THE HOUSE INTERNATIONAL RELATIONS COMMITTEE SUBJECT: NORTH KOREAN MILITARY AND NUCLEAR PROLIFERATION THREAT CHAIRED BY: REP. DOUG BEREUTER (R-NE) WITNESSES: ROBERT GALLUCCI, U.S. AMBASSADOR AT LARGE EDWARD WARNER, ASSISTANT SECRETARY OF DEFENSE FOR STRATEGY AND REQUIREMENTS THOMAS HUBBARD, DEPUTY ASSISTANT SECRETARY OF STATE FOR EAST ASIAN AND PACIFIC AFFAIRS 2172 RAYBURN HOUSE OFFICE BUILDING AMB. GALLUCCI: Mr. Chairman, thank you very much. It's a pleasure to be -- have the opportunity to appear before the subcommittee. (Adjusts microphone.) Mr. Chairman, is this better? A little better? I'm going to be sucking on thismicrophone in a minute, Mr. Chairman. Mr. Chairman, I will try to stick to your 10-minute guideline. This is a complicated agreed framework, and many of the issues you raise are themselves complicated. But I will do the best I can. Mr. Chairman, members of the committee, the Clinton administration believes the approach we have taken in the agreed framework serves our interests, the interests of our allies in the region, and those of the international communit y.If it is fully implemented, it will create a nuclear-free Korean peninsula, erase an important threat to the international nonproliferation regime and potentially open the door to discussions on other issues of concern, such as theNorth's export of ballistic missiles. Since there's been a great deal of testimony recently, including Secretary Christopher's extensive remarks before the Senate Foreign Relations Committee, Iwould like to just briefly explain our approach to the negotiations and then elaborate a bit on why we believe the agreed framework is in our national interest. I'd also like to conclude with a few remarks on the status of our efforts to implement the agreement so far. Mr. Chairman, when the Clinton administration entered office in January of '93, it was immediately confronted with the problem of North Korea's nuclear program. That program, which had been underway for more than a decade, had the potential to produce hundreds of kilograms of plutonium and a significant stockpile of nuclear weapons by the end of this decade. Such a stockpile in thehands of a totalitarian regime that had engaged in aggression in the past, whoseconventional forces already threaten our close allies in the region and that hadseen fit to export ballistic missiles and mig ht well do the same with nuclear materials would have been intolerable. The administration's direct involvement with the nuclear issue began in March of'93, when North Korea announced its intention to withdraw from the nuclear Non-Proliferation Treaty. That declaration, coming after the IAEA was unable toresolve discrepancies in the way the North accounted for its plutonium stockpiles raised international alarm about North Korea's nuclear program. Some comments about this period of negotiations. First, throughout the period, our diplomacy to resolve the nuclear issue was conducted from a position of strength, including evident military readiness on the ground. When North Korea took the unacceptable step of unloading fuel from its five-megawatt reactor last spring, we were prepared to pursue a sanctions resolution in the Security Council and to put additional military forces in place to counter any hostile reaction, and the North Koreans knew that. When talks ultimately resumed, it was only after North Korea accepted our new terms; namely, that it not reload and operate its five-megawatt reacto r,not reprocess any of the spent fuel in the storage pond, and accept a continuing IAEA presence. Second here, we set ourselves the goal of neutralizing the North Korean nuclea r program in a way that went far beyond simply gaining North Korean compliance with its NPT safeguards. Our initial goal, when we began this progress -- excuse me, this process -- was to bring North Korea back into compliance with its IAEA safeguards obligations and to end its threat to withdraw from the NPT. But the North's interest in light water reactors opened the door to a more far- reaching solution; that is, freezing and ultimately dismantling its entire gas graphite nuclear program. Together with our South Korean and Japanese allies, we decided to pursue this more far-reaching objective because even under IAEA safeguards, these facilities posed a threat to our security and the security of our allies. They would have enabled -- these facilities would have enabled the North to continue to produce and separate large quantities of weapons-grade plutonium. As a result, when we went back to the table in Geneva last summer, we were determined to secure North Korea's return to its IAEA obligations and to dismantle North Korea's existing nuclear facilities. We succeeded in both of these objective s. A third point is that we conducted our policy and continue to do so in close consultation with our allies South Korea and Japan. These consultations have been unparalleled in my 20 years in government. They have been conducted throughembassies in capitals, working-level discussions, daily consultations through the negotiations, regular trilateral meetings, and contacts between the highest levels of all three governments. If I could briefly turn to the framework itself, the result of these efforts wasthat the U.S.-DPRK agreed framework was concluded, and the conclusion of the framework in turn resulted in an immediate freeze on North Korea's nuclear program. The freeze includes a prohibition on the reloading and restarting of the five-megawatt reactor and thus a halt to any further production of plutonium. It also includes sealing the reprocessing plant and requires the safe storage and eventual shipment of the existing spent fuel out of the country. This puts a stop to the separation of any more plutonium and makes provision for the removal of four to five bombs nuclear weapons worth of plutonium out of North Korea. The framework also freezes construction of the two large reactors, the50- and 200-megawatt reactors, which when completed would have produced enough plutonium for dozens of bombs each year. Finally, under the agreed framework, North Korea will remain in the NPT. It must take any measures deemed necessary by the IAEA, including special inspections, to fully disclose past nuclear activities. The North Koreans, of course, get something in return. In return, we will lead an international effort to provide North Korea with proliferation-resistant light-water reactors and heavy fuel oil shipments until those reactors come on line. In this context, I want to emphasize that no delivery of any significant nuclear components for the reactors will take place until North Korea complies fully with its safeguards obligations. Also, under the framework the United States and North Korea will move toward more normal relations, including the opening of liaison offices in each others capitals. However, under the framework, full normalization will only come when the DPRK moves to resolve other issues of concern to us. We have already identified for the North our strong concerns about its ballistic missiles exports and its forward destabilizing deployment of conventional forces. In addition to opening the way for the establishment of more normal political and economic relations between the United States and North Korea, the framework is intended to promote dialogue between North and South. As part of the framework, North Korea has pledged to resume dialogue with South Korea on matters affecting peace and security on the peninsula. We have made it clearthat resuming North- South dialogue is essential to success of the framework. Deputy Assistant Secretary Hubbard will have more to say on this point. In sum, the agreed framework is a good deal for us. It places the burden of up-front performance on North Korea, not on the United States. North Korea was required to freeze its nuclear program immediately. It has done that. In response, we have provided the North with a small amount of heavy fuel oil, begun to move towards establishing liaison offices, and very selectively eased commercial sanctions. We are also working with the North to place the existing spent fuel in containers for it to be ready for shipment out of the country. The most significant benefit for North Korea, construction of light- water reactors, will not come for several years, and sensitive nuclear components, as I said before -- for them -- will not be delivered until the North fully accounts for its past nuclear activities. The framework also places highest priority on the elements of the North's program that most acutely threaten U.S. and regional security. Our most immediate concerns were the North's current capability to produce more plutonium for nuclear weapons, the existing spent fuel, the operating five megawatt reactor and the reprocessing plant and it's potential ability to produce more in the future, the two larger reactors under construction; all these facilities are dealt with in the agreed framework. That document also requires the North Koreans to accept special inspections and to come clean on past nuclear activities, but not, obviously, immediately. Quite frankly, Mr. Chairman, while it is, and was, vital to achieve that commitment to special inspections, from a national security perspective, just when those inspections were conducted was less critical than the time-urgent need to stop any further production or separation of plutonium. The informationto be obtained from those special inspections will not perish during this time. Finally, we'll be able to monitor closely North Korean compliance with the agreed framework both through IAEA inspections and the use of our own national technical means. Moreover the structure of the agreed framework provides us with additional insurance, since the past implementation has defined checkpoints. If at any time North Korea fails to meet its obligations we can take appropriate action. Since the burden of up-front performance falls on the North if the agreement breaks down before the light water reactors are complete,we will still be ahead of the game. North Korea's entire nuclear program willbe frozen potentially for years. Mr. Chairman, while the conclusion of the agreed framework is an important step,successful implementation will be critical. For our part the United States intends to live up to it's end of the bargain if North Korea fulfills its commitments. Currently our overall assessment is that while we do have some concerns we are satisfied with implementations of the agreed framework. I'd like to very briefly describe the status of implementation activity to date. On the nuclear freeze. North Korea has frozen it's entire program, while the IAEA already has inspectors on the ground monitoring the freeze, that presence will be expanded. We understand the talks between the DPRK and the IAEA on expanding the agency's monitoring measure have gone well and hopefully will be completed soon. On spent fuel storage, the United States and North Korea haveagreed to a plan for safely storing the existing spent fuel unloaded from the five megawatt reactor last Spring. That fuel, if reprocessed, would have yielded sufficient plutonium for four to five nuclear weapons. The process of placing the fuel in canisters for safe storage and eventual shipment out of the country can begin this Spring and be completed by next Fall provided the Department of Energy's request for reprogramming is approved by Congress soon. On easing commercial restrictions, the United States and North Korea have eased restrictions on commercial transactions. On January 20th, the U.S. announced the easing of sanctions against North Korea including areas such as telecommunications, travel, and journalism and financial transactions. How we build on these first steps will depend on North Korea's performance on a wide range of issues of concern, two of which I've alluded to already. On liaison offices, the agreed framework calls for the United States and DPRK toopen these offices in each other's capitals after resolving technical and consular issues related to such an opening. These offices would be opened at thelowest level allowed under the Vienna Convention on Diplomatic Relations, and staffing will be kept to a minimum. After two rounds of expert-level talks, most of the technical issues and all of the consular issues have been resolved, but further meetings will be necessary. On the light-water reactor supply contract, under the terms of the agreed framework best efforts should be made to reach a light- water reactor supply contract by April 21st of this year. While discussions with the DPRK on the light-water reactor project have made progress, critical differences remain. The most important is which country will provide North Korea with those reactors. From the U.S. perspective, the only viable vendor is the Republic of Korea. The ROK, which has offered to play a central role in financing the light- water reactor project, and Japan, which will provide significant funding for the project, insists on the provision of South Korean reactors. This point has been emphasized time and time again to the North. The DPRK says it is concerned about the technical viability of those reactors, but more accurately, we believe the North finds it politically difficult to have South Koreans build reactors in its country. We plan to have another meeting with theDPRK on the light- water reactor project soon. There simply is no alternative to the South Korean reactor. On heavy fuel oil deliveries, as specified in the agreed framework, the United States delivered 50,000 tons of heavy fuel oil to North Korea in January. We do have some concerns about the disposition of a small portion of the heavy fueloil that we have shipped them for heating and power generation. We have no concern, however, that the oil has been used to power North Korea's military machines. One of the reasons we sent them heavy fuel oil in the first place is that it cannot be used in planes or in vehicles. We have raised this concern with North Korea and told them that we expect them to comply fully with the terms of the framework. On the establishment of KEDO, we have made good progress on establishing the Korean Peninsula Energy Development Organization, or KEDO. This is the international consortium that will have a key role in implementing the framework. It is KEDO that will ensure the provision of light-water reactors toNorth Korea, the heavy fuel-oil shipments, the safe storage of spent fuel, andits eventual shipment out of North Korea. KEDO's structure will also allow for broad international participation. The U.S., supported by its trilateral partners, has begun to approach other potential members of KEDO in Asia, the Middle East and Europe. We hope to hold a meeting of interested countries next month. We hope to hold a meeting of interested countries next month. Finally, on the North-South dialogue, the agreed framework obliges the DPRK to take steps to implement the North-South declaration on denuclearization and to engage in North-South dialogue. This dialogue is therefore essential if the framework is to be fully implemented. Even more to the point, however, North-South dialogue is the key to creating a solid, stable state of peace on the Korean peninsula. So far, the DPRK has not taken any steps to fulfill its obligations under the framework to engage in North-South dialogue. We are usingevery possible occasion to emphasize to the DPRK that dialogue is vital to the full implementation of the framework. The U.S. will remain in close consultations with the ROK on this issue. Mr. Chairman, thank you very much. REP. BEREUTER: Thank you, Ambassador Gallucci. I thought it was appropriate that you have a chance to complete your full statement in some detail so that members of Congress will understand it and so that the American public will havea better understanding of the agreement and the context. Accompanying Ambassador Gallucci today is another key member of the U.S. negotiating team, the Honorable Thomas Hubbard, deputy assistant secretary of state for East Asia. We did not ask him for a prepared statement, but perhaps to speak to the broader context of this agreement with respect to U.S.-Korean peninsula issues, we recognize you for two or three minutes or whatever you needto adequately supplement the remarks of the ambassador and provide us the regional context. Secretary Hubbard, you are recognized for your remarks. MR. HUBBARD: Mr. Chairman, thank you very much for giving me the opportunity to add just a few brief words to what Ambassador Gallucci has said. I wanted to behere and to speak in part in order to stress the point that throughout this process of negotiating with North Korea, this has been a team effort for the Department of State. As you mentioned, I have been an integral part of the negotiating process, have been with Ambassador Gallucci throughout and have had a few ventures of my own in negotiating with the North Koreans. My boss, Assistant Secretary Lord, has been a key member of the policymaking process, and in fact he would be with you here today if he were not right now in Seoul, in fact consulting on how we and the ROK can work together to implement the agreed framework and to achieve our broader objectives on the peninsula. Indeed, our objectives are broader than just implementing the agreed framework. The framework is, of course, an integral, critical effort to implement our -- toachieve our nonproliferation objectives, but is also an important step in a process in which the U.S. and the ROK work together toward our common goal; thatis peace and security on the Korean peninsula. As Ambassador Gallucci has said, the agreed framework obliges the DPRK to take two specific actions in relation to the ROK. One, to take steps to implement the North-South joint declaration on the denuclearization of the Korean peninsula, and two, to engage in North- South dialogue. South-North dialogue istherefore essential if the framework itself is to be fully implemented. But it is probably even more important to note that South- North dialogue is key to a broader effort to create a solid, stable state of peace on the peninsula. The dialogue will, of course, create an atmosphere -- we hope create an atmosphere -- that will be conducive to the expanded interaction between South and North that will be required to carry out the projects envisaged under the .ramework. And here let me stress again that one of those projects is the provision of South Korean reactors to North Korea, and that is an essential part of this process. And here let me stress again that one of those projects is the provision of South Korean reactors to North Korea, and that is an essential part of this process. It is a matter of continuing concern that the DPRK has not yet taken any steps to fulfill its obligations to engage in North-South dialogue. We are using every possible occasion to reinforce to the North Koreans that dialogue is vital to the full implementation of the framework. And as I say, we remain in the closest of consultations with the ROK with Assistant Secretary Lord there right now. Ambassador Gallucci has also described our efforts, our steps to comply with theagreed framework's provisions regarding the establishment of liaison offices between the U.S. and the DPRK. We believe those liaison offices will facilitatecommunication, will help us deal with issues like that of the helicopter incident without having to send senior officials off to North Korea. But let me stress that we will not establish these offices, we will not improve our relations with North Korea at the expense of our vital alliance and our vital relationship with South Korea. We do plan to move forward with the liaison offices when we resolve the technical issues. We have not yet reached that point. We will not go beyond that, however, without improvement across a broad range of issues. Ambassador Gallucci has pointed out some of those issues -- missile proliferation, conventional troop deployment. Let me add two others to those, that is progress on MIAs and genuine progress in North-South dialogue will be needed if we are to move towards full diplomatic relations. Let me finally stress one other issue, it's an issue that is separate from the agreed framework but a very important one to us. That relates to the status of the armistice, the status of the Military Armistice Commission. Of course that was -- the spotlight was on that during the helicopter incident, but it is a matter of ongoing concern to us. For several years now, the DPRK has been attempting unilaterally to destroy the armistice mechanism set up in the armistice agreement which ended the Korean War. This runs counter to the North-South Agreement on Reconciliation, Non-aggression, and Exchanges and Cooperation signed in December 1991, which states that it is the responsibility of the two Koreas to transform the armistice regime into a firm state of peace. It also commits both Koreas to abide by the present armistice agreement until a stable peace can be created. The armistice mechanism consists of the MilitaryArmistice Commission, the MAC, and the Neutral Nations Supervisory Commission, or the NNSC. The function of the latter, the NNSC, is to oversee the cessation of the introduction of reinforcing military personnel and equipment and to conduct investigations of armistice violations. That is an institution that is now threatened. The DPRK has failed to nominate a successor to Czechoslovakia as a member of theNNSC and has persuaded the Chinese to recall their representatives from the Military Armistice Commission. Now the DPRK is threatening to evict the Polish NNSC contingent. We have forcefully told Pyongyang that such an action would bea violation of the armistice agreement, which has maintained the peace now for more than 40 years. If Pyongyang hopes that its attempts to destroy the mechanism set up by the armistice agreement will lead us to enter into bilateraltalks on a peace treaty, it is badly mistaken, and I made that point while I was in North Korea over the Christmas holidays. Peace on the Korean peninsula,as we have always maintained, is a matter for Koreans, North and South, to settle. The U.S. is willing to assist if both Koreas desire it, but we will not negotiate a bilateral peace accord with the DPRK. Thank you very much. REP. BEREUTER: Thank you very much, Secretary Hubbard. We'll now turn to Dr. Edward L., Ted, Warner, who is the assistant secretary of defense for strategy and requirements. After graduation from the Air Force Academy, Dr. Warner served 20 years in the U.S. Air Force with a very distinguished record in very responsible positions. Before his nomination, he was on the Rand Corporation organization roster as a senior defense analyst specializing in matters relating to the Soviet Union and East-West arms control issues. Secretary Warner, we're pleased to have you here to testify. You may proceed asyou wish. MR. WARNER: Thank you, Mr. Chairman. I appreciate the opportunity to come before you and the other members of your subcommittee and the larger committee to discuss at your request various dimensions of the military balance, the security situation on the Korean peninsula. In particular, I will address four issues. One is the posture of United States and Republic of Korea forces under the Combined Forces Command and our basic approach to deterrence and defense in that critical region. Next I will discuss steps that were taken by the United States and South Korea and, through their military command during the buildup of the crisis last year, as we made preparations to enhance our defenses and did enhance our defenses as we were confronting the difficult diplomatic negotiating tasks of convincing theNorth Koreans to halt their nuclear weapons program. I will then speak for a couple of minutes on the military risks we see in the years ahead, during the process, we hope, of following through on the implementation of this agreement, and finally I will speak briefly on the impactof the possibility of North Korean nuclear capability upon our military planningin this critical region. After that, obviously, I'd be happy to answer your questions. On the question of sustaining deterrence and defense on the Korean peninsula, I have no doubt that the security partnership with the Republic of Korea and thejoint military capabilities that we field together to support it, in our view, are the key to peace and stability in Northeast Asia. Next I will discuss steps that were taken by the United States and South Korea and, through their military command during the buildup of the crisis last year, as we made preparations to enhance our defenses and did enhance our defenses as we were confronting the difficult diplomatic negotiating tasks of convincing theNorth Koreans to halt their nuclear weapons program. I will then speak for a couple of minutes on the military risks we see in the years ahead, during the process, we hope, of following through on the implementation of this agreement, and finally I will speak briefly on the impactof the possibility of North Korean nuclear capability upon our military planningin this critical region. After that, obviously, I'd be happy to answer your questions. On the question of sustaining deterrence and defense on the Korean peninsula, I have no doubt that the security partnership with the Republic of Korea and thejoint military capabilities that we field together to support it, in our view, are the key to peace and stability in Northeast Asia. The administration is most certainly committed to sustaining our alliance with the Republic of Korea. It is by sustaining that alliance, and by enhancing our capabilities that we believe that we provided incentives to the regime in Pyongyang, first toconclude -- and we will continue to provide incentives for them to follow through on the framework agreement. The framework agreement, as Ambassador Gallucci and Secretary Hubbard have noted, has in fact halted at this point the North Korean's nuclear weapons program, and it promises to fully dismantle that if implemented over the next several years. It has also opened the way to more constructive policies that might be followed by the DPRK. It remains to be seen, however, whether Pyongyang will take advantage -- will take this path toward more constructive policies in many other areas even as and if it follows through on the framework agreement to dismantle its nuclear program. The fact of the matter is that the North Koreans still pose a very substantial and serious military threat to peace and stability in that part of Asia and particularly -- directed against our allies to the South. The bulk of the 1.1 million man armed force of North Korea is deployed forward within about 100 kilometers of the demilitarized zone, separating North and South. This and a set of preparations that have systematically been implemented by the North Koreans over the last 15 years give them the capability to mount an attack with relatively short warning. That is, with preparations that could be counted in hours or only a few days. And the North Koreans have continued their pattern of enhancing their military capabilities through sustained modernization efforts that date back many years, with a particular focus on the deployment of new artillery and multiple-launch rocket systems with their forward- deployed forces. Arrayed against the threat from the North we have the combined forces of the Republic of Korea and the United States. For the ROK that means about 640,000 active military personnel and over a million in their ready reserve. For the United States, we have over 37,000 troops deployed on the Korean peninsula, including the two brigades of the 2nd Infantry Division, four squadrons of land-based air power, an array of sea-based capabilities in the immediate region, and other capabilities nearby in Japan. The nature of the North Korean threat demands that we sustain our military forces at very high state of readiness. Both United States forces and those of the Republic of Korea are, in the view of all American observers, including most recently the testimony of General Luck before the Congress within the last several days, that these forces are highly ready, their morale is high, they arewell led, and they are well equipped. This posture provided the incentives thatI spoke to earlier, in our view, to help motivate the North Koreans, number one,not to initiate any war in that critical region, and number two, to in fact follow the path that they have followed with regard to their nuclear weapons program. The key elements of our defense posture -- I mean, we can talk about sort of thestanding state of our forces. Let me speak for just a moment about our campaignplans and how we would address the possibility of aggression from the North. Wemust, and have been considerable efforts to get reliable warning of an impendingNorth Korean attack. Having received that warning, should it occur, it will be imperative for the United States to commence as rapidly as possible reinforcement of the U.S. forces on the Korean peninsula and in the region. We would intend to mount a forward defense, a very vigorous forward defense, against the attacking North Korean land forces and any other attacks that they might tend to mount. The bulk of this effort, this initial land force defense, will be borne by the army of South Korea with strong assistance from the American forces on the scene, and particularly from American air power. We would also have to conduct defense of critical assets and critical facilitiesin the rear within the Republic of Korea, key sea ports from which and throughwhich reinforcements need to flow -- various air bases and the like, and we haveto defend them against a very large special operations force that has been fielded by the North, and the possibility of both air and missile attack. A particular challenge associated with the forward-defense is the need to deal with and suppress effectively the massive deployments of North Korean artillery and multiple rocket- launch systems near the DMZ. And finally, we would intend in the initial defense period to mount a wide-ranging set of air attacks in the near and deeper rear to unhinge their would-be offensive operations. We are confident that we could stop a North Korean offensive within the opening weeks of such a war well short of its objectives. Having halted the North Koreans, the subsequent phases of the war over the next several weeks would be first a phase in which we would be engaged in heavy bombardment against a whole variety of targets -- military- related targets and those related to the political and economic infrastructure of the North -- and during that period bombardment, we would be flowing our reinforcements to prepare the way for the launching of a decisive counteroffensive, which we are convinced would expelthe North Koreans from any captured territory, and then go on to decisively defeat them. We believe that the current deterrent balance between the two forces I've described -- and in light of the campaign plans that I've just run through -- are in fact capable of meeting the wartime mission. General Luck testified in recent days, in his view, that Republic of Korea and U.S. forces are ready andable to defeat North Korean aggression and achieve favorable war termination objectives, should deterrents fail. Having said all that, let me spend just a couple of minutes talking about step s we took last year to improve our defense posture in Korea as we were engaged in negotiations, but faced with actions on the part of the North Koreans where they had -- were in the process of withdrawing from the NPT, went ahead and de-fueled the five megawatt reactor, and were on the brink of what they declaredwould be the beginning of a reprocessing of the load of spent fuel that had beentaken from that reactor. REP. BEREUTER: It's important, but could you give us a fairly brief summary of it? MR. WARNER: Yes. Quite briefly, the things that we did were as follows: We deployed a Patriot air and missile defense battalion onto the peninsula in the opening six months of last year. We replaced 36 Cobra helicopters with the more modern Apaches. We replaced the older M-113 armored infantry vehicles, armored personnel carriers, with 28 Bradley modern infantry fighting vehicles. We incorporated GPS receivers into the maneuver elements of the second infantry division, and we made a series of command and control upgrades, both for our ground forces and for our air forces, and particularly the ability to operate --to interoperate effectively, and to construct and pass the daily air tasking order. Last spring, however, despite all those efforts, the set of activities I spoke about didn't -- did occur in the late spring and on into the early summer. And as we reached midsummer, we were moving toward and taking diplomatic steps to prepare for the imposition of sanctions against the North Koreans. In that period we consulted closely with not only General Luck in Korea but the other commanders-in-chief of relevant theater commands, and it was literally on the eve or during a discussion with the president in the White House on a given day about additional measures that we intended to take militarily should we move to sanctions that we achieved the breakthrough in which the North Koreans agreed tonot proceed with reprocessing and to reopen negotiations. During those deliberations, Secretary Perry and General Shalikashvili had taken to the president and members of this Cabinet a set of options for further augmenting our forces in the region. We were prepared to add over 10,000 military personnel and additional aircraft and other military equipment in orderto enhance our military capabilities as we move towards sanctions. The North Koreans had stated that any move toward sanctions would be in their view tantamount to an act of war. While we were by no means intimidated by this rhetoric, we had to take it sufficiently seriously that we were prepared to evenfurther augment the very substantial military capabilities that we have in the region. Let me turn for a moment now to the question of future risks as we look ahead during the period of implementation of the agreement. We cannot, of course, knowwhether the North Koreans will follow through on this multi-year phased step-by-step agreement, and given the fact that their military capabilities, their conventional military capabilities are being maintained at the current high rate and continue to be modernized, we must continue to sustain our military capabilities and to augment them further. Let me mention just a few things that we have in mind in that regard. During this year, we are going to preposition the heavy brigade set of equipment for anadditional brigade, the third (fillout ?) brigade for the Second Infantry Division, on the Korean peninsula. We are also moving ahead with an upgrade of the M1 tanks that are available to the Second Infantry Division, giving them a more heavily armored and an up-gunned variety of that tank. We are also moving ahead over the next couple of years with swapping out our self- propelled artillery to our more modern version of the 155 howitzer. At the same time, the Republic of Korea is engaged in a sustained force improvement program thatwe've been working hand in hand with them for several years. It includes tanks, artillery, infantry fighting vehicles, night vision capability, the procurement of modern F-16 aircraft, new coastal defense ships and generally improving their capability to carry out modern mechanized armor warfare. A final point I'd make in that regard is we have worked very closely with the South in improving the realism of the training that is available to them and available to us to make us even more prepared in case it would be necessary. Let me now speak a -- say a few words on the issue of the impact of the possibility that the North Koreans may possess a nuclear weapon -- REP. BEREUTER: Mr. Secretary? MR. WARNER: -- and what this does -- REP. BEREUTER: Mr.Secretary? MR. WARNER: -- with regard to our planning for wartime operations in Korea. REP. BEREUTER: Mr. Secretary, I'm worried about our time -- MR. WARNER: This is the last -- REP. BEREUTER: All right. MR. WARNER: This is absolutely the last part, sir. As has always been the case, we have the full range of U.S. military capabilities available to us to support our deterrence and defense efforts in Korea and elsewhere. With these, we can assure that no adversary -- including North Korea -- can ever accrue any advantage from using weapons of mass destruction -- including nuclear weapons -- against the forces, people or assets of the United States or its allies. While we do not know whether the North Koreans actually possess an operational nuclear weapon today, the framework agreement has contained the growth of any nuclear -- North Korean nuclear capability. In conclusion, let me simply say we have a very strong defense posture on the Korean peninsula. Our cooperation with the Republic of Korea under the Combined Forces Command remains stronger than ever. We believe that our forces are at a state of extremely high readiness to support the security needs in thatarea and our continued operations in Northeast Asia. REP. BEREUTER: Thank you very much, Mr. Secretary. We will operate under the normal five-minute rule. I'll defer my questions, at least for the moment. And I'll turn first to Chairman Roth for his questions. REP. TOBY ROTH(R-WI): Well, I thank you, Chairman Bereuter. And it's wonderful to see you in that chair. REP. BEREUTER: Thank you. REP. ROTH: Ambassador Gallucci, you -- I had some high-ranking Koreans, South Koreans, in my office recently, and they told me they weren't sufficiently consulted. I want to ask you this: You said in your testimony that there is no alternative to using South Korean reactors. Is it fair to say that if North Korea rejects the use of South Korean reactors then we do not have an agreement? AMB. GALLUCCI: Mr. Roth, I don't know which high-ranking South Koreans you had in your office, but the high-ranking South Koreans who are members of the government of South Korea have not expressed to us an unhappiness with our consultations to date, and as I said, I really do believe we have stayed very close to our South Korean allies and that they have been with us every step of the way, and I did want to make that point. With respect to your question about the -- our position on the South Korean reactor being the reference reactor for the light-water reactors to be built in North Korea under the agreed framework, it is our position, and has been sincethe summer and through the negotiations, that the reactor project must be, as wesay, technically, politically and financially viable. We could find no -- repeat -- no alternative to the model of a South Korean reactor being the reference reactor. We have made that clear to the North Koreans throughout. They understood that when they signed the agreed framework. We have never deviated from that position and we have no intention of deviating from it. REP. ROTH: So the answer is yes: No South Korean reactor, no agreement. AMB. GALLUCCI: Mr. Roth, I want to make clear that one of the things that the DPRK gets as a result of this agreed framework is the light-water reactor project, 2,000 megawatts of light-water reactor generating capacity. If the North Koreans abide by the other provisions -- REP. ROTH: Mr. Ambassador, I'm sorry, I'm not asking you how a watch is made, I'm just asking what time it is. AMB. GALLUCCI: Yes, I understand that, Mr. Roth. And I'm going to ask you to bear with me, and I'll try not to go into any more details on the wristwatch. REP. ROTH: Well I've got two questions and I only have five minutes, though. AMB. GALLUCCI: It's very important that I make this point, and I ask, please -- REP. ROTH: Okay. AMB. GALLUCCI: -- that I be allowed to finish it. If the DPRK does not accept the South Korean reference reactors but maintains the freeze on its nuclear activity, and therefore is in compliance with the agreed framework, that is a situation in which we can continue to operate. In other words, the benefit to them is a light-water reactor project. The failure of the North Koreans to accept that model at this point is not an obstacle to implementation from our perspective. REP. ROTH: Well wait a minute. Let me see this. You refer to the -- in your statement, to the Nuclear Nonproliferation Treaty. Now you're saying if they live according to those agreements. Well Iraq, you know, was a Nuclear Nonproliferation Treaty signature. Iran claims to be a member, but we believe they're developing a nuclear weapon. In today's world, aren't we being a littlenaive if we say that as an NPT member that you're -- (word inaudible) -- nuclearweapons? AMB. GALLUCCI: Mr. Roth, we have never, in my 20 years in government, been naive about membership in the Nonproliferation Treaty. Libya is a party to the Nonproliferation Treaty, Iraq is a party, Iran is a party, and we have known that North Korea is a party. We believe there are nuclear weapons intentions in each of those countries, and have been. The Nonproliferation Treaty has manybenefits, notwithstanding the fact that some members who maintain their obligations under the treaty have intentions inconsistent with the purpose of the treaty, and that is that the safeguards that are applied by the IAEA can be a monitoring vehicle to assure that they are not doing anything inconsistent with the treaty. As it turns out, our experience in Iraq increased the ability of the IAEA to do such monitoring. It is because of those safeguards that were provided for underthe treaty that North Korea was discovered to have incorrectly described the amount of plutonium it had separated. The safeguards performed a very useful function. It's not naive at all. REP. ROTH: Well, to put it bluntly, really what difference does it make? You're saying it gives us a chance to do some research or some background, but it doesn't assure us that just because they're members of the Nuclear Nonproliferation Treaty, that they're abiding by the accords in the treaty. MR. GALLUCCI: Mr. Roth, certainly the commitment of a country to the Nonproliferation Treaty in and of itself does not mean that that country's abiding by the treaty. We look for verification measures, and the IAEA safeguards provide us with one such measure. REP. ROTH: Well, as I understand it from our question here, that if the South Korean reactors are not used, no agreement. That's my interpretation from your answer. MR. GALLUCCI: Mr. Roth, I want to say again, without building another wristwatch, that the benefit to the North Koreans under this agreement, one of the principal benefits is the provision of two light-water reactors. The only light-water reactors that we, the United States together with our allies and others, would propose to build are the South Korean reference reactors. In the meantime, until that issue is resolved, what we are looking at is compliance by North Korea with those provisions which are a benefit to us, principally the freeze on their nuclear activities. And as long as those provisions are in place, then they are abiding by the agreed framework. Our ability to go ahead and provide them with one of the things that they get under the agreement will depend upon their willingness to accept the South Korean reactor. No other reactor is on our mind to be provided to North Korea. REP. ROTH: Thank you, Mr. Chairman. REP. BEREUTER: Thank you. Mr. Ambassador, would it be fair to say that as long as they're living with the nonproliferation issues that are important to us, if they choose not to build --accept the Korean reactors, South Korean reactors, that's their loss, but we're not going to replace them with reactors from other sources as part of our agreement? AMB. GALLUCCI: Mr. Chairman, that's a much better way of summing up what I was trying to sum up. That's right. REP. BEREUTER: I yield five minutes to the gentleman from California, the ranking member of the Asia Pacific Subcommittee. REP. HOWARD BERMAN (D-CA): In other words, you're not trying to jam a Western-financed, Western-built light-water reactor down their throats? AMB. GALLUCCI: That's correct, Mr. Berman. REP. BERMAN: One of the witnesses who's going to appear on the second panel has written in the past, and he's essentially said the agreed framework is worth pursuing and worth implementing, but it's not likely to succeed or in the end advance U.S. national interests unless it's subordinated to a more comprehensive policy towards the Korean peninsula and Northeast Asia. You touched on some of that in your statement -- the issue of conventional forces, the issue of exported missile technology, the issue of the nature of the regime in North Korea. And then he points out the problem is in the end of the day if there is a failure to reduce the North Korean conventional threat while reducing the barriers to trade and investment, that runs the risk of merely strengthening an enfeebled regime and increasing the threat to South Korean and U.S. forces stationed in South Korea. What's your opinion of that analysis? AMB. GALLUCCI: First, Mr. Berman, we -- I think as Secretary Hubbard made clear -- are very aware of the context in which the nuclear issue resides, in terms ofNortheast Asian security. And we believe the framework -- while it places the nuclear issue center stage, as it ought to -- envisions both the rapprochement between North and South as essential to ultimate implementation, and places on the table -- by reference to the vehicle for improved North Korean- U.S. relations -- the other issues of concern to us. And I began with two of them: ballistic missile program and forward deployment of their conventional forces. So, I believe we are very aware of -- generally of the context. With respect to the argument that as barriers are lowered and as restrictions orsanctions are eased on trade, the North Korean regime will be made stronger and therefore more viable, and therefore pose a continuing threat to the South and our allies. I would argue that it is probably the other way about. Certainly, we could not afford to wait for the North Korean regime to simply crumble, and while we wait watch a nuclear weapons program come to be fully materialized together with a ballistic missile program. We needed to act and we did. I would go on to argue that the economic opening -- which I would note the SouthKoreans are prepared to support as well, and South Korean businessmen are makingapproaches to the North and other businessmen are doing the same -- we believe will open the North Korean system and make it a lot less likely that a totalitarian regime would be able to sustain itself than would be the case it ifit remained isolated. REP. BERMAN: I will not apply any of those answers to the question of U.S. policy towards Cuba. (Laughter.) AMB. GALLUCCI: And I will not comment, Mr. Berman. REP. BERMAN: One last question. What's going on in North Korea? Maybe this is to you, Mr. Secretary. What's the status of Kim Jong Il? Why hasn't he assumedall of his father's titles and powers? What's a good monarchy for if you can't assume those powers? What conclusions should we draw about power in North Korea as a result of the downing last December of the U.S. army helicopter andthe struggle to secure the release of the surviving pilot? MR. WARNER: Mr. Berman, you notice that Mr. Gallucci passed the hard question to me -- REP. BERMAN: I know, I -- MR. WARNER: And I'm afraid I'm not going to give you a very clear answer. We don't know. REP. BERMAN: Well, ask him what's happening to Saddam Hussein? MR. WARNER: We don't really know what's happening in North Korea. It is unusual -- REP. BERMAN: Well, somebody's guessing over there, aren't they? MR. WARNER: It is strange the Kim Jong Il has not assumed all of the offices that normally would be associated with what we believe is his power in North Korea. But all indications do suggest that he is in charge. What we have seen, I believe, in our negotiations in Geneva, as well as in the helicopter incident is a policy making process that seems to work and in the final analysis seems to bring logical decisions. What I think we saw in Geneva was the fulfillment of the line handed down and the line to which Kim Il Sung agreed with us in the wake of former President Carter's visit to Pyongyang. There were some ups and downs, there were some tactical moves and all of that, but finally I think that they fulfilled that line. In the case of the helicopter incident, I think various parts of thefabric of North Korea, the military, tried to use the incident for various reasons. The North Koreans can be greedy, I think they tried to use that incident to get some more concessions out of us -- unsuccessfully. But in the final analysis they made the right decision, they finally did release Airman Hall. So we, based on our own experience, see a policy making process that seems to be working and have no reason really to question what all North Koreans say to us, that is that Kim Jong Il is in power. REP. BEREUTER: The time of the gentleman has expired. I will deviate from the normal alternating in order to recognize the ranking member of the other sub committee for five minutes. REP. GEDJENSON: Thank you, Mr. Chairman. Are we keeping -- are we paying enoughattention to the possible fissionable material that's coming out of the former Soviet Union? I mean, are we shutting down an operation here with a focus that kind of watches what they're doing internally, but the -- at least the stories of fissionable material out of the former Soviet Union, the loss of control of it -- could the North Koreans simply be changing their -- where they get their fissionable material, from trying to develop it domestically to purchasing it? Or do we have adequate safeguards in that area? AMB. GALLUCCI: Mr. Gejdenson, we have been working for some time with the Russian government to assure ourselves that the disposition of their nuclear weapons, as they move to dismantle them, is well tracked, that the material thatcomes out of the nuclear weapons -- indeed, the fissile material that is contained in their civilian fuel cycles, plutonium and highly enriched uranium -- is accounted for, and also, I might add, that the scientists and engineers who were employed for all those decades in the program are usefully engaged in non- weapons work to the extent we can insure that within Russia. We have programs -- much of this under the Nunn-Lugar legislation -- with the Russians. And I think we're doing everything we can together with the Russians to assure ourselves that that's all true. REP. GEJDENSON: You're confident we're successful? AMB. GALLUCCI: In the end, Mr. Gejdenson, I don't want to make you feel too relaxed on this subject. It is one that we have to continue to work hard on. The time for any country -- whether it be North Korea or a terrorist group --would take to acquire a weapon is very much determined by the availability ofthe fissile material. And that's something we have to watch very carefully. REP. GEJDENSON: In the agreement with the North Koreans, do we have adequate safeguards for the North Koreans' bringing in the fissile material from outside its own borders? AMB. GALLUCCI: What we have, Mr. Gejdenson, is language that commits the North Koreans to abide by IAEA safeguards with respect to material in their country, and that would mean that to the extent we knew about any nuclear material, they would have to subject it to safeguards. Indeed, the material that we now know about that's contained in spent fuel -- and we estimate it at 25 to 30 kilograms plutonium -- they've agreed to have shipped out of their country. But in the future, safeguards will be one of the most important mechanisms to assure ourselves that the disposition of that material is not for weapons purposes. MR. HUBBARD: If I might say, just for a moment, Bob Gallucci mentioned the Nunn-Lugar Cooperative Threat Reduction. We believe that that is an initiative funded in the Department of Defense for the last few years, one that's been under attack as a nontraditional approach to defense. We believe itis nontraditional because this is a new situation that we face, with -- REP. GEJDENSON: It's also a lot cheaper than the old approach. MR. HUBBARD: It is, it is -- REP. GEJDENSON: Try to target all those facilities. MR. HUBBARD: It has a much more direct approach on some of these issues, and while we can by no means guarantee success, we believe it's why it's a very important dimension of our dealing with nuclear issues worldwide. REP. GEJDENSON: I agree with that. Where do we -- what does this agreement, if anything, do for the India-Pakistan situation, which has some of the same -- you know -- elements, obviously not as hot, thankfully, but still, you know, a very tough situation where there are both conventional forces and traditional tensions in the region, and one established nuclear power and another one that most of us assume is a nuclear power at this point. AMB. GALLUCCI: Mr. Gejdenson, there are probably more differences than similarities between the North Korean situation and that on the sub-continent. But on the sub-continent we have two countries that can in a very short amount of time, we believe, deploy nuclear weapons, two countries that have some ballistic missile capability potentially, two countries that have a history of chronic conflict, and two countries that are contiguous. So it's not a very good situation at all. It is one that the administration and other administrations have worked to try to ameliorate. It is a difficult problem. Neither country is a party to the Nonproliferation Treaty. Neither of them have full-scope safeguards on their nuclear activities and -- REP. GEJDENSON: Should we make a more serious and focused effort on trying to defuse the situation between Pakistan and India? AMB. GALLUCCI: Mr. Gejdenson, I couldn't say no, but I couldn't say yes to that because I think the most serious efforts are being made. The deputy secretary involves himself in that and we're looking for ways to do something about that problem -- REP. GEJDENSON: Let me -- I don't mean to cut you off, but we don't have a lot of time. Let me ask one additional question, and that is, one of the problems we're facing now in the Middle East peace process is that it's very difficult to applypressure to Iran where most people agree that terrorists' at least financing andsupport comes from, and once you take off the economic sanctions anywhere -- the United States sells GE jet engines to Iran, it's very hard for us to turn aroundand tell the French and others to not do business in Iran. Is there a danger inthis agreement with the North Koreans that the United States cracks the door a hair and we're very serious about only cracking it a hair to get this agreement,and all of a sudden the Japanese and the French and the rest of the world will be in there, and once they're in there then it's impossible to gain any kind of economic leverage? AMB. GALLUCCI: Mr. Gejdenson, at the risk of building another wristwatch, I'd like to take an extra moment and answer that because in the chairman's initial questions there was the question of precedent and what have people learned from this agreement and do they learn the wrong thing; does a bad regime get good things? And I just want to take that one on head-on if I could for a minute. The situation in North Korea is one in which you have a country that is in violation of its safeguards undertaking, but also has a nuclear program which doesn't violate any safeguards programs or initiatives or commitments. That gasgraphite program that produces hundreds of kilograms of plutonium is not illegalunder the IAEA and the Nonproliferation Treaty, but it is that program that poses a threat in addition to the safeguards anomaly. And what we are doing, particularly with the light-water reactor component of the deal, particularly with the heavy fuel oil component of the deal, is trading legitimate energy programs for what looks to us a lot like a nuclear weapons program, but one which cannot be called illegal. That's -- those are extant facilities that we want to remove, and that's the deal. The case of Iran is entirely different. Iran has, we believe, nuclear weapons intentions and very low-to-nil capabilities. We would like Iran not to turn into the North Korean case. We are trying to convince everybody not to do nuclear business with Iran so you do not end up with extant nuclear facilities. So we don't believe the message is a bad one; we think it's a good one. The good message is the United States of America does not walk away from a nuclear proliferations problem, does not walk away from material violation of safeguards. REP. BEREUTER: Thank you for addressing that issue. The gentleman from California, Mr. Kim, is recognized for five minutes. REP. JAY KIM (R-CA): Thank you, Mr. Chairman. I have three questions, perhaps to Mr. Gallucci. The first question is about this heavy oil that we ship to North Korea; to be exact, 50,000 tons just in January alone. And according to agreed framework, I think you stated on page 11, the oil is actually heavy oil, so that this cannot be used in military planes and vehicles. That's fine. But what kind of verification mechanism do wehave to make sure that this oil can be used only for electrical generation? That's my first question. My second question is -- again, you mentioned, page 4, you have an excellent dialogue with South Korea. I received different opinion on that, different information. South Korean told me that they have been informed always after thefact in every part of this process. It seems like North Korea wants to deal directly with the USA at the expense of South Korea. Now, you stated that we already lifted some economic sanctions partially, such as telecommunications, financial transactions, tourism and et cetera, and journalism. That makes even the situation more delicate. Now I'd like to ask you a question. What kind of policy do you have to link any further economic orpolitical concessions to North and South engagement? I believe that this dialogue should be part of the agreement, part of this framework agreement, to guarantee that there will be a future dialogue between North Korea and South Korea. My final question, Mr. Chairman, is that -- matter of fact, that I talked to you the other day and I had the impression that you are confident thatNorth Korea will accept the South Korea proposal on this $4 billion light-water reactor assistance program. Now obviously North Korea reject that. Now it's frightening me that they are going to Russia, demanding Russia's reactor, instead of South Korea. As a matter of fact that, in light of this recent aggression, aggressive action toward this Chechnya, makes me wonder what's going to happen then, what's our position. Are you going to insist that North Korea should accept the South Korean reactor? Are you going to finally agree to them and go (out ?) and receive from Russia? Supposing North Korea continue reject? Then what are we going to do -- impose a sanction, are we going to strong position, or are you just going to on yielding? Thank you, Mr. Chairman. AMB. GALLUCCI: Thank you, Mr. Kim. First on the heavy fuel oil, as I indicated in my opening remarks, we have some concerns about the disposition of that heavy fuel oil. There is nothing in the agreed framework that could be called a verification procedure for the disposition of the heavy fuel oil. However, we have, all I can say, is a capability to verify its disposition, and it is because we have that capability that we developed some concerns and because we developed some concerns that we have been in communication with the DPRK about those concerns. All I can say to you in open testimony, Mr. Kim, is that we are going to insist on compliance with the agreed framework. We are talking about a small portion of the initial amount of heavy fuel oil. We are talking to the North Koreans about this, and we intend to get a situation in place in which the North Koreanswill dispose of the heavy fuel oil as is provided for the limited purpose of heating or electrical energy generation. And I must ask that, to pursue this further, that we go into a closed session. But I can't, because of (certain ?) methods involved, say any more. On the question of the dialogue with South Korea, I am aware that some South Koreans have been unhappy with the degree of consultations. In responding on this point before, I referred to the South Korean government, the officials withwhom we talked. There are some South Koreans who do not like the agreed framework. I think there are some members of Congress who do not like the agreed framework. That happens. We believe it is a good agreed framework. I don't know that we will make everybody happy. We do believe our consultations have been extremely forthcoming, and in my experience unique in their closeness.And I think that's a position I'm going to maintain, and certainly I think it's a position that the South Korean government would endorse. REP. KIM: Can you go one step beyond, make this dialogue as part of the agreement? AMB. GALLUCCI: I want to speak to that next. The question, Mr. Kim, of whether we should explicitly link a step, in let us say the lowering of barriers to trade in transactions of various kinds to a particular step in the North-South dialogue, that is not a course that I think would be prudent. This is now a personal view. We have in the past with the South Koreans linked certain steps in the North-South venue to certain steps that we would take with the North Koreans. We did that in the course of the negotiations and we together with the South Koreans agreed to move away from that and make that connection somewhat softer. We believe it is vital that the North Koreans understand that the North- South dialogue is essential if this agreed framework is ultimately going to be fully implemented. We, I think, are making this clear. I myself do not think it's wise to try to pick out a specific step in the North-South resumption of talks and link it to a particular step in the easing of sanctions. If we move in that direction we would do so only in close consultation with the South Korean allies. REP. KIM: Ambassador, if you could very briefly answer the last question, with respect to the possibility of a Russian reactor. AMB. GALLUCCI: The possibility of a Russian reactor has been on the table for about two years. The problem with the Russian reactor is the same problem with the German reactor, a French reactor or an American reactor. It does not meet at least one of the three criteria, namely, being financially viable. There is no financial support for a Russian reactor. I was as little as two weeks ago inMoscow, having a discussion along those lines. We have no plans, Mr. Kim, I think to put it as Mr. Berman did, to force any light-water reactor on the North Koreans. On the other hand if the agreed framework is going to be implemented as envisioned it is going to be with a South Korean model reactor in North Korea. That's a position we have maintained throughout as the only viable one. The issue of how this will be resolved brings me to the point that I made earlier that, while it is being resolved, our focus must be on whether the NorthKoreans are abiding by the commitments they make under the agreed framework to freeze their program. As long as they do we can continue to negotiate, discuss the issue of a light water reactor, but as I said there is no alternative that Iam aware of to the South Korean model reactor. REP. BEREUTER: Thank you. The gentleman from New York, Mr. Ackerman is recognized for five minutes. REP. GARY ACKERMAN (D-NY): Thank you, Mr. Chairman. If I could return for just a brief moment to the heavy fuel oil possible diversion. Could you explain to us what might be some alternative uses of this product that, as you've explained, cannot be used for military planes or automobiles? AMB. GALLUCCI: Mr. Ackerman, I will try to do that. Heavy fuel oil is not an area of expertisefor me, but I understand there are industrial or processes -- steelmaking processes for example -- in which heavy fuel oil can be used at some point in the process, and I think I've just now exhausted my knowledge of the subject. (Laughter.) REP. ACKERMAN: Under the framework, can you tell us if there have been any failures on the part of the North Koreans to meet their commitments, any of the obligations, thus far? AMB. GALLUCCI: Mr. Ackerman, I've noted two. One is our concerns in the disposition of the heavy fuel oil, and the other is the obligation that the North takes on to resume its dialogue with the South Koreans, and they have not done that yet. We have been taking every opportunity, as Secretary Hubbard and I said, to make the point to them that they need to get on with that. REP. ACKERMAN: Just to underscore the difficulty in dealing with the North Koreans, is my understanding correct that in part the reason that they're not proceeding with the North-South dialogue is because the South did not express its condolences upon the death of Kim Il- Sung and then has not apologized for not expressing those condolences, and this is a matter of great national pride and part of the hang-up here? AMB. GALLUCCI: Mr. Ackerman, they have made those points as among the points of contention between North and South. REP. ACKERMAN: Some have been critical of the fact that within this package there are some economic advantages that some have characterized as giveaways by the United States, offerings that we have made, and amongst them -- I have read the list -- and tourism is among them, and the use of credit cards. Could you tell me how many credit-card machines there are in North Korea? AMB. GALLUCCI: No, Mr. Ackerman, I can't, but I expect the number is less than two. REP. ACKERMAN: I'm a professional shopper. Maybe, Mr. Hubbard, there's only a few of us, I guess, who have been to North Korea. You were there. I was there. I think Steve Solarz was there, and of course Bill Richardson was there. REP. : Would the gentleman yield for just 30 seconds? REP. ACKERMAN: I'd be delighted. REP. : I would say that if the panelists don't know the answer, check with the Contract with America. I think it's in there. REP. ACKERMAN: How many credit card -- (laughter) -- the number of credit-card machines -- (laughs) -- is this a document of Nostradamus? (Laughter.) MR. HUBBARD: Mr. Ackerman, I might just comment that you know as well as I how difficult it is to pay for things in North Korea. On my trip we carried in with us a large bag of cash to pay for the meals and the guest house fees, and I'm sure you had to do the same thing. It would be a lot more convenient to be able to use plastic there like we can anywhere else in the world. But I did notsee any credit-card machines, nor did I see any American Express signs on shop windows. REP. ACKERMAN: Did you come across any tourists, any American tourists, or wouldyou know how many American tourists might be in all of North Korea? MR. HUBBARD: (Laughs.) I'd have to say no to both of those questions. But also,my experience aboard suggests to me that Americans are prepared to go almost anywhere out of natural curiosity. REP. ACKERMAN: Is this a great benefit to the North Koreas, at any kind of sacrifice to us to allow the use of credit cards by these non-existent American tourists? MR. HUBBARD: (Laughs.) We don't necessarily see this as a tit- for-tat or a zero-sum game. We think that, as Ambassador Gallucci has said here, we did agree in the agreed framework that we would begin lifting some of the sanctions.We found a few sanctions that we would lift at the initial stage. And let me get back just a second to Mr. Kim's point. We do believe that over time developments in North-South relations must move in rough parallel with developments in U.S.-DPRK relations, even if we don't particularly wish to set up precise linkages. REP. ACKERMAN: I bring these issues up not just to be whimsical, which I do not deny, but to make the point that I'm hard-pressed to see where some of the criticism is going as far as what we have actually given away and what capital, politically or otherwise, we have spent in this agreement. I think it was rather masterful on the part of the administration, and I further commend you for encouraging, as my good friend Jay Kim has done, to try to keep to the fire the feet of the North Koreans in pursuing a North-South dialogue. A relationship with the South Koreans is one that we cherish and we look forward to them actually beginning a meaningful dialogue with the North and improving the conditions on the Korean peninsula. I yield back the balance of my time. REP. BEREUTER: Thank you, Mr. Ackerman. The gentleman from Illinois, Mr. Manzullo. REP. DONALD MANZULLO (R-IL): Thank you very much. Ambassador Gallucci, can you tell me who Kang Sok Gu is? (Pause.) K-A-N-G, S-O-K, G-U. Kang Sok Gu. AMB. GALLUCCI: Who he is? REP. MANZULLO: Who is he? AMB. GALLUCCI: He's the vice foreign minister of the DPRK. REP. MANZULLO: What is his relationship to the president, Kim Jong Il? AMB. GALLUCCI: I'm going to try to approximate an answer to that, and then ask Mr. Hubbard if he wants to help me out. REP. MANZULLO: Well I've only got five minutes. It's not a very -- I mean -- AMB. GALLUCCI: It's a brief answer. I believe he is reasonably close to Kim Jong Il, and I don't know more than that. MR. HUBBARD: Just quickly, he is the first vice minister of foreign affairs. Hewas the designated representative of the government of the DPRK in the negotiations with Ambassador Gallucci. I am told that he has a seat on the partycentral committee as well as he is a member of the politburo. REP. MANZULLO: Do you know if he was acting with the permission or within the scope of authority granted to him, if at all, by the president of North Korea? MR. HUBBARD: He entered into the agreement. He signed the agreement. He did that representing the government of North Korea. REP. MANZULLO: That doesn't answer my question. MR. HUBBARD: It seems to me it does. He was the representative of the government of North Korea in the negotiations with us. He was first appointedwhile Kim Il Sung was still alive. He remained in that position after his death. REP. MANZULLO: At any time during these negotiations, did you see Kim Jong Il? AMB. GALLUCCI: Other than tapes on television, no, sir. REP. MANZULLO: He never showed up at any of the conferences, any of the talks? AMB. GALLUCCI: In Geneva? No. No, he did not. REP. MANZULLO: I've got the unclassified portion of the agreed framework betwe enthe -- and note that there's a letter from President Clinton dated October 20th,1994 to Kim Jong Il. Did Kim Jong Il ever respond to this letter of the president? AMB. GALLUCCI: We did not seek a response, and to my knowledge, there was no response. REP. MANZULLO: This is a letter from the president of the United States to the president of Korea. His authority is questioned, nobody knows who is in charge, and you didn't seek a written response from him, at least some type of averification that these talks were carried out -- carried out with his approval or under his control? AMB. GALLUCCI: Mr. Manzullo, we didn't have a doubt with whom we were dealing with. We were dealing with representatives of the government of Korea. REP. MANZULLO: But I have a doubt with whom you were dealing, and so do the people -- AMB. GALLUCCI: Well, we didn't, sir, and -- REP. MANZULLO: -- of this country. AMB. GALLUCCI: -- and when we negotiated with them, we were sure they were representing their government. And in fact, we prepared a letter which did not require a response other than the actions of the North Koreans. That -- REP. MANZULLO: This is the letter -- excuse me. This is the letter from the president of the United States ostensibly for the purpose of saying that an agreement has been brought about to dismantle their nuclear facilities, and you're telling me that this letter does not deserve a response in writing from Kim Jong Il? Is that what you're telling this Congress? AMB. GALLUCCI: I'm telling you exactly, Mr. Manzullo, that we did not seek a response to the letter. REP. MANZULLO: I think that's very poor diplomacy, Mr. Gallucci. I think that whenever the president of the United States sends a letter to the North Korean president, that the minimum we should have is a letter signed by him, perhaps verifying his signature, that he is in fact in control. That's an issue of thiscongress and an issue of the American people because we don't believe anybody testifying before this panel or any panel in this country that Kim Jong Il is control, because you don't have that knowledge. All you have is assurances, and assurances are not acceptable to the Congress ofthe United States. Least we could have is a letter from Kim Jong Il in responseto that of the president. AMB. GALLUCCI: Mr. Manzullo, I believe I understand your point, but if I could ask a question for clarification on my own part: Had we received a letter signedby Kim Jong Il, would that have made you or the Congress feel any more relaxed about who's in charge, or any more confident about compliance? Should we not have focused as we have on what they did? REP. MANZULLO: Perhaps not, but at least it's better than what we have now, which is nothing. I mean, I have a four-page document here -- I've not examinedthe classified section; it's not my desire to do so. This is a four-page document signed by King Sat Ju (ph) -- I don't speak Korean. I don't understandthe language and don't know how to pronounce these names, but I do understand the name of Bill Clinton. And this is a letter simply ratifying of -- that thisfour- page document is with the approval of the United States. I would certainly expect the State Department or the president at the minimum to say -- you know, this is -- I mean, this is a major document. This is a major document. And let me give you a follow-up question. I don't know, I think my time is running out on here. REP. : Would the gentleman yield? REP. MANZULLO: No, not at this point. My time's running out. The president says, "In addition, in the event that this reactor project is not completed for reasons beyond the control of the DPRK, I will use full powers of my office to provide to the extent necessary such a project from the U.S., subject to approval of the U.S. Similarly, in the event that the interim energy alternatives are not provided for reasons beyond the control of the DPRK, I wi lluse the full powers of my office to provide to the extent necessary such interimenergy alternatives from the U.S." Does this mean that if North Korea simply cannot afford to pay for these that the United States is going to furnish them, and at our expense? AMB. GALLUCCI: Excuse me, Mr. Manzullo, but you left out two words, and that is,"subject to the approval of the U.S. Congress," in both cases. REP. MANZULLO: Oh, I understand that. AMB. GALLUCCI: Well, what the president is saying here is that we intend -- the United States, as far as he is concerned, intends to make good on this agreed framework -- our part of it -- as long as they are making good on their part of it. And he'll do his best to see that that happens, of course, subject to the approval of the United States Congress. REP. DAN BURTON (R-IN): Well, because of the length of your answers, I'm going to make a statement and give you some questions, and then I'm going to let you talk.First of all, I want you to know that communists are not always trustworthy. I don't know if you know that or not, but they are not always trustworthy. They've lied to us numerous times in the past. And I think Mr. Manzullo makes a very, very good point in that unless the chief of state signs onto an agreement,they could very easily say, hey, that was one of my subordinates who did it without my approval. And nobody has seen this president for a long time, they don't even know if he's in good health. So I think for you to take at face value an agreement without the chief of state signing onto it is naive. Now, let me also say that you said in there that this is subject to the approvalof Congress, and I want to tell you, that's very pleasing to my ears because theMexico agreement was not subject to the approval of Congress because he couldn'tget the votes and he went ahead and did it anyhow. The Haitian invasion was notsubject to the approval of Congress, and the American people didn't want that but he did it anyhow. And yesterday, the strike breaker decision that the executive branch made was not approved by Congress, nor would it have been, but he did it anyhow. So it's kind of nice to hear that the president once in a while is going to seek the approval of the Congress of the United States. Now, let me read a real brief statement here and I'll let you answer some questions that I have. Number one, I am especially concerned about the length of time that the International Atomic Energy Agency must wait before being allowed to inspect the two nuclear waste sites that the IAEA has sought unsuccessfully to inspect since North Korea suspended inspections in February of 1993. Administration officials have candidly stated that North Korea will not have to fulfill this obligation for five years. Under the agreement, IAEA, quote, "ad hoc and routine", unquote, inspections of North Korean facilities which were designated in the 1992 North Korea IAEA safeguards agreement, quote, "will resume," unquote, upon conclusion of the supply contract for the two new light-water reactors. The agreement also states that before delivery of key nuclear components for the reactors, North Korea will come into full compliance with its safeguards agreement with the IAEA, including taking steps that may be deemed necessary by the IAEA. Now here's the first question. I hope you'll write these down for me. Number one: Will North Korea allow inspections required under the agreement five years from now? That's number one. Will North Korea be able to significantlyimprove its ability to deliver its existing nuclear weapons in the five years prior to the required inspections? These two questions I think are important. Now, onward. In debate about the framework agreement, the administration has emphasized that should North Korea deny inspection of its two nuclear waste sites, which provide the key to knowing how many nuclear weapons North Korea really has, that the United States can simply withhold delivery of key nuclear components for the two new reactors. Yet, little discussion has been held on what the key nuclear components really are. So here's the third question. Could these nuclear components be obtained elsewhere if we withhold their delivery to North Korea? Four. Could we have a scenario where the United States, South Korea and Japan complete 90 percent of the work on these reactors and the North Korea decides to deny inspections? Next, could then North Korea find other sources, from some other place, for the final phase of the completion of these reactors. Could they find those components elsewhere? And then I have two other real quick questions for you. Number one, how much is this going to cost? We still don't know. We'd like to know how much this is going to cost. You know, Japan's going to pay part of it,South Korea's going to contribute part of it, and how much will the United States ultimately pay? And I hope you can get all that in within my five-minutetime period. Thank you. AMB. GALLUCCI: Thank you, Mr. Chairman -- Mr Burton. First with respect to the North Koreans being communists and our experience that sometimes communists are not trustworthy, and the suggestion that we were in this administration naive inthe course of these negotiations, I don't believe that we were naive. I think we -- all of us involved in them were very aware of North Korea's history, itsresponsibility for the Korean War, the incredible casualties, the hostilities since then, the incidents on the DMZ, terrorism against South Korea, its president, its people. I think all of that was very much on our mind, as well as the possibilities of having to deal with this nuclear weapons problem by other means. I really do think that we took account of that and therefore fashioned a framework which does not depend upon signatures. It doesn't depend upon language so much as it depends upon action. We were acutely aware of the fact that we were negotiating -- REP. BURTON: Rather than making a speech on that, would you please answer the questions I gave to you, sir? AMB. GALLUCCI: Mr. Burton, I'll do my best, and that's what I've been doing. REP. BURTON: Well the chairman has said that he wants to you to limit your response because of the time problem, and you're going to have to give them to us in writing. I'd like for this to be in a public forum, so if you could get to the questions I'd really appreciate it. Cut to the chase, will you? AMB. GALLUCCI: Mr. Burton, the -- REP. ACKERMAN: Mr. Chairman, I don't know that it's fair to badger the witness with a series of 15 questions and then ask him to cut to the chase. Perhaps I'dlike to ask if the chair would allow Mr. Gallucci the full extent of the time toanswer Mr. Burton's very important questions -- REP. BURTON: Well, it's my time, and I'll reclaim my time and just say that I'veserved here for 12 years under the Democrats and I watched them badger Bush and Reagan administration officials, so don't give me a hard time about it. REP. ACKERMAN: No, we're not giving you a hard time, we're just trying to get a full answer from the witness. REP. BEREUTER: (Pounds gavel.) (Audio break.) AMB. GALLUCCI: Thank you Mr. Chairman. Mr. Burton, your questions go to how much time the -- is permitted under the agreed framework for the IAEA before it does its inspections. And we have estimated that it could be as much as four or five years before the light-water reactor project gets to the point where significant nuclear equipment would be delivered. And since the agreed framework provides that thatequipment cannot be delivered, it is at that point which these inspections must take place. It is our view, as I indicated, that there is no material disadvantage, or no significant material disadvantage to waiting. It is a political disadvantage. And I agree with you certainly that as soon as those inspections can take place the better it would be for the IAEA and the inspection regime, and I certainly concede that point. I do not believe that there is a material disadvantage in terms of security. You do make a point -- and perhaps Secretary Warner would like to comment on it -- that if North Korea does have four or five, six, seven, eight kilograms of plutonium and has had it since 1989, they will have an additional number of years to fabricate one or possibly two nuclear weapons. And that is a functio n of the agreed framework, and I don't see a way of avoiding that observation. But I would ask only that you put it in the context of our concern about the certainty we have over the 25 or 30 kilograms of plutonium in the pond which we are, under the agreed framework, assuring ourselves is not going to be separatedand fabricated into weapons. MR. WARNER: If I can just briefly answer your delivery system issue, probably the main issue people would be concerned about is in the area of ballistic missiles. The North Koreans have ballistic missile development programs in the Nodong missile, the Nodong I, Nodong II. I could give you more detailed descriptions of those programs in a classified hearing. In the area of aircraft-delivered systems, they have a very primitive air forc e.The most they've been doing is they bought about 10 or 12 more modern aircraft from Russia a few years ago, and were they to go into that path they perhaps could augment their air attack capabilities, I don't believe indigenously, but from buying from some other during this four- to five-year period. REP. BEREUTER: Mr. Burton -- excuse me just a minute. Mr. Burton, with your cooperation, I'd appreciate it if we could just give the ambassador a chance to answer one more question. I'd like to turn to Mr. Royce, who's been in and out here all morning, before we have to go vote. Would you take one more minute andaddress at least one more of the gentleman's quest ions? AMB. GALLUCCI: Very quickly, if I could. Mr. Burton, the other questions got to the question of whether those reactors, or even the first reactor, could be finished if the North Koreans didn't agree to accept the special inspections. Would somebody else, for example, provide the nuclear equipment? And by the way, it's very specific, the nuclear equipment that can't be delivered -- anything listed on the Nuclear Supplies Guidelines trigger list can't be delivered, and that means the reactor can't be finished if that equipment isn't provided. And the point is really that there is nobody that produces the equipment, the sensitive elements of the nuclear steam supply system for a reactor that would be willing to provide it under those circumstances. They're all members of the Nuclear Supplies Guidelines. There would be no way for the North Koreans to finish thatreactor. REP. BURTON: Mr. Chairman, can we get the rest of the questions answered in writing? REP. BEREUTER: Yes, certainly. We would like the rest of the questions answered-- AMB. GALLUCCI: Will do. REP. BEREUTER: -- and I have one myself which I would like to have answered orally, but it's impossible. I yield five minutes to the gentleman from California, Mr. Royce, the vice chairman. REP. ROYCE: Thank you, Mr. Chairman. Let me explain the reason for some of our concern. North Korea is on the terrorist list. We've never in the past given oil or economic assistance or power stations to terrorist countries, and so from our standpoint when we are talking about giving this assistance or going throughout Asia drumming up trade and throwing a lifeline to North Korea, there's some concern over how that caneven be done, given the fact that this country is on the terrorist list. I would say that it is curious, why do we say in the case of Korea that the light-water reactors present a minimal proliferation threat, when we strongly oppose the provision of similar reactions (sic) to Iran by Russia. So that, again, strikes us as something to be considered about -- concerned about. And let me just finish with my question. What guarantees do we have, what can you promise us, in regard to the North Koreans stopping, as a part of this agreement, development, delivery and commerce in nuclear weapons, long-range missiles and otherwise sharing their technology or what we're about to give themfor that matter, with other countries, especially some of their friends and these countries don't happen to be our friends? So those are my questions. AMB. GALLUCCI: Thank you, Mr. Royce. First, with respect to the comparison between North Korea and Iran and why would we propose to provide what we're calling more proliferation-resistant nuclear technology to North Korea but oppose -- REP. ROYCE: No, I understand the why. I'm just saying that it's curious, whentalking about the minimal proliferation threat. You see, that's the point I'm making. I understand the reason why. I'm just saying, in one case we say there's no real threat; in the other case we acknowledge that there seems to be a threat by allowing Russia to go through with this deal. AMB. GALLUCCI: If I could, Mr. Royce, I think the issue is that the comparisons are comparisons of two quite different circumstances. Iran has no nuclear capability, but we believe has the intention to acquire nuclear weapons if it could. We are not interested in Iran getting any nuclear capability. In the case of North Korea, we're looking at a state that has substantial nuclear capability, has already separated some quantities of plutonium, and we're talking about replacing a very dangerous gas graphite system with a much safer, from a proliferation perspective, technology. It's an entirely different circumstance. And I'd add something else that's quite relevant here. It is our intention, andwe have indication that we'll succeed in achieving the objective of getting the North Koreans to accept a provision whereby the spent fuel that emerges from those light-water reactors will also be shipped out of the country, just as the spent fuel that is now in the pond is shipped out of the country. That, of course, requires negotiation of that provision and arrangements for where exactly that fuel would be shipped. But what I principally want to say with respect to the comparison is that they are not comparable situations.