HEADLINE: PREPARED TESTIMONY OF AMBASSADOR AT-LARGE ROBERT L. GALLUCCI HOUSE INTERNATIONAL RELATIONS COMMITTEE SUBCOMMITTEE ON ASIA AND THE PACIFIC BODY: Mr. Chairman, it is a pleasure to testify on the Agreed Framework concluded by the United States and the Democratic People's Republic of Korea in Geneva just over four months ago. 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 community. If fully implemented, it will create a nuclear-free Korean Peninsula, erase an important threat to the international non-proliferation regime and, potentially, open the door to discussions on other issues of concern, such as the North's export of ballistic missiles. Since there has been a great deal of testimony recently on this issue-- including Secretary Christopher's extensive remarks before the Senate Foreign Relations Committee-- I would like to just briefly explain our approach to the negotiations and to elaborate on why we believe the Agreed Framework is in our national interest. I would also like to discuss in more detail the process of implementation which has already begun.U.S. Policy: An Overview Mr. Chairman, when the Clinton Administration entered office, 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 nuclear stockpile, in the hands of an totalitarian regime that had engaged in aggressionin the past, whose conventional forces already threaten our close allies in the region, and that had seen fit to export ballistic missiles and might well do thesame with nuclear material, would have been intolerable. The Clinton Administration's direct involvement with the nuclear issue began in March 1993 when North Korea announced its intention to withdraw from the Nuclear Nonproliferation Treaty (NPT). That declaration-- coming after the International Atomic Energy Agency (IAEA) was unable to resolve discrepancies inthe way the North accounted for its plutonium stocks-- raised international alarm about North Korea's nuclear program. I do not want to recount now the events over the next 18 months which led to theOctober 1994 Agreed Framework but let me make just three points. First, throughout this period, our diplomacy to resolve the nuclear issue was conductedfrom a position of strength including evident military readiness on the ground. When North Korea took the unacceptable step of unloading fuel from its 5 megawatt (MW) reactor last spring, we were prepared to pursue a sanctions resolution in the Security Council and to put additional forces in place to counter any hostile reaction. And the North Koreans k. Second, we set ourselves the goal of neutralizing the North Korean nuclear program in a way that went far beyond simply gaining North Korean compliance with its NPT safeguards. Our initial goal when we began this process was to bring North Korea back into compliance with its IAEA safeguard obligations andto end its threat to withdraw from the NPT. But the North's interest in light water reactors (LWRs) opened the door to a more far-reaching solution: freezingecurity. They would have enabled the North to continue to produce and separate large quantities of weapons- grade plutonium. As a result, when wewent back to the table in Geneva last summer, we were determined to secure North Korea's returea and Japan. These consultations have been unparalleled in my twenty years in government. They have been conducted through embassies in capitals, working-level discussions, daily consultations during the negotiations, regular trilateral meetings and contacts between the highest levels of all three governments. The October 21 U.S.-DPRK Agreed Framework The result of these efforts was the U.S.-DPlutonium. It also includes sealing the reprocessing plant and requires the safe storage and eventual shipment of existing spent fuel out of the country. This put a stop to the separation of anymore plutonium and made provision for the removal of 4-5 bombs worth of plutonium from North Korea. The Framework also freezes construction of the twolarger reactors-- 50 and 200 MW-which, when completed, would have produced enough plutonium fordozens of bombs each year. Finally,rnational 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 coson offices in each other's 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 conventional force deployments . Korea fails to meet its obligations, we can take appropriate action. Since theburden of up front performance falls on the North, if the agreement breaks down before the LWRs are complete, we will still be ahead of the game. North Korea's entire nuclear prograr part, the United States intends to live up to its end of the bargain if North Korea fulfills its commitments. Currently, ouroverall assessment is that, while we have some concerns, we are satisfied with implementation of the Agreed Framework. Nuclear Freeze: North Korea has frozen its entire nuclear program. While the IAEA already has inspectors on the ground monitoring the freeze, that presence will be expanded. We understand that talks between the DPRK and unloaded from the 5 MW reactor last spring. That fuel, if reprocessed, could have yielded sufficient plutonium for 4-5 nuclear weapons. The U.S.- DPRK agreement followed a series of meetings between both country's experts and the first Agreed Framework, the U.S. and North Korea agreed to begin reducing restrictions on telecommunications services and financial transactions within three months, or by January 21. On January 9, the DPRK announced it was lifting legal barriers totrade with the U.S., including prohibitions on imports from the U.S. and port-calls by U.S.-flag vessels. On January 20, the U.S. announced the easing ofsanctions 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. Liaison 0ffices: The Agreed Framework called for the U.S. and DPRK to open liaison offices in each others capitals after resolving technical and consular issues related to such an opening. These liaison offices would be opened at the lowest level allowed under the Vienna Convention on Diplomatic Relations and staffing will be kept to a minimum. The mission of these offices will be to provide the necessary liaison between the U.S. and DPRK governments as we implement the various parts of the Agreed Framework. After two rounds of expert level talks, most of the technical issues and all of the consular issues have been resolved. The main issue to be resolved is choosing property for the sites of the liaisonoffices. This issue remains under discussion at the expert level. A U.S. team went to Pyongyang to look at property in early February and we expect a North Korean team will make a similar trip to Washington in the next few months. LWR Supply Contract: Under the terms of the Agreed Framework, "best efforts" should be made to reach a LWR supply contract by April 21, 1995. 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. prospective, the only viable vendor is the Republic of Korea. The ROK, which has offered to play a central role in financing the LWR project, and Japan, which will provide significant funding for the project, insist 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 the DPRK on the LWR project soon. Heavy Fuel 0il Deliveries: As specified in the Agreed Framework, the United States delivered 50,000 tons of heavy fuel oil to North Korea in January. We have some concern about the disposition of a small portion of the heavy fuel oilthatwe 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 machine. One of the reasons we sent them heavy fuel oil is that it cannot be used in military planes and vehicles. We have raised this issue with North Korea and told them that we expect them to comply fully with the terms of the Agreed Framework. Korean PeninSula Energy Development Organization (KEDO): We have made important progress towards establishing the Korean Peninsula EnergyDevelopment Organization (KEDO), the international consortium that will have a key role in implementing the Agreed Framework. It is KEDO that will ensure the proh will play a central role, and Japan will play a significant role, in the financing and construction of the LWR project. Both countries strongly support the Framework as in their national interest, and have demonstrated that suppor t with of KEDO in Asia,the Middle East, and Europe. We hope to hold a meeting of interested countries next month. North-South DialOgue: The Agreed Framework obliges the DPRK to take steps to implement the North-South Denuclearization Declaration and to engage in North-South dialogue. North-South dialogue is therefore essential if the Framework is to be fully implemented. Even more to the point, however, ery 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 consultation with the ROK on this issue.