U.S. GOVERNMENT PRINTING OFFICE

65–823 CC WASHINGTON : 2000

NORTH KOREA: LEVERAGING UNCERTAINTY?

HEARING

BEFORE THE

COMMITTEE ON

INTERNATIONAL RELATIONS

HOUSE OF REPRESENTATIVES

ONE HUNDRED SIXTH CONGRESS

SECOND SESSION

MARCH 16, 2000

Serial No. 106–126

Printed for the use of the Committee on International Relations

(

Available via the World Wide Web: http://www.house.gov/international—relations

(II)

COMMITTEE ON INTERNATIONAL RELATIONS

BENJAMIN A. GILMAN, New York, Chairman

WILLIAM F. GOODLING, Pennsylvania

JAMES A. LEACH, Iowa

HENRY J. HYDE, Illinois

DOUG BEREUTER, Nebraska

CHRISTOPHER H. SMITH, New Jersey

DAN BURTON, Indiana

ELTON GALLEGLY, California

ILEANA ROS-LEHTINEN, Florida

CASS BALLENGER, North Carolina

DANA ROHRABACHER, California

DONALD A. MANZULLO, Illinois

EDWARD R. ROYCE, California

PETER T. KING, New York

STEVE CHABOT, Ohio

MARSHALL ‘‘MARK’’ SANFORD, South

Carolina

MATT SALMON, Arizona

AMO HOUGHTON, New York

TOM CAMPBELL, California

JOHN M. MCHUGH, New York

KEVIN BRADY, Texas

RICHARD BURR, North Carolina

PAUL E. GILLMOR, Ohio

GEORGE RADANOVICH, California

JOHN COOKSEY, Louisiana

THOMAS G. TANCREDO, Colorado

SAM GEJDENSON, Connecticut

TOM LANTOS, California

HOWARD L. BERMAN, California

GARY L. ACKERMAN, New York

ENI F.H. FALEOMAVAEGA, American

Samoa

MATTHEW G. MARTINEZ, California

DONALD M. PAYNE, New Jersey

ROBERT MENENDEZ, New Jersey

SHERROD BROWN, Ohio

CYNTHIA A. MCKINNEY, Georgia

ALCEE L. HASTINGS, Florida

PAT DANNER, Missouri

EARL F. HILLIARD, Alabama

BRAD SHERMAN, California

ROBERT WEXLER, Florida

STEVEN R. ROTHMAN, New Jersey

JIM DAVIS, Florida

EARL POMEROY, North Dakota

WILLIAM D. DELAHUNT, Massachusetts

GREGORY W. MEEKS, New York

BARBARA LEE, California

JOSEPH CROWLEY, New York

JOSEPH M. HOEFFEL, Pennsylvania

RICHARD J. GARON, Chief of Staff

KATHLEEN BERTELSEN MOAZED, Democratic Chief of Staff

PETER BROOKES, Professional Staff Member

JOAN I. O’DONNELL, Staff Associate

(III)

C O N T E N T S

WITNESSES

Page

The Honorable Wendy R. Sherman, Counselor, U.S. Department of State ........ 4

The Honorable Douglas Paal, President, Asia Pacific Policy Center .................. 22

Mitchell B. Reiss, Director, Reves Center for International Studies, College

of William and Mary ............................................................................................ 25

Scott Snyder, Representative of Asia Foundation/Korea ...................................... 27

APPENDIX

Prepared statements:

The Honorable Benjamin A. Gilman, a Representative in Congress from New

York and Chairman, Committee on International Relations ........................... 38

The Honorable Wendy R. Sherman ........................................................................ 41

The Honorable Douglas Paal .................................................................................. 49

Mitchell B. Reiss ...................................................................................................... 52

Scott Snyder ............................................................................................................. 57

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NORTH KOREA: LEVERAGING UNCERTAINTY?

THURSDAY, MARCH 16, 2000

HOUSE OF REPRESENTATIVES,

COMMITTEE ON INTERNATIONAL RELATIONS,

Washington, DC.

The Committee met, pursuant to notice, at 10 a.m., in room

2200, Rayburn House Office Building, Hon. Benjamin A. Gilman,

(Chairman of the Committee) presiding.

Chairman GILMAN. The Committee will meet once again to review U.S. policy toward North Korea. This is the fifth hearing on

the Democratic People’s Republic of Korea, the DPRK, in the last

18 months held by our Full Committee on International Relations.

Today’s hearing will focus on the status and the prospects for our

policy toward North Korea in the aftermath of Dr. Bill Perry’s report to the Congress last October. We are pleased to have gathered

a distinguished group of witnesses to discuss this very important

national security issue.

Regrettably, our concern about North Korea and our policy still

remains unabated. Let me discuss why we feel that way. The CIA

reported in Congressional testimony last month that North Korea

is continuing to develop the Taepo Dong II—an intercontinental

ballistic missile—despite a test moratorium, and could launch that

missile this year should it decide to do so.

The intelligence community, CIA, further states that a threestage Taepo Dong II would be capable of delivering a several-hundred kilogram payload anywhere in the United States. The CIA has

also concluded that the DPRK is the world’s major supplier of ballistic missiles and technology, primarily to South Asia and to the

Middle East. Their transfers to Pakistan, Iran, Syria, and Libya

pose a significant threat to our national interest, to our American

forces, and to our allies.

It has also been alleged that North Korea may be pursuing a

uranium-based nuclear weapons program while the cost of heavy

fuel for the 1994 Agreed Framework is likely to top $100 million

this year. There is a continuing concern about being able to get the

IAEA into North Korea to conduct its assessment of their nuclear

program, as well as finding willing underwriters for the nuclear reactor project.

In recent testimony, the Commander of U.S. Forces of Korea

called North Korea ‘‘the major threat to stability and security in

Northeast Asia, and the country most likely to involve our Nation

in a large-scale war.’’

General Schwartz further stated that North Korea’s goal is to

unify the peninsula by force. American military dependents, EmVerDate 11-MAY-2000 15:42 Mar 27, 2001 Jkt 065823 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 F:\WORK\65823 HINTREL1 PsN: HINTREL1
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bassy staff, and their families in Seoul were recently issued 14,000

gas masks because of the North Korean chemical weapons threat.

According to our Commander in Chief of the Pacific, North Korea

conducted its largest conventional force exercise in years this past

winter. Admiral Blair went on to say that North Korea continues

to divert a disproportionate share of their meager national wealth

to their military programs.

The DPRK recently declared the nullification of the Northern

Limit Line, where they fought a sea battle with South Korea last

summer, and Pyongyang bought 40 Mig–21 fighter jets from

Kazakhstan for some $8 million.

Recently, the Japanese police seized 250 kilograms of amphetamines believed to have originated in North Korea. That seizure,

with an alleged street value of 15 billion yen, or $139 million, was

the fifth largest single haul of illegal drugs ever seized in Japan.

Confronted with impossible access to the most vulnerable groups

of North Korean citizens, the French NGO, Action Against Hunger,

withdrew from North Korea after 2 years. Their press release stated, ‘‘We are convinced that the international aid flowing into North

Korea is not reaching the people most in need, and that thousands

of people continue to die despite the massive food aid provided to

that government.’’ In their press conference announcing their decision, the French group said that international food aid is undoubtedly being diverted to the military and to the civil servants.

The Director of Central Intelligence said that instead of pursuing

real reform, North Korea’s strategy is to garner as much aid as

possible from overseas, and has directed its global diplomacy to

that end. This means more people will needlessly starve as

Pyongyang chooses ideology over reform.

Our State Department is considering removing North Korea from

the list of state sponsors of terrorism despite the fact that North

Korea abducted Japanese citizens for use in their intelligence apparatus, continues to harbor Red Army hijackers, and is reportedly

involved in political assassinations abroad. DPRK agents recently

may have also kidnapped a South Korean clergyman working in

China near the border.

The DPRK continues to severely oppress its citizens, and the

international community has not spoken out forcefully enough

about the day-to-day horrors of the North Korean gulag. In a highly celebrated case, several North Korean defectors were forcibly repatriated from China to a certain death.

Diplomatically, North Korea is willing to talk with anyone but

South Korea. They talk with Rome, Canberra, and Tokyo, but not

with Seoul. Despite numerous overtures toward Pyongyang, Seoul

is rebuffed time and time again.

Furthermore, it was reported this morning that talks in New

York over a visit to the United States by a high-level North Korean

official have broken off without any agreement. This visit was first

proposed by Dr. Perry almost a year ago. These recent developments are hardly encouraging.

As the North Korea Advisory Group pointed out in its report last

October, before all of this took place, the threat to the United

States and global interests of North Korea continues to grow, despite almost 6 years of engagement and close to $1 billion in aid.

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It is clear that the challenges presented by North Korea are significant, and managing the threat is a tremendous policy undertaking. We look forward to today’s testimony on how we plan to

deal with the ever-widening and deepening threat presented by the

DPRK to our own interests.

We want to thank our good Ambassador Sherman for being with

us today.

Allow me to yield time to Mr. Gejdenson, our Ranking Minority

Member.

[The prepared statement of Chairman Gilman appears in the appendix.]

Mr. GEJDENSON. Thank you, Mr. Chairman. I, too, welcome Ambassador Sherman. She was an able advocate for the State Department when she headed up their Legislative Affairs Bureau. If she

could handle Congress, we know that she will be able to handle

North Korea as well.

I think there is clearly a case that while there is great consternation here and elsewhere in how to deal with North Korea, and

there is a great sense that it poses a threat to the United States

and many in the international community, few of us have any real

solutions on how to deal successfully with the North Koreans.

The North Koreans have aggressively pursued programs that

have harmed millions of their people, leading to starvation and

leaving their population decimated. Unfortunately, their nuclear

missile programs, which began in the 1980’s, are still a potential

threat, even if some of that has been stalled.

It seems clear that the North Koreans, with their missile flight

tests and other policies, tend to use these to leverage their position

in the international community.

We are in a difficult position. Millions of North Koreans are

starving, with a government that seems to care little for its own

population. Maybe they sense that our own humanity prevents us

from simply walking away and trying to be more confrontational.

However, I think that the one thing the North Koreans have to

know is that there is a limit to the patience of the U.S. Congress

and the American people.

Their failure to move forward in this new round of negotiations

is a very bad signal, and I think that both Democrats and Republicans alike in Congress are losing patience with the North Korean

government, which believes it can continue to live in this wonderland where its irresponsible policies threaten the world and threaten their own population.

Thank you, Mr. Chairman.

Chairman GILMAN. Mr. Bereuter.

Mr. BEREUTER. Mr. Chairman, I appreciate the words of my two

colleagues and the introduction of Ambassador Sherman. However,

I will defer my comments prefering first to hear from our witnesses.

Chairman GILMAN. Thank you very much.

With that, I would like to welcome our first panelist, Ambassador

Wendy Sherman. It is a pleasure to welcome you back to our Committee as one of the State Department’s leading policymakers on

North Korea.

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Wendy Sherman was confirmed by the United States as Counselor, Department of State, with the rank of Ambassador, for the

tenure of her service in July 1997. Prior to assuming that position,

from April 1996 to 1997, Ambassador Sherman was President and

CEO of the Fannie Mae Foundation.

From 1993 to 1996, Ambassador Sherman served as Assistant

Secretary for Legislative Affairs in the Department of State. From

1991 to 1993, Ambassador Sherman specialized in strategic communications as a partner in the political and media consulting firm

of Doak, Shrum, Harris, and Sherman. Prior to that, she directed

EMILY’S LIST.

We thank Ambassador Sherman for being with us once again.

You may feel free to summarize your remarks and submit your entire statement for the record. We have asked our Members to withhold their questions until your testimony is complete.

Ambassador Sherman, please proceed.

STATEMENT OF THE HON. WENDY R. SHERMAN, COUNSELOR,

U.S. DEPARTMENT OF STATE

Ambassador SHERMAN. Thank you very much, Mr. Chairman.

Thank you, Ranking Member Gejdenson, and Subcommittee Chairman Mr. Bereuter, for being here this morning. Thank you very

much for the opportunity to discuss the Administration’s North

Korea policy.

I have submitted a fuller written version of my testimony for the

record, and I will try to summarize my comments and make time

for your questions.

Just this last September, Dr. William J. Perry presented the

findings and recommendations resulting from his 10-month long review of our policy toward North Korea. I have been very privileged

to be part of the policy review team as the senior government official who worked most closely with Dr. Perry, and I chair an interagency working group responsible for implementing the report’s

recommendations.

Mr. Chairman and Members, I completely agree with you: the

Korean Peninsula remains one of the most volatile areas in the

world. Our overarching goal there is simple—achieving lasting

peace and stability and removing the threat that it poses for the

United States, for our allies, and for the world.

Since 1994, the Agreed Framework has been at the center of our

DPRK policy, and key to any ultimate success in achieving our

goal. Two events in 1998, however, called that policy into question.

That summer we found ourselves in protracted negotiations with

the DPRK to gain access to a site at Kumchang-ni that we suspected might be the future site of a nuclear reactor.

If confirmed, the existence of such activities would have violated

the Agreed Framework and jeopardized its continued viability. A

visit to the site last May demonstrated that it was not involved in

such activities, and we will revisit the site this spring. As was confirmed in the talks that Ambassador Kartman just completed in

New York, we will return in May.

The experience, nonetheless, demonstrated the need for a mechanism to address similar concerns should they appear in the future,

at least until such time as the DPRK comes into full compliance

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with its IAEA obligations under the terms of the Agreed Framework.

Separately, in 1998, North Korea fired a long-range missile, the

Taepo Dong I, over Japan in an apparently failed attempt to

launch a satellite. Even though missile controls are not part of the

Agreed Framework, this test firing rightly provoked a storm of protest in both the United States and Japan, and led to calls in both

countries to end support for the Agreed Framework.

There is no doubt in my mind, however, that had we aborted the

Agreed Framework, the DPRK would have responded by reopening

its nuclear facility at Yongbyon. This would have placed the DPRK

in a position to resume production of weapons-grade plutonium,

and eventually to arm those very missiles with nuclear warheads— the very worst of all possible worlds.

During that period in 1998, the Congress called for a review of

policy toward the DPRK. President Clinton and Secretary Albright

agreed with the Congress and asked Dr. William J. Perry to assemble a policy review team. Over the course of 10 months, we met

with experts inside and outside of the U.S. Government, including

all of you on this panel and many Members of Congress and their

staffs.

We traveled several times to East Asia to consult with our allies

in the Republic of Korea and Japan, and with China’s leaders. We

also exchanged views with the EU, Russia, Australia, and other interested countries. We visited Pyongyang to talk with the leadership of the DPRK, and we have reported to this Committee on that

visit.

Through many long sessions with our ROK and Japanese allies,

we discussed how best to pursue our common goals of peace and

stability, while taking into account our respective interests. After

many months, we reached a common approach and a common understanding. The Perry Report is the result.

The comprehensive approach recommended by Dr. Perry, and developed in close consultation with our two allies, gave highest priority to our security concerns over DPRK nuclear weapons and missile-related programs. The strategy he recommended envisioned

two paths.

On the first path, the U.S. would be willing to move step-by-step

in a reciprocal fashion toward comprehensive normalization if the

DPRK was willing to forego its nuclear weapons and long-range

missile programs.

Alternatively, if North Korea did not demonstrate its willingness,

by its actions, to remove these threats, the United States would

seek to contain them by strengthening our already strong deterrent

posture.

Because the second path is both dangerous and expensive, but

most importantly because it is so dangerous, we and our allies all

strongly prefer the first alternative, if we can go down that road.

As I have indicated, perhaps one of the most fundamental things

to result from the Perry process has been extraordinary coordination among the three allies, which is stronger than at any time in

the past. This is largely the result of the newly instituted trilateral

coordination oversight group, or TCOG—perhaps not the world’s

greatest acronym—created nearly 1 year ago to ensure more freVerDate 11-MAY-2000 15:42 Mar 27, 2001 Jkt 065823 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 F:\WORK\65823 HINTREL1 PsN: HINTREL1
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quent, close consultation among the United States, South Korea,

and Japan, at the subcabinet level. I chair our delegation to that

TCOG.

We have met nine times trilaterally over the past year, including

a meeting of foreign ministers and a summit meeting. Allied support for the U.S. approach is strong, in part because the Perry report is, in essence, a joint project. In January, I visited Seoul and

Tokyo on one of our many trips there. I met with President Kim

Dae-jung, participated in a TCOG meeting, and met with Japanese

leaders.

During our discussions, President Kim again expressed his full

support for our policy as complementary to his own policy of engagement. We, in turn, fully concur with his view that North-South

dialogue remains central and key to ultimate peace on the peninsula.

We hope the DPRK leadership will have the foresight to take advantage of the opportunities before it to address issues of mutual

concern, and to move its relationship with the United States, the

ROK, and Japan, more rapidly down the path toward normalization and ultimate peace and stability.

There are increasing signs that other members of the international community would be prepared to increase their contacts

with the DPRK as the DPRK addresses the international community’s legitimate concerns. Italy has recently established diplomatic

relations with the DPRK.

The Australians and the French both recently sent delegations to

Pyongyang. Canada received an unofficial DPRK delegation. The

Philippines is considering establishing relations, and, as you know,

Japan is about, probably at the beginning of April, to move forward

in normalization talks with the DPRK. We are consulting constantly and closely with our friends and allies on North Korea policy to ensure that our approaches are coordinated.

Guided by the Perry recommendations, U.S. policy is making

progress in the step-by-step reciprocal approach recommended by

the Perry Report. In September, the DPRK announced its intention

to refrain from long-range missile tests of any kind, while highlevel discussions were underway to improve relations. This was a

small but important step in dealing with our proliferation concerns.

In September, we announced our intention to ease certain economic sanctions against the DPRK. More recently, the North accepted Dr. Perry’s invitation for a reciprocal visit to Washington by

a high-level DPRK visitor. From March 7th to just yesterday,

March 15th, in New York, Ambassador Charles Kartman and Vice

Foreign Minister Kim Gye Gwan held their third round of preparatory talks for the high-level visit. Further preparatory talks

will be needed before the visit occurs.

The DPRK did agree yesterday in New York to recommence talks

related to our concerns about the DPRK’s missile program, and to

begin a new negotiation on implementation of the Agreed Framework. As you know, as part of the positive path outlined in his report, Dr. Perry proposed talks to deal with our continuing concerns

about DPRK missile-related and nuclear weapons-related activities.

We are glad that the DPRK has now agreed to proceed with those

negotiating tracks.

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Finally, the DPRK reconfirmed yesterday its agreement for another visit to Kumchang-ni in May of this year. The negotiations

leading to a DPRK high-level visit have been difficult, and, knowing North Korea, will remain difficult, as are all negotiations with

the DPRK. These discussions continue.

Nonetheless, we and our allies remain convinced that the visit

would advance our interests. We view the visit as an opportunity

for both sides to demonstrate their intention to proceed in the direction of a fundamentally new relationship. It would be an important, but, as Secretary Albright said, a modest step, and would

make clear to the DPRK that as it addresses our security concerns

we are prepared to reciprocate by taking other steps to improve

ties with the DPRK.

As we move forward in our relations with North Korea, the

Agreed Framework will remain central to our policy. The turnkey

contract, the light water reactor construction, was signed on December 15, 1999, and became effective on February 3rd. This

means that construction can now, as soon as winter is over, begin

in earnest.

As you know, the ROK in Japan committed respectively to providing 70 percent of the actual costs—that is the Republic of

Korea—and the yen equivalent of $1 billion for Japan, based on the

current estimated cost of $4.6 billion. Since the turnkey project became effective, South Korea has already disbursed nearly $120 million, and Japan over $51 million, to KEPCO, the primary contractor for the project.

We believe the Framework continues to be our best means of

capping and eventually eliminating the threat of DPRK nuclear

weapons by replacing the dangerous and frozen graphite-moderated

reactors with proliferation-resistant light water reactors.

Faithful implementation of the Agreed Framework by all sides is

absolutely essential to keeping the DPRK’s nuclear activities at

Yongbyon and Taechon frozen, and to the maintenance of stability

on the peninsula.

We do need, and have appreciated, the Congress’ continued support in order to continue to live up to our side of the bargain by

helping to provide heavy fuel oil, even as fuel oil prices, as you all

know very well, are painfully high and have a difficult impact on

our project as well.

In doing so, we will, of course, continue to hold the DPRK strictly

to its own obligations and commitments under the Agreed Framework, including the rapid conclusion of spent fuel canning and resumption of North-South dialogue.

While we are striving to advance our nonproliferation goals, we

remain committed to addressing other issues of concern with the

DPRK. We have and will continue to do all we can to improve the

monitoring of food aid and other international assistance to North

Korea. We will continue to monitor, condemn, and work multilaterally to gain improvement in the DPRK’s dismal human rights

record. We will support UNHCR’s effort to address the plight of

North Korean refugees.

As suggested in the Perry Report, we will pursue our serious concerns about the DPRK’s chemical and biological weapons multilatVerDate 11-MAY-2000 15:42 Mar 27, 2001 Jkt 065823 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 F:\WORK\65823 HINTREL1 PsN: HINTREL1
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erally. We will also continue to seek information on the alleged

North Korean drug trafficking and other illegal activities.

Bless you, Mr. Chairman.

Chairman GILMAN. Thank you.

Mr. GEJDENSON. Is that part of your official statement?

Ambassador SHERMAN. Absolutely.

Chairman GILMAN. I like that.

Ambassador SHERMAN. I am also very personally committed to

ensuring that we resolve, as fully as possible, the status of the

American soldiers who remain unaccounted for from the Korean

War. As we approach the 50th Anniversary of that conflict, this is

absolutely critical.

The DPRK has been cooperative on this issue in the past, but the

current lack of progress is more than a disappointment. This is a

very important issue for veterans, for the families of those still

missing, and for all Americans. We have an obligation to continue

to press the DPRK to work with us on this very critical issue.

Let me stress, as I seek to conclude, Mr. Chairman, that we are

attempting to pursue a constructive dialogue with the DPRK that

addresses our central security concerns and leads us more rapidly

down the path toward full normalization only as those concerns are

addressed.

The Cold War still exists on the Korean Peninsula. We hope that

our dialogue will be a crucial step toward ending it. We are under

no illusions that it will be an easy path. We recognize fully that

everything we and our allies do in diplomacy requires, first and

foremost, the maintenance of a strong allied deterrent posture.

This is fundamental.

In fact, the Perry Report stresses, and Dr. Perry has said directly

to the DPRK, that there would be no change in our conventional

forces. Congress’ support of our forces in the region remains essential. The presence of 37,000 U.S. troops in South Korea and 47,000

in Japan demonstrates our commitment to stand with our allies

against any threat of aggression.

With our South Korean and Japanese allies, however, we believe

that this comprehensive two-path strategy recommended by Dr.

Perry offers the best opportunity to change the stalemated situation on the Korean Peninsula in a fundamental and positive way.

Through these efforts, we hope to lead the Korean Peninsula to a

stable, peaceful, and prosperous future.

In closing, Mr. Chairman and Members, I would like to cite a

senior Administration military leader on the Korean Peninsula who

told me the following in my most recent trip there. He said, ‘‘When

I came here 18 months ago, I thought I would have to fight a war.

Thanks to the efforts of your team, I see this as an increasingly remote possibility.’’

Mr. Chairman, making war an increasingly remote possibility,

working to address our concerns about weapons of mass destruction, and addressing pressing human needs—these are challenging

and hard-to-achieve objectives. It will take time—unfortunately,

probably lots of time—to accomplish them. I know, however, that

we share these goals, and, working together, I believe we can and

will succeed in this mission.

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I thank you very much, and I am happy to take your questions.

Thank you, Mr. Chairman.

[The prepared statement of Ambassador Sherman appears in the

appendix.]

Chairman GILMAN. Thank you, Ambassador Sherman, for your

extensive statement. We want to thank both you and Dr. Perry for

your good work in trying to find a peaceful solution to the problems

in North Korea.

Ambassador Sherman, it was reported this morning that the

talks on a high-level visit by senior North Korean officials to Washington have broken down. This seemed to be a critical milestone in

the Perry process. Can you tell us why those talks failed? How does

that delay your intentions to begin missile and nuclear talks with

North Korea? How does that affect your desire to get North Korea

to sign a written agreement to halt missile testing?

Ambassador SHERMAN. First of all, Mr. Chairman, I don’t exactly

see what happened in New York in exactly the same way you do,

which probably doesn’t come as a surprise. I don’t see it as the

talks having broken down or having failed. I see it as part of a very

tough and continuing negotiating process that we expected to take

time.

In the Perry process, and in the Perry Report, we sought to address two immediate, we thought, highest priority fundamental

concerns. That is, the implementation of the Agreed Framework

and concerns about ongoing nuclear-related activities, and the missile program that North Korea has. In that report, we suggested

that there needed to be a reintensified missile negotiation and a

new negotiation on implementation of the Agreed Framework.

Oddly, nowhere in the Perry Report do we suggest a high-level

visit. The high-level visit actually became a concept that arose out

of a discussion with the North and a desire to reciprocate an invitation that we put on the table when we were in Pyongyang that

they were welcome to come to Washington.

So we are actually quite pleased with the outcome from New

York, as difficult as it was and as difficult as the days ahead will

be, in that we expect very soon to have that reintensified missile

negotiation underway, to have the Agreed Framework implementation negotiation underway, and to continue our conversation on the

high-level visit. I fully believe that will take place.

The two negotiations may take place in advance of it, but I think

the sequence matters less than trying to reach our security objectives.

Chairman GILMAN. Has a new date been set for further discussion?

Ambassador SHERMAN. A new date has not yet been set, but I

would expect that to happen in the next few days. Ambassador

Kartman had to come back and consult with us. They had to go

back and consult with Pyongyang.

Chairman GILMAN. Ambassador Sherman, why did the President

not certify that North Korea has not diverted assistance provided

by our Nation for purposes for which it was not intended, or that

North Korea is not seeking to develop or acquire the capability to

enrich uranium or any additional capability to reprocess spent nuclear fuel?

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Ambassador SHERMAN. On the diversion of assistance issue, we

believe, based on the Perry Report and reports from within North

Korea, that assistance is reaching the targeted population. So the

President used his waiver authority on that certification provision.

On the uranium issue, the way that certification is written, it

goes to the intention of North Korea. To tell you quite frankly, Mr.

Chairman, having sat across from North Koreans, it is very hard

to conceive of what their intentions are. One can hypothesize, one

can apply logic, but it is very hard to know, actually sitting across

from anyone, what their intentions are.

So we felt, again, to be fully accurate to the Congress, we could

not certify as to North Korea’s intentions, but, rather, use the

waiver authority which the legislation provides.

Chairman GILMAN. Thank you, Madam Ambassador. What were

the results of the recent talks in New York? Why is our Nation now

considering removing North Korea from the terrorism list? What

objectives did you actually achieve? What criteria does our Nation

have for removing North Korea from the terrorism list?

How will we be dealing with the Japanese kidnappings, the Red

Army hijackers, the incursions into South Korea and Japan, and

politically motivated assassinations and kidnapping, such as the recent one of a South Korean clergyman?

Ambassador SHERMAN. Thank you, Mr. Chairman. Ending terrorism in the world is one of the highest priorities for the U.S. Government. It poses a substantial threat to American citizens, as I

think America has seen quite painfully in the last few years. So,

it is in the United States’ interest to get North Korea to take those

steps which would end its state sponsorship of terrorism and any

terrorist activities that it might undertake.

There are two ways that a country can be removed from the list

of state sponsors of terrorism. Both contain the concepts of cessation and credible forbearance of terrorism. I can go through, if

you would like, the excerpts from the law, which I am sure you

know, that specify the kinds of things that must take place for a

country to come off the terrorism list.

I would suspect that our process with North Korea will take

time. Michael Sheehan, Ambassador Sheehan, who is the head of

our counterterrorism office—an office which you, Mr. Chairman,

had a great deal to do with making sure it had prominence, focus,

and the attention of the Secretary of State—met with the North

Koreans in an introductory meeting where he merely laid out what

it took under our law to come off of the terrorism list, and the process of negotiations that we wanted to undertake to talk with the

North Koreans about taking the steps they would need to take to

no longer be seen as a terrorist country.

I would suspect that we will have follow-on negotiations and discussions. I think this will take some time to do. Let me hasten to

add that before Ambassador Sheehan even had the introductory

talks, in the TCOG that I held in Seoul with Japan and South

Korea—both bilaterally and trilaterally—we discussed the terrorism issue. Bilaterally particularly, I spoke with both countries

about what their particular concerns were that they hoped we

would address.

11

So we very much have in mind the concerns of our allies as we

undertake this particular discussion. However, it will take some

time, and I would be happy in a closed session to brief you or your

staff about each specific requirement. I don’t think it would be good

tactically to have that discussion in public.

Chairman GILMAN. Thank you very much, Madam Ambassador.

Mr. Gejdenson.

Mr. GEJDENSON. Thank you, Mr. Chairman.

Who are North Korea’s closest allies? Are the Chinese helping

them, either economically or with military technology?

Ambassador SHERMAN. North Korea is considered an ally of

China, and China of North Korea. China does supply oil and food.

I believe we have very good reason to know, in fact, that in urging

North Korea not to test launch a long-range missile, and to agree

to the moratorium on such launches, that China played a very positive role in encouraging them to not destabilize the peninsula further by undertaking test launches.

It is ironic, Congressman Gejdenson—because some of our goals

are probably not the same—that we share objectives in this area.

China has no interest in an arms race on the peninsula. That is

because of North Korea, but that is also, quite frankly, because of

Japan and Taiwan. China has no interest in people having nuclear

weapons on the Korean Peninsula because it is destabilizing not

only for South Korea and Japan, but for China as well.

So we believe that China has actually played a constructive role

in getting North Korea to end its isolation and to move forward in

working in a somewhat coordinated fashion, though not in the

same way that the ROK and Japan do with us.

Mr. GEJDENSON. Now, what are the relationships in the Middle

East? Are they primarily, sales, where the North Koreans sell rockets of some kind, and the Middle Eastern countries buy them? Or

are the relationships more significant than that?

Ambassador SHERMAN. I believe, Congressman, the relationships

are largely of exporters and importers. There are some details of

those relationships that I would be glad to discuss with you in a

private session.

Mr. GEJDENSON. I would like to have that. Then what about Russia? Do the Russians have any kind of relationship with the North

Koreans?

Ambassador SHERMAN. The Russians do have a relationship with

the North Koreans. Foreign Minister Ivanov recently went to sign

a friendship agreement in Pyongyang. He spoke with Secretary

Albright before he went and briefed us when he came back. In fact,

we suggested some messages that he might want to take, and he

did, indeed, do so. We try to stay in close touch with Russia.

I think it is significant that although I believe the DPRK was interested in a military alliance with Russia, Russia did not want to

proceed in that direction. There is no longer a military alliance between Russia and North Korea.

Mr. GEJDENSON. Are there any other countries, other than

China, that have a relationship that is significant with North

Korea?

Ambassador SHERMAN. I think other countries are trying to develop a relationship, in part because they have adopted the apVerDate 11-MAY-2000 15:42 Mar 27, 2001 Jkt 065823 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 F:\WORK\65823 HINTREL1 PsN: HINTREL1
12

proach of our trilateral alliance, and of the Perry Report, to believe

that if we can begin to bring North Korea out of its isolation—out

of the closed hermit kingdom that many people describe it as—that

we might have a better chance of getting them to join the norms

of the international community. That is a hypothesis that we are

testing out, and I don’t know, to tell you the truth, what the answer to that will be.

Italy will be visiting. Foreign Minister Dini, is going to be visiting Pyongyang, and he is stopping here for a consultation before

he goes. I believe that we will probably see normalization of relations with other countries as well in the coming days. But all of

these countries are doing it quite slowly, usually by double-hatting

their Ambassadors in Beijing, and then moving very slowly in close

consultation with all of us who are involved in policy toward North

Korea.

Mr. GEJDENSON. What countries have the most significant diplomatic relationship at this point with North Korea, and have an ambassador there, have a significant presence, either economically or

politically, in the country? China, obviously, would be——

Ambassador SHERMAN. China obviously, Russia, and then there

are several other countries. I don’t know the number.

Do you know the number?

Mr. GEJDENSON. Does Vietnam have a significant——

Ambassador SHERMAN. Yes.

Mr. GEJDENSON [continuing]. Presence there?

Ambassador SHERMAN. They have a presence. They have a presence, and as does Sweden, and there are a few others. We can get

you the list, Congressman. I don’t think we would say that any of

them have a staggeringly significant relationship. In fact, it is not

a post that people clamor to take on.

Mr. GEJDENSON. What a surprise.

What are the most significant economic relationships with the

private sector that exist? Are there any large private corporations—whether it is hotels, industrial, or service sectors, in North

Korea?

Ambassador SHERMAN. Probably the largest and most significant

economic relationship is with South Korea. Hyundai opened a tourism project at Kumgang Mountain. They are also working to put

together an agreement for, in essence, what we might call an enterprise zone. There have been, I think, in the last year over $300 million spent in North Korea in the tourism project. Samsung has

opened up a project in North Korea.

In fact, I met with the president of Hyundai Asan when I was

last in Seoul. The amount of private sector relationship with North

Korea is growing quite significantly. In my discussions with President Kim Dae-jung, although the North has not yet developed a

government-to-government relationship with South Korea in the

way that we all would hope it to be, the private sector relationships, I think, are heading in a very positive direction, and ultimately will require, probably for infrastructure reasons, a relationship with the South.

Mr. GEJDENSON: I will finish with this. Those private sector relationships are, indeed, with the government of North Korea, because

13

if you are doing a tourism project in North Korea, there is no private land ownership or——

Ambassador SHERMAN. No.

Mr. GEJDENSON [continuing]. Sector that you would sign up with.

So it is an agreement between a corporation in South Korea and

the government of North Korea.

Ambassador SHERMAN. Correct. With the knowledge and understanding of the South Korean government.

Mr. GEJDENSON. Thank you.

Chairman GILMAN. Mr. Bereuter.

Mr. BEREUTER. Thank you, Mr. Chairman.

Ambassador Sherman, I want to express my sincere appreciation

to you, to Secretary Perry, to Ambassador Kartman, and to all of

the assistants and support people you have, in focusing on these

important North Korean issues for us. I wish you well, and I hope

you will convey that to them.

Ambassador SHERMAN. I will, indeed. Thank you.

Mr. BEREUTER. Ambassador, Secretary Albright, within the last

month, has answered questions before the Committee, including

one I addressed to her. I asked her if the resumption of missile

flight tests of the Taepo Dong II would signify a decision by the

DPRK to follow the path of confrontation, the second of the two

paths that Secretary Perry has put before them.

Do you agree with her view? Do you know whether or not Secretary Perry would agree with that view?

Ambassador SHERMAN. I think what we believe, Congressman, as

I said, we would know if North Korea was choosing the second path

by its actions. There is no question that if they launched a Taepo

Dong II missile, it would be a very serious action, and we would

be in immediate consultation with the Congress and with our allies

on those steps that we would need to take.

I think, more importantly, or as importantly, when the Taepo

Dong I overflew Japan, the response in Japan and here in the

United States, and rightly so, was one of concern. One can see that

you could be down a downward slippery slope quite quickly. So I

think it is a very dangerous situation we would have to take extremely seriously. I know that Dr. Perry feels that way as well.

Mr. BEREUTER. Do you think it would suggest that they have decided to take the path of confrontation or to continue on it perhaps?

Ambassador SHERMAN. I think it would certainly show that they,

for the moment at least, had chosen not to take the positive path.

What we tried to do in the Perry Report and in the classified report

that was submitted to Congress is to build a ledge, so to speak,

Congressman, because I don’t think we want to go from a missile

launch to war, if that can be avoided.

Although it would certainly mean they were not on the positive

path, we would need to take those actions that would help us from

going on a downward slope quickly toward war and conflict.

Mr. BEREUTER. The second path is basically to prepare our capacities to deal with a continued or a more militant North Korea,

as I understand it.

Ambassador SHERMAN. Yes. It includes——

Mr. BEREUTER. It is not a matter of war or——

14

Ambassador SHERMAN. Right. Not a matter of war necessarily,

but a way, if they took negative actions, that we could strengthen

our deterrent posture, but also what we could do politically and

economically, which sometimes is equally as important.

Mr. BEREUTER. Ambassador, on February 15th of this year, a

memorandum was sent to the Committee which conveyed a memorandum of justification about the certifications and intent to waive

certifications required under various statutes to continue our participation in KEDO.

On page 3 of that unclassified memorandum, it says, specifically,

that North Korea’s agreement to freeze and eventually dismantle

its declared graphite-moderated nuclear reactors and related facilities at Yongbyon and Taechon has halted activities that, had they

not been stopped, would have given the DPRK a nuclear weapons

capability.

My question is: Is this suggesting that North Korea does not

have a nuclear weapons capacity, or is it suggesting that the

Agreed Framework has halted the North Korean nuclear weapons

development program? Which is it?

Ambassador SHERMAN. What it is and what we have said repeatedly is that the Agreed Framework halted the plutonium production through graphite-moderated reactors at Yongbyon and

Taechon, which is the quickest and surest way to the development

of nuclear weapons.

Dr. Perry has said in front of this Committee that we have—we

all have concerns about whether, as he calls it, the physics of nuclear weapons is still occurring, because that could take place in a

room smaller than this.

One of the reasons that we want an Agreed Framework implementation negotiation, which the North has now agreed to, is to get

at some of those concerns that would be realized in the Agreed

Framework, but would not be realized until all IAEA full safeguards were in place, which will take some time because of the

steps that are in the process of the Agreed Framework.

Mr. BEREUTER. Then I think that is a misleading statement in

that memorandum because it does say that the agreement has

stopped what would have given the DPRK a nuclear weapons capability. It appears to me that you are not saying North Korea does

not have a nuclear weapons capability right now.

It is just that the nuclear weapons development program and the

judgment behind the certification has been stopped. However, the

capacity may be there now. At least—— Ambassador SHERMAN. I think, though, part of it is the passive

verb. There is no question that the facilities at Yongbyon and

Taechon would have given the DPRK a nuclear weapons capability.

Mr. BEREUTER. But they are not saying they don’t have one now.

Ambassador SHERMAN. But we are not saying anything about

that here.

Mr. BEREUTER. Right. OK.

May I have one more question, Mr. Chairman.

Chairman GILMAN. Without objection.

Mr. BEREUTER. Thank you.

Ambassador, this would seem like a question that should have

been asked a long time ago, but maybe it has and I am not aware

15

of it being asked or the answer to it. Has the Department of Energy, or any Federal agency, made preliminary decisions regarding

the licensing of nuclear reactors or nuclear technology to North

Korea?

Has Secretary Richardson or his predecessor, Secretary O’Leary,

made any commitments regarding the expedited licensing of nuclear technology that eventually would reach the DPRK? It goes to

what safeguards would have been put in place or which would still

need to be put in place. Are you aware of the answer to those questions?

Ambassador SHERMAN. I think one of the reasons that it may not

have been asked in that way, Mr. Bereuter, is that the light water

reactors that are being built are being built through KEDO, which

is a consortium of countries and an entity that is responsible for

the development of those light water reactors.

The primary contractor for those light water reactors is KEPCO,

which is a South Korean entity. So I will go back——

Mr. BEREUTER. But it is——

Ambassador SHERMAN [continuing]. What my colleague is telling

me is there are no licenses yet, and we would need to put a nuclear

cooperation agreement in place first, prior to such licensing.

Mr. BEREUTER. Because those are U.S.-licensed technologies——

Ambassador SHERMAN. Yes.

Mr. BEREUTER [continuing]. That would be put in place through

the South Korean entity, through the KEDO entity, I believe.

Ambassador SHERMAN. Yes. As you know, Congressman, there is

a sequence of events that need to take place, the nuclear cooperation agreement being one of them, before key components are in

place and the construction is complete.

Mr. BEREUTER. So you would expect or convey to the Department

of Energy that they need to be in consultation with Congress to assure that the safeguards that they need to negotiate yet would

meet statutory requirements?

Ambassador SHERMAN. I am sure they will be, and we will be in

very close consultation with Capitol Hill as we present a nuclear

cooperation agreement at the appropriate time.

Mr. BEREUTER. Thank you, Mr. Chairman, for your indulgence.

Thank you, Ambassador.

Chairman GILMAN. Thank you, Mr. Bereuter.

Mr. Royce.

Mr. ROYCE. Ambassador Sherman, if I could ask you, The Los

Angeles Times not too long ago reported that North Korea has been

conducting major military exercises, showing capabilities that have

caught analysts off guard. The L.A. Times reports that Pentagon officials have said that these exercises were being supported by the

food aid that the U.S. and others are providing the regime in the

North.

Now, what is your response to this criticism? Is The L.A. Times

wrong in that report, in your view?

Ambassador SHERMAN. I believe that Admiral Blair testified in

front of this Committee and said quite publicly that the winter

military exercises were quite large, quite sophisticated, and quite

good. I would not differ with Admiral Blair in that regard.

16

It is true the scale of operations during the winter cycle did exceed what had been observed over past years. But I want to remind

the Committee that we have never shrunk from the fact—and it is

part of our grave concern about North Korea—that their million

man army is formidable; that the artillery and supplies that they

have, although not as up to date as they would like to be, probably

without some of the spare parts they want, could do catastrophic

harm to our allies and to our troops. We take it quite seriously.

As for the food issue, Congressman, it is also my understanding,

though I was not here, that Admiral Blair said that at the end of

the day, food aid did not make a difference, in his judgment, in the

capabilities of that million man army, and that it was the American tradition to provide such food aid. He believed it was the right

way to go.

There is no question, and we have said this before publicly, that

food aid—food is fungible, and there is no question in my mind but

that North Korea wants to feed its military first and foremost.

They cannot produce enough food for their own people, and probably the food they do produce goes first to their military, and then

foreign food aid goes to others in the population.

We do believe, through the monitoring of the WFP, although it

is not perfect and we are always trying for better monitoring, that,

in fact, food is reaching the most vulnerable populations. Those

who have been there frequently have seen, just with their own

eyes, a difference in terms of the health and welfare of children,

women, and the elderly.

Mr. ROYCE. We were providing some 500,000 tons of fuel each

year. Do we know if that fuel was used in these military exercises?

Ambassador SHERMAN. We do not believe so, Congressman. One

of the reasons that we wanted to provide heavy fuel oil was the fact

that it is harder to convert heavy fuel oil to other forms of fuel. I

cannot tell you with a guarantee and a certainty that they have not

gone through the process which would enable them to do that, but

it is one of the reasons that heavy fuel oil was chosen.

Mr. ROYCE. If the analysts are caught off guard by the magnitude of the military exercises, perhaps we should focus on that

question, since we are still providing the fuel.

I recently had the opportunity to travel to Macau, and there have

been reports in their papers about growing illegal North Korean activities there. North Korea allegedly is using Macau banks to launder money gained from drug trafficking. It is also, we heard, using

Macau as a base of an operation that is counterfeiting $100-dollar

U.S. bills. Is this a serious concern, this activity? Maybe you could

shed some light on the counterfeiting of U.S. $100-dollar bills by

North Korea?

Ambassador SHERMAN. I am aware of these reports, Congressman, and we are very concerned about them. This is a very sensitive subject because it goes to a number of areas. I would be

pleased to have someone come up and give you a full brief, but I

would rather not do that in a public hearing.

Mr. ROYCE. The last question I would ask you is the Administration and our South Korean partners have been engaged with the

North Korean regime for several years now, providing all types of

17

aid. However, I am a little hard-pressed to see how the North Korean regime’s behavior has been modified.

Do we really believe that this aid is leveraging reform in North

Korea for at least more responsible international behavior? If that

is the case, what are the signs that you could share with me that

this is working right now?

Ambassador SHERMAN. I am very glad you asked this question.

I happen to have a card here ready for it. It is hard, and it is very

frustrating. I have many colleagues who have been at this a whole

lot longer than I have been. I think to myself on the days—which

is almost every day with North Korea—that I am intensely frustrated, I think of other parts of the world where negotiations have

taken a long time.

Ambassador Dennis Ross, who is a tremendously able negotiator,

has been working on Middle East peace for 10 years. We didn’t see

the end of the Soviet Union for more than 40 years. We tend to

think of timeframes in 2, 4, 6, and 8 years. It has something to do

with our election cycle probably. But North Korea sees life and

time in 40-year increments. Somebody gets to be the head of North

Korea for 40 years, and then dies and his son takes over.

So their sense of time is quite different than ours. Their approach to proceeding on these issues is quite different than ours.

That said, Congressman, you have every right to ask, so what

has this gotten us anyway? Let me tell you what I think we have

achieved, even in this very painful, difficult, slow process.

There is no question in my mind that the Agreed Framework

froze plutonium production, and plutonium production was and still

remains the fastest way to nuclear weapons. If that reactor, that

potential reprocessing plant, were to startup again today, in

months we would have dozens of nuclear material for nuclear

weapons.

Second, we have gotten far enough in our relationship with

North Korea that when we have a crisis, when we have a problem,

we are able to negotiate our way to the other side; Kumchang-ni

being the best example of that. That was a crisis situation. The

Congress, understandably, the intelligence community, the policy

community, the Secretary of State, the President, and the Secretary of Defense, were quite concerned that Kumchang-ni was a

nuclear reactor site, given its size and given some of the characteristics of it.

Ambassador Kartman, through very patient and tough negotiations—he is one of the most tenacious negotiators I’ve ever met.

You would not want to sit across from him. He can sit and stare

at you for hours and not blink and not move until you are ready

to move in his direction. He managed to gain access to Kumchangni, not just once but as many times as it took to satisfy our concerns. As I said, the North Koreans just reconfirmed again the visit

in May of this year.

Third, again, through very tough negotiations, the North Koreans have agreed to suspend their launch and testing of long-range

missiles while conversations and dialogue go on with us. This is no

small action. It is not that they have stopped all of the development of their missile program. I do not believe they have. But

it——

18

Mr. ROYCE. That is the question I have, because I don’t—— Ambassador SHERMAN. Right. It is very, very hard to continue

development of a program if you cannot test. If you cannot test, it

is harder to market your weapons. If you do not test and you only

have one missile, it is hard to give it a whirl because you don’t

know whether it is going to work or not.

So folks who are missile negotiators, who—Bob Einhorn, who is

our Assistant Secretary for Non-Proliferation, would tell you that

the single most important thing anyone can do to slow down, if you

cannot yet stop a missile program, is to stop the testing.

We have a long way to go. We are very glad that North Korea

has agreed to reintensify the missile negotiation to schedule the

next missile negotiation, because as the Perry Report says, our goal

is to end North Korea’s long-range missile program, to get a

verified program to end the development, deployment, testing, and

export, which is critically important. That remains our objective.

We also now have, as I mentioned, commitments to a reintensified missile negotiation, Agreed Framework implementation, which

gets to nuclear-related concerns. We will have ongoing terrorism

talks, which is a tremendous interest.

Fourth, or fifth—I don’t know where I am in the list—food aid

is very controversial, but it is, as Admiral Blair said, the American

way. We have fed vulnerable, starving-to-death people, and that is

important. It is still important to our country.

Finally, and I think quite critical to whether we will ultimately

succeed here or not—and I still don’t know whether we will—is

that we have constructed and now carried out the strongest trilateral consultation, I think, in our security, both military and political, relationship with South Korea and Japan. We have now proceeded also to further multilateralize that approach, so that we are

in consultation and coordination with virtually everyone who is approaching North Korea.

Chairman GILMAN. The gentleman’s time has expired.

Dr. Cooksey.

Mr. COOKSEY. Thank you, Mr. Chairman.

Thank you, Madam Ambassador. Let me ask you, what is the

main source of financial aid? I understand they receive about a billion dollars, apparently, a year in financial aid. What country gives

them cash? Do any countries give them financial aid directly?

Ambassador SHERMAN. I don’t know any country that gives them

hard cash. I would have to consult with my colleagues. I don’t believe so. Our contribution is heavy fuel oil, and some administrative expenses to KEDO, and our food aid. When the Congress has

monetized that food aid, it gets upwards to several hundred million

dollars.

The EU makes contributions toward KEDO. China gives oil and

food. Hyundai, which is a private corporation that we discussed

earlier, does make payments to North Korea for the mountain tourism project. But there is no government that I can think of that

gives cash, except those governments which buy missiles and missile technology from North Korea.

We believe that North Korea exports that technology for three

reasons. First, as status and pride that they, in fact, can do this.

Second, as a leverage in its relationships with us and others in the

19

world. Finally, for hard currency. We don’t think the hard currency

is the primary reason because although it is substantial, it is not

really as much as one would think.

Mr. COOKSEY. I would assume that they don’t really export a lot

besides missiles and misery. What will it take for them to collapse

financially, to have just a financial collapse?

Ambassador SHERMAN. It is hard to answer that question, Congressman, because I think many people would have predicted that

North Korea would have collapsed already. Certainly, I think, a

couple of years ago a lot of analysts thought they would, but I

think virtually every analyst would say today that they are not

going to collapse.

One of the fundamental premises of the Perry Report, which

leads one to certain conclusions, is that we have to deal with this

regime as it is, not as we wish it to be, because it is not in danger

of imminent collapse. That is the view of our South Korean allies

who are quite closer to the situation than we are, and I think of

most analysts.

There is no question that if one believes they are on the verge

of imminent collapse, then one might have adopted one of the proposals that we outlined in our report which we rejected. If you

thought they were in imminent collapse, one might move to try to

undermine the regime because you might think you could do it

rather quickly.

We rejected that proposal because we don’t believe they are in

imminent collapse, and to undermine a regime takes a long time.

During that time they would develop weapons of mass destruction

further, and make it even more difficult to get them to give up

their indigenous program.

Mr. COOKSEY. I know that we have given them food and heavy

oil, but you gave me an answer about what the world has gained

from it. I accept that as a reasonable answer and probably a good

response.

I would assume, as I look out over this audience, that there is

someone in here that is a representative from North Korea. It probably wouldn’t be too difficult to guess who they are. How long will

it take for people that are North Koreans to come to this country

and see the way we operate here in an open forum, to see that

there is a better way of doing things? Will there be people that

have seen the outside of North Korean that would go back and be

the basis for a revolt?

Maybe there is someone in this room—is there likely to be someone in this room—does anybody want to raise their hand that is

a North Korean?

Ambassador SHERMAN. I doubt it, Mr. Cooksey, because North

Koreans cannot travel outside of a 25-mile radius of New York,

where they have a permanent representative at the U.N., without

permission by the State Department. Those who were with Ambassador Kartman in New York did get permission to go to Georgia

for a meeting at Georgia Tech tomorrow, but we know where North

Koreans travel in this country, unless, of course, they are here in

ways that we are not aware of.

So I would suspect there isn’t a North Korean in this room, but

I couldn’t guarantee it.

20

Chairman GILMAN. The gentleman’s time has expired.

Mr. COOKSEY. Thank you, Mr. Chairman.

Thank you, Madam Ambassador.

Ambassador SHERMAN. Thank you.

Chairman GILMAN. Ambassador Sherman, one last request. If I

heard you correctly, you said you were quite pleased with the results of your New York talks. I am concerned about the New York

talks, the fact that North Korea has rebuffed us once again on

scheduling a high-level visit, and the fact that North Korea has

rebuffed us once again in providing a written assurance on the ban

on missile tests, and the fact that North Korea has once again

rebuffed us on agreeing to the specific agenda for the follow-on missile and nuclear talks, which should be part of a joint communique

of the recent visit.

So tell us a little bit, what made you so pleased with all of that?

Ambassador SHERMAN. When I said I was pleased, it is because

I feel that we are still taking steps forward in this process. I think

probably I get pleased maybe perhaps with less than would please

you, Mr. Chairman, because this is a very, very difficult process.

So if you can take forward steps with North Korea, then one is

ahead in this process.

In the overall scheme of things, there is no question. I wish we

had a date for a high-level visit. I wish we had the agenda completely nailed down. I wish that we had already had the missile negotiation, the Agreed Framework negotiation. I agree with you. I

would be even more pleased if those things had occurred.

However, we did make forward movement in a process in which

forward movement, small steps, one at a time, is the way that we

are going to solve this problem. I wish it were otherwise. I truly

do. I know Ambassador Kartman, who has to sit for hours and

hours and hours with some of his team who are here, across from

the North Koreans wish that more progress would go forward.

I think, fundamentally, there was no rebuff of our objectives.

There was no disagreeing that, in fact, we are still proceeding toward a high-level visit. The missile moratorium remains in effect,

which is crucial to meeting our ultimate objectives around their

missile program.

We are still proceeding in very small steps—I agree with you,

very small steps—very slow, small steps. However, we are still

moving in a forward direction, and that, I think, is what our allies

believe is necessary and what we have agreed to with South Korea

and Japan, as Japan is proceeding in its own bilateral track.

The one last thing I would add, Mr. Chairman, is I had a meeting yesterday with one of our colleagues from Japan, and one of the

points he made, which I think is quite true, is that we have to look

at the aggregate of what is occurring. We believe, and Japan and

South Korea believe, that any progress each of us makes is part of

the aggregate progress that all of us are making toward dealing

with North Korea because we are working together.

So, if Japan has its bilateral talks because they are in such close

coordination with us, we are moving forward on the objectives of

the Perry Report. If South Korea moves, both in its private economic channels and, I hope sometime soon, in North-South direct

21

government channels, toward reaching those objectives, we are

reaching our common objectives.

I am not as pleased as I would like to be, but we are at least

still moving forward.

Chairman GILMAN. Mr. Bereuter.

Mr. BEREUTER. Thank you, Mr. Chairman.

Both the Chairman and I are interested in whether the North

Koreans have agreed to dates certain for talks on missiles. I would

also ask a second question. Since North Korea is the world’s worst

proliferator when it comes to missile technology, and since non-U.S.

independent sources indicate that North Koreans are working on

nuclear development programs elsewhere in Asia, to what extent

are we making that an element in our talks with them to try to

get a commitment that they are going to abandon this kind of third

country work on missile development and nuclear development?

Ambassador SHERMAN. Without getting into the specifics of the

issues that you are discussing——

Mr. BEREUTER. I just want to know if it is being taken into account—third country.

Ambassador SHERMAN. Yes, absolutely. The reason for the

Agreed Framework implementation talks, as I said, is to address

our concerns that we either cannot get to soon enough because of

the Agreed Framework implementation guideline and parameters,

or where other concerns have been raised that we want to address

as it was in the Kumchang-ni situation.

In the missile talks, absolutely. We are quite concerned about the

range of activities of North Korea. I cannot today give you dates

for the missile and the Agreed Framework implementation. As I

said earlier, Ambassador Kartman had to come back to us. Kim

Gye Gwan had to go back to Pyongyang. But we expect those dates

to be set very soon through the New York channel.

Mr. BEREUTER. Thank you.

Thank you, Mr. Chairman.

Chairman GILMAN. Thank you, Mr. Bereuter.

The Committee stands in recess until the vote is completed. We

will continue very shortly.

Ambassador Sherman, we thank you for your appearance.

Ambassador SHERMAN. Thank you.

Chairman GILMAN. I don’t think there is any need for you to

stay.

Ambassador SHERMAN. Thank you very much, Mr. Chairman.

Chairman GILMAN. Thank you.

[Recess.]

Mr. COOKSEY [presiding]. I would now like to welcome our second

panel headed by Douglas Paal. Mr. Paal is President of the Asia

Pacific Policy Center and a former senior staff member of Asian Affairs on the National Security Council during the Reagan and Bush

Administration. We are glad you could join us today to give us your

perspective on the Korean problem.

Mr. Paal will be followed by Dr. Mitchell Reiss. Dr. Reiss is the

Director of the Reves Center for International Studies at the College of William and Mary. We welcome your perspectives on the

North Korean policy dilemma as a former policy advisor at KEDO.

22

Finally, we will hear from Scott Snyder of the Asia Foundation.

Mr. Snyder represents the Asia Foundation in Seoul, and recently

published a book on North Korean negotiating behavior. We are

glad you could join us today to give us your perspective on North

Korea’s negotiating tactics and strategy.

Welcome to all of you. I know that many of you have appeared

before Congress previously. For the sake of time, I would request

that you summarize your remarks and have your full statement appear in the record.

Again, I would ask Members to withhold questions until all of

the witnesses on this panel have testified.

Mr. Paal, proceed.

STATEMENT OF THE HON. DOUGLAS PAAL, PRESIDENT, ASIA

PACIFIC POLICY CENTER

Mr. PAAL. Thank you, Dr. Cooksey. It is a pleasure to be here

to present the views, and I will submit a small statement for the

record.

Current U.S. policy toward North Korea remains a distasteful exercise in dealing with an obnoxious and threatening regime. With

little to no consultation with the Congress, the Administration

reached the Agreed Framework with North Korea in 1994.

Since then, the Congress has been forced to choose between overturning a major international undertaking by the U.S. Government, which in principle would be a harmful act to U.S. interests,

and appropriating taxpayer money every year for use by a despicable elite in Pyongyang. This is not a welcome choice, as you

well know.

You and your colleagues have tried to steer a course between

these alternatives and have succeeded to a limited extent in conditioning and monitoring the flow of food and heavy fuel oil to North

Korea. You have also succeeded in pressing the Administration to

organize a more comprehensive effort under the original direction

of former Defense Secretary Perry, and now under Ambassador

Sherman.

How successful has this approach been? In the short term, it appears to be a mixed result. The most likely source of full-scale plutonium production in the Yongbyon facility has ceased operations,

though not yet been dismantled or intrusively inspected. The North

has also momentarily ceased testing long-range missiles with a

hint of willingness to enter into a more formal moratorium.

In the longer term, however, we will not know probably for at

least 4 years whether the North has found another way to produce

nuclear weapons at sites away from Yongbyon. It stretches the

mind to imagine that a key element of the Agreed Framework—

satisfactory special inspections by the IAEA—will ever be intrusive

enough in a secretive society like North Korea.

To meet a high standard of investigation 8 months to 2 years of

inspections are likely to be required. It will be an important question during that period whether the North will bend to the international community in order to get the critical components necessary for the light water reactors under construction, or the international community, led by the United States, will bend its standards to keep Pyongyang cooperative.

23

Before turning to the outlook for the future, I would like to note

that I have great respect for the hard work and many frustrations

of the civil servants who have had to work this wet of problems

with North Korea. I was one of them myself in the Bush Administration. They have labored under policy constraints in the new Administration that leave few options, and all are suboptimal.

When the Agreed Framework was adopted, the choices before the

Administration were framed as either war or cooperation with

Pyongyang. The absence of major conflict since then, despite repeated skirmishes, is, of course, an accomplishment for which the

architects of the Framework claim credit. However, war has been

avoided on the Korean Peninsula since 1953 through effective deterrence. The cessation of long-range missile tests and the arrest

of the Yongbyon nuclear facility are two other outcomes of the

Agreed Framework. But as I have noted in my statement, these are

qualified successes.

The problem for the Congress and the next Administration is

that the Agreed Framework and Secretary Perry’s efforts have effectively postponed the ultimate confrontations with North Korea

over nuclear weapons and missiles, and they have yet to address

the fundamentally more serious problem of conventional arms on

the peninsula.

As Admiral Blair noted in his testimony here 2 weeks ago, despite years of poor economic performance and large-scale international food aid, Pyongyang surprised observers with the largest

winter military exercise in nearly a decade.

Alliance requirements have also limited the room for the U.S.

maneuver. The election of President Kim Dae Jong, with his strong

commitment to win over or undermine North Korea through blandishments and economic assistance, has made it more difficult for

any Administration to take a hard line with the North. There may

be some room, however, for a ‘‘bad cop, good cop’’ approach to

Pyongyang, with the U.S. playing a heavier role to the more pacifying role of Seoul.

The preconditions already exist in the different emphasis Seoul

and Washington—that these two capitals give to weapons of mass

destruction, Seoul playing this issue down much more than the

U.S. plays it up.

Going forward, the next Administration and Congress will need

to rig for heavy weather. Sometime in the first year and a half of

the next term, the IAEA will have to inspect at a level of intrusiveness that would be difficult in, say, Sweden, let alone North Korea.

The Iraqi experience is a daunting premonition of the North Korean situation. The level of political support for President Kim Dae

Jong’s approach to the North also appears to be diminishing in

South Korea as the economy there returns to health and the dividends of his Sunshine Policy remain lean.

The next Administration should expect to be tested in a confrontation engineered by the North, as President Clinton and South

Korean President Kim Young Sam were in 1993, with Pyongyang’s

threat to leave the Non-Proliferation Treaty. Here I will interject

that this political component to the behavior of North Korea, which

is very often missing from analysis and debate—they watch our

election cycle much more closely than they are perceived to do.

24

They have timed their challenges to leaders when they are new

in office and are unsure of themselves. This happened in 1993, and

President Kim of Korea and President Clinton of the United States

responded, in my view, against the previous Administration’s background fairly weakly.

In 1994, when the tensions were rising, they signed the Agreed

Framework on the eve of the Congressional elections, perhaps believing in their own minds, if not in the minds of the White House,

that this would somehow be a time to strike a deal when the Administration was looking for victory.

I believe that they are choosing the present time, the May visit

by a senior leader, to come and test the political environment in

the United States and see whether the Administration is going to

be hungrier for a deal when it is up against a political opponent

in our own domestic contests.

I fully expect Pyongyang to try to sweeten the deal or reduce its

cost by confronting the U.S. and Korean leaderships again with a

choice between confrontation or cooperation or classic appeasement.

It will be up to the new team to fashion an alternative to these

choices if we are to resolve our concerns about Pyongyang’s nuclear, missile, and conventional weapon threats.

Thank you.

[The prepared statement of Mr. Paal appears in the appendix.]

Mr. COOKSEY. Ordinarily, I would go to the other statements.

However, in statement four and statement seven, you seem to

question the position of the State Department. Is that assumption

correct? I get the impression that you don’t have as much confidence that they are doing the right thing as Ambassador Sherman did. Or do you?

Mr. PAAL. There are three choices I believe that the U.S. Government has as broad categories for dealing with North Korea. One is

a real confrontation. We go to the United Nations, we try to get

votes against them, we try to isolate them. That was the choice

that was put up before the President in 1993 and 1994. Another

option is to work out some kind of cooperative arrangement with

all of the agonizing that goes along with it, which Ambassador

Sherman and her team have had to go through.

I have always felt that there is a third option, which is simply

to turn a cold shoulder to the North on a political level, but to give

them opportunities to go into the international economic community. If they want to buy things, if they want to sell things, they

are welcome to do it. We could lift our sanctions on North Korea,

except for things such as military items, and transfer to the North,

and then say, ‘‘Here is our phone number. If you want to do business, come to us.’’

Instead, we find ourselves chasing after them and proceeding to

build a process-driven approach to North Korea, which yields extremely small dividends at an extremely slow pace, which is something that is easier for them to do because they don’t operate in

the democratic political environment where representatives, such

as yourself, have to go to the taxpayers and ask for money for a

despicable regime’s small lifting of its little pinky when it takes

from us.

25

Mr. COOKSEY. Good. Thank you. I am going to come back to you

shortly.

Dr. Reiss, If you would go ahead with your statement. Thank

you.

STATEMENT OF MITCHELL B. REISS, DIRECTOR, REVES CENTER FOR INTERNATIONAL STUDIES, COLLEGE OF WILLIAM

AND MARY

Mr. REISS. Thank you, Congressman. I would like to thank the

Committee for inviting me to testify here today on this important

issue.

I would like to submit my written testimony for the record and

then offer a brief summary of the major points.

There are currently three myths that influence U.S. policy toward North Korea and impede our ability to maintain stability and

security on the Korean Peninsula and in the region.

Myth number one: It is impossible to negotiate with North

Korea. Determining how best to deal with North Korea has posed

a serious challenge for the Clinton Administration. However, it is

possible to do business with Pyongyang, as proven by the experience of KEDO, an international organization that was created to

deal with the North’s nuclear weapons program by building two

nuclear power reactors in North Korea.

During the past 5 years, KEDO and the North Koreans have

reached agreements that have produced real and tangible progress

to implement this nuclear project. Many of these agreements deal

with highly sensitive national security issues, such as direct transportation routes from South Korea to North Korea, independent

means of communication from the work site to the outside world,

and blanket immunity from prosecution for all KEDO workers

doing business in the North.

KEDO has shown it is possible to engage North Korea in ways

consistent with U.S. national security interests. The KEDO experience also teaches the importance of demanding strict reciprocity.

There is no such thing as a free lunch when it comes to North

Korea. It is possible to take from the North, but only if you are prepared to give something in return.

It is essential that anyone negotiating with the North not be

afraid to walk away from the negotiating table. They should never

be or seem to be more eager than the North Koreans to reach an

agreement. Hard-headed engagement, which is strongly supported

by South Korea and Japan, can work. By keeping faith with our

allies, the United States will emerge in a much stronger position

should North Korea decide to remain a rogue state.

My final point here is that it is useful to talk with Pyongyang

if only to make absolutely clear to them the consequences their actions will bring. In other words, the United States has a strong interest in preventing North Korea from ever thinking that its provocative behavior would go unanswered.

The second myth is that the Agreed Framework nuclear deal can

be attacked without harming broader U.S. national security interests. Despite all of the criticisms of the Clinton Administration’s

handling of North Korea, the reality is that the next AdministraVerDate 11-MAY-2000 15:42 Mar 27, 2001 Jkt 065823 PO 00000 Frm 00029 Fmt 6633 Sfmt 6633 F:\WORK\65823 HINTREL1 PsN: HINTREL1
26

tion, whether Democrat or Republican, is unlikely to substantially

change U.S. policy.

If there is a Republican Administration come next January, I

would expect to see important changes in policy style and policy

execution, but little change in policy substance, with the possible

exception of addressing the North’s military posture along the demilitarized zone.

Indeed, leading Republican foreign policy experts advising Governor Bush have already gone on record saying it would be difficult

for a Republican Administration to overturn the current U.S. approach to North Korea.

These Republican foreign policy experts recognize that the

Agreed Framework and KEDO, Secretary Perry’s report, and South

Korean President Kim Dae-jung’s Sunshine Policy, provide useful

tools with which to deal with many of the challenges North Korea

presents. This is not to say that the current U.S. approach is ideal.

Far from it. It is the least worst option.

Before dismantling the current approach, it is essential to formulate a viable policy alternative. Suddenly reversing Washington’s

North Korea policy without such a policy alternative in place would

harm our relations with two key U.S. allies—South Korea and

Japan. The likely result of such behavior would be the weakening

of U.S. influence throughout all of East Asia and perhaps beyond.

Myth number three is that KEDO doesn’t need or deserve strong

U.S. support. According to published accounts, North Korea’s work

at the nuclear facilities covered by the Agreed Framework has halted. This nuclear freeze is being monitored not only by U.S. national

technical means, but also by international inspectors on the ground

at these sites in the North.

Without this nuclear freeze, which is due largely to KEDO’s ongoing efforts, it is estimated that Pyongyang would have the capability to build five to six nuclear weapons a year. In other words,

without the Agreed Framework and KEDO, North Korea could

have a nuclear arsenal of at least 25 to 30 bombs by this time.

Needless to say, this result would be profoundly destabilizing to all

of East Asia and detrimental to U.S. stature and influence in the

region.

Unfortunately, the KEDO nuclear project is an estimated 5 years

behind schedule. KEDO needs strong support from the Administration and from Congress to move the nuclear project forward. It is

useful to recall that under the Agreed Framework, North Korea

has pledged to come clean about its nuclear past, to disclose how

much weapons-grade plutonium it has separated, only after KEDO

completes a significant portion of the two nuclear reactors it has

pledged to build.

Many people, including myself and my friend Doug Paal here,

are skeptical whether Pyongyang will ever place all of its nuclear

cards on the table. We delay testing this proposition with each day

the KEDO project is stalled. We delay forcing North Korea to

choose which path to follow—the one leading to greater engagement with the outside world, or the one leading to greater isolation

and poverty with the North Korean regime.

In conclusion, I would like to leave the Committee with four key

points. First, it is imperative that the United States keep its eye

27

on the prize. Our overriding priority is to maintain security and

stability on the Korean Peninsula.

Second, we must keep solidarity with our allies—South Korea

and Japan. Anything that weakens our alliances weakens our security.

Third, we need to force North Korea to make a choice through

tough negotiating, so we can have a better sense of which U.S. policy is most appropriate for dealing with the threats that North

Korea poses.

Fourth, and finally, Congress has a crucial role to play in working closely to help this Administration shape our policy for North

Korea.

Thank you.

[The prepared statement of Mr. Reiss appears in the appendix.]

Mr. COOKSEY. Thank you, Dr. Reiss. It is my understanding that

you were working for KEDO, and you sat down across the table

from the North Koreans and negotiated the agreement that proceeded with KEDO.

Mr. REISS. Yes, sir. For 4 years I was the chief negotiator.

Mr. COOKSEY. Where was this where these negotiations—— Mr. REISS. The negotiations took place in North Korea and in

New York, where KEDO is headquartered.

Mr. COOKSEY. What is your opinion of the people you negotiated

with? What was their education level? Were they tenacious? Were

they honest?

Mr. REISS. They were extremely tenacious and difficult negotiators. I have explained in other addresses that I like to describe

the North Koreans as smart but not terribly sophisticated. A lot of

what we did was actually explain and educate the way the world

worked, international standards, technical advances. Their people

literally don’t get out a lot, and they are not as familiar as one

would hope in terms of what is current concerning technology levels, international standards, international practices.

For the first part of many of these negotiations we spent an enormous amount of time explaining and educating, providing them

with written documents and materials, so they could get up to

speed themselves.

Mr. COOKSEY. I will probably come back to some more questions

for you, but thank you, Dr. Reiss.

Mr. Snyder.

STATEMENT OF SCOTT SNYDER, REPRESENTATIVE OF ASIA

FOUNDATION/KOREA

Mr. SNYDER. Thank you very much for the opportunity to be here

to address the Committee. I am also going to summarize my statement by first focusing on contributions of the Perry review process.

I think the primary contribution has been the alignment of policies among the United States, Japan, and South Korea, in favor of

working with the North Korean leadership to engage in mutual

threat reduction in return for the creation of a more benign international environment necessary for North Korea’s regime survival.

The policy coordination effort itself is unprecedented and has potentially significant implications for the shape of future security relations in Northeast Asia, including perpetuation of U.S. alliances

28

with Japan and South Korea as part of the shaping of that security

environment.

Another result of the policy review process has been to underscore both the practical limits and essentially unsatisfactory nature

of the options available, and the difficulties of achieving a political

consensus on how to deal with North Korea in the United States,

Japan, and South Korea.

The true test of success or failure of the Perry process in the

long-term will depend on whether or not the following positive developments are sustainable—first, continued strengthened alliance

coordination among the United States, Japan, and South Korea to

prepare along the two-pronged path of engagement or confrontation; second, the ability of the Administration to move from the design phase represented by the policy review process to overseeing

an implementation process while maintaining bipartisan political

support; and third, an ongoing and regularized engagement with

North Korean leaders at higher levels that gives North Korea a

stake in and benefits from an engagement process, so that leaders

in Pyongyang recognize that they have so much to lose that they

cannot afford to walk away.

Although it is necessary to be realistic about the ability of any

external party to influence Pyongyang’s process of policy formation,

the relative influence of external actors and policies toward North

Korea clearly has increased during the past decade from a lowlevel.

This trend has critical significance for policy toward North

Korea, in my view, because it means that the focus of the debate

increasingly should not be over whether to provide external assistance, but over how to provide assistance and in what forms. To be

more specific, it seems to me that the issue of whether or not that

assistance is being provided in such a way that strengthens the

current regime is a critical criterion that one wants to look at in

terms of assessing those efforts.

So the critical objective of the U.S. and the international community is how to increase the pace of positive change in North Korea,

while the objective of Pyongyang’s leadership, focused on regime

survival, is to control the pace of change in ways that do not

threaten their political control.

In my view, the single criterion by which all assistance should

be judged is whether or not that assistance increases the pace of

change in ways that facilitate North Korea’s integration with the

international community, or whether that assistance actually reinforces policies or gives new life to systems in North Korea that

have already failed.

This benchmark has critical implications for how food assistance

is provided, how one thinks about issues such as sanctions lifting

for implementation of the KEDO project, and which actors inside

North Korea are best suited to serve as counterparts to external

parties.

The coordinated policy approach toward North Korea that the

Perry process has helped to put into place is important for several

reasons. First, it manages the differences in priority on specific

issues that may exist internally between the United States and

Japan, or the United States and South Korea.

29

Second, it reduces the ability of North Korea to exploit differences in the policy stances of allies.

Third, it underscores the importance of containing North Korea’s

destabilizing behavior while expanding the base of resources available as part of an engagement strategy with North Korea.

Fourth, it diminishes the possibility that precipitous unilateral

action against North Korea by any single party in the coordination

process will lead to the spread of broader conflicts in Northeast

Asia.

Here I would just note that the coordination process is demonstrated in the way in which the United States, Japan, and South

Korea are working to approach North Korea diplomatically. It also

has extended what I would call comprehensive deterrents against

North Korean destabilizing action. I think this is particularly evident in some of the Japanese attitudes in the national Diet, with

regards to some of the negative activities that North Korea is engaging in that impacts Japan in various ways that were mentioned

earlier in the session.

The fundamental irony in engaging North Korea is that North

Korea has also reached a point where its options have narrowed to

the single option of engagement with the outside world, despite

Pyongyang’s protracted search for alternatives to the kinds of engagement with the international community that will require real

changes in their own system.

The Perry process at this point is the best way to test North Korean intentions and frame hard choices for Pyongyang’s leadership.

Gradually, the realities of North Korea’s increased dependence for

regime survival on external inputs are being revealed. I think this

reality is well-known to North Korean diplomats, including one

that privately expressed to me his vision for improved U.S.-North

Korea relations as a process through which two parties, both in

danger of drowning, have to save each other.

So, in summary, North Korea’s system is caught in a contradiction between its long-standing revolutionary nationalist and socialist ideological aspirations, and the North Korean reality of a highly

traditional dynastic and feudalistic system, in the words of the

highest ranking defector, Hwang Jang Yop.

North Korea’s past approaches to the outside world have been

highly consistent, even if they are often self-defeating. These days,

North Korean approaches to the outside world are also increasingly

tempered by a mix of dependency, desperation, paranoia, and pragmatism borne of the reality of North Korea’s essential weakness

and isolation.

The primary achievement of the Perry review process is that it

has provided an opportunity to manage, and possibly avoid, renewed crisis with North Korea, but it does not guarantee that crisis will indeed be avoided. The next equally difficult task is to test

whether there is sufficient political will in Pyongyang to overcome

some of the differences between the United States, South Korea,

and Japan, by pursuing concrete tension reduction measures. In essence, the question of whether moving to a normalized relationship

with North Korea will also lead to a normalized North Korea in its

relations with the rest of the world.

[The prepared statement of Mr. Snyder appears in the appendix.]

30

Mr. COOKSEY. Thank you, Mr. Snyder. Just in summarizing your

message, you are saying that we should indeed provide external assistance that does not profit the regime or strengthen it, and yet

external assistance that will hasten this change from an old outof-date political and economic model to a modern world, 21st century global democracy, which they seem to be ions away from right

now. Is that, in essence, what you are—— Mr. SNYDER. That is right. External assistance can be used to facilitate changes in North Korea, although still at a very limited

level.

Mr. COOKSEY. Have you been to North Korea?

Mr. SNYDER. Yes, I have been there four times.

Mr. COOKSEY. Were you involved in the KEDO negotiation?

Mr. SNYDER. I have not been involved in the KEDO process.

Mr. COOKSEY. How did you happen to go?

Mr. SNYDER. These were academic study missions led in three

cases by Professor Robert Scalapino when I was working with the

Asia Society and at the U.S. Institute of Peace.

Mr. COOKSEY. There are some critics, and probably some who

may have a political agenda or bias, that feel that the United

States or this Administration has given too many concessions to

the Koreans which put us in a dangerous cycle of political blackmail.

You don’t have to tell me whether or not you agree with that or

not, but do you feel that there is a cycle going between them making demands and blackmailing us? You don’t have to tell me

whether or not you think it is right or wrong, but do you feel like

there is a cycle of political blackmail?

Mr. SNYDER. I believe that part of North Korea’s strategy in dealing with the United States is to try to draw resources to itself without giving very much in return. I would agree with some of the

comments that Mitchell Reiss made earlier on that note.

Mr. COOKSEY. How can we break the cycle?

Mr. SNYDER. The basic vehicle by which the—what North Korea

is doing in order to enhance its negotiating capacity with the

United States is trying to show that it has alternatives to negotiation. It is trying to demonstrate commitment and maintain control

over the negotiating agenda.

Our objective should be to cutoff the alternatives to a negotiation

process, and to try to maintain our own commitment and control

over a negotiating process that leads in the direction that we want

North Korea to go in.

Mr. COOKSEY. How long is your book?

Mr. SNYDER. Two hundred pages. I will be glad to give you a

copy later.

Mr. COOKSEY. I buy a lot of books, but I am so far behind.

It would be interesting to get through it or see as much as I

could. My great passion is reading.

Mr. Paal, do you think in light of the testimony from the three

of you that this Administration or a future Administration should

be tougher, should be more coercive? Is that the only thing that the

North Koreans understand?

Mr. PAAL. I would distinguish between the tougher word and the

coercive word. I think we have put ourselves at risk of many equiVerDate 11-MAY-2000 15:42 Mar 27, 2001 Jkt 065823 PO 00000 Frm 00034 Fmt 6633 Sfmt 6633 F:\WORK\65823 HINTREL1 PsN: HINTREL1
31

ties in East Asia if we go on a coercive, aggressive campaign

against North Korea. Deterrence has worked for almost 50 years

at keeping them from doing large-scale operations that would destabilize Northeast Asia. Deterrence is being maintained fairly effectively now by our Armed Forces and the overall structure of our

national defense strategy.

Going after them encourages the process of blackmail in the

sense of trying to win them over, get them to come to meetings. We

have spent a lot on food aid, and this has been very well documented. We have claimed humanitarian principles for the food, but

it always tied to a meeting or an element of the process of making

them look like they are being more cooperative.

This has become very obvious to North Korea. They don’t go to

meetings unless they are going to be paid off. Then you are told

this is a humanitarian act; it has nothing to do with the process.

I think we can get somewhere between the confrontational and

aggressive approach and the one where they are setting the terms

and driving us along. That is where we say, ‘‘Here is what we need.

Here is our phone number. Meanwhile, you are going to confront

a world that is pretty cold and unfriendly. Unless you change to

meet the terms of that world, we are not going to send you the aid

to save yourself.’’

Food aid is an interesting proposition. As you probably know

from previous testimony, North Korea cannot feed itself. It sits on

a slab of granite. It can’t feed 20 million people in that climate on

that soil.

Mr. COOKSEY. They never will be able to.

Mr. PAAL. That is right. They have to sell things or threaten us

to give them food. We want to get them into the position of selling

things, and to do that they have got to get into the international

marketplace. You know all of the complexities and the burdens on

societies to change and modernize and to adapt international

standards.

That is the path we want them to go on, and I think doling out

assistance is just—it implies a kind of blessing of the system as it

is, or at least it incurs the risk of some day discovering who you

were feeding who was oppressing somebody that was not getting

fed, when the records become clear. Or it implies an assumption

that the regime is going to fall.

We can no longer make the easy assumption the regime is going

to fall that was made in the early 1990’s. They have proved that

they can stand up, so we have to make an adjustment in the way

we approach it.

Now, as I said in my prepared statement, we are also coming up

to deadlines under the Agreed Framework which are going to force

us either to be straight about what we really need from North

Korea or change that and lead them to believe they can get a special standard and get by again.

Mr. COOKSEY. It seems to me, then, that there is a fine line between propping up this regime and playing the political blackmail

game. Do you think that is a proper assumption, or a correct assumption? Or let me ask you this: Do you think we are propping

up the regime at all?

32

Mr. PAAL. I think we clearly prop up the regime with the food

assistance. We are not the major contributors to that. China is the

most important contributor. I think that a new policy toward North

Korea would have as an important component a much more aggressive attempt to get the Chinese to take responsibility for the misbehavior of North Korea and to do more about correcting that behavior.

Ambassador Sherman gave a long list today of all of the good

things China is doing. However, those are all our assumptions

about China’s behavior. The Chinese have not demonstrated it, and

they have tried to stay out of the spotlight for a variety of reasons.

We have certain common interests with China right now, but it

is not long-term an abiding common interest. We separate very

quickly when you go down the list of our respective interests in

North Korea. I think we ought to be—at the same time we try to

construct a more stable relationship with China, we use that stable

relationship to get them to do more to help us achieve our objectives in North Korea.

Mr. COOKSEY. You said that North Korea is basically a country

of granite and no ground, no place for—— Mr. PAAL. That is an overstatement, but that is the—you get the

general point.

Mr. COOKSEY. They just do not have much land that lends itself

to farming, and they never will have. Do you think that is part of

the reason they have been such a belligerent country all of these

years, because they knew they couldn’t feed their people and they

were trying to control South Korea, or acquire South Korea?

Mr. PAAL. In the 1950’s and the early 1960’s, they were considered the most successful example of a socialist society. Their productivity had been propped up by barter arrangements with the

Communist Community of States, and they just fell behind. Their

belligerence goes back to the very beginning, and it has something

to do with the system that is in power in North Korea.

You have got 600,000 people in a nomenclature controlling the

other 21 million. That system is more what dictates the attitude of

the regime, I believe, than the physical conditions on the peninsula. The physical conditions are not much different in South

Korea, and we have a very different kind of country in South

Korea.

Mr. COOKSEY. Dr. Reiss, what can North Korea export besides

missiles?

Mr. REISS. They can export trouble.

Mr. COOKSEY. What good things can they export, that they can

get some hard currency from?

Mr. REISS. I think there are some natural resources that they

have—manganese. There are some other ores that have value on

the international market. I would like to ask the other people on

the panel if they can think of some other items. There aren’t too

many big ticket items that come to mind. I think ballistic missiles

are their single largest source of hard currency, aside from perhaps

counterfeiting or narcotics trafficking.

I think the big concern that we have is their ability to export ballistic missiles to countries in South Asia and the Middle East. Doug

was absolutely right in saying deterrence on the peninsula has

33

worked for 50 years. We have deterred a large-scale invasion of

South Korea by the North.

What we haven’t been able to deter is smaller incursions, terrorist acts, by North Korea. It is unclear to me whether our current

military posture, as strong as it is, without the Agreed Framework

and KEDO would be able to deter the North Koreans from building

a nuclear arsenal, from exporting nuclear material, putting it on

the marketplace along with ballistic missile technology, as they

have done in the past.

So deterrence is important. It is essential. However, I am not

sure that it addresses all of the policy concerns that the United

States has.

Mr. COOKSEY. Let me go back to the KEDO process, in view of

your role in the—or your formal role in that organization. If we are

not able to work out a nuclear liability for the LWR project, what

are the delay and cost implications, particularly if GE backs out?

Mr. REISS. I think, as I said in my written remarks, that there

would be enormous delays and increase in costs. I don’t have a cost

figure off the top of my head to give you. I can try and find out

and provide it to you and your staff. I think that it would cause

a significant delay. There might need to be some plant redesign

work being done. Whoever was found to replace GE, the same

issues of nuclear liability would arise.

Mr. COOKSEY. Who could potentially replace GE?

Mr. REISS. I think there is some thought that there is a Japanese

company or companies that could build similar technology for the

KEDO project.

Mr. COOKSEY. Does South Korea, Europe, China, or Russia—do

any of these countries have the potential to replace them?

Mr. REISS. I think it is possible technically that some European

companies may do so. I am not sure that the Russians, since they

operate a very different type of reactor system, would be able to

step in right away. Anybody who comes in, though, is going to have

to fit their product into the Korean nuclear standard plant. So,

there will be a lot of retrofitting, a lot of adjustments. It is going

to be a very difficult process to try to put in a new component into

an existing system.

Mr. COOKSEY. If their largest export is missiles, do any of the

three of you panelists think that there is any likelihood that they

would give up this single largest export, source of hard currency?

Mr. PAAL. I don’t see them doing that. In fact, they have an unusually good circumstance. As the Rumsfeld Commission showed,

you don’t have to test missiles to have them. You can do a lot of

tabletop testing. You can also sell a few. It reduces the price at

which you can sell them, because people are not as confident they

are going to get the bang for the buck. But if you can’t get them

anywhere else, you have still got your market.

So, North Korea, even with the moratorium informal or formalized, is still in a position to continue to market these missiles.

Mr. REISS. If I could offer a slightly different answer. I think I

would reply that we don’t know the answer to that because we

haven’t put a deal on the table with the North Koreans. In the

early 1990’s, there were reports that the Israelis had worked out

an arrangement to buy out some or all of the North Korean balVerDate 11-MAY-2000 15:42 Mar 27, 2001 Jkt 065823 PO 00000 Frm 00037 Fmt 6633 Sfmt 6633 F:\WORK\65823 HINTREL1 PsN: HINTREL1
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listic missile program, at least to prevent them from exporting to

other countries in the Middle East that threatened Israel.

There also was a statement in June 1998 in which the North Koreans strongly indicated that they are willing to sit down and negotiate a price for their ballistic missile program. The answer currently is that we don’t know whether that is sincere or whether

that is posturing, because we haven’t been able to do what we need

to do internally, the hard work of coordinating our side of the table

in order to engage seriously with them on this issue.

Mr. COOKSEY. Ambassador Sherman had made a statement that

she does not feel that they are likely to make a lot of progress in

a very rapid manner, that they think in terms of 40 years. I believe

it was—wasn’t that her? Do you agree with that assessment, that

they will outwait us—that they will be slower in their negotiations

process?

Mr. PAAL. They don’t have an election cycle and we do, and it

makes a big difference. It makes a big difference.

Mr. COOKSEY. Forty-year election cycle.

Mr. PAAL. That is right. It makes a real big difference in how

they can approach these issues. Also, they have—they see negotiators come and go. It is not just the election cycle. Our cycle

doesn’t fit neatly over the Japanese and South Korean cycles either. They have a strong incentive to play us off against each other

and pick and choose the times when they want to move.

Mr. COOKSEY. Do you think they are likely to fire another missile

across Japan in the next 6 to 12 months?

Mr. PAAL. I cannot prove the following statement, but I believe

it. I think some day we can prove it. That is I think China, in

pressing North Korea to stop making life worse for China, by testing missiles that are leading to the theater missile defense in

Northeast Asia, probably gave some pretty good tradeoffs to North

Korea in terms of assistance on their missile program.

This is so deeply embedded in the secrecy of the relations between those regimes, and so undetectable by the relevant intelligence means, that I clearly can’t prove that at this point. But it

is in the nature of the way they deal, that this is likely to be the

case, in my personal view.

Mr. REISS. I would be a little surprised if there was an actual

test, but I don’t think we should be surprised if they rattle the

saber a little bit and threaten to do it in order to ratchet up the

negotiating leverage in the talks with the United States, and perhaps also with Japan.

Mr. COOKSEY. Do you think the other missile firing was a saber

rattling, or do you think it was actually a test? Or was it all of the

above?

Mr. PAAL. It is difficult to untangle their motive. They had—an

important event took place, and there seemed to be an effort to

launch a satellite that would signal that North Korea had arrived

in some way. It serves the purpose of testing an international

range missile. It serves the purpose of marketing such a missile.

It gave them leverage in dealing with us.

They did things such as digging a hole at Kumchang-ni. Now,

whether that hole had a maligned intent in the initial phase or not,

we may, in fact, have surprised them by coming in with 300,000

35

tons of food to have a look at that hole in the ground when they

weren’t going to do anything but just have a hole in the ground.

It is very hard to understand what their intentions are.

Mr. COOKSEY. I did see photographs of that hole in the ground.

It was an interesting hole in the ground.

I do appreciate your coming, all three of you—Mr. Paal, Dr.

Reiss, and Mr. Snyder—to testify in front of this Committee. It is

one of the many problems that we have got to deal with, and it is

a problem that could impact everyone in the world. I think there

are going to be some rogue nations for the foreseeable future.

I did read something recently—that at the beginning of this Century, there was probably less than 5 percent of the world’s population that lived under a true democracy in which every segment

of society could vote. We were not part of that 5 percent.

Today, 48 percent of the 6 billion people in the world are in democracies and can truly vote. Hopefully, North Korea will get there

someday, but I think they will be the last to get there at the rate

they are going. I think that we are going to have some inherent

costs in that delay.

I personally feel that the quickest way to bring it about would

be for them to collapse economically, or something along those

lines. From everything I have gathered in the information that we

are presented, I don’t really know that there are people there that

would move in and be part of an insurrection, or be part of the

leadership, or have the background to be part of the leadership of

a nation that would be able to be players—reasonable, rational

players—with democracy as a political model and market forces as

an economic model.

Thank you for being here today. We are glad to have had all of

you here and look forward to seeing you again.

[Whereupon, at 12:14 p.m., the Committee was adjourned.]

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A P P E N D I X

MARCH 16, 2000

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