ICAS Special Contribution

No. 2000-0316-MBR

North Korea:
Leveraging Uncertainty?

Mitchell B. Reiss

Institute for Corean-American Studies, Inc.

965 Clover Court, Blue Bell, PA 19422

Fax: (610) 277-3992
Email: icas@icasinc.org

Biographic Sketch: Mitchell B. Reiss

[Editor's note: We gratefully acknowledge the special contribution with written permission to ICAS from Mitchell B. Reiss of testimony that he delivered to the United States House of Representatives: sjk]

Prepared Testimony


Mitchell B. Reiss

Dean of International Affairs

Director of the Wendy and Emery Reves Center for International Studies

College of William & Mary

Williamsburg, Virginia

before the

Committee on International Relations

U.S. House of Representatives

Washington, D.C.

March 16, 2000

I would like to thank the Committee for inviting me to testify today on this important and complex issue. My testimony will explore three myths that currently influence U.S. policy towards North Korea and impede our ability to maintain stability and security on the Korean peninsula and in Northeast Asia. I will then suggest some ways in which Congress might work to improve this policy.

Myth #1: It is impossible to negotiate with North Korea

That North Korea poses a threat to important U.S. interests in Northeast Asia and around the globe is not in doubt. Ideologically hostile to the outside world, armed with ballistic missiles (perhaps loaded with chemical or biological agents), and capable of building nuclear weapons, North Korea is the world's poster child for rogue regimes. This dysfunctional country excels in only one area -- it exports trouble. The North's aggressive military posture threatens American allies in the region and directly places at risk the 35,000 U.S. soldiers based in South Korea. Through its sale of ballistic missile technology to Pakistan and the Middle East, Pyongyang helps undermine global security.

Determining how best to deal with North Korea has posed a serious challenge for the Clinton Administration. But it is possible to do business with Pyongyang, as proven by the experience of a specialized international organization created to deal with the North's nuclear program.

In 1995, the United States, South Korea and Japan created KEDO (the Korean Peninsula Energy Development Organization), whose mission is to deliver 500,000 tons of heavy fuel oil/year and two 1,000 MW(e) light-water reactors to North Korea in return for the North initially freezing and eventually dismantling its nuclear weapons program. In return, Pyongyang pledged to freeze and eventually dismantle its nuclear complex capable of producing enough plutonium for dozens of nuclear bombs.

At the start, it was unclear whether the North would even meet with KEDO officials, let alone permit thousands of South Korean to live and work at the construction site alongside North Koreans. Yet KEDO and Pyongyang have reached agreements that have produced real and tangible progress to implement this project. Many of these agreements deal with highly sensitive national security issues, such as direct transportation routes from the South to the North, independent means of communication from the work site to the outside world, and blanket immunity from prosecution for all KEDO workers.

With no clear road map to follow, KEDO has shown it is possible to engage Pyongyang in ways consistent with U.S. national security interests. Reaching agreement with the North is never easy, but few worthwhile things in life are. Like other skilled negotiators, the North Koreans prefer to keep their options open for as long as possible. Indeed, they are often under instructions to do so because competing bureaucracies back home can't agree on a common position.

The KEDO experience also teaches the importance of demanding strict reciprocity; there is no such thing as a free lunch with the North Koreans. It is possible to "take" from the North, but only if you are prepared to "give" something in return. Although it is easy to blame the North Koreans for many misdeeds, the truth is that stalemate in the negotiations was at times due not to the North's belligerence, but to disagreements among the KEDO parties - the United States, South Korea and Japan -- over what to horse-trade. Significantly, when KEDO has reached agreement with the North Koreans, they have largely kept their side of the bargain.

KEDO's experience also teaches that you must stand firm with the North Koreans. They are masters at raising the tension level to realize their objectives. The negotiating table is simply one more venue for this type of brinkmanship. For example, in late 1995 the North's Ambassador Ho Jong threatened to have Pyongyang restart its nuclear weapons program if KEDO did not make certain concessions. Despite the risk of triggering a new nuclear crisis on the Korean peninsula, KEDO hung tough. Ho eventually dropped his demands.

Constant vigilance is warranted in dealing with North Korea. The United States should not be surprised when Pyongyang engages in provocative actions, such as the September 1996 submarine incursion, the August 1998 Taepo Dong 1 ballistic missile launch, and the June 1999 confrontation between the North and South Korean navies over the Northern Limit Line. It is entirely possible that they may threaten to test launch another ballistic missile later this year.

It is therefore essential that anyone negotiating with the North not be afraid to walk away from the table. The United States should never be, or seem to be, more eager than the North to reach a deal. Offering the North inducements for simply showing up, or holding meetings solely for the sake of holding meetings, diminishes U.S. credibility in Pyongyang and elsewhere around the world.

At the same time, the United States should never be less eager than North Korea to craft a more stable and secure Korean Peninsula. Hard-headed engagement, which is strongly supported by South Korea and Japan, can work. And by keeping faith with our allies, the United States will also be in a much stronger position should North Korea decide to remain a rogue state.

Finally, it is useful to talk with Pyongyang if only to make absolutely clear to them the consequences their actions will bring. In other words, the U.S. has a strong interest in preventing North Korea from ever thinking that its provocative behavior would go unanswered.

Myth #2: The Agreed Framework nuclear deal can be attacked without harming U.S. national security interests

Despite all the criticisms of the Clinton Administration's handling of North Korea, the reality is that the next Administration, whether Democrat or Republican, is unlikely to substantially change U.S. policy. If there is a Republican Administration come next January, I would expect to see important changes in policy style and policy execution, but few changes in policy substance (with the exception of addressing the North's military posture along the DMZ). Indeed, leading Republican foreign policy experts advising Governor Bush have already gone on record saying that it would be difficult for a Republican Administration to overhaul the current U.S. approach to North Korea.

These Republican foreign policy experts recognize that (i) the Agreed Framework and KEDO, (ii) former Secretary of Defense William J. Perry's Report of October 12, 1999, and (iii) ROK President Kim Dae-jung's "sunshine policy" of greater economic cooperation and reconciliation with North Korea provide useful tools with which to deal with many of the challenges North Korea presents. This is not to say the current U.S. approach is ideal. Far from it. It is the least worse option. But before dismantling the current approach, it is essential to formulate a viable policy alternative. Suddenly reversing Washington's North Korea policy, without such a policy alternative, would harm our relations with two key U.S. allies - South Korea and Japan - each of which has more at stake than the United States in promoting a stable and secure Korean peninsula.

As former U.S. Ambassador to South Korea during the Bush Administration, Donald P. Gregg, has recently observed:

A rapid and uncoordinated American policy shift away from the Perry Report and the "sunshine policy" to a more confrontational posture toward North Korea would undermine President Kim [and] confuse the Japanese…One of the greatest strengths of the "sunshine policy" is the regional support that it enjoys from Korea's neighbors. For the U.S. to distance itself from this support, and by so doing weaken it, would be counterproductive in the extreme. North Korea would be strengthened, not weakened, by such a move.

Indeed, the likely result of such behavior would be the weakening of U.S. influence throughout all of East Asia, and perhaps beyond.

Myth #3: KEDO doesn't need, or deserve, strong U.S. support

According to published accounts, North Korea's work at the nuclear facilities covered by the Agreed Framework has halted. This nuclear freeze is being monitored not only by U.S. national technical means, but also by international inspectors on the ground at these sites in North Korea.

This nuclear freeze is the result of KEDO, the multinational consortium envisioned in the Agreed Framework and established in 1995. Without this nuclear freeze, it is estimated that Pyongyang would have the capability to build 5-6 nuclear weapons per year; in other words, without the Agreed Framework, North Korea could have a nuclear arsenal of at least 25-30 bombs by now. Needless to say, this result would be profoundly destabilizing to all of East Asia and detrimental to U.S. stature and influence in the region.

Despite this useful role, KEDO suffers today from a number of problems, all of which require immediate high-level attention from Washington. First, KEDO needs to reach an agreement with the prime contractor, KEPCO, that is acceptable to the subcontractors on nuclear liability for the LWR project. If certain subcontractors decide not to participate in the project because of the nuclear liability issue, then the entire project will be put at risk, or at a minimum, suffer additional delay and cost. Specifically, if General Electric, which licenses technology for the steam turbine generators and supplies certain components, decides not to participate, the next best source of technology and components would be a Japanese company. This option would be strongly resisted by Seoul and, even if it were approved eventually, would entail extensive revisions of LWR plant design. The result would be additional delays and increased costs for the LWR project, which is already an estimated five years behind schedule.

Second, there is still no agreed-upon delivery schedule that sets out the time-frame for KEDO's construction of the two LWR plants, as well as the obligations the DPRK side must meet for the project to be completed. Currently, KEDO has been unable to arrive at a consensus approach to this protocol. A major point of internal disagreement is how to handle the timing of North Korea's coming into full compliance with its International Atomic Energy Agency (IAEA) safeguards obligations. It is estimated that the IAEA's investigative and analytical process may take as long as 24 months, during which time little or no work would be done at the Kumho site. This delay would increase significantly the cost of the LWR project. As the country footing the largest portion of the bill, South Korea has argued that this time period needs to be shortened by having the North Koreans take certain cooperative steps with the IAEA in advance of the IAEA's inquiry. Seoul would like KEDO to require that these steps be enshrined in the delivery schedule and performance protocol. The Clinton Administration is opposed to this approach, not wanting to entangle KEDO on an issue that is primarily the concern of the IAEA. Third, KEDO is faced with the difficult task, first, of explaining to the KEDO Executive Board members that an internationally acceptable nuclear liability regime must be established in the DPRK, a regime that may be very different from the ones in place in the ROK and Japan. It then must explain to the North how this regime works and, in addition, have Pyongyang formally adopt domestic legislation that will channel to the DPRK operator of the LWR plants all liability for claims arising from a nuclear incident. While many of these steps are stipulated in the December 1995 Supply Agreement, which provides the overall framework for the LWR project, few officials in Seoul, Tokyo and Washington have to date invested much time in understanding this complex issue.

Making matters potentially more difficult, the entire KEDO project is premised on the DPRK assuming all nuclear liability and the DPRK always being deemed the operator of the two LWR plants. However, there is already a conflict on this subject between KEDO and the North Koreans. Because this project will be delivered on a "turn-key" (completed) basis to the North, Pyongyang has argued that KEDO is responsible for delivering two fully functioning nuclear power plants to the North. This would include KEDO performing all of the nuclear commissioning tests to ensure the LWR plants worked properly before responsibility for the reactors was formally transferred to the North. Under this scenario, KEDO would have to operate the LWR plants during this commissioning phase, and would thereby assume the risk of nuclear liability. North Korea has identified language in the Supply Agreement that supports its interpretation. A nuclear liability protocol must be in place before the project goes very far forward because of the time that will be required for the DPRK to implement the procedures necessary to establish a nuclear liability regime acceptable to KEDO, its contractors and the larger international community.

These three issues have been debated for years inside the KEDO Secretariat, which has been unable to broker differences among the Executive Board members. The reality is that none of these issues will be resolved - and the KEDO project will not go forward -- without the attention of senior officials in Washington, as well as in Seoul and Tokyo.

It is useful to recall that under the Agreed Framework, North Korea has pledged to come clean about its nuclear past - to disclose how much weapons-grade plutonium it has separated - only after KEDO completes a "significant portion" of the two light-water reactors it has pledged to build. Many people, including myself, are skeptical whether Pyongyang will ever place all of its nuclear cards on the table. But we delay testing this proposition with each day the KEDO project is stalled. We delay forcing North Korea to choose which path to follow - the one leading to greater engagement with the outside world or the one leading to greater isolation and poverty for the North Korean regime.

In the past, Congress has from time to time played a useful role in critiquing the Administration's North Korea policy. Congress has been most helpful when it has avoided the temptation to score political points at the Administration's expense and instead focused on the larger strategic issues at stake for the United States in Northeast Asia. For example, in November 1998, it passed legislation requiring the Clinton Administration to appoint a Special Coordinator to conduct a thorough review of Washington's North Korea policy. This Congressional initiative yielded tangible results: the Perry Report and the Trilateral Coordination and Oversight Group.

Congress still has an important role to play in helping shape the Administration's strategy towards North Korea. Congress should emphasize to the Administration that U.S. goals are greater security and stability on the Korean Peninsula, continued close policy coordination with our South Korean and Japanese allies, and the maintenance of a strong deterrent posture towards the North. The purpose of future negotiations with the North is not simply more negotiations. Rather, it is to ensure that the North take tangible steps to reduce the military threat it poses to the South and in the region through its nuclear weapons, chemical, biological and ballistic missile programs, and with its conventional forces.

At the same time, Congress can and should articulate what it is willing to allow the Clinton Administration to place on the negotiating table when it discusses these issues with the North. Are we willing to relax all economic sanctions? Are we willing to remove the North from the terrorism list? Are we willing to establish diplomatic relations and exchange ambassadors? Are we willing to officially end the Korean War and sign a peace treaty with North Korea? Are we willing to "buy out" the North's ballistic missile program, and if so, for how much? Are we willing to establish confidence-building measures, such as establishing hot lines between military commanders on either side of the DMZ? Are we willing to consider redeploying US/ROK forces if the North agrees to redeploy its forces?

During the past five years of dealing with the North, the Clinton Administration has not even asked many of these questions, let alone come to some consensus on answering them. To be sure, these are complex issues that resist simple answers. But if the United States is serious about addressing the threat posed by the North, we must first of all decide what price we are willing to pay. Only then will we be able to present the North with a clear and well-defined choice - either greater engagement and better relations with the outside world or continued international isolation and poverty. Otherwise, the North will defer making this choice for as long as possible, milking the negotiations for every concession it can extract from the United States.

By proceeding in a more resolute manner - stating clearly what we want from the North and what we are prepared to offer in return -- we allow ourselves the greatest opportunity for a successful policy of engagement with Pyongyang that will lead to greater security and stability in Korea. We will also emerge in a much stronger position, with domestic public opinion, with our allies and with the international community, should the North decline our offer. Congress, and this Committee especially, has an indispensable and ongoing role to play in this effort.

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