 
Korea, that is of being close to them and somehow showing a lot 
of patience, is also not working. So I would argue that we need 
to step up the pressure, but I do not think the United States 
can do that alone. By pressure I mean economic pressure.
    I think we need to work with our partners that we believe 
have more leverage, and the Chinese do have more leverage. The 
Chinese also have more concerns because North Korea is right on 
their border. So I think what we need to convince the Chinese 
of and work with the Chinese on is the fact that this current 
situation cannot hold. It is inherently instable, unstable. So 
what China needs to do is to determine whether it can carry on 
a relationship with North Korea as it has in the past and 
compel North Korea to make these changes that we all demand.
    So I think China needs in short to begin to review its own 
policies and I think that can be best done when we can work 
closely with China.
    Senator Hagel. You note those with the most influence on 
North Korea, using trade as an example, although, as you have 
correctly noted, it is limited influence. South Korea certainly 
is one of those, and I would ask, in light of the collapse of 
the talks between South and North Korea last week, what actions 
has South Korea taken or intend to take regarding humanitarian 
assistance, cutting off any food assistance, any official 
actions they have taken in light of those talks?
    Ambassador Hill. Well, you are correct, Mr. Senator, that 
the South Koreans agreed to go forward with a ministerial. 
Their minister of unification met with his counterpart in North 
Korea in Pusan. They did this after considerable discussion 
within their government and they decided that, because they 
have always valued these North-South contacts, they did not 
want to be the party that cut them off.
    But they did set a different agenda, and the agenda they 
set was that they wanted to discuss the missile launches and 
the importance of getting North Korea back to the Six Party 
process. The North Korean delegation walked out of the talks, 
and the result is that the talks have been suspended. South 
Korea has suspended shipments of humanitarian goods, including 
fertilizer. North Korea in response, just yesterday, has 
suspended the Red Cross-organized family visits. This is a 
particularly cynical act because when we talk about family 
visits these are families that were divided by World War II and 
by the Korean War. We are talking about 85-year-olds trying to 
get together to see each other, often for the last time.
    So I think it really is a measurement of that regime's 
cynicism that they would go after this type of interaction.
    It is very interesting what is going on in South Korea 
today. There is a burgeoning discussion in South Korea, among 
South Koreans, about the North Korean policy, whether they 
should be engaged in this type of--in this policy of reaching 
out to North Korea, whether they should be insisting on more 
quid pro quos.
    I think it is important that the South Koreans have this 
discussion, and I think it is also important that Americans 
allow them to have this discussion. Obviously we have opinions 
about it. Obviously we need to register our opinions with the 
South Korean authorities. But I think ultimately it would be 
better for all concerned if the South Koreans have their own 
debate and come to their own conclusion based on a common set, 
a common analysis.
    So the trend right now is for South Korea to tighten up in 
its relations with North Korea. And by the way, it is a very 
wrenching experience for South Korea. What happened to the 
Korean Peninsula in the mid-20th century is one of the great 
tragedies of that century, and here we are 50-something years 
later with no end in sight.
    Senator Hagel. Do you know if North Korea has offered to 
sell plutonium or enriched uranium to any countries, 
governments, terrorist organizations?
    Ambassador Hill. We know of--this gets into intelligence 
matters, but I can say on the record we know of no particular 
instance that they would offer to sell plutonium. We also know 
that they understand that this would be a very serious matter 
indeed.
    Senator Hagel. Do you believe that you have adequate 
flexibility, you personally, in the negotiations and Six Party 
Talks, flexibility in dealing with the Chinese and with the 
North Koreans, others involved?
    Ambassador Hill. I wish the North Koreans gave me something 
more to work with. I wish they showed that they were going to 
be interested in the fifth round. I wish they could demonstrate 
that they have done a little homework like the rest of us have, 
to see how we would implement the September agreement.
    With respect to my flexibility within our Government, I 
take my directions from Secretary Rice and I think I am okay in 
that regard.
    Senator Hagel. So you do not feel that you need any 
additional flexibility on site in order to do your job?
    Ambassador Hill. What I need is for the North Koreans to 
show they are serious. I think that would help skeptics in the 
United States, both in and out of Government, to believe more 
in the negotiating process. Sir, my problem is that the North 
Koreans have given me nothing to work with.
    Senator Hagel. How deeply has our financial sanctions 
against North Korea impacted their economy?
    Ambassador Hill. Opinions about this vary. Clearly, they 
were upset and remain very upset about our actions against 
them, and they have used this as the latest excuse for not 
coming to the talks, the fact that we suspended our United 
States banks' interaction with a bank in Macao which is known 
to have a number of North Korean accounts there. They have been 
very upset about that.
    It appears that they have had to scramble around and look 
for other ways to move their money around. To be very frank, I 
would be careful, however, measuring the success of these 
measures on the basis of how loudly the North Koreans complain, 
because they complain about a lot of things. I think they have 
certainly been disruptive, but I think we need to look to see 
how we can do more in this area and also, very fundamentally, 
work with partners in this area, because we cannot do this 
alone.
    If you look at all the partners in the Six Party process, 
we have less interaction with North Korea than any of the other 
partners. Indeed, today we can see the Japanese are looking at 
a number of measures. I mentioned the South Koreans have done 
so as well. We need all these partners doing this. I think 
together we could come up with something.
    But I want to emphasize too that we do need a diplomatic 
process. We do need a way to put this together and to get the 
North Koreans back to the table.
    Senator Hagel. Secretary Hill, thank you for your efforts.
    Mr. Chairman, thank you.
    The Chairman. Thank you very much, Senator Hagel.
    Senator Chafee.

   STATEMENT OF HON. LINCOLN CHAFEE, U.S. SENATOR FROM RHODE 
                             ISLAND

    Senator Chafee. Thank you very much, Mr. Chairman.
    From what I understand, there were seven launches, is that 
correct, and one Taepodong 2? What exactly occurred with the 
six smaller ones and then the bigger one, and how do we know? 
How do we monitor them? I am just curious on the facts of what 
exactly took place on July 4.
    Ambassador Hill. I do not feel qualified to give a 
discussion of the national technical means that we bring to 
bear, bring to bear on this, and moreover I am not a rocket 
scientist. But we had, I think, very adequate, I think, robust 
capabilities in seeing these missiles launched. We know that 
the Taepodong 2, the what we believe to be a long-range 
missile, went a lot--did not go as far as any of the other 
missiles, and there are signs that it barely managed to clear 
land and get out to sea.
    So it was--I think it is fair to say it was a failure. But 
I would hasten to add that when you do missile tests, things 
that are failures from the point of view of an operation, you 
can actually learn from the failures. So I cannot say that the 
test in and of itself was a failure. We do know that they fired 
a number of shorter range missiles, including something called 
the Nodong and some Scud missiles, and they appear to have 
fired them into the vicinity that they wanted to fire them to, 
because this is the vicinity that they warned mariners to stay 
out of.
    So from what we can tell, those other tests appear to have 
been successful, and if you consider the fact that North Korea 
had not fired missiles for some 13 years and one day fired one 
off and hit the test range, I think you have to acknowledge 
there is some success there. I would not necessarily like to 
take a piece of equipment out that has not been used in 13 
years and fire it off. Yet it appears to have been successful.
    So we should not underevaluate their missile technology.
    So the smaller missiles, Scuds and the like, kind of--I do 
not want to exaggerate, but inconsequential really. It is the 
bigger----
    Ambassador Hill. Well, they are not inconsequential to our 
partners in the process. Scuds are not inconsequential because 
they can hit just about every part of South Korea. Nodongs are 
not inconsequential because they can also hit Japan. So our 
partners have to be very concerned about it. And I might add 
that those both are treaty partners.
    Senator Chafee. Had they been launched in 14 years?
    Ambassador Hill. North Korea launched a No Dong missile in 
May 1993. The 1993 launch was the last and only launch before 
July 2006.
    Senator Chafee. In a long time.
    Ambassador Hill. In a long time, yes.
    Senator Chafee. I see.
    Ambassador Hill. Well, 1998 was the Taepodong 1.
    Senator Chafee. 1998 was the----
    Ambassador Hill. Taepodong missile, the one that flew over 
Japan. But the shorter range systems, my recollection is not 
since the early 1990s. I will get back to you on that 
precisely. A number of years.
    Senator Chafee. What would have been the worst case 
scenario, that the Taepodong 2 would have traveled to the best 
of its capability, which would have been what?
    Ambassador Hill. Well, on the assumption that we are sort 
of rooting for their missiles not to succeed, we would not want 
it to--we would certainly not have liked to see a Taepodong 
missile reach its full range, which could hit, reach the 
continental United States in theory. Obviously, we did not see 
that, nothing close.
    So I guess a worst case scenario would have been that it 
did that and plopped down somewhere on somebody's house.
    Senator Chafee. And I am sure there is--trying to figure 
this and decipher it all out--some suspicion that, is it 
possible that these were planned failures?
    Ambassador Hill. Well again, the shorter range missiles 
seem to have hit the target range, so they seem to be tests, 
and from what we can tell they achieved what they are supposed 
to achieve. Clearly, this large longer range missile did not 
succeed, but again I do not know what test data the North 
Korean scientists were able to glean from it. So I am sort of 
reluctant to term it the failure that it certainly looks like.
    Senator Chafee. I guess I am wondering. You said the 
Chinese had asked them, do not go ahead with any kind of 
aggressive activities. Maybe this was: All right, well, we will 
fire off a couple of duds.
    Ambassador Hill. Well, they fired off seven missiles and I 
would call that aggressive, because they were all shapes and 
sizes. And as I mentioned, their missiles are capable basically 
of hitting every country in the Six Party process. So I would 
not say that they in any way responded positively to the 
Chinese. And by the way, it was not just the Chinese. All of 
the other participants asked them not to do this, told them not 
to do this. And the United States, in addition to asking them 
not to do this, through other countries, we asked the Chinese 
to ask them not to do this. We also informed the North Koreans 
directly through their mission in New York, through what we 
call the New York channel, just so there would be no confusion 
at all the seriousness with which we viewed missile launches.
    Senator Chafee. And as you went ahead with the U.N. 
resolution, how were the Chinese cooperating on that? How high 
was their cooperation with what we wanted in a resolution?
    Ambassador Hill. Well, I think the Chinese had not done 
this before, had not participated in a resolution that condemns 
North Korean's behavior. So it was a diplomatic process where 
we worked intensively with the Chinese on the language of this. 
I would say that the Chinese earlier in the week had asked us 
to hold off on the resolution because they had a diplomatic 
team in the field. They had their Vice Premier Hei. He was 
joined by the Six Party coordinator, Vice Foreign Minister Wu 
Dawei, and they asked us to hold off.
    We did. The mission went to planning Pyongyang, was not 
able to get the North Koreans to come back to the Six Party 
Talks or to affirm, reaffirm, their missile moratorium that 
they had broken by firing these missiles. So I think when it 
was clear the Chinese diplomatic mission was not able to come 
back with the success they wanted, intensive negotiations, more 
intensive negotiations, took place in New York and we 
ultimately were able to agree on a unanimous resolution.
    Senator Chafee. That would--them asking us not to delay 
would signal to me that if you looked at the Chinese livid-
meter it was not that high.
    Ambassador Hill. Well, I think the Chinese--again, I do not 
speak for the Chinese here, but they were not at all happy with 
how the North Koreans had defied them. They were not at all 
happy with how their mission to Pyongyang had been treated. I 
think the Chinese are well aware that as an emerging world 
power it is important for them to insist on certain things and 
get it done.
    They had a neighbor here that depends on them every day of 
the year and they asked the neighbor to do something; the 
neighbor refused. So I think there is considerable concern in 
China, and I think this is reflected in their joining with us 
in condemning the North Korean missile launch.
    Senator Chafee. From what information I have, there are 
some reports that the North Koreans and the Burmese are 
potentially doing some arms deals? Am I accurate in that?
    Ambassador Hill. Well, Senator, this is an example of birds 
of a feather. The Burmese regime is another regime that does 
not seem particularly interested in joining the international 
community. As you know, Burma and North Korea broke off 
relations back in 1983 after the North Koreans murdered half 
the South Korean cabinet at a ceremony at a Burmese temple near 
Rangoon. So they have not had relations since that time.
    Clearly, the Burmese junta and the North Korean regime feel 
they have something in common today, so they are in discussions 
and there are reports that they are going to reestablish 
diplomatic relations that have been broken since the North 
Koreans blew up half the South Korean cabinet in 1983 there.
    Senator Chafee. Back to the key player, how is China going 
to deal with that new relationship?
    Ambassador Hill. Well, I think it is important for us to 
deal frankly and intensively with the Chinese on their 
relations with countries that are on their borders. We do that, 
obviously, in North Korea, and I think it is also important 
that we do talk to the Chinese about their relationship with 
Burma. Obviously, this is not a hearing about Burma, but if it 
were I would be telling you that we are very, very unhappy with 
the direction of things in Burma.
    This was one of the most promising Asian countries in the 
1950s and now it is about the least promising. What we do not 
like to see is a situation where the Burmese are able to play 
off China against India or India against the ASEAN countries or 
China against Japan, et cetera, to try to divide and conquer. 
We think it is important that we all speak with one voice on 
Burma.
    So we engaged the Chinese in this discussion and I can tell 
you we will be doing more of it.
    Senator Chafee. Thank you, Mr. Chairman. And I thank you 
for your valuable service to our country.
    Ambassador Hill. Thank you, and I look forward to getting 
to Rhode Island in a few weeks, by the way.
    Senator Chafee. I know that will charge the batteries for 
the challenges ahead.
    The Chairman. Thank you, Senator Chafee.
    Let me say for the benefit of all Senators who are with us 
who have come in, we are having a 10-minute round of 
questioning because of the importance of our questions, and we 
want the members to have an opportunity in this hearing to 
question Secretary Hill. The fact that we have a great number 
of members here I hope will lead members to be careful not to 
exceed the 10 minutes if you can avoid it. We will try to be 
courteous to everybody in allowing the dialog to continue, but 
this is a crowded calendar today and, fortunately, now more of 
a crowded podium. So we are appreciative of that.
    Senator Sarbanes.

 STATEMENT OF HON. PAUL R. SARBANES, U.S. SENATOR FROM MARYLAND

    Senator Sarbanes. Well, thank you very much, Mr. Chairman. 
I am glad we got this endorsement of Rhode Island tourism into 
the record here this morning. [Laughter.]
    Mr. Secretary--we are pleased to have you before us. Could 
you tell us a bit about what went into getting this resolution 
at the Security Council and how satisfied you are with the 
resolution?
    Ambassador Hill. Well, first of all, I want to be clear. I 
represent East Asia Bureau, not the United States U.N., which 
is run by Ambassador John Bolton. But I will tell you that----
    Senator Sarbanes. Well, presumably you all were part and 
parcel of the effort.
    Ambassador Hill. Oh, sure, yes.
    Early, soon after the missile launch, one of the members of 
the Security Council, not a permanent member of the Security 
Council but Japan, was very interested in taking the lead in 
putting together a robust resolution. Japan worked very hard to 
put together a resolution and worked very closely with us. The 
resolution that was put together had some eight cosponsors of 
it, that is eight countries in the Security Council, 
representing different countries in different parts of the 
world. The Europeans were cosponsors. We had some Latin 
American countries there.
    That was done the previous--that is, within 3 days of the 
actual missile launch. The Chinese signaled that they were 
concerned whether this resolution would be in their view 
helpful to the situation, and so the Chinese asked that, given 
the fact that they were going to launch a diplomatic mission to 
Pyongyang to convince the North Koreans to reimpose their 
missile moratorium and to come to the Six Party Talks and, most 
importantly, come to the talks with a view to implementing the 
September agreement, they asked that consideration of this 
resolution be postponed.
    So the sponsors of the resolution agreed to give China time 
to do that. By the end of the week, however, with the Chinese 
delegation still not having had key meetings in Pyongyang and 
not having indications that the North Koreans were prepared to 
come back to the talks or to reimpose the missile moratorium, 
the Chinese then proposed a resolution of their own, with 
different language in the resolution. At that point it became 
what often happens in New York, an intensive negotiation to 
come up with a resolution.
    It was possible at any time that we would have two 
resolutions, but I think it was strongly felt by our 
leadership, by our President, our Secretary of State, that it 
was valuable to have one resolution that represented the unity 
of the Security Council and, frankly, the outrage of the 
international community. So they worked, my colleagues in New 
York, worked very hard on taking the Chinese text and the 
Japanese text and putting it together in one resolution.
    We believe it is a very strong resolution. We believe the 
operative elements of it are to require that countries work to 
exercise vigilance in not allowing North Korea the means to 
develop these missile and WMD programs nor the means to 
proliferate this. We believe the resolution is very robust in 
terms of requiring countries to exercise vigilance, not to 
allow North Korea to have the financial means to develop these 
things.
    In addition, the resolution calls--first of all, condemns 
the North Korean action, but also very importantly calls North 
Korea back to the Six Party process.
    North Korea, as you know, their ambassador attended the 
Security Council session. He clearly contained his enthusiasm 
for the resolution and stormed out, not before he called the 
Security Council some names, and I think has put North Korea in 
the position now of defying the Security Council.
    So we will continue to work with our partners on this. I 
cannot stress enough the importance of working multilaterally 
on this because the United States in and of itself, we can 
protect ourselves, but we cannot solve this problem. We need to 
solve this problem with the partners. So we will work 
intensively with our partners and we will assess where we go 
from here.
    Senator Sarbanes. Have you identified the countries that 
are providing assistance to the North Koreans in their effort? 
In other words, the countries that this resolution is designed 
to curtail in terms of their relationship with North Korea?
    Ambassador Hill. Well, there are--all countries, all member 
states, are required to exercise vigilance. So I think what we 
want to do is work closely with countries that have the most 
interaction with the DPRK, financial interaction and also 
material interaction. Often those are countries that are 
closest to the DPRK and we are working with them diplomatically 
on this.
    Clearly, we need to continue to work very much with the 
Chinese, but, as you know, Japan is considering a list of very 
robust sanctions which, if implemented by the Japanese 
authorities, will help constrain North Korean access to 
financing, to financing these programs.
    Senator Sarbanes. How far apart are the countries that are 
directly engaged in this effort amongst themselves in terms of 
what they think the policy should be?
    Ambassador Hill. The countries engaged all have--all share 
the same goal, which is North Korea needs to be denuclearized, 
needs to get out of this business; that North Korea needs to 
reimpose its missile moratorium; and North Korea needs to begin 
to join the international community. Countries, however, have 
different motivations for this. I would say that in the 
immediate region there is concern that if--for example, in 
China there is concern that if North Korea were to go ahead and 
develop a nuclear program--I mean, a successful deliverable 
nuclear weapons program, that this could encourage other 
countries in the region, and the Chinese frequently cite Japan 
as a concern, that they do not want to see Japan go nuclear, 
for example.
    So I think China is very concerned about the potential of 
an arms race in northeast Asia. So that is something that is a 
concern that we share as well.
    I think generally countries in the region want to see 
northeast Asia as a region that not only exports many of the 
world's exports, manufactured exports, but as also a region 
that can export peace and stability, and it cannot do that 
while it has this one country there producing these weapons 
systems.
    Senator Sarbanes. You have given us a quick analysis of the 
China posture. What about South Korea, Japan, and Russia?
    Ambassador Hill. I think South Korea obviously has a 
complex relationship to North Korea. It goes back a couple of 
thousand years during which they lived together. So it is a 
very emotional issue with South Korea. I mentioned earlier that 
it is one of the great tragedies of that country that 60 years 
later there is this terrible division, that their country was 
divided in the middle of the 20th century. So it is a major 
humanitarian issue for South Korea to have its people to be 
able to be together. There are people in South Korea----
    Senator Sarbanes. I think I saw in the morning paper that 
they have suspended the permissions to go back and forth 
between the two?
    Ambassador Hill. The North Koreans did that, yes. The North 
Koreans did that in retaliation for the South Koreans cutting 
off some humanitarian assistance. The South Koreans do not want 
to have to go this route, but they understand that there is a 
point at which there is behavior in North Korea that they 
simply cannot, cannot countenance.
    I would add, as I mentioned earlier, that there is a debate 
going on in South Korea, a very active, lively debate about 
what their correct policy should be to North Korea, because 
there are those in South Korea who want to be supportive of 
North Korea and not expecting much back, but somehow keep North 
Koreans fed, to prevent further humanitarian catastrophe in 
that country. There are people who feel that they should do 
that without anything in return.
    Then there are people in South Korea who feel that the 
North Koreans have abused that, and there is an active 
discussion on that, and I think that is to be encouraged. So 
there are very strong emotions there.
    I feel as an American diplomat it is important that South 
Koreans work this out, that we not lecture them, shake a finger 
at them, tell them what to do, because, A, I do not think it 
will work, and B, I think it could actually do some damage to 
our relationship with South Korea. So South Korea has a special 
interest there.
    Japan has to be very concerned about a country that is so 
implacably against Japanese interests and is setting up medium-
term missile systems that Japan's own self-imposed limits on 
its military could not deal with on its own. So it has actually 
stimulated a discussion in Japan about the type of military it 
needs. That discussion in Japan has reverberated in South 
Korea, where people are worried about the Japanese reaction to 
the North Koreans. It has also stimulated concerns in China as 
well. So there is a lot going on there in the region right now, 
but I think we need to keep focused on who started this 
problem, and it is North Korea.
    Senator Sarbanes. Russia you did not do.
    Ambassador Hill. Russia also does not want to see an arms 
race in northeast Asia. Russia--this is, the Pacific Far East, 
is an area perhaps of secondary concern in Moscow, where Russia 
has many European areas that they are more concerned about. But 
nonetheless, we believe we share the same strategic interests 
as Russia. They do not want to see North Korea become a source 
of technology or a source of instability in the region.
    Senator Sarbanes. Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Sarbanes.
    Senator Allen.

   STATEMENT OF HON. GEORGE ALLEN, U.S. SENATOR FROM VIRGINIA

    Senator Allen. Thank you, Mr. Chairman, for holding this 
hearing. Thank you, Secretary Hill, for shedding light on an 
increasingly worrisome, dangerous situation insofar as North 
Korea is concerned.
    All of us recognize that the key player as we move forward 
in trying to get North Korea to comply with its agreements as 
well as international standards is China. China provides the 
sustenance, the support, and is a key benefactor for North 
Korea. If they really did want to have an impact, they could, 
or at least they are in the best position to do so. So China's 
actions as this moves forward will, from my perspective and I 
think from our perspective, should be that if they want to be a 
credible partner they need to step up.
    There are several things that concern us. Including 
deploying a missile defense system as effectively as possible 
to help out our allies in that region, particularly Japan and 
potentially South Korea as well, but especially Japan.
    Now, on the weapons front, let me follow up. Senator Hagel 
posed a question to you whether there was evidence of North 
Korea transferring nuclear capabilities to any country, and you 
said there was not. Now, at these missile tests, though, as far 
as other proliferation of arms and weapons of mass destruction, 
is it not true that there was at least one or more Iranian 
officials there to watch these missile launches?
    Ambassador Hill. Yes, that is our understanding, and our 
understanding is that North Korea has had a number of 
commercial relationships in the Middle East with respect to 
missiles.
    Senator Allen. Well, the fact that the Iranians were there 
and they have relations with them and that we know that 
Hezbollah is firing rockets, not missiles but rockets, into 
Israel right now, we know that Hezbollah is armed, funded, 
protected, and for all intents and purposes directed by Iran, 
that would be a great concern, that Iran has those 
relationships militarily with North Korea; is that not correct?
    Ambassador Hill. That is absolutely correct. I want to say, 
though, in truth in advertising, I am the--I deal with East 
Asia Pacific. I am not the point person in the Department on 
missile proliferation. But you are absolutely correct.
    Senator Allen. Well, they were not there just for a United 
States Independence Day celebration to see the rockets and 
missiles that North Korea sent off.
    Ambassador Hill. It is clear North Korea has interests in 
commercializing this technology. My response to Senator Hagel 
was in--was to the specific question----
    Senator Allen. On nuclear.
    Ambassador Hill [continuing]. Of selling plutonium.
    Senator Allen. Understood. Insofar as Iran, that is a 
concern and they do have those relations.
    Also, the Asia Times had reported recently that North 
Koreans are strengthening ties to other countries. You 
mentioned Burma. Venezuela has also been mentioned and stated 
by Venezuelan leaders, and also Syria. What do we know about 
any of the military transactions with Syria or Venezuela?
    Ambassador Hill. Well, we certainly--we have certainly 
tracked that and we do know that they have been engaged in 
these types of talks. I am not sure I can say in this hearing 
room the extent of what we know, but I can assure you we are on 
that one.
    Senator Allen. All right, that would be instructive for a 
classified briefing I think, Mr. Chairman, at some point when 
convenient.
    Insofar as the resolution that was passed by the United 
Nations, it was not the Japanese-proposed resolution; it was a 
resolution that you have characterized as strong. However, it 
was not as strong as the Japanese resolution. I will not get 
into some of the classified briefings we have had on that. But 
China was not supportive of the Japanese resolution.
    Should North Korea continue to respond in an unpositive or 
negative way to the recently passed U.N. resolution in their 
reaction to this one that is less strong than what Japan had 
proposed, have we, the United States, received any assurances 
from China and Russia that they would agree to invoke Charter 7 
mandatory sanctions on North Korea if North Korea continues?
    Ambassador Hill. Well, I am not aware that we have received 
assurances against the possibility that North Korea will 
continue to defy this resolution. But what I can assure you of 
is that----
    Senator Allen. What is your characterization of North 
Korea's reaction to this resolution that has been passed?
    Ambassador Hill. Defiant.
    Senator Allen. Right. And if it should continue?
    Ambassador Hill. Should it continue, I think we need to be 
very, very much in close contact with these countries about 
next steps. I cannot at this point tell you whether next steps 
would be a new resolution, but certainly we want to work with 
these countries to make sure that they are doing all that they 
can do to fulfill their obligations under this, under this 
resolution, to be exerting vigilance against the North Korean 
efforts to fund these programs and to develop these programs.
    I think that is probably going to be the area where we work 
most closely with those countries. We want to--I think it is 
very important that the resolution also lays out the need for a 
diplomatic track, and we will continue to work with these 
countries on the way forward in the diplomatic track. But 
ultimately the North Koreans are going to have to make their 
own decisions on that, and it does not look as of now that they 
are interested in rejoining a diplomatic track, and so we are 
going to need to reassess and see what else we can do.
    Sir, we have a number of options here. We do not have the 
options of walking away from this problem. We have got to stick 
with it. We have got to look to see what we can do with it. We 
need to work with these partners. Multilateral diplomacy is not 
an easy thing. Everyone has a different--everyone has a better 
idea in the room. So you have to work with them. But that is 
what I do for a living and that is what I will continue to do.
    We are not going to walk away from this problem.
    Senator Allen. Well, thank you for doing this for a living, 
and I do not believe we can walk away from it. If we turn our 
backs on it there will be even more danger from North Korea. I 
thank you for your service. This is very trying, but very 
important for our future.
    Insofar as Japan is concerned, have they made any 
statements or any indication that they are satisfied with the 
actions of the Security Council, and what are we doing to 
provide assurances to them for stronger actions should the 
North Koreans continue not to cooperate? In particular, I know 
this is not necessarily the portfolio of the State Department, 
but the deployment of a mobile missile defense system to 
protect Japan; what can you share with us on those aspects?
    Ambassador Hill. First of all, we have worked very, very 
closely with the Japanese through this entire crisis, extremely 
closely. We have sought to assist them with various short-range 
defensive systems. Again, I am not the right person to brief 
you on that. I think that should come from Defense Department. 
But we have been looking to--we have placed some additional 
Patriot missile batteries in Japan, for example. But I 
emphasize the need to talk to Defense Department on that.
    I would say our cooperation with Japan has become--is 
unprecedented in its positive nature. As you know, Prime 
Minister Koizumi was here a few weeks ago and a lot of the 
discussion had to do with dealing with this North Korean 
missile threat. As you know, there has been a discussion in 
Japan about the whole issue of what kind of armed forces it 
should have. As I mentioned earlier, this has caused some 
concern among its neighbors. We very much want to see Japan 
have a better relationship with its neighbors, and we work with 
Japan on that and we work with its neighbors on that.
    Japan is a very close ally of ours and I think that has 
been proven in the preceding weeks.
    Senator Allen. Thank you.
    In 1 minute, where do you see the public in South Korea? 
Where do you see any public opinion shifting with, not just the 
provocative launches, but North Korea's recalcitrance and 
objections to the Security Council resolution?
    Ambassador Hill. Well, as I mentioned earlier, I think 
there is a very, very lively public debate going on. You look 
at the South Korea press every day and there is a lot of 
discussion about whether the government has the right policy, 
policies toward this issue. I was just in South Korea about a 
week ago and I would say overall the tendency, the trend there, 
is going to be to probably tighten up in its relationship with 
North Korea. They do this very reluctantly because I cannot 
emphasize enough this is a very, very emotional issue for a 
people who have been divided, a people who have really felt 
that the mid-20th century divided them and humiliated them. So 
it is not easy for them.
    But they clearly are discussing this. It is a very lively 
democracy there in South Korea, and I do not think they need me 
to help them with this. I think they can work this through.
    What is important to us, though, is at the end of the day 
we not allow the issue with North Korea to weaken our 
relationship with South Korea. On the contrary, we want to see 
these tough issues strengthen our relationships there, 
especially with our allies, Japan and South Korea.

    Senator Allen. Thank you, and thank you for your service. 
We are fortunate to have somebody of your capability and 
integrity serving our country.
    Ambassador Hill. Thank you.
    Senator Allen. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Allen.
    Senator Dodd.

   STATEMENT OF HON. CHRISTOPHER J. DODD, U.S. SENATOR FROM 
                          CONNECTICUT

    Senator Dodd. Thank you very much, Mr. Chairman.
    Thank you, Mr. Ambassador, for your involvement. We are 
glad you stay involved, engaged in this. I think the good news 
I have heard you say already--and I apologize for missing your 
opening statement--is that we have got to stay engaged in this, 
in this process, that we cannot sit on the sidelines and hope 
somehow it resolves itself.
    I happen to believe there are some opportunities in all of 
this as well, to strengthen some relationships and to take us 
in some improved directions with some of the parties involved 
in the Pacific Rim. I guess I would like to ask you--you may 
have addressed this and I apologize if in your response to 
earlier questions you may have touched on some of these. But 
let me--if you have, you will tell me so.
    But like all of us, I guess here, we are trying to figure 
out sort of what is the objective that Kim Jong-Il is seeking 
with this effort. What are his goals? Is it--obviously, the 
ones that come to mind, it could be deterrence. I question the 
legitimacy of that, but you could make a case. Winning economic 
and political concessions make a case, I suppose, for that as 
well.
    I suspect--and I am going to ask you to comment on some of 
these; there is a question mark on the end of all of this. 
Prestige at home and abroad. Where is he vulnerable in his own 
country? I suspect it is the only group that may pose some 
threats to him would be his own military, so scoring points 
with them by doing this may be solidifying his own position at 
home.
    I believe you said at the outset of your comments here or 
in response to a question that we are not necessarily 
interested in regime change in North Korea; we are interested 
in a change of behavior. I think those were your words or words 
to that effect. If that is the case--and I would like to have 
you make the case here--why are we more explicit? If in fact 
many argue that what Kim Jong-Il is seeking here and what the 
Chinese and the South Koreans and the Japanese and the Russians 
cannot really offer is exactly what you have suggested in your 
comments here, that the only thing the United States can offer 
that others cannot is this not seeking regime change 
militarily, I guess you might want to add here.
    Why not be more explicit about that if in fact that may be 
the piece that North Korea is seeking? I am making that as a 
conclusion. I put a question mark there because I want to know 
whether or not you agree with that. Other than that, then go 
back to my earlier point and what are the objectives? What are 
they trying to achieve here? I am sort of mystified by what 
goals they hope to accomplish with all of this.
    Ambassador Hill. Mr. Senator, you are not the only person 
that is mystified by it. I must say I listen to a lot of North 
Korean experts, and you listen to five and you get six 
different explanations of it. It is truly difficult to fathom 
what they have on their minds. My own sense--and again there is 
no official policy on what this is, so I will just tell you my 
own sense. I think they have a misplaced notion that the 
tougher they are, the stronger their military, that somehow the 
tougher, the more prestigious their position will be in the 
world community and, more specifically, at the bargaining 
table.
    So I think they feel that the bigger the missiles, the 
stronger their position. I think--I do not agree that they are 
looking for nuclear deterrence. I really do not agree with the 
notion that somehow they live under a sort of imminent threat 
of a U.S. attack and that is why they need these super-weapons, 
to protect themselves from our attack.
    We have told them over and over again publicly, privately, 
wherever, that we are not interested in attacking or invading 
North Korea.
    Senator Dodd. Have we said that to them directly?
    Ambassador Hill. We have said that. And if you look at the 
September statement, it is there in black and white. So they 
know this.
    I think what they are looking for in having a nuclear 
capability is prestige value, and I am sorry to say, frankly, I 
think it is also a way to kind of intimidate their neighbors. 
They look around, they see neighbors that are much more 
powerful than they are. To understand the dynamics of North-
South relations, in 1960 North Korea was well ahead of South 
Korea. In 1970, North Korea was well ahead of South Korea. And 
now North Korea has a per capita GDP that is minuscule compared 
to South Korea.
    History has already happened. It is over. And you can 
imagine if there is a trauma there, you can imagine how they 
feel about that. So how do they catch up? They catch up with a 
sort of super-weapon.
    So I really think it is a misplaced sense of how to be 
strong. What we have to do is to be a little tough in response, 
and I think we need to make very clear that we are not going to 
allow them to become a nuclear state. You know, they look at 
some other examples in the world and say, well, we allowed 
country X to become a nuclear state, and so why do you not 
allow us? We are not going to allow North Korea to acquire 
these types of weapons.
    I think the sooner they understand that, the better. We 
have put together the Six Party process with the Six Party 
Agreement and anything they should want in the world is 
contained on those two and a half pages. It is all there. If 
they want energy, it is there. If they want security 
assurances, it is there. If they want bilateral recognition, it 
is there through a process.
    By the way, there will be a process. If we ever get to the 
point of normalizing our relations, we will have to address 
some issues that they do not like, for example human rights. 
But they are just going to have to understand that the rest of 
the world has its human rights record. Our human rights record, 
as well, gets inspected and they are just going to have to get 
used to the fact that if they are going to join the world they 
have got to play by the rules.
    Right now they have a sense of somehow there is this North 
Korean exceptionalism, that rules are for someone else, not for 
them. So I think we have to be a little tough on this point. 
But if they are willing to work with us, we have got an 
agreement that will really offer them a way back into the 
international community.
    Senator Dodd. But we are not going to let them--you say we 
are not going to let them acquire weapons. Do they not already 
have them?
    Ambassador Hill. They have--what we know is they have some 
missile technology and we know that those short- and medium-
term missiles seem to work. We know that they have plutonium. 
We do not know whether they have been able to put the plutonium 
into some sort of explosive device they have never tested. But 
we know they have the raw material, that is plutonium. We do 
not know whether they have put it into a----
    Senator Dodd. Could it be enough to maybe do six or eight? 
I have heard the report they have enough material to produce 
six or eight.
    Ambassador Hill. You talk to analysts and you will get 
different points of view, but in that order of magnitude, yes.
    What is a little discouraging, frankly speaking, is 
throughout our negotiations in the Six Party, on these 
principles in September, they kept this Yongbyon reactor 
operating. So this Yongbyon so-called graphite-moderated 
reactor, it was not there to produce electricity. It is there 
to produce plutonium byproduct. And they kept that going the 
whole time.
    Then at the end of this process when the United States 
announced certain measures that we were taking against some of 
their illicit activities, their financial illicit activities, 
they said they will boycott the rest of the talks unless we 
stop that. My point is, if they can go ahead and produce 
plutonium through the talks, surely we have the right to 
protect ourselves against illicit activities, and that is what 
we continue to do.
    Senator Dodd. I do not want to--the reason I say do they 
not already have it is because we heard from John Negroponte 
testifying publicly that he believes in fact they do have this, 
they do have this capacity.
    Ambassador Hill. I am sorry? Capacity?
    Senator Dodd. Weapons, nuclear weapons capability.
    Ambassador Hill. We know they have plutonium. We do not 
know that they have taken the plutonium and through an 
explosion caused a nuclear--or have the capability of causing a 
nuclear explosion. Now, people who know this kind of stuff say 
that the trick is in producing the plutonium and after that it 
is relatively easier.
    But what we know is that they have produced plutonium, and 
we do not know beyond that how much they have been able to turn 
it into a device or miniaturize it and put it onto a missile.
    Senator Dodd. But they are getting--if not there, it is 
your view that they are pretty close to doing that?
    Ambassador Hill. I do not know how close they are. I just 
know that they are developing missile technology on the one 
hand and they are harvesting plutonium on the other end, and 
clearly they are looking to fill in the middle, and I do not 
know how far they have gotten. But frankly, I do not think we 
should be waiting around for that to happen.
    Senator Dodd. Let me if I can--let me ask you quickly about 
the Chinese, because here there have been some who have 
suggested that the Chinese ought to listen to us, that this 
could be a defining moment in the relationship with China. I 
understand that. Are we listening to the Chinese? It seems to 
me here, of all the players outside of ourselves, the critical 
country regarding this effort here is China, for all the 
obvious reasons, I think some of which you have articulated 
already.
    It seems to me that we ought to be listening to the Chinese 
because they may have the key to this issue, and I wonder if 
you might expound on that a bit.
    Ambassador Hill. I think the Chinese are the key players 
and it is no accident that they are the host of the entire Six 
Party process. I completely agree with you they are the key 
players and they probably know the most about the North 
Koreans. They have certainly seen them the most. They have the 
most connections. They have economic connections, political 
connections, they have military connections. They know a lot 
about them.
    I think they have also had a long relationship with North 
Korea, some 60 years, and they are--in China policies do get 
changed, but it takes a while for things to change there. The 
nature of my discussions with the Chinese tends to be they ask 
me for more patience and I ask them for less patience. We have 
to come to a sort of agreement, a sort of work plan on how we 
can move ahead.
    I feel we had an important week last week. The Chinese 
asked for a delay in the Security Council. We gave them a 
delay. Their diplomacy did not work. They came back to the 
Security Council. They worked with us and we came up with one 
unanimous resolution. I thought that was very valuable, but in 
and of itself it is not going to solve this problem. We have 
got to keep working with the Chinese and find other ways to 
work together.
    Senator Dodd. But they are being cooperative?
    Ambassador Hill. I'm sorry?
    Senator Dodd. They are being very cooperative in your view?
    Ambassador Hill. I think they understand that this problem 
is not going to go away with patience. This problem is going to 
require us to be aggressive in dealing with it. So I have a 
very good relationship with my counterpart there and I really 
feel that if you look at the waterfront of United States-
Chinese relations, a complex relationship if there ever was 
one, this is an area where we can work together, and I think if 
we can solve this one we are going to be able to solve a lot of 
problems.
    Senator Dodd. Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Dodd.
    Senator Voinovich.

 STATEMENT OF HON. GEORGE V. VOINOVICH, U.S. SENATOR FROM OHIO

    Senator Voinovich. Thank you, Mr. Chairman.
    First of all, I would like to congratulate you, Ambassador 
Hill, for the outstanding job that you are doing. You have had 
great patience and persistence. You have been very restrained 
in your rhetoric and, even though we have been taking some 
criticism because we have stuck with the Six Party multilateral 
approach to this, we stayed the course, and I think that your 
great success at the Security Council is something that is a 
highlight of this year in terms of foreign policy.
    One of the things that puzzles me is the incentives for the 
Chinese to use its influence to get North Korea to comply with 
this resolution that has been passed. Now the spotlight is on 
the enforcement, compliance. I would be interested to know, in 
terms of incentives, is if the Japanese talking about perhaps a 
preemptive strike or changing their constitution or developing 
a nuclear weapon capability had much influence on their 
decisionmaking?
    Ambassador Hill. When I was in Beijing last week, there was 
frankly in private discussions, there was a lot of criticism of 
Japan, and clearly the Chinese have expressed a great concern 
about Japan. I took it as my mission to continue to focus them 
on the problem, which is not Japan but rather North Korea, and 
I think they got the point.
    Senator Voinovich. I know that the relationships between 
China and Japan are not as good as they should be, although 
economically they are doing a lot of business with each other. 
Are we doing anything to encourage the Japanese to prevent 
Prime Minister Koizumi visiting that shrine to the veterans of 
the war? Then there has been some--I know I have met with some 
Chinese and they have complained about the history books are 
not really capturing what really happened during the Second 
World War.
    Ambassador Hill. There is a--this is an ongoing issue 
between Japan and China, between Japan and South Korea. 
Memories are very long in Asia and this is something that, we 
would like to see these historical issues resolved. We think, 
though, that with respect, for example, to Japan and South 
Korea, these are two democracies, two allies of ours, and we 
think they ought to be able to solve this without advice from 
us.
    Senator Voinovich. So you are letting them work it out?
    Ambassador Hill. We are letting them work it out.
    Senator Voinovich. How much are the Chinese paying to the 
United States--in terms of their relationship with us, one of 
the things is that, how much influence do we really have with 
them, and then the other side of it that I worry about because 
I have been involved in normal trade relations--not normal 
trade relations, but intellectual property rights violations 
and the fixing of their currency, this concept that we need 
them so badly on North Korea that we may be compromising in 
terms of some of the other issues that are very important to 
the United States. Could you comment on that?
    Ambassador Hill. Well, I think we have a very broad, very 
robust agenda with the Chinese, which as you intimate includes 
a lot of issues that are in the economic area. Certainly from 
our vantage point or from my vantage point, I do not see any 
effort to go slow in those areas so that we can get more from 
them in the North Korean issue.
    We are not asking China to do anything in North Korea that 
we do not think is in their interests to do. Clearly, as I 
mentioned earlier, to have North Korea develop nuclear weapons 
is a serious problem for us all, especially for China and for 
the region. So I would say that the Chinese very much value our 
relationship, and what we are trying to do is broaden that 
relationship, that we are not just dealing with China on an 
issue of North Korea and then the economic issues, but we are 
engaged with China on a lot of issues around the world. We are 
talking to them about problems in Africa, we are talking to 
them about Burma, we are talking to them about a lot of issues.
    So I think the Chinese want to work with us on that, and 
they understand the depth of our concerns on North Korea. We 
have made it abundantly clear that we have got to solve this 
one. We do not just have to sit around and talk about this one. 
We need to solve it.
    So I think they are incentivized on North Korea. I think 
what we need to understand is--and I hate using this word 
because I sound like a typical State Department person, but it 
is complex. It does go back years. I think we need to 
understand the relationships with China and relationships with 
North Korea. There are a lot of them. So changing Chinese 
policy on North Korea is not just going to be the result of one 
meeting where they slap the side of their head with the palm of 
their hand and say: Okay, now we get it; we will change. It 
does not work that way. We need to work with them on this.
    Senator Voinovich. Do you think that they have got some 
tools in their box that they still have not used to restrain 
North Korea's nuclear ambitions and the erratic behavior?
    Ambassador Hill. I would like to believe that they do. 
Again, we do not tell them what to do, tell them how to do it. 
But we make clear to them that ultimately we need results in 
this area.
    Senator Voinovich. You mentioned the long relationship and 
how difficult it is to change that relationship. But has their 
concern about the destabilized North Korea and the possibility 
that they would get a tremendous number of people coming into 
China had anything to do with their being a little bit 
reluctant maybe to push as hard as they should?
    Ambassador Hill. I agree that is one of the issues. But 
frankly, I do not think the current situation is all that 
stable, either. While I am sympathetic to the idea that they 
are concerned about 20 million people streaming over the Yalu 
River, I think they should also be concerned, maybe more 
concerned, about proliferation of weapons of mass destruction.
    So it is one of the issues, but I think that problem really 
can be controlled and, frankly, I think the issue of weapons of 
mass destruction is a much more destabilizing problem than the 
so-called collapse of North Korea scenario. What we have made--
what we have also made clear to the Chinese is we are not 
interested in taking some kind of strategic advantage from some 
change in political relationships in the Korean Peninsula.
    We want to work with China. We understand their security 
concerns and we are not interested in taking advantage.
    Senator Voinovich. Has the issue of Taiwan come into these 
talks at all, or negotiations?
    Ambassador Hill. No. Taiwan does not come up directly in 
the context of these negotiations or in the sense of any kind 
of tradeoffs of any sort. China knows our position on Taiwan 
and we know their position.
    Senator Voinovich. The last thing I would like to say is I 
think that we have been very fortunate that we have had 
responsible people in the United Nations, in the Security 
Council. I have had an opportunity to speak with Mr. Oshima, 
Kenzo Oshima, who I was very impressed with, and I think that 
we should pat the Japanese on the back in terms of their being 
willing to come to the table and compromise, because they are 
the ones that really have the most at stake immediately. I 
think that their cooperation and help should be recognized by 
all of us and we ought to let them know we are appreciative of 
it, and I think it underscores the fact that now that 
resolution is passed we are going to do everything we can to 
make sure that the North Koreans comply with it.
    The Chairman. Thank you very much, Senator Voinovich.
    Senator Feingold.

   STATEMENT OF HON. RUSSELL D. FEINGOLD, U.S. SENATOR FROM 
                           WISCONSIN

    Senator Feingold. Thank you, Mr. Chairman, for having this 
very important hearing. Secretary Hill, thanks to you for 
joining us today. I want to add my voice to the others in 
thanking you for your continued service in our Government. I 
know that you are working on these issues day in and day out 
and I appreciate your professionalism and your dedication.
    I also appreciate the work that the men and women in the 
State Department are doing, both here and throughout the world, 
and I hope you pass on this committee's appreciation for their 
efforts in some of our country's most difficult tasks.
    I think we all agree that North Korea remains one of the 
greatest challenges to our country's foreign and national 
security policy. It is clear that approaches to date have not 
been successful. It is also clear that we are all interested in 
contributing to an approach that will work.
    That said, Mr. Secretary, I remain concerned that our 
policy in North Korea has been dormant for too long. It appears 
to me and others that we have been waiting on the sidelines, 
hoping, almost passively, that conditions will turn our way. We 
have been distracted by Iraq, so much so that it took North 
Korea's launch of seven missiles before we got fully engaged 
again.
    North Korea should be at or near the top of our foreign 
policy agenda. We need to figure out a way to get North Korea 
back into the international fold. Unfortunately, we cannot do 
that if we signal that our true desires are regime change and 
if we refuse to consider other options.
    This is not really a partisan issue as much as a true 
policy challenge. While some of us may differ in approach, we 
are all interested in learning about what the United States 
Government and the international community can do to get North 
Korea to change its behavior. And I am glad you are here to 
shed some light on that, and I have been listening to some of 
the questions you have already answered.
    I would like to follow up on the chairman's comments and 
questions and talk a little bit in more detail about direct and 
formal diplomatic engagement with North Korea. What are, if 
any, the negative aspects of opening a direct and formal 
diplomatic dialog with North Korea?
    Ambassador Hill. Well, we are prepared to have a direct 
formal diplomatic dialog in the context of the Six Party Talks. 
That is, we are not prepared to improve our relations with 
North Korea or to have this direct dialog while they are 
boycotting the Six Party Talks, because we believe that at the 
end of the day if this problem of nuclear weapons, of weapons 
of mass destruction, is going to be resolved, it is going to 
have to be resolved in the Six Party process. If they are 
prepared to do that, we are prepared to sit down formally, 
bilaterally, and work through our bilateral issues, which 
include human rights concerns and other issues as well.
    So we are--so if they are back in the talks and if they are 
prepared to implement the September statement, one of the 
provisions is to have a bilateral process and we will implement 
that. We are prepared to implement every word in that 
agreement.
    Now, to begin this process while they are boycotting the 
Six Party process is really to run the risk that they would 
essentially render the Six Party process moot and that they 
would try to resolve this just with the United States. In fact, 
as the missile launches confirmed, this is not just a threat to 
the United States. It is a threat to the region.
    Senator Feingold. So your main concern that I have heard 
here about direct talks is that it would undermine the Six 
Party Talks?
    Ambassador Hill. If it is done in the context where they 
are boycotting the Six Party Talks, yes.
    Senator Feingold. Say a little bit more about--could you 
just speculate a bit about what positive outcomes could come 
from direct engagement with North Korea? I understand the 
negative is that it could undermine the broader talks, which 
sounds like you say that without the Six Party Talks it will 
not work. But are there some positives that could come out of 
directly engaging with North Korea?
    Ambassador Hill. You mean while they are boycotting the Six 
Party Talks?
    Senator Feingold. Yes. I just want you to speculate on 
that.
    Ambassador Hill. I do not believe there are. Because the 
positives could be, let us say, to put aside misunderstandings. 
But we have channels for getting information to them. For 
example, on the missile launches we went directly to them 
through their operation in New York. So I do not think it is a 
problem of misunderstanding.
    Then what I would like to emphasize is last summer in 
Beijing during the Six Party process I met with them numerous 
times. At one point I tried to keep track of that, and I met 
with the North Korean delegation almost as many times as I met 
with the South Korean delegation and the Japanese delegation. I 
met with them in formal meeting rooms in the actual convention 
center at the Diaoyutai Complex. I invited my colleague, my 
North Korean colleague, to private dinners outside the complex. 
He invited me.
    Senator Feingold. This was all in the context of the Six 
Party Talks, right?
    Ambassador Hill. But these were--no one else was there. It 
was just Americans and North Koreans. You recall even 2 years 
ago Secretary Powell met with his North Korean counterpart at 
the ASEAN meeting.
    We have had a number, we have had numerous bilateral 
meetings. So I do not think the problem is having another 
bilateral meeting. I think the problem is that they have not 
made the decision to implement the September agreement, because 
if they are prepared to implement that we are prepared to sit 
down with them bilaterally and go through any range of issues.
    So my concern is, I just do not think this is really the 
problem.
    Senator Feingold. I understand that. But what it sounds to 
me is that if they refuse to return to the Six Party Talks for 
the next 2 years and continue to build weapons, the most we 
will do are these sort of informal contacts or talking with 
them when they basically shoot off some missiles. It sounds 
like we are going to be at a pretty low level of contact with 
them. Is that a likelihood?
    Ambassador Hill. Well, if they refuse to return to the Six 
Party Talks it is because they do not want to denuclearize, and 
when they do not want to--it is not like they are going to 
denuclearize if they meet with us after the Six Party. They are 
not telling us that if we do away with the Six Party Talks they 
will denuclearize. On the contrary, they have said they support 
the Six Party Talks.
    So the fact they are not going there means that they are 
not interested in fulfilling the things that we want to be 
fulfilled. So I am not sure what it is we are supposed to talk 
to them about.
    Senator Feingold. How do you know that, though, given how 
difficult they are to understand?
    Ambassador Hill. I have met with them many times. I have 
talked to them. I have sat down with them. There is no 
indication whatsoever that they are interested in pursuing 
this.
    Senator Feingold. I know you are not in charge of the Iran 
policy, but I would like to talk a little bit about how we are 
handling the nuclear standoff with Iran and what it means for 
North Korea. In your opinion, are there any ramifications or 
lessons or impacts that our current policy on Iran is having on 
North Korea? Is North Korea watching our policy in Iraq and 
Iran and other places, and in your mind what is it sort of 
taking from that?
    Ambassador Hill. Well, I think the North Koreans are 
watching that policy. They have watched our India policy, for 
example. They do read the newspapers. So I think what we have 
done in Iran we have already done in North Korea. We have a 
multilateral approach in North Korea where we are prepared to 
deal with them bilaterally in the multilateral approach.
    So I am not sure there is anything there that is happening 
in Iran that they feel that they, that the North Koreans feel 
they do not already have. The only other issue is they seem to 
have this notion that because they are further along in 
developing weapons of mass destruction that somehow they should 
get more from us. And I am not sure we can really buy into 
that, buy into that logic.
    So while the situation, while it does come up, I think they 
understand what the real issues are on the table.
    Senator Feingold. In your opinion are there any sort of red 
lines that if North Korea crossed them China, Russia, and South 
Korea would agree to cut off all aid and trade to the regime?
    Ambassador Hill. It is of course hard to say in advance. I 
think a North Korean nuclear test, which would be a real 
confirmation of a successful nuclear program, where they have 
taken the plutonium that we know that they have had and in 
effect weaponized it, I think that test would be regarded with 
extreme seriousness by these partners, extreme seriousness. So 
while I cannot identify precisely what they would do, I can 
assure you they would not be indifferent.
    Senator Feingold. What then in your opinion is likely to be 
Kim Jong-Il's next move? Is there a chance that he will try to 
launch another series of missiles or, worse, as you just 
alluded to, conduct a nuclear test? What is your guess?
    Ambassador Hill. Well, predicting his behavior is a bit of 
an occupational hazard. But I think we need to be prepared for 
the idea that he will want to show what is in his view more and 
more strength. I think the problem is that the more he does 
this kind of thing the more he loses sympathy. I mean, he does 
not have any support, but he does have some sympathy among some 
of the Six Party partners.
    Frankly, I think to the extent there was any reservoir of 
goodwill toward the North Korean regime, I think that reservoir 
is fast becoming empty, and I think actions of that kind, which 
are the sort of actions that he takes, would be inclined to 
drain it still further.
    I would like to see him find a way to get back to the Six 
Party process. It is clearly the way to go and we are certainly 
on the lookout for signs that he is prepared to do that. But I 
think in that regard this is probably not a good week.
    Senator Feingold. Thank you, Mr. Secretary.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Feingold.
    Senator Alexander.
    Senator Alexander. I pass to Senator Murkowski.
    The Chairman. Very well. Senator Murkowski.

   STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR FROM ALASKA

    Senator Murkowski. Thank you, Mr. Chairman.
    Thank you, Senator Alexander.
    Secretary Hill, thank you for your time this morning. Thank 
you for all that you are doing, obviously quite tireless in 
your efforts as we try to deal with North Korea. It has been 
interesting sitting through your testimony this morning. You 
have been asked to speculate about a lot of things: What is Kim 
Jong-Il going to do next? Why did he do it? That was my 
question to you this morning: Why did he--why did he launch?
    The Chinese have been telling him no. Everyone has been 
telling him no. Why did he do it? I think when those missiles 
were launched on the Fourth of July, we here in this country 
took it very personally, that you would send these our way on 
our Independence Day.
    But you indicated in your testimony earlier, I think you 
said, you used the phrase ``there was a missile there for 
everybody.'' So it was not necessarily--and I am speculating 
now--it was not necessarily just directed at the United States 
to send us a message, but to the Japanese, to South Korea, to 
China, to the neighborhood in general, everyone within 
proximity, and I think to the world.
    I am going to be leaving this hearing this morning not any 
more entirely sure why he did it. But I think that is part of 
our problem. We cannot understand the actions, if you will, of 
Kim Jong-Il and why he does what he does. That makes your job 
as the chief negotiator that much more difficult.
    Ambassador Hill. Thank you. I would add one other 
explanation, which is domestic. I suspect that he has elements 
in the leadership, perhaps in the military, that feels they 
need to somehow show their own strength and perhaps to some 
extent that was another reason.
    From the point of view of diplomacy, from the point of view 
of getting North Korea's way in the world, it makes no sense. I 
mean, he has really galvanized unity against him, and I think 
the Security Council resolution, which he probably did not 
predict, a unified resolution of that kind that included China 
using a word like ``condemns,'' very strong word, I suspect he 
miscalculated.
    So often when someone miscalculates it is kind of difficult 
to understand their reasoning because clearly their reasoning 
was flawed.
    Senator Murkowski. Hopefully, he understands that it was 
flawed as well.
    Nobody has really discussed the upcoming ASEAN Regional 
Forum that is going to be held in Malaysia next week. That is 
being viewed by many as our first opportunity to kind of have 
others engaged with the Six Party Talks to come together and 
put the pressures that will be needed to have North Korea come 
in and talk. I know that Secretary Rice is hoping to meet with 
the North Korea Foreign Minister. I have read reports that the 
prognosis for this and whether or not we are going to achieve 
any success is perhaps not very optimistic at this point.
    I would ask your opinion as to whether you think we are 
going to have any success in Malaysia. I had a meeting with the 
foreign minister from Thailand and I know he met with Secretary 
Rice. He offered his assistance as well. How can we utilize 
others to kind of bring North Korea around? So if you can 
address what we can expect in the next couple weeks?
    Ambassador Hill. I think it is very important for North 
Korea not to get mixed messages. Again, there will be people 
with their own views of how to solve this, but I think the 
Security Council really gives an excellent template to how 
people should think about this issue. So the ASEAN meeting is a 
first opportunity really to get together with the Six Party 
countries, but also with countries in the broader Asia Pacific 
region, to deal with what is truly a threat to security in the 
overall region.
    Indonesia for example, like Thailand, has been very 
interested in trying to use its good offices to solve this. So 
we look forward to talking to the Indonesians about how they 
see the situation. As the chairman mentioned, the Indonesians 
have a special envoy to North Korea who recently went there.
    It was interesting that Indonesian President Yudhoyono 
postponed his visit to North Korea because he did not want the 
visit to appear to be a mixed signal. But you are quite correct 
that a number of these Asian countries are very concerned about 
this, because it does affect the overall prospects in the 
region.
    But let me just say one other thing about the meeting in 
Kuala Lumpur. We will look at this as an opportunity to consult 
with partners on the way forward in North Korea undoubtedly, 
but we also look at it as an opportunity to work with our ASEAN 
countries on furthering Asian integration and on really 
strengthening the bonds between the United States and these 
other Asian countries. We have a great interest in the success 
of ASEAN. We have a great interest in the success of the 
broader region in Asia, and we cannot allow North Korea, 
difficult problem that it is, to crowd out or to drown out 
these other issues.
    So I know Secretary Rice looks forward to having good 
discussions with her Malaysian hosts, but also other countries 
from Southeast Asia. So it is going to be a very, very busy 
agenda. Indeed, as you know, Secretary Rice has a lot on her 
plate right now, especially with this very difficult situation 
in the Middle East. I will be going to ASEAN a couple days 
earlier, so I will be hitting the road again this Sunday to get 
moving on this.
    So we look at ASEAN or these meetings in Kuala Lumpur 
really as a very strong way where the United States can work 
with all of our Asian partners.
    Senator Murkowski. There was an article in the Wall Street 
Journal a couple weeks ago using the terminology ``the threat 
perception gap'' as it relates to North Korea and how other, 
the surrounding nations, South Korea, Japan, China, view, have 
viewed, and currently view North Korea. It was an interesting 
observation about what they called the disconnect between how 
the United States views the threat of North Korea and how South 
Korea, who has been sitting literally in the crosshairs of 
North Korea as the neighboring country for 50 years, and a 
recognition that there is more at stake than just being within 
missile range from South Korea's perspective.
    The concern may be that--and this is the reference in the 
article--that it is not the nuclear capability or the missiles 
themselves, but the South Koreans fear a United States 
overreaction could drive Pyongyang further into the Chinese 
camp, thus ruling out any reunification. Can you kind of speak 
to that dynamic that we are dealing with with South Korea? 
Obviously they are very concerned about North Korea's actions, 
but they have other issues that they are intimately tied with 
with their neighbor to the north.
    Ambassador Hill. I think you are absolutely right. North 
Korea's behavior has often been described as reckless, 
including by myself. One of the reasons it is reckless is the 
effect it has on the overall region. Clearly it could ignite an 
arms race and that is in no one's interest.
    South Korea does have a very special relationship to North 
Korea. You cannot discount 2,000 years of history. So when 
South Korea looks at North Korea, no one really knows the 
future. I mean, whether there could be a unified state at some 
point or some other. No one really knows the political 
arrangements. But what the South Koreans want is that the 
political arrangements on the Korean Peninsula should be 
determined by the Korean people.
    So there is concern in South Korea about the idea that 
North Korea's economy could become more and more organically 
linked to China and that if South Korea is not present that 
North Korea could sort of look more and more like something 
that is really more a part of China. So that issue does come 
up.
    But I hasten to add that the South Koreans value their 
relationship with China, so they do not want to make this some 
sort of major wedge issue with China. They want to work with 
China. South Korea knows the importance of China to the region. 
China wants to work with South Korea, but people do think about 
these sorts of things.
    So when we look at sometimes what South Korea is doing in 
North Korea--and I know from the point of view of when we are 
here in Washington and we look at this, we wonder why they are 
doing it. There are different reasons why they are doing it, 
some of which are not readily apparent to us. So I think when 
one approaches these issues one does have to approach them with 
a certain respect for the thousands of years of history that 
have gone on before them, and it behooves us all to think these 
through a little.
    Senator Murkowski. I appreciate that.
    I am going to ask you to engage in just one more question 
of speculation. Is North Korea perhaps trying to wait out the 
Bush administration to see if they get something better in the 
next round?
    Ambassador Hill. Well, there has been speculation about 
that. I like to think that from the United States' political 
side that they have heard messages from both our main political 
parties that make it clear to them that they should not think 
that they can get a better deal.
    I must tell you, I am less concerned about their thinking 
that they are going to get a better deal from someone than I am 
concerned about whether they really want a deal in the first 
place. You know, these nuclear programs, this effort to acquire 
nuclear weapons, this did not just start in this administration 
or in the Clinton administration. This goes way back. So I am 
concerned about that.
    I mean, our Six Party process, I do believe, is the right 
format. But it does not offer any refuge for those in need of 
instant gratification. That is, you really have to work this 
through and, dare I say it, accept some of the advice I get 
from the Chinese to be patient. But I really think it is the 
right process.
    Senator Murkowski. We appreciate all your good work and I 
thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Murkowski.
    Senator Alexander.

 STATEMENT OF HON. LAMAR ALEXANDER, U.S. SENATOR FROM TENNESSEE

    Senator Alexander. Thank you, Mr. Chairman.
    I only have one question. The United States is helping 
Japan today, I believe, install missiles on land and in the sea 
to defend against--that might intercept missiles coming in; is 
that correct?
    Ambassador Hill. I think some of these missile systems were 
envisioned some months ago, so one has to be a little careful 
with the time lines. But certainly we work carefully with the 
Japanese on these kinds of defensive systems, yes.
    Senator Alexander. Well, my larger point is that the 
nuclearization of North Korea has consequences beyond the 
immediate consequences. It seems to me that we are pretty good 
in Washington at seeing the immediate consequence of our 
actions. If we decide that we would like to topple Saddam 
Hussein, we can imagine that and we can do it. We are not as 
good at imagining what might come next.
    As we think about North Korea's nuclear plans, I think of 
China in that respect. China is a distinguished country with a 
long history and a long memory, and you said they counsel 
patience. But I wonder how much of your diplomacy has to do 
with helping China think about what steps two, three, and four 
are of the consequences of a nuclear-armed North Korea, and if 
so what are some of those steps?
    If we were to look ahead and to try to explain to China, if 
North Korea continues and were to acquire nuclear weapons and 
arm its missiles with those, what would the consequences be 
that China should think about that affect China over the next 
5, 10, 15 years?
    Ambassador Hill. Well, what I often try to do with the 
Chinese--and look, I want to be very clear. I am not any 
smarter than they are. I mean, I do not give them some special 
insights that they were not able to come up with on their own. 
They have some very talented people across the table.
    But I do try to focus them on one resounding fact, which is 
the United States one way or the other is not going to accept 
North Korea with weapons of mass destruction. We are just not 
going to accept it. The Chinese say they are not going to 
accept it either, and I say to them: Fine, and that is a good 
beginning because we have a common outlook.
    In not accepting it, though, I think we need to make, 
continue to make clear to the Chinese, that the current 
situation is not in equilibrium. This is not going to hold. 
That is, this is not stable, to have this country, North Korea, 
continuing to develop these things, and it is not stable for 
some of the reasons that you alluded to. It is beginning to 
cause a certain arms race in the region. It is beginning to 
cause certain tensions within the region, as we have seen 
between South Korea and Japan.
    So in short, in bureaucracy you often have problems that if 
you leave them alone, lo and behold, they get better. This is 
not one of these problems that is going to get better if we 
leave it alone. We have really got to be engaged in it and 
really work it.
    So I do try to kind of lay out to the Chinese my views of 
what could happen if we work this and the bad things that could 
happen if we try to pretend this issue is getting better on its 
own. China has a view that somehow in the long run North Korea 
will develop its economy and that as they develop and as they 
interact with the world they will realize they do not need the 
weapons. I do not see that happening right now.
    Senator Alexander. Does China not worry about the 
possibility of a nuclear-armed Japan?
    Ambassador Hill. They do. They do, and I think, frankly 
speaking, I think the North Korean missile launch brought some 
of these concerns about Japan, which by the way are concerns 
that we do not necessarily share, but certainly it brought some 
of these concerns that the Chinese have into sharper focus.
    My effort in Beijing was to keep focusing the Chinese on 
the culprit here, which is North Korea, not Japan.
    Senator Alexander. Well, why would China not think that at 
least a rearmed Japan would not be the inevitable consequence 
of a nuclear-armed North Korea?
    Ambassador Hill. I think they--I think they understand that 
interplay. I think the Chinese believe that the North Koreans 
need to be encouraged to join the international community and 
they need to see the value of being a member of the 
international community, and when these sort of megatrends 
finally set in that somehow North Korea will realize that these 
nuclear weapons do not have a role to play in that and will 
therefore want to give up the nuclear weapons.
    I do not believe that those are time lines that we can 
necessarily live with, and I think in the mean time we have 
these issues as you describe, with an arms race in northeast 
Asia.
    Senator Alexander. What are the possibilities that a 
nuclear-armed North Korea would produce a nuclear-armed South 
Korea?
    Ambassador Hill. I think how the South Koreans regard their 
own defense is, like in Japan, something that they discuss. 
They discuss it quietly now, but I think we could look ahead to 
a very bad scenario where North Korea develops nuclear weapons, 
Japan has to look very hard at that, and South Korea will also 
look hard at that. So I think there is a lot at stake, which is 
why I think we have got to stick with this until we solve it.
    Senator Alexander. Well, I do not disagree with that. It 
seems to me that in this case that it is hard for me to see--
China is a very thoughtful and careful-thinking country about 
its foreign policy and it would seem to me that the prospect of 
a rearmed or even nuclear-armed Japan and a nuclear-armed South 
Korea--it is hard for me to see how in any set of circumstances 
that is in the interest of China. It also seems to me it is 
inevitable if North Korea has nuclear arms.
    Ambassador Hill. I think the Chinese support for a U.N. 
Security Council resolution condemning the North Koreans is an 
indication that China is kind of coming around in its thinking. 
China has traditionally had concerns about North Korean 
stability. They also have their own concerns that they have had 
a longstanding relationship with North Korea, to change that 
relationship could involve a lot of changes within 
relationships, be their political, economic relationships with 
North Korea. But also, it can also feed back into China's own 
internal issues.
    So China does not change the policy lightly. But I think 
the more it sees of what is going on, that is the very negative 
trends that we outlined to them and that they in their very 
sober moments realize are happening, I think we can expect to 
gain more support, and I'd like to think this Security Council 
resolution is an indication of that. For me, I take an 
optimistic note from it that we should continue to work on this 
issue with China.
    Senator Alexander. Thank you, Mr. Secretary.
    Thank you, Mr. Chairman.
    Senator Dodd. Mr. Chairman, could I ask one question?
    The Chairman. Thank you, Senator Alexander.
    Yes, one more question.
    Senator Dodd. Just one more. I realize we are holding 
things up, but I gather you--well, I will not put words in your 
mouth, but you seem less than optimistic about the possibility 
of some sort of an arrangement or deal here with North Korea, 
with all of us trying to wrestle with what their intentions 
are, what their goals are. I wonder if you might just go back 
to thinking about the Agreed Framework, where for 8 years 
anyway the plutonium program was frozen in North Korea. Now, 
there was obviously the problem in 2002 with Assistant 
Secretary Kelly. We discovered the enriched uranium program 
that they had, they argued was not part of the Agreed 
Framework, we obviously argued it was, and so things broke 
down.
    But what is the problem with going back and trying to 
recreate the conditions in 1994 that produced the Agreed 
Framework? And is there not a possibility there that there is a 
deal? If there was something that produced that kind of deal, 
albeit not perfect and there were problems, clearly problems in 
2000-2001, there were certainly some advantages North Korea saw 
in 1994 that caused them to freeze the plutonium program, which 
was clearly in our interest and the interest of those who want 
to see a disarmed North Korea.
    Ambassador Hill. Well, my concern has always been that if 
we go in the direction of a freeze we will never get at the 
root of the problem. They have produced some plutonium. We need 
the kind of transparency from the North Koreans that they never 
offered us in that context. We need to be able to get all of 
this fissionable material.
    I am concerned if we go the route of the freeze we will 
never get at the root of the problem.
    Senator Dodd. Put aside the freeze for a second. What are 
the conditions that produced that agreement? You can change 
the----
    Ambassador Hill. It was a different time in history, but it 
involved a lot of tough negotiation and they ended up with this 
Agreed Framework, which included providing these rather 
expensive so-called light water reactors, that is providing----
    Senator Dodd. We never provided them, really, did we?
    Ambassador Hill. No, it took 10 years to--we set up a 
bureaucracy for dealing with them.
    Senator Dodd. In your view could that have been a problem 
and why this thing might have failed, because the light water 
reactors were never forthcoming?
    Ambassador Hill. My understanding of the negotiating 
history of this is the real failure had to do with the fact 
that we uncovered evidence that North Korea was making 
clandestine purchases of HEU, highly enriched uranium, 
equipment, and of course that type of equipment, that is the 
sort of nightmare breakout scenario where they could produce a 
lot more than just a few kilograms of plutonium.
    Senator Dodd. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Dodd.
    Secretary Hill, I join my colleagues in their commendation 
of you for the extraordinary work you do on behalf of our 
country and peace in the area. We wish you every continuing 
success. We thank you for spending this time with us today 
responding in so forthcoming a way to all of our questions. 
Thank you.
    Ambassador Hill. Thank you very much.
    The Chairman. The chair would like to call now our 
distinguished second panel of the morning.

    [Pause.]

    Our second panel will include the Honorable Arnold Kanter, 
Principal Member of the Scowcroft Group in Washington, DC; and 
the Honorable Morton Abramowitz, a Senior Fellow with the 
Century Foundation in Washington, DC.
    May I ask that there be order now in the committee room so 
that we may proceed with the testimony of these distinguished 
witnesses. I will call upon you in the order that you were 
introduced. First of all, Dr. Kanter, would you please proceed 
with your testimony. Your statement and that of Ambassador 
Abramowitz will be placed in the record in full and you may 
proceed in any way that you wish.

    STATEMENT OF HON. ARNOLD KANTER, PRINCIPAL MEMBER, THE 
                SCOWCROFT GROUP, WASHINGTON, DC

    Ambassador Kanter. Thank you, Mr. Chairman. I appreciate 
the opportunity to appear today to provide my assessment of the 
recent North Korean missile launches and their implications for 
United States policy. I would like to note at the outset that I 
am here today in a personal capacity and I do not represent 
anyone's views with the possible exception of my own.
    Let me start by stating my two principal conclusions. 
First, while undeniably provocative, the military threat posed 
by the North Korean missiles depends far less on the missiles 
themselves than on whether they are armed with nuclear weapons. 
Or to put the matter a different way, the central security 
issue has been, is, and remains whether North Korea has a 
nuclear program, and we should not allow their missile launches 
to divert or dilute our attention from that central issue. It 
follows that our responses, including our military responses, 
to this North Korean provocation should be guided accordingly.
    My second point is that the North Korean missile launches 
have produced effects that paradoxically have been positive, I 
repeat, positive, from the perspective of United States 
diplomatic and security objectives. I think the challenge that 
we face is to seize and exploit the opportunity that the North 
Koreans have unintentionally created for us.
    Let me explain how I have reached these conclusions. As we 
have already heard this morning, no one is quite sure what Kim 
Jong-Il had in mind with these missile launches. If one of the 
things that he had in mind was to get our attention, then that 
certainly worked. But it worked in a way that almost surely was 
unintended and unsought by Pyongyang. Indeed, it is hard to 
avoid the conclusion that, whatever the North Korean plan may 
have been, it has backfired on them and it has produced results 
that serve our interests much more than it serves theirs.
    North Korea's open defiance of widespread calls not to 
launch the missiles has produced near-universal condemnation by 
the international community and has left North Korea even more 
isolated diplomatically. A closely related result is that those 
missile launches have had a commendable unifying effect on our 
negotiating partners in the Six Party Talks, and Saturday's 
U.N. Security Council resolution on North Korea was a critical 
test of this renewed unity of purpose and I think the test was 
passed.
    The fact that the key members of the Six Party Talks were 
able to come together to pass unanimously not only a tough 
resolution, but I think it is worth emphasizing here a tough 
binding resolution, demonstrated that these members could and 
would submerge their differences over priorities, over tactics, 
and so forth to come together and stay focused on the North 
Korean threat.
    So I think that the Saturday vote was enormously important. 
Having said that, I need to quickly add that I think this 
renewed unity of purpose could prove to be quite fragile, and 
its fragility could well be tested and could well be tested 
soon. If the North Koreans follow through on their threats to 
conduct more missile launches, then the differences that were 
compromised among Security Council members in the July 15 
resolution could well re-emerge.
    Another test will be how the U.N. member states now proceed 
to implement the resolution. If we, the Japanese, whomever, 
rush to implement its provisions in such an expansive way that 
China, South Korea, and Russia believe that the result amounts 
to and is intended to amount to de facto regime-threatening 
economic sanctions, then I think the unity that was forged on 
Saturday could well erode and ultimately could vaporize.
    In many ways, the most important result of the missile 
launches has been to move North Korea off the back burner and 
back onto the front page. It has not only produced that result; 
simultaneously, these launches have created a more favorable 
environment by fueling a broadly negative international 
perception of North Korea as an irresponsible, reckless actor.
    Now, I know that the committee fully appreciates not only 
the importance but also the urgency of the North Korea issue 
and I do not propose to replow that ground. I also share the 
skepticism, dare I say deep skepticism, that many have about 
whether there exists any plausible set of security, economic, 
and political inducements that will ultimately persuade North 
Korea to abandon its nuclear weapons ambitions.
    But, that said, it is really hard not to be struck by the 
fact that while we have been insisting that Pyongyang needs to 
make a strategic choice, a choice between nuclear weapons and 
becoming a prosperous and secure member of the international 
community, the reality is that the North Koreans face few if 
any incentives to make what will be a very hard choice, and 
moreover they face few if any penalties for refusing to choose.
    Instead, North Korea continues to have it both ways, a 
little bit like my mother. They continue to produce material 
for nuclear weapons and at the same time they continue to 
receive economic assistance and investment, particularly from 
China and South Korea.
    I think their missile launches and the ensuing 
international response have put us in a better position to make 
North Korea make that choice. Now, I think the outlines of what 
is required to exploit this opportunity are familiar. On the 
one hand, North Korea needs to be persuaded that it will pay a 
steadily increasing price for its continued defiance, and I 
think that the public embarrassment that Pyongyang has caused 
both Beijing and Seoul increased the chances that they will now 
be more willing to make clear to North Korea that its continued 
stonewalling will not be cost-free.
    On the other hand, the United States not only needs to 
persuade North Korea that we are serious about delivering on 
our promises and commitments in the September 19 statement; in 
some ways as important or more important, we also need to 
persuade our negotiating partners about our good faith so that 
they will use their leverage on Pyongyang to get it to return 
to the talks and get it to negotiate seriously.
    How then should the United States proceed? I believe there 
are two principal and closely related tasks. First, we need to 
seize this moment and seize the initiative. Second and equally 
important, we need to work hard to maintain the current unity 
of purpose about North Korea that has emerged. Among other 
things, I think this means removing, working to remove 
obstacles to resumption of the Six Party Talks. These are not 
obstacles so much as they are North Korean excuses and 
acceptance by others of North Korean excuses for refusing to 
return to the talks.
    In this connection, I think that the issue of direct United 
States-North Korean talks is or at least ought to be a red 
herring and we ought to take it off the table, not only to deny 
the North Koreans the excuse but also to deny needless 
friction, to avoid needless friction among the five, and I 
think a clear reiteration and an appropriately flexible 
interpretation of what is the current United States position, 
one that you heard Ambassador Hill give this morning, namely 
that it is prepared to engage with North Korea bilaterally in 
the context of the Six Party process, ought to do the trick.
    The Treasury Department's investigation of money-laundering 
by the Banco Delta Asia in Macao is a more difficult problem. 
Some may wish the United States had not decided to move against 
the Macao bank, but we have and, having done so, we should 
pursue the matter as a tightly-focused investigation and one 
that is completed as expeditiously as possible. We need to do 
this both to rebut accusations by Pyongyang and to assuage 
concerns among our Six Party partners that this investigation 
really is a de facto set of economic sanctions against North 
Korea that we intend to remain in place indefinitely.
    My bottom line is simple: The stars are in better alignment 
than they have been for a long time and the challenge for U.S. 
policy is how best to capitalize on the opportunity that has 
been presented.
    Let me close by expressing my appreciation again for this 
opportunity to present my views to the committee. Thank you, 
Mr. Chairman.
    [The prepared statement of Ambassador Kanter follows:]

    Prepared Statement of Hon. Arnold Kanter, Principal Member, The 
                    Snowcroft Group, Washington, DC

    I appreciate the opportunity to appear before the committee today 
to provide my assessment of the recent North Korean missile launches 
and their implications for Unites States policy options with respect to 
North Korea. I would like to note for the record that I am appearing in 
a personal capacity, and that the views I am expressing are my own.
    I have two principal points:

   First, while undeniably provocative, the military threat 
        posed by North Korean missiles depends far less on the missiles 
        themselves than on whether they are armed with nuclear weapons. 
        Put differently, the central security issue is and remains the 
        North Korean nuclear program, and we should not allow their 
        missile launches to divert or dilute our attention from that 
        central issue. Our responses, including our military responses, 
        to this North Korean provocation should be guided accordingly.
   Second, the North Korean missile launches have produced 
        effects that paradoxically have been largely positive from the 
        perspective of United States security and diplomatic 
        objectives. The challenge we face is to seize and exploit the 
        opportunity that the North Koreans have unintentionally 
        created.

    Let me explain how and why I have reached these conclusions.
    As with almost everything that North Korea does, its motives for 
launching multiple missiles on July 4 are, at best, unclear. The 
military results have been mixed. Although the North Koreans may have 
acquired useful data from the apparent failure of Taipodong 2, the 
missile's destruction shortly into its flight must have been 
embarrassing to Pyongyang, and will do nothing to increase the 
confidence of North Korea's would-be missile customers in the product 
that Pyongyang is marketing. That said, the North Koreans did 
demonstrate a capability to do multiple launches in a relatively short 
period of time. In doing so, they also underscored their ability to 
threaten Japan and South Korea--including the United States military 
forces and nationals in those countries--as well as China--with 
ballistic missiles. But I conclude that the direct and immediate 
significance of the North Korean missile launches lies less in their 
military effects than in their political effects, both intended and 
unintended.
    The political effects of the North Korean missile launches likewise 
have been mixed. If they were designed to get attention, it certainly 
worked, but almost surely in a way that was unintended and unsought by 
Pyongyang. (As a corollary, I would note that we should be careful 
neither to give too much credit to Pyongyang's ability to play a weak 
hand, nor be too sanguine about its ability to avoid serious 
miscalculations.) Indeed, it is hard to avoid the conclusion that 
whatever the North Korean plan may have been, it has backfired on them 
and has produced results that serve our interests.
    North Korea's open defiance of widespread calls not to launch the 
missiles produced near-universal condemnation by the international 
community, and left it even more isolated diplomatically. China and 
South Korea have been particularly embarrassed. As a result, they 
probably are less inclined and--in terms of their own politics--
probably less able to provide the support and economic assistance to 
Pyongyang that, intentionally or not, have facilitated North Korea's 
stonewalling. Closely related, the North Korean missile launches have 
had a commendable unifying effect on our negotiating partners in the 
Six Party Talks by narrowing differences between the United States and 
Japan on the one hand, and China and South Korea on the other, and by 
highlighting that it is North Korea, not the United States, that is the 
problem and obstacle.
    Saturday's U.N. Security Council resolution on North Korea was a 
critical test of this renewed unity of purpose. A Chinese veto of the 
Japanese resolution, and/or a United States veto of the Chinese-Russian 
resolution would have been a huge self-inflicted wound. Conversely, the 
fact that key members of the Six Party Talks were able to come together 
to pass unanimously a tough, binding resolution not only underscored 
Pyongyang's intensified isolation, but also demonstrated that they 
could and would submerge their differences over priorities and tactics 
to stay focused on the North Korean threat.
    Make no mistake: This renewed unity of purpose is quite fragile. 
Moreover, it could well be tested again--and in the near future. If the 
North Koreans follow through on their threat to conduct more missile 
launches, the U.N. Security Council will have no choice but to confront 
the issue of how--and how forcefully--to respond. In that event, the 
differences that were papered over and compromised in the July 15 
resolution will reemerge. Another test will be how U.N. member states 
now proceed to implement the resolution. If the United States and/or 
Japan implements it in a way that China, South Korea, and perhaps 
Russia regard as overly aggressive and expansive--amounting to broad-
gauged, regime-threatening economic sanctions by another name--then the 
unity that was forged on Saturday could well erode and potentially 
vaporize.
    In some ways, the most important result of the missile launches has 
been not only to move the North Korea issue off the back burner where 
it has been pushed by other priorities and back onto the radars of 
senior policy makers, but to have done so in a way that also has fueled 
a broad-based and broadly negative international perception of North 
Korea and its irresponsible behavior. The challenge for U.S. policy is 
how best to capitalize on the opportunity that has been presented.
    I know that everyone on the committee appreciates not only the 
importance but also the urgency of the threat presented by the North 
Korean nuclear issue, and I do not propose to replow that ground. I 
also share the skepticism--even the deep skepticism--that many have 
about whether there exists any plausible set of security, economic, and 
political inducements that would persuade the North Koreans to abandon 
their nuclear weapons ambitions.
    That said, it is hard not to be struck by the fact that while we 
insist that Pyongyang needs to make a strategic choice between nuclear 
weapons and becoming a prosperous and secure member of the 
international community, the North Koreans currently face few, if any, 
incentives to make that very hard choice, and confront few, if any 
penalties, for their failure to do so. Instead, they continue to have 
it both ways: Continuing to produce material for nuclear weapons while, 
at the same time, continuing to receive economic assistance and 
investment, particularly from South Korea and China. Their missile 
launches and the ensuing international response create a new and 
potentially promising opportunity at least to make North Korea choose--
and make clear--the path it will take.
    The outlines of what is required to exploit this opportunity are 
familiar. On the one hand, North Korea needs to be persuaded that it 
will pay a steadily increasing price for its continuing defiance. The 
public embarrassment that Pyongyang has caused Beijing and Seoul 
increases the chances that they will now be more willing to make clear 
to North Korea that its continued stonewalling will not be cost-free, 
while the July 15 U.N. Security Council resolution provides the 
international authority for them to do so.
    On the other hand, the United States not only needs to persuade 
North Korea that we are serious about our commitment to a diplomatic 
solution, and about delivering on our promises of security assurances 
and economic benefits. In some ways more important, we also need to 
persuade our negotiating partners about our own good faith so that they 
will use their leverage on Pyongyang to get it to return to the talks 
and negotiate seriously.
    To outline these conditions is to make the current Perm 5 + Germany 
approach on Iran an almost irresistible metaphor, and perhaps even a 
model, for a strategy toward North Korea, including with respect to 
some specifics, e.g., an analogous approach on the issue of civil 
nuclear power.
    How, then, should the United States proceed? I believe there are 
two primary and closely related tasks. First, we need to seize the 
moment and the initiative. Second, and equally important, we need to 
work hard to maintain the current unity of purpose about North Korea 
that has emerged. This means making clear that, as in the case of Iran, 
we will be prepared to respond to North Korea's legitimate concerns 
provided our partners are prepared to join with us in taking tougher 
measures if North Korea continues to pursue its nuclear weapons 
ambitions. It also means working to remove obstacles to a resumption of 
the Six Party Talks or, more precisely, North Korean excuses for 
refusing to return to the talks.
    In this connection, let me note that the issue of direct United 
States-North Korean talks is--or at least ought to be--a red herring, 
and we should take it off the table in order both to deny the North 
Koreans the excuse and to ensure that it is not a point of friction 
among the five. A clear reiteration and an appropriately flexible 
interpretation of the current United States position that it is 
prepared to engage with North Korea bilaterally in the context of the 
Six Party Talks should be sufficient.
    The Treasury Department's investigation of money laundering by the 
Banco Delta Asia in Macau is a more difficult problem. Some may wish 
that the United States had not decided to move against the Macau bank, 
but we have. And having done so, there are legitimate law enforcement 
concerns that now need to be addressed, if only because it is hard to 
argue that the United States should and will turn a blind eye to money 
laundering and other serious currency violations in exchange for a 
North Korean agreement to return to the Six Party Talks. However, the 
United States should pursue the matter as a tightly focused 
investigation, and one that is completed as expeditiously as possible, 
so as to rebut accusations by Pyongyang--and to assuage concerns among 
our Six Party partners--that these are de facto economic sanctions 
against North Korea that will remain in place indefinitely.
    Let me close by again expressing my appreciation for the 
opportunity to present my views to the committee.
    Thank you.

    The Chairman. Well, thank you very much, Dr. Kanter.
    We would like to hear now from Ambassador Abramowitz.

STATEMENT OF HON. MORTON ABRAMOWITZ, SENIOR FELLOW, THE CENTURY 
                   FOUNDATION, WASHINGTON, DC

    Ambassador Abramowitz. Thank you, Mr. Chairman, for 
inviting me to discuss our North Korean problem with you today. 
I have tried to step back, tried to shut out some of the 
rhetoric, and focus my remarks on whether there is a diplomatic 
approach that could achieve a principal American foreign policy 
objective, the verifiable elimination of North Korea's nuclear 
weapons capabilities. I personally doubt it, but I have tried 
to see whether there is such an approach.
    In light of time constraints, I am going to avoid 
speculations on what has happened and proceed to my specific 
suggestion, which is quite parallel to Dr. Kanter's.
    While the six power forum is still a potentially useful 
forum, there has been a lack of negotiating content in the Six 
Party forum, in great part because of our profound strategic 
differences in approach to North Korea with two countries who 
have great stakes in this issue: China, North Korea's best 
friend, and South Korea, our treaty ally.
    China has not proven to be the deus ex machina who would 
bring North Korea around by persuasion or economic pressures to 
resolve the nuclear issue, as many predicted when the Six Party 
Talks began. China has many common interests with the United 
States on the Korean Peninsula, but it has also many other 
interests at play in North Korea, and it has simply not been 
willing to subordinate those to United States purposes.
    The same has been true in spades of South Korea. This 
differing view with China and South Korea on how to manage 
North Korea has allowed Pyongyang to escape the consequences of 
bad behavior and has made a negotiation with Pyongyang 
difficult, if not impossible.
    More specifically, both countries do not want North Korea 
to have nuclear weapons. That is clear. But they do not share 
the American sense of its primacy as an issue.
    Second, they do not want to join in bringing concerted 
pressures to bear on the North, fearing it would create serious 
tensions and potentially affect the peace, stability, and 
economy of the peninsula.
    Third, while we freeze Pyongyang out except for some 
humanitarian assistance, they provide sizable economic 
assistance, effectively undermining any bargaining position.
    Fourth, they believe that we have been insufficiently 
forthcoming in our negotiating proposals to the North.
    Finally, they want us to talk to the North in any forum, 
bilateral, multilateral, and they of course do so themselves.
    These differences have been mostly papered over by constant 
to-ing and fro-ings and the usual diplomatic rhetoric. The 
missile tests, however, have clearly had an impact on both 
countries and throughout the region. China is embarrassed by 
North Korean behavior and angry at its refusal to listen to 
their entreaties. It also fears that North Korean action will 
have damaging regional implications, notably causing Japan to 
reassess its defense requirements.
    China, surprisingly, even supported a U.N. Security Council 
resolution censuring North Korea, although Beijing has refused 
to adopt punitive measures at this time.
    In South Korea there is ferment. The government's soft 
approach to North Korea has been increasingly publicly 
questioned and Seoul, also surprisingly, has suspended some 
assistance pending North Korea's return to the Six Party Talks.
    North Korea is unhappy with its isolation and is sputtering 
badly. It could well isolate itself further by cutting off 
projects with South Korea in an effort to scare Seoul into 
becoming more accommodating.
    These changing perspectives may open--I say may open--
greater opportunities for diplomacy that could bring closer 
together the postures of the United States, China, and South 
Korea toward North Korea, which is an indispensable requirement 
for any serious negotiations with North Korea. The first part 
of this diplomatic effort must be to try to bridge the gulf 
with Beijing and Seoul. We might well want to wait to see if 
there is any further thought from Pyongyang's isolation and its 
unhappiness with China and South Korea. But it is an 
appropriate time, although hardly the most politically 
appropriate time in Washington, for the United States to craft 
a new approach that might get real Chinese and South Korean 
support to seriously test the proposition that there may be 
some package of security assurances, political measures, and 
economic bait that would cause North Korea to put aside its 
nuclear ambitions and stop throwing missiles around.
    That means going further than the statement of principles 
agreed to last September by the six powers and putting forth a 
negotiating position beyond expecting the North to accept a 
Libyan-like approach to eliminating their nuclear weapons. 
North Korea is profoundly absorbed with the United States. 
Obviously, the elements of a negotiating package must be worked 
out within the U.S. Government, which can be enormously 
difficult, given the reported sharp differences within the 
administration.
    We would expect China and South Korea to make clear to 
Pyongyang that a fair deal has been presented. We would try to 
secure commitments from both countries on what they are 
prepared to do if North Korea spurns such a new approach. 
Whether their commitments would be worth anything if North 
Korea balked is a risk we would have to take.
    Departing even further from American political reality, I 
believe that any new negotiating approach should be accompanied 
by some dramatic measure to show our willingness to negotiate 
not only to North Korea but to our two principal partners as 
well, such as an offer to begin negotiations immediately to 
establish diplomatic relations.
    Mr. Kanter has talked about the problem of resuming 
negotiations. I agree with his presentation.
    In summary, let me say we have no credible red lines for 
North Korea beyond their not attacking South Korea and Japan. 
Nor as far as I can tell do we have any concerted policy for 
dealing with North Korea as a state, besides talking to them 
about nuclear weapons and perhaps modifying some conduct. Every 
principal party to this issue is tired of the North Korean 
regime. They all would like it to go somehow or other. But only 
China and South Korea want to do something about that regime. 
China has been trying to turn it into a mini-market China. 
South Korea hopes by large-scale assistance to make them 
dependent and transform that regime over time. That may all be 
a triumph of hope over reality.
    America's policy toward the North seems to be hold its nose 
and wait for them to implode, which is possible, or for China 
and South Korea to see the light and join us in putting serious 
pressures on North Korea. Maybe we will witness some internal 
cataclysm. I believe that is the way the North Korean state 
will end. But waiting for that to happen is not a policy, and 
that still leaves the nuclear issue, and we all know there is 
no good option for the nuclear issue. Force would be violently 
opposed by South Korea, which has the most to lose.
    Pressure and isolation requires unity with China and South 
Korea. Maybe North Korean actions will stimulate our friends to 
further action. But U.N. resolutions guarantee nothing.
    That leaves diplomacy and whether we want to try to 
seriously pursue it. We should not forget that North Korea is 
not an 800-pound gorilla. Far from it, it is a failed state 
that is dependent very much on foreign handouts, which will one 
day be on the trash can of history. But before that happens, it 
can cause us great harm, and the United States should not be 
afraid of dealing directly with Pyongyang on this issue.
    Moreover, if we were to decide to try tougher measures and 
even force, it makes good sense to put ourselves in the best 
international position to do it by having gone the extra mile 
diplomatically.
    Thank you, Mr. Chairman.
    [The prepared statement of Ambassador Abramowitz follows:]

   Prepared Statement of Hon. Morton Abramowitz, Senior Fellow, The 
                   Century Foundation, Washington, DC

    Thank you for inviting me to discuss our North Korean problem with 
you today.
    I will focus my remarks on whether there is a diplomatic approach 
that could achieve a principal American foreign policy objective: The 
verifiable elimination of North Korea's nuclear weapons capabilities.
    First, some unverifiable observations:

   I believe there is little possibility of reaching an 
        agreement to eliminate North Korea's nuclear weapons capability 
        that would satisfy both the United States and North Korea, if 
        only because of the difficulties of verifying North Korea's 
        compliance. It is also hard to have much confidence in their 
        honoring any agreement.
   North Korea may have badly miscalculated the reactions of 
        China and South Korea to their missile tests on July 4 and 5, 
        but I conclude at this point, given the international political 
        risks to them for such actions, that Pyongyang has probably 
        given up on the Bush administration as a negotiating partner 
        and considers it an unrelenting enemy. Senior leaders believe 
        they must have a serious nuclear delivery capability to give 
        them greater deterrence and a more powerful negotiating 
        position. They will wait for another American administration 2 
        years down the pike. This does not preclude their returning to 
        the Six Party Talks.
   Some North Korea watchers suspect they may carry out a 
        nuclear weapon test so that any new administration will face an 
        unambiguous nuclear weapons capability. The latter is highly 
        conjectural. We are ignorant of the state of their weapons and 
        of the highest level political debates in Pyongyang. China, 
        their most important patron, would be strongly opposed to any 
        nuclear weapons test; although we do not know what China's red 
        line is on North Korea's nuclear weapons. We also may well be 
        witnessing some deterioration in their public relations. In 
        some quarters the missile firings are seen as also a message to 
        China.

    This reading of North Korea may be wrong. However, we cannot 
determine their willingness to negotiate a deal to eliminate their 
nuclear weapons capabilities by intelligence analysis or intuition or 
exhortation. It will have to be done--if at all--by diplomatic 
exploration.
    The American generated Six Party initiative to negotiate the 
elimination of North Korea's nuclear weapons has been useful in 
bringing together the major powers of East Asia for the first time to 
talk collectively about a major security issue in the area. It has 
generated some sense of purpose at least among the five. But after 3 
years, the talks have produced one joint statement of principles; a 
useful document, but only a first step.
    There has been a lack of negotiating content in the Six Party 
forum, in great part because of our profound strategic difference in 
approach to North Korea with two countries who have great stakes in 
this issue--China, North Korea's ``best friend,'' and South Korea, our 
treaty ally. China has not proven to be the deus ex machina who would 
bring North Korea around by persuasion or economic pressures to resolve 
the nuclear issue as many predicted when the Six Party Talks began. 
China has many common interests with the United States on the Korean 
peninsula, but it also has many other interests at play in North Korea 
and has not been willing to subordinate those to United States' 
purposes. The same has been true in spades of South Korea.
    The differing view with China and South Korea on how to manage 
North Korea has allowed Pyongyang to escape the consequences of bad 
behavior and has made a negotiation with Pyongyang difficult, if not 
impossible. More specifically:

   They do not want North Korea to have nuclear weapons but do 
        not share the American sense of its primacy as an issue.
   They do not want to join in bringing concerted pressures to 
        bear on the North, fearing it would create serious tensions and 
        potentially affect the peace, stability, and economy of the 
        peninsula.
   While we freeze Pyongyang out except for some humanitarian 
        assistance, they provide sizable economic assistance, 
        effectively undermining our bargaining position.
   They believe we have been insufficiently forthcoming in our 
        negotiating proposals to the North.
   They want us to talk to the North in any forum, bilateral or 
        multilateral, and do so themselves.

    These differences have been mostly papered over by constant to-ings 
and fro-ings and the usual diplomatic rhetoric.
    The missile tests, however, have clearly had an impact on both 
countries and throughout the region. China is embarrassed by North 
Korean behavior and angry at its refusal to listen to their entreaties. 
It also fears that North Korean action will have damaging regional 
implications for East Asia, notably causing Japan to reassess its 
defense requirements. China, surprisingly, even supported a U.N. 
Security Council resolution censuring North Korea, although Beijing has 
refused to adopt punitive measures at this time. In South Korea the 
government's ``soft'' approach to North Korea has been increasingly 
publicly questioned, and Seoul, also surprisingly, has suspended some 
assistance pending North Korea's return to the Six Party Talks. North 
Korea is unhappy with its isolation and sputtering badly. It could well 
isolate itself further by cutting off projects with South Korea in an 
effort to scare Seoul into becoming more accommodating.
    These changing perspectives could open greater opportunities for a 
diplomacy that might bring closer together the postures of the United 
States, China, and South Korea toward North Korea, an indispensable 
requirement for any serious negotiations with North Korea.
    The first part of any new American diplomatic effort must be to try 
to bridge the gulf with Beijing and Seoul. We might wait to see if 
there is any further fall-out from Pyongyang's isolation and its 
unhappiness with China and South Korea. But it is an appropriate time--
although hardly the most politically opportune one in Washington--for 
the United States to craft a new approach that might get real Chinese 
and South Korean support to seriously test the proposition that there 
may be some package of security assurances, political measures, and 
economic bait that would cause North Korea to put aside its nuclear 
ambitions and stop throwing missiles around. That means going further 
than the statement of principles agreed to last September by the six 
powers and putting forth a negotiating position beyond expecting the 
North to accept a Libyan-like approach to eliminating their nuclear 
weapons. Obviously the elements of a negotiating package must be worked 
out within the U.S. Government, which can be enormously difficult given 
the reported sharp differences within the administration.
    We would expect China and South Korea to make clear to Pyongyang 
that a fair deal has been presented. We would try to secure commitments 
from both countries on what they are prepared to do if North Korea 
spurns such a new approach. Whether their commitments would be worth 
anything if North Korea balked is a risk we would have to take.
    Departing even further American political reality, I believe that 
any new negotiating approach should be accompanied by some dramatic 
measure to show our willingness to negotiate not only to North Korea 
but to our partners as well--such as a visit by Secretary Rice to 
Pyongyang or an offer to immediately begin negotiations to establish 
diplomatic relations.
    There is also the problem of resuming negotiations. North Korea has 
insisted on bilateral negotiations. The United States insists that 
bilateral meetings can only continue to take place within the 
multilateral forum. That is a rather remarkable posture, and makes the 
Six Party Talks the only multilateral negotiation, that I am aware of, 
in which the United States insists that it alone will hold bilateral 
talks with one of the parties only when the multilateral meeting is on. 
The North Koreans would probably have accepted that, but now insist 
that before they go back to the Six Party Talks, the United States 
rescind the financial sanctions it has recently imposed to stem a 
variety of North Korean illicit activities. There must be an early 
resolution of this issue or some face-saving way found for Pyongyang to 
return to negotiations.
    We have no credible red lines for North Korea beyond not attacking 
South Korea and Japan. Nor, as far as I can tell, do we have any 
concerted policy for dealing with North Korea as a state besides 
talking to them about nuclear weapons. Every principal party to the 
issue is tired of the North Korean regime, but China and Korea want to 
do something about it. China has been trying to turn it into a mini 
market-oriented China. South Korea hopes that by large-scale assistance 
to make them dependent and transform the regime over time. Maybe all 
that is a triumph of hope over reality. America's policy toward the 
North seems to be to hold its nose and wait for them to implode or for 
China or South Korea to see the light and join us in putting serious 
pressures on North Korea. Hopefully there will be some surprise 
internal cataclysm--not to be dismissed that washes the regime away. 
Waiting for that to happen is not a great basis for policy.
    That still leaves the nuclear issue. And we all know there is no 
good option. Force would be violently opposed by South Korea which has 
the most at stake. Pressure and isolation requires unity with our 
friends. Maybe North Korean actions will stimulate our friends to 
further action, but U.N. resolutions guarantee nothing. That leaves 
diplomacy and whether we want to try to seriously pursue it. We should 
not forget that North Korea is not an 800-pound guerrilla. Far from it. 
It is a failed state dependent very much on foreign handouts, which 
will one day be on the trash heap of history. But before that happens 
it can cause great harm and the United States should not be afraid of 
dealing directly with Pyongyang on the nuclear issue. Moreover, if we 
were to decide to try tougher measures and even force, it makes good 
sense to put ourselves in the best international position to do it and 
have gone the extra mile diplomatically.

    The Chairman. Well, thank you very much, Ambassador 
Abramowitz, for some important suggestions and some new 
insights in our hearing.
    We will have another 10-minute round of questions, and 
maybe more if Senators wish to do that.
    Let me just mention, historically, Dr. Kanter, I can 
remember questions were raised about the missiles in 1993. At 
least that was my recollection, because you were heavily 
involved in policies with North Korea and South Korea back in 
those days.
    That seems like a long time ago, and for the Japanese it is 
a return to this situation, which was very serious then, and 
very serious for General Luck as he took a look and had, as I 
remember, a graphic about the percentage or some sort of 
scoring as to the likelihood of North Korean aggression against 
South Korea, with our troop emplacements very close.
    So the history goes on for quite a while and we have been 
involved in this for a quite a while. Attempts were made in the 
Clinton administration, which have been mentioned today, as 
well as in this administration. But let me just ask, after all 
is said and done, as both of you have said one way or another, 
China and South Korea have developed and maintain very 
different agendas with regard not only to the North, but with 
regard to the rest of the world. The political leadership 
really in South Korea has changed a great deal, with the under-
35 group or others coming into it. A recent poll that the 
committee saw of South Koreans under the age of 24, China was 
perceived as by far the best friend of South Korea, and we were 
in a tie, that is the United States, with North Korea in terms 
of the regard of young people, young voters in South Korea.
    Now, that is quite a change from older people who feel they 
might have been rescued by the United States at some point. It 
is a very different perspective of history. How the politics of 
this is going to play out in South Korea is very, very, 
difficult, it seems to me, for anybody to fathom.
    The complexity of the Chinese relationship I think both of 
you have indicated. The nuclear issue is important. All things 
considered, China would prefer that North Korea got over the 
idea of developing these weapons, but for the Japanese, as I 
termed it earlier, it is sort of an existential event. The 
North Koreans have the range and it is a question whether they 
can hone and machine nuclear capacity into a nose cone and 
create extraordinary damage.
    Now, the United States shares this likewise. You can make a 
case that the tests were of intense interest to Japan and 
certainly of great interest to us. Do they in fact have the 
range? The Rumsfeld Commission a while back thought that they 
might. They were really on the threshold of all of this.
    You ask, well, if they have that much range why are not the 
Chinese and the South Koreans or even the Russians that 
concerned about it? Well, why indeed? But in fact there are 
other objectives here.
    Now, is it reasonable to anticipate, as we have with the 
Six Party Talks, that even if these recent shots have created 
more consternation among all the allies--and, as you have said, 
Dr. Kanter, may have created an opportunity here, sort of 
pushed everybody much closer together--is it not a fact that 
the agendas of these parties are still so varied and so far 
apart that your second conclusion, that this unity might be 
fragile, is the more likely conclusion of what is going to 
occur?
    In other words, from your experience of all of this, what 
is there in this that might lead to some degree of unity among 
all the parties, and I finally include the United States? 
Mention has been made, without our going into it a great deal, 
of debate within our own administration as to whether regime 
change, use of force, other items, are really what we ought to 
be about, sterner stuff, as opposed to endless negotiations, 
waiting around for months at a time for somebody to come to the 
table.
    You may or may not have been parties to these 
conversations, but we had Ambassador Hill today at least giving 
a pretty unified front, that everybody seems to be on board, 
and I think we all pray that is so.
    Comment, if you will, on any of these musings.
    Ambassador Kanter. Yes, Mr. Chairman. First on the question 
about whether this new-found unity will be sustainable over 
time, as I did indicate, I think it is fragile. But I think it 
is--depending upon what the parties now do, the chances are 
better that the unity of purpose can be preserved and pursued 
or, alternatively, depending upon what the parties do, it could 
just fly apart.
    I do not think that South Korea and China have different 
agendas with respect to North Korea compared to us. It is 
rather that they have different priorities among the same set 
of objectives than we do and different risk tolerances, because 
they could imagine really bad things happening to them if, in 
their view, too much pressure is applied on North Korea, and 
from our point of view either those bad things will not happen, 
are not as likely to happen to us, they will not be as bad, or 
we believe they are not as likely to happen.
    So it is a matter of kind of differing risk assessments and 
different priorities.
    What I think the missile launches have done and the U.N. 
resolution has done is the following. I think it has made it 
more likely, far from a certainty, that Seoul and Beijing will 
now contemplate, to be blunt, putting some pressure on North 
Korea. Not publicly, not overtly, not loudly--quietly, 
indirectly, denying that it is pressure. We all remember the 
interruption of fuel supplies for 3 days a few years ago from 
China that was attributed to technical problems in the 
pipeline. I would take that again in a minute.
    Given the position that Pyongyang has put Seoul and Beijing 
internationally and I would say also to some extent 
domestically, I think that there is the possibility that they 
will be more willing to behave this way now, in a low-key 
manner, but hopefully effective.
    It can fly apart, however. This unity of purpose can fly 
apart either if I am wrong and Seoul and Beijing essentially 
continue their current view that what we need is more time and 
more patience and pressure is counterproductive. If they 
continue that view as though nothing has happened, then the 
opportunity will be squandered.
    Conversely, if other member states rush to implement the 
U.N. resolution in a very robust way, giving Seoul and Beijing 
no time to reconsider and maybe begin to move quietly behind 
the scenes, that too will squander the moment. So I think what 
we need to hope for is that Seoul and Beijing will recalibrate 
their strategy and that the rest of us will give them enough 
time for that to happen.
    The Chairman. Let me just follow up with one thought 
because you have touched upon the Macao bank situation. Once 
again, within our own administration this may have been 
coordinated: State, Defense, NSC, and Treasury in this 
particular case. The North Koreans have complained about the 
transactions that they have being disrupted. Now, as I 
understand it, the Treasury's objective--and maybe this is 
generally true of the administration--was to stop 
counterfeiting and the passage of illicit moneys, perhaps from 
weapons sales or from whatever else. But nevertheless, it seems 
to have been effective, at least in Macao. Some have suggested 
why not try it elsewhere? In other words, if this seems to get 
the attention of the North Koreans, it certainly is better than 
armed conflict and striking the missiles on the runway before 
they go off, or something of this sort.
    Now, you have mentioned, however, that one problem with 
this may be once again in our relations with the Chinese and 
the South Koreans, that we have just been calibrating, that 
somehow or other that may disrupt the major game, the Six Party 
Talks and their effectiveness, the unity of purpose here.
    Elaborate a little bit more on your analysis of Macao and/
or the spread of what might be considered a type of banking or 
transaction sanctions that, given the general poverty of the 
North Korean state, its lack of revenues from abroad and so 
forth, the importance of its sales and recouping the gains, why 
this is not a good thing to sort of continue, to keep the 
attention of the North Koreans centered on the problem?
    Ambassador Kanter. First with respect to the Macao bank, 
however we got to where we are on that matter, we are there now 
and it is essentially a matter of law enforcement. I do not 
think the United States can put itself in the position of 
suggesting we will turn a blind eye to violations of law in 
order to lure the North Koreans back to Six Party Talks. That 
is just not a tenable position. So I think we need to see this 
investigation through.
    Having said that, I agree that we have gotten the North 
Koreans' attention, but I am not sure that we have done so in a 
productive way. But much more to the point, as I indicated, one 
of our key objectives now is to maintain this unity of purpose, 
and the actions against the Macao bank have had exactly the 
opposite effect.
    As Ambassador Hill said earlier this morning, I do not 
believe that there is anything the United States can do itself, 
can do unilaterally, to bring enough pressure on North Korea to 
really change its strategic calculus. If we found ourselves in 
a situation--and the U.N. resolution, I should say, gives ample 
room for this--whereby the other members of the Six Party 
Talks, all of whom of course are member states of the U.N., 
joined together in a cooperative effort, that would be a quite 
different proposition.
    But a unilateral expansion of these financial 
investigations and sanctions I think is unlikely to have the 
desired effect on North Korea and is likely to be 
counterproductive with respect to our objective of trying to 
enlist the other members of the Six Party Talks together with 
us on our diplomatic approach.
    The Chairman. Ambassador Abramowitz, you have suggested 
that it may be a time for what you characterize as a new 
approach, something well beyond the principles that were 
established in negotiations last September that Ambassador Hill 
mentioned earlier today. Many, at least in the press, have 
suggested, often starting with economic benefits to the 
country--it is a poor country. Obviously, we have talked today 
about the sustenance that comes from China, to some extent from 
the South Koreans, in terms of food and nutrition, basic energy 
to keep people alive.
    But the thought of some, is that well beyond a sustenance 
level, we try to think about normalization, a country that 
might begin to engage in trade, maybe in tourism, people coming 
and going, this sort of thing. Whether or not the North Korean 
Government permits this sort of thing or that type of regime 
they have now is sort of hard to tell.
    But can you give some outline, just some spurt of the 
imagination of others that might be thinking of a new program 
of this sort?
    Ambassador Abramowitz. Well, I think, going back to your 
previous question and relating it to what you just asked, I 
think what we do over the next 3 or 4 months will be critical 
to determining the type of reaction we get from China and South 
Korea. I think it is important in the first instance to show 
that there is a potential for serious negotiations. After the 
principles were issued, the United States, presumably because 
of problems in Washington, issued its own unilateral statement, 
in effect saying: You have to clean up your nuclear act and all 
associated activities before in effect anything else comes into 
play.
    I do not think North Korea can accept that sort of policy. 
So there have been always two issues in this negotiation which 
have not really been discussed. The first is who goes first, 
who goes second, what do they do, what are the acts. That is 
still way up in the air. I have no idea what the U.S. 
Government position is on that.
    The second is verification, and verification can be used in 
all sorts of ways, whether to try to get an agreement or try to 
sink an agreement, and I do not know where the U.S. Government 
is on that.
    I believe to try to bring the position of the United 
States, South Korea, and China together, we will have to over 
time develop a position that offers something concrete to the 
North Koreans, whether they accept it or not. I do not know 
whether we can develop that position.
    We have been going on saying we have got these great 
principles, they have agreed to denuclearize, but nothing more 
has happened. So the question is why has nothing more happened. 
We have got to ask ourselves that.
    In that regard, let me make an observation about the United 
States. We seem to act as if what we say today is what is 
important and what we said for the last 4 years does not count. 
We
wonder why do you fellows remember this? First of all, the 
administration broke with the Clinton policy. It broke with the 
policy of engagement. That was the policy of the Clinton 
administration, rightly or wrongly. It called North Korea a 
rogue state. It declared it was an evil country. Part of the 
axis of evil, it said we should get rid of it: regime change. 
We invaded another country which was part of that axis of evil.
    So now we expect North Korea to say: Oh, wonderful, you are 
a friendly country. I think we have to recognize that--I am not 
making a case for North Korea; obviously it is a terrible 
state--I am making a case for how do we get to an agreement, 
and I believe our rhetoric in the past has been very 
detrimental, first with our allies and second in getting North 
Korea to a serious negotiation. Whether they will do so or not 
I do not know.
    Sorry for the lecture.
    The Chairman. Well, it is an important recitation of 
history.
    I would say that we appreciate very much Ambassador Hill 
coming before the committee in public session to try to give an 
idea of our position. As you say, one could historically trace 
our position back through several permutations--the axis of 
evil, the three countries, the regime change, and so forth.
    In my earlier question I raised this issue of regime 
change, are we on that track? Not necessarily, apparently. The 
thought has been that maybe that regime will atrophy and decay 
or maybe military powers inside the regime will rumble around. 
This is given some credence from time to time, that the great 
leader is not all by himself there, that he has some 
constituents to satisfy, albeit at very high levels.
    But having said all of that, for the moment the 
administration's point of view is that we are going to insist 
upon the Six Party Talks. However, as Ambassador Hill says, he 
talks all the time to North Koreans, but within context, not 
behind the backs of anybody. Now, from time to time the Chinese 
and the South Koreans, as I listen to them, say: We do not care 
if you talk behind our backs; we as a matter of fact think you 
ought to be talking all the time to everybody. Maybe something 
will break in the process. Maybe we are not quite so rigorous 
about the desire for Six Parties and so forth.
    On the other hand, from our standpoint we do not want to be 
undermined if we come to some agreement with the North Koreans 
and suddenly the South Koreans and the Chinese think that is a 
bad idea and they are really not going to help us enforce that, 
particularly when it comes to verification. As you just 
mentioned, it is a very serious objective. Ambassador Hill, as 
you heard today, rejected the thought of a freeze. We have been 
there before and that can be violated and so forth.
    Now, we get back then to what we have been skirting around 
all day: Well, what if the United States said we are just 
simply tired of this, there are certain places here and we can 
bomb them or we can destroy them, and the South Koreans, as you 
all pointed out, say, well now, hold on. You already have 
troops in South Korea, so you are going to be vulnerable; but 
we are going to be vulnerable in a very big way. This becomes 
really monumental for us. Regardless of what happens with the 
Chinese, the South Korean reaction is very, very strong on 
this, and we have to be thoughtful about that. Even as we are 
concerned about our agenda, the decimation of another country, 
particularly an ally with whom we have treaties, has to be very 
important, quite apart from what might happen to the Japanese. 
The North Koreans have already demonstrated the possibilities 
there.
    So we keep circling around between rocks and hard places. 
For the moment, it would appear to be we are back to insisting 
on the Six Party Talks. As Dr. Kanter said, probably we cannot 
recant whatever is occurring in Macao because we are talking 
about law enforcement there. Some have even suggested that this 
is a milder way of handling the sanctions problem, of putting 
some pressures. We already have the PSI program and the attempt 
to cut off nuclear shipments by North Korea and the attempt to 
hold that down to a dull roar and deprive North Korea of some 
income from these acts of mischief, as we see them.
    But I think we are all probing with each other today as to 
what would be in a package that is even slightly attractive, 
that begins to get movement here, because absent that it would 
appear that we will all need a lot of patience, that we are 
there for quite a while sitting around the Six Powers.
    Dr. Kanter, do you have a good thought?
    Ambassador Kanter. As Ambassador Hill said, the clock is 
ticking. The problem we have is that this is not an issue that 
gets better with time. In fact, it is an issue that only gets 
worse with time.
    The Chairman. Why do you say that? Why would it get worse?
    Ambassador Kanter. If for no other reason than that North 
Korea continues to produce plutonium for nuclear weapons while 
nothing else happens, and so they will have more plutonium 
tomorrow than they have today, they have more today than they 
had yesterday.
    Whatever the uncertainty about how many nuclear weapons 
North Korea has, there is far less uncertainty about the 
material they have for nuclear weapons and the accumulation of 
that material. So as time goes on and not much time goes on, we 
face the prospect of not only a nuclear-armed North Korea, but 
a North Korea that is an exporter of nuclear weapons. And given 
their list of customers for the other stuff they sell, that is 
a very chilling prospect indeed.
    So I do not think that that--it seems to me that there is 
no way for any neglect of this issue to be benign.
    Now, in terms of what can we do, I think Ambassador 
Abramowitz put his finger on something that is probably worthy 
of some exploration. We have the statement of principles, but 
then we have rather divergent views on how these principles are 
implemented and, perhaps most important, divergent views about 
the sequence in which things happen.
    The Chairman. In other words, the follow-up statement by 
others in our government after Ambassador Hill.
    Ambassador Kanter. Right.
    The Chairman. And of course, I would just state for the 
record, other countries then around the table also came forward 
with their interpretations.
    Ambassador Kanter. As was inevitable.
    The Chairman. Yes.
    Ambassador Kanter. I would think that it would be useful, 
if it has not already been done, for the United States to have 
at least internally a view of how they see the process 
unfolding, not only most desired but some alternatives that are 
more or less acceptable, and which things are unacceptable. So 
that if and when the Six Party Talks are resumed, we will have 
done our homework.
    I do not see--I personally do not see any realistic 
prospect of an outcome whereby the North Koreans do everything 
before anyone else does anything. That is, I think there is 
going to have to be some sequencing and some phasing. The 
formula that some members of the Six Party Talks have used to 
capture this idea is: ``Word for word, action for action.'' But 
it gets the idea of tit for tat in a positive sense. It seems 
to me that is a concept that we need to, we the United States, 
need to engage, if only for internal planning purposes in 
anticipation of a resumption of talks.
    If there is such a process, it seems to me sort of a 
physical inevitability that North Korea would have to freeze 
before it dismantles its nuclear weapons programs. Just sort of 
the logic of a process means that there will be a point at 
which there will be a freeze. And if there is some sort of 
step-by-step reciprocity to get to this point, we will find 
ourselves in a situation in which, at that moment at least, 
there has been a freeze in exchange for some consideration from 
the other parties.
    The trick will be to ensure that that is not the end of the 
process and indeed that that process is reversible if it looks 
as though from a North Korean perspective that is the end, 
because that would be unacceptable.
    But just as I think that we can make too much of the issue 
of direct talks and somehow get diverted from a substantive 
problem to a symbolic issue, I believe we can make too much of 
the concept of a freeze and get diverted from hard thinking 
about how we get from where we are to where we want to be.
    The Chairman. Let us say we obtained a freeze and the six 
powers or the other five powers came forward with an idea, not 
unlike our cooperative threat reduction program with Russia, 
that we buy the fissile material, that we have a buyout of all 
of this and you sort of take it off the table. Plutonium is not 
as useful as uranium perhaps for other nuclear industries 
around the world, so that the resale value of the plutonium may 
be somewhat less.
    But is there any potential with the North Koreans for a 
buyout of their program?
    Ambassador Kanter. One answer I think is we will not know 
until we try. It seems to me any such arrangement, however, not 
only would require one to hold one's nose very, very hard, but 
it would have to be accompanied by real confidence that the 
plutonium that was being bought is all the plutonium that there 
is, and----
    The Chairman. Not production going on.
    Ambassador Kanter [continuing]. And that there is not new 
plutonium being produced, so there is this sort of unending 
stream, because at the end of the day this would not be a 
commercial transaction; it would be a rather distasteful 
buyout.
    Finally, it would be incomplete because, however and 
however successfully one deals with the plutonium program, that 
still leaves the uranium program.
    The Chairman. I think you put your finger on it. You hold 
your nose, and with some it would be more than that. They would 
say: There you go again, rewarding all the perfidy of the North 
Korean state.
    But we keep going around and around this point, and that 
is, leaving aside the buyout idea, even if we talked about 
trade or investment or some way of changing the lives of the 
North Koreans and so forth, some would say this is what comes 
if you violate agreements. If in fact you play it the wrong way 
long enough, why, you make it more and more expensive and you 
do better at the end of it. We have got to have lessons here 
with regard to world-type strategy, and one of them is not that 
there is a reward for this.
    So you keep getting back again to who goes first and who 
gets rewarded and the nature of the package and so forth. It is 
hard to evade the thought that some will accuse whoever is 
making such a proposal of rewarding bad behavior.
    Ambassador Kanter. There are virtually certain to be those 
accusations. But at the end of the day we have to choose among 
the alternatives that are available rather than the world we 
wish we were in.
    The Chairman. As opposed to war or the loss of several 
hundred thousand South Koreans or various other grim 
alternatives.
    Ambassador Kanter. Yes, sir.
    The Chairman. Ambassador Abramowitz.
    Ambassador Abramowitz. Dr. Kanter has very, very well 
expanded what needs to be done. I would just like to make an 
observation, which may be unfounded. It is sort of like an 
intelligence analysis of our Government, not the North Korean 
Government. Getting them to put down a detailed negotiating 
package is an existential moment in this government, and I do 
not know whether they will be able to do it. I simply do not 
know whether they will be able to do it.
    But I would urge you, if you feel so inclined, to do what 
you can to force the government to explain to this committee 
their thinking in detail, because without that sort of package 
we are just spewing forth rhetoric. We have to move beyond the 
rhetoric, and I do not see that happening. I believe to the 
extent that this body is willing to see whether there can be 
any progress along these lines, I think it is important to make 
the American Government put down what is in a negotiating 
package which is more than: You commit suicide and then we will 
talk.
    The Chairman. Well, I appreciate the counsel. I would maybe 
use different words, such as ``we would encourage'' or 
``advise,'' as opposed to having any ostentatious coercive 
ability with regard to all the elements of our administration. 
But clearly one of the purposes of our hearing today and our 
engaging the two of you and our negotiator, Chris Hill, in this 
conversation is to try to bring, from more than isolated press 
accounts or persons making comments, some concerted focus. I 
think our hearing has achieved that, and it will not be the 
last in the series, whether it is behind closed doors or in 
front of closed doors, because this is a very, very huge 
problem facing the United States of America. I think all of our 
citizens understand that and they really want public officials 
to be wrestling with this and coming to the sort of 
conclusions, existential or not, so that we do make progress.
    Well, I thank both of you for assisting that process and we 
look forward to seeing you again many more times.
    Ambassador Abramowitz. Thank you.
    Ambassador Kanter. Thank you.
    The Chairman. The hearing is adjourned.
    [Whereupon, at 12:32 p.m., the committee was adjourned.]

 Additional Questions and Answers Submitted for the Record by Senator 
                              Joseph Biden

                 Responses of Hon. Christopher R. Hill

    Question. The U.N. Security Council unanimously approved Resolution 
1695 condemning North Korea's missile tests, urging North Korea to 
return to the Six Party Talks, and calling on all member states to 
curtail cooperation with North Korea's missile development programs. 
What are the next steps needed to get the Six Party Talks back on 
track? Will you call a meeting of the ``five''--the United States, 
China, South Korea, Japan, and Russia--to consider how to get North 
Korea back to the table?

    Answer. UNSCR 1695 ``strongly urges'' the DPRK to return 
immediately to the Six Party Talks without preconditions and expresses 
the support of the UNSC for that negotiating forum. The United States 
has repeatedly expressed commitment to the talks and our intent to 
fully implement the September 19, 2005 Joint Statement. We continue to 
consult with our partners in the Six Party process and in the region on 
ways to move forward. In Kuala Lumpur, ministers of all Six Party 
participating countries were invited to attend a Six Party meeting 
without preconditions, but unfortunately, the North Koreans chose to 
decline the invitation. Instead, on July 28, the other five parties met 
together with Canada, Australia, Malaysia, Indonesia, and New Zealand. 
The United States and its partners remain ready to attend a Six Party 
session, but there is no immediate plan for a meeting. Nor has China, 
as host of the Six Party Talks, announced plans to reconvene the fifth 
round.

    Question. Everyone knows that even if North Korea abandons its 
pursuit of nuclear weapons, we will still have many serious differences 
with the Government of North Korea. Some believe we must resolve those 
differences before normalizing relations. Others believe we should 
follow a step by step approach, normalizing diplomatic relations early 
and then working to address issues such as human rights, regional 
security, and trade, much as we did with China.
    a) What is the administration's position on normalization of 
relations? What are our conditions?
    b) All of our European allies except France have established 
diplomatic relations with North Korea. Are they wrong to do so?

    Answer. The September 19, 2005 Joint Statement of Principles 
provides a path toward normalization of relations between the United 
States and the DPRK, and between the DPRK and Japan. According to the 
Joint Statement, normalization of relations will be ``subject to . . . 
respective bilateral policies.'' The United States has made clear, both 
publicly and privately, that any normalization process would include 
discussion of matters of concern to the United States, such as the 
human rights situation in North Korea.
    The United States and Japanese commitments in the Joint Statement 
to take steps to normalize relations with the DPRK, subject to 
bilateral policies, and indeed the various other commitments of the 
United States and its partners expressed in the Joint Statement, were 
made in the context of the DPRK's commitment to abandon all nuclear 
weapons and existing nuclear programs and to return, at an early date, 
to the NPT and IAEA safeguards. The United States cannot fulfill its 
commitments until the DPRK returns to the negotiating table and makes a 
serious effort to implement the aspects of the Joint Statement related 
to denuclearization.
    We are aware that many European Union countries have diplomatic 
relations with, and embassies in, North Korea. Sweden, which has an 
embassy in Pyongyang, serves as Protecting Power for the United States 
in North Korea. The United States neither encourages nor discourages 
countries to establish or break diplomatic relations with other 
countries.

    Question. South Korea, China, Russia, and Japan have all held 
summit meetings with North Korea. All talk directly to North Korea in 
order to advance the Six Party Talks. All have asked us to talk 
directly to the North. Only the United States refuses to talk directly 
with North Korea. Our objection to bilateral talks seems to be based 
mostly on the fact that North Korea wants direct dialog. Why does the 
administration continue to oppose direct dialog? Must direct dialog 
undermine the Six Party process, or could it complement those talks, as 
all of our allies suggest?

    Answer. As I said in my July 20 testimony, the United States is 
prepared to have a direct, formal diplomatic dialog in the context of 
the Six Party Talks. But the United States is not prepared to improve 
our relations with North Korea or to have direct dialog while Pyongyang 
is boycotting the Six Party Talks. The United States continues to 
believe that the best means of resolving the North Korean nuclear issue 
is through the multilateral, Six Party process.

    Question. In July, 2002, North Korea launched limited market-based 
economic reforms.
    a) What is your assessment of these reforms?
    b) Do you think the United States should encourage or discourage 
the North from pursuing economic reforms?
    c) In the long term, do you believe economic reforms and opening 
will bolster, or undermine, the authority of Kim Jong-Il?

    Answer. North Korea began to undertake limited economic reforms in 
July 2002; these included measures in areas such as farm reform, 
monetary and fiscal policy (a currency devaluation was undertaken), and 
wage and price adjustments. In addition to these specific reforms, the 
DPRK has established Special Economic Zones (SEZs) along its 
northwestern border with Russia at Rajin-Seonbong (established in 1991) 
and on the DPRK-PRC border at Sinuiju City (established in 2002). North 
Korea announced Sinuiju as an ``international financial, trade, 
commercial, industrial'' zone, operating free of central government 
interference for a period of 50 years. The Kaesong Industrial Complex 
(KIC) near the border with South Korea is also a special economic 
project. NGO and other reporting suggests fledgling market activity 
inside North Korea, although actions by the regime to reassert the role 
of the government's public distribution system (PDS) periodically 
inhibit the development of the market.
    Periodically, the DPRK expresses a desire to become more attractive 
to foreign direct investment (FDI). But much more progress on economic 
reforms will be necessary to create favorable conditions for a 
significant increase in FDI. The DPRK has sent delegations to Eastern 
Europe, Switzerland, and Singapore to study alternative economic 
development and market strategies. In January 2006, Kim Jong-Il visited 
industrial cities in China's southern provinces, possibly to study the 
results of economic reforms that were first tried in China's own SEZs 
near Hong Kong in the 1970s and 1980s. DPRK officials appear to be 
greatly impressed with China's ability to carry out economic reforms 
while retaining ``socialism with Chinese characteristics.'' But the 
organizing principle of the DPRK state remains hereditary central 
control and a ``military first'' policy as a priority. This means that 
any economic reforms undertaken by the DPRK presumably have been deemed 
advisable by Kim Jong-Il, according to his own political calculus, 
under which regime survival seems to be the paramount goal. Kim Jong-Il 
appears very reluctant to open his system effectively as would be 
necessary to encourage widespread private sector activity and create an 
environment conducive to substantial foreign investment.
    The United States view is that the interests and welfare of the 
North Korean people could benefit dramatically if Pyongyang embarked on 
broad market-oriented reforms such as we have seen in China and 
Vietnam.

    Question. When President Bush came into office, North Korea 
reportedly had enough plutonium to produce one or two nuclear weapons. 
Over the past 4\1/2\ years, North Korea has reportedly expanded its 
stockpile of fissile material by at least 400 percent. Moreover, its 
Yongbyon reactor produces spent fuel from which the North can extract 
plutonium, and it reportedly has a clandestine program to produce 
highly enriched uranium.
    a) Please tell the American people what is the current unclassified 
estimate of how many nuclear weapons North Korea may possess? Do you 
agree with the recent estimate by the International Institute of 
Strategic Studies that North Korea may have enough plutonium to 
manufacture a dozen nuclear bombs?
    b) Can North Korea mount a nuclear warhead on one of its ballistic 
missiles?
    c) What is the status of North Korea's unfinished 50 megawatt and 
200 megawatt nuclear reactors? Has North Korea begun to work on these 
reactors?
    d) What is the current unclassified estimate about the status of 
the North's efforts to produce highly enriched uranium?

    Answer. This question asks about specific intelligence estimates 
and is best referred directly to the intelligence community for 
response.

    Question. What is the Department's view of the North Korea 
Nonproliferation Act?

    Answer. The administration considers the Iran-Syria 
Nonproliferation Act an important tool in our efforts to stem 
proliferation. We are still formulating a position on this specific 
legislation, and I will notify you as soon as we have a definitive 
interagency position. However, we clearly support the goal of the draft 
bill--halting North Korean proliferation. Indeed, the administration 
now is looking at a broad range of additional specific measures, 
including sanctions and other economic pressure to deal with DPRK 
weapons, missiles and proliferation programs, and we'll need to see how 
the legislation would mesh with the package we will move forward. But I 
certainly support the goal of identifying and penalizing those that 
trade in proliferation-sensitive material to North Korea. We have in 
place and under consideration a number of additional USG measures 
directed at achieving that result.
    We understand that the bill, S. 3728, passed the Senate on July 25.

                                  
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