U.S. State Department Geographic Bureaus: East Asia and Pacific Bureau



FRIDAY, APRIL 21, 1995

MR. BURNS: Good afternoon, ladies and gentlemen. Welcome to the State Department briefing. I know there's a lot of interest in the North Korea issue today, so we have with us Ambassador Robert Gallucci, Ambassador at Large, the senior American official dealing with this issue. Bob.

AMBASSADOR GALLUCCI: Good afternoon, folks. I'd like to begin by just reading a brief statement, and then we can take questions.

I understand the North Korean delegation has left Berlin to return to Pyongyang after declaring that the talks in Berlin have broken off. I can also confirm that the talks in Berlin this week were difficult and did not produce much progress.

In response to these developments, we have proposed to the North Koreans that we meet in Geneva soon to discuss problems that we have failed to resolve in Berlin that are related to the light-water reactor issue.

We've told the DPRK that we are prepared to meet in Geneva so long as they continue to adhere to the terms of the Agreed Framework. Most importantly, that means that the North Koreans need to maintain the freeze on their nuclear facilities.

We have been in close and continuous communication with our South Korean and Japanese allies on this issue, and we will, of course, continue that process of close consultation.

Q In the last few days, we haven't heard the flacked statement that they have to accept South Korean reactors. Is that still the case, or are you now thinking of some variation that might push this deal over -- you know, an American subcontractor like Westinghouse or a larger Russian role?

Is the U.S. demand still as clean and clear as that? Take the South Korean models or else?

AMBASSADOR GALLUCCI: I would like to apologize on behalf of the Administration if we have let a day go by without saying that what we seek here, and have always sought, is the implementation of the Agreed Framework. That would mean, with respect to the portion of the Framework which refers to the provision of a light-water reactor project, that the Republic of Korea would play a central role in the design, manufacture, construction and financing of the project.

In less contorted language, we are looking for an outcome in which essentially what the South Koreans call the "Korean standard reactor" or the model Ulchin 34 is the basis for the reactor that is constructed in the DPRK.

Q Could I follow up? Would you like to see the South Korean Government be more flexible in considering the arrangements under which a South Korean reactor is provided?

AMBASSADOR GALLUCCI: I said in the opening comment that we have consulted closely with the South Koreans and the Japanese. We have, and we are very satisfied that consultation has produced a position that we have taken in Berlin which is the right position.

In terms of the substance of this, I just will be unwilling, and it's unwise, to go into the real details of the negotiations, because it is our hope that we're going to continue this discussion in another venue.

I will say that what I described as our outcome here that we are seeking is, as I said, the outcome that we believed we had negotiated in Geneva in October last. We are open to language that describes this and are not committed to particular words that describe this arrangement; but there is, I would say, no change. There has never been a suggestion of change in what the outcome is to be. If there is to be a light-water reactor project in North Korea, then it will be, I believe, of the kind I just described to you. That has been a consistent position of the United States Government in coordination with our allies in Japan and South Korea.

Q Can I follow up. Not to nit-pick, but "central" doesn't mean "only." Presumably, there's still some --


Q -- room for compromise here that would allow something politically palatable for the North Koreans along the lines that Barry was asking about.

AMBASSADOR GALLUCCI: Let me say that you're quite correct. "Central" does not mean "only," and, when we say it is essentially South Korean reactors that would be the reactors or the type of reactor built in North Korea, we don't mean that no other company would be involved in sub-contracting. We're not excluding German, French, American, Japanese, or anybody else's companies from participating in the project.

I think that those of you who are familiar with projects of this magnitude -- light-water reactor projects like this -- are aware that there can be a large number of sub-contractors from any number of governments; and it is not for me to describe which governments, which countries these firms would come from.

But there is a fundamental, or crux, of the issue here that I wouldn't want you to miss, and that is that the South Koreans have said their willingness to play this role in financing turns on them also playing that comparable role in the design, manufacture and construction. We are completely in agreement with them in that, as are the Japanese.

Q Can I follow?


Q Did the North Koreans say "no central role for South Korea," period, or are they -- are we arguing -- are you and the North Koreans arguing about the dimension of what "central" means?

AMBASSADOR GALLUCCI: As is often the case in a negotiation, one cannot be certain what exactly one is arguing over. That can be true when you're purchasing a house or you're working out arrangements for a $4.5 billion light-water reactor.

There may be more or less than meets the eye in the course of the negotiations in Berlin. I really don't know. I do know that as we understand the issue, this is a solvable issue. In other words, there should be a way to capture in language the role that the Republic of Korea and its entities would play, provided, of course, that the DPRK is prepared to implement the Agreed Framework as we negotiated it in October.

Q Can I just ask why you think that would be a solution to the problem? I mean, presumably the DPRK is less concerned about the words on the paper than they are about South Koreans constructing facilities on their territory.

AMBASSADOR GALLUCCI: You certainly can ask the question. The problem is the answer, as I described before, is that I cannot tell you the full dimension of what's at issue here. In other words, if it is a matter of finding language that is acceptable to both sides, then with a bit of good will we should be able to do that, provided fundamentally the DPRK is prepared to implement the agreement as we negotiated it.

Q But we don't know whether that -- finding a solution to the language is actually a solution to the problem, because we don't understand the North Korean difficulty clearly?

AMBASSADOR GALLUCCI: We may or may not. I mean, what I am going to avoid doing with you today is trying to tell you or convince you that I understand all North Korean calculations. I have tried to be very careful about that in the past. We have an Agreed Framework with the North Koreans that protects us in a situation in which we are going to look at what North Koreans do rather than what they say, and that's how we are proceeding.

Q Mr. Secretary, excuse us, but we're going to take a filing break here. Your remarks are so captivating we want to transmit them around the world. Thank you.

Q Just one final question, is --

(Multiple comments)

AMBASSADOR GALLUCCI: I can continue. I'm not taking a filing break.

Q Is finance the only reason that we believe the South Koreans should play the central role? I mean, is it simply a question of finance, or are there other reasons that we believe South Korea should play that role?

AMBASSADOR GALLUCCI: Initially, when we were crafting our negotiating position in Geneva in the summer of last year and before, when it appeared as though the North Koreans were interested in an arrangement in which they would give up the gas graphite program for a light-water reactor program, we not only discussed this with the South Koreans, we also discussed it with the Japanese, the Russians and others to see what other projects might be put together. At the time we said, I think quite reasonably, that there were three criteria that a project design had to meet: technical, political and financial viability. The South Korean project concept is the only one that met all three, and that's the best way I can answer that.

Q This is a "yes" or "no" question.


Q Yes. Have the two sides reached an impasse?

AMBASSADOR GALLUCCI: In the past, Elaine, you've always told me the truth, and I'm most disappointed today (laughter). We certainly --

Q I said "yes" or "no."

AMBASSADOR GALLUCCI: And that's what I meant, of course, you didn't ask me a question that could be so answered. The situation right now is that the talks in Berlin have broken down. As I told you, we have offered, as we indicated we would way back in October, if there was a problem in the implementation of the Agreed Framework, to resume discussion in Geneva. That's what we have proposed. How one characterizes this I think I will leave to you.

You have a follow-up.

Q Why in your negotiating did you not specifically get in writing all of the requirements for North Korea using South Korean reactors?

AMBASSADOR GALLUCCI: When we were negotiating the Agreed Framework, we were aware that the North Koreans were -- and as I've said this before -- unhappy about the prospect of having South Korean reactors built in North Korea. And as I've said before, they had a preference; they preferred Russian reactors, they preferred French reactors and German reactors and American reactors -- any reactors other than South Korean reactors.

We understood, in other words, that this was politically difficult for the DPRK. It was partly with that in mind that the Agreed Framework was crafted to include a commitment on our part to try to establish an international consortium that would be in the role of the supplier of the light-water reactor project. And we went and did that, and we did that when we created with the Japanese and South Koreans the Korean Peninsula Energy Development Organization or KEDO, to which other countries have since joined.

So the point here is that the political difficulty that the North Koreans we anticipated would experience with the South Korean reactor -- being aware of that led us to what I think was the right conclusion: that the North Koreans needed to understand what it is we had in mind, and I am absolutely confident that they did understand what we had in mind. But there was no need to make it impossible to reach an agreement by specifying it in a way that would be difficult for them to accept politically when we were in fact crafting language to create an organization that would be in the position of the project supplier exactly because we wanted to make it politically more palatable.

Q Bob, would you be leading the delegation to Geneva --

AMBASSADOR GALLUCCI: Would you say it one more time, please?

Q Will you be leading the delegation in Geneva if these are talks occur?

AMBASSADOR GALLUCCI: If there are such talks, yes.

Q And by doing that, are you -- by upgrading the contacts -- are you basically giving them a reward for obstruction?

AMBASSADOR GALLUCCI: I'll answer that with a yes or no. No, we're not. We're not in the reward/penalty business here. We're trying to solve a problem that exists between our two governments in the implementation of an agreement. It's very important to our security and that of our allies in the world, so I don't want to talk in terms of rewards or punishments. We're trying to solve a problem.


Q First of all, this week, the United States proposed that a U.S. firm sort of be overall coordinator for this in an attempt to make the idea of a prime contractor from South Korea be more palatable. Exactly how would that relationship work? How did you explain it? How would it work out according to the way you explain it to them?

AMBASSADOR GALLUCCI: Can I take that before I forget it? In the charter of the Korean Peninsula Energy Development Organization, or KEDO, you'll find reference to a program coordinator. There are a number of functions for the Program Coordinator in a general way, and then over time, of course, KEDO may define that with a lot more technical detail. But, principally, the Program Coordinator would assist the Executive Director of KEDO in assuring that the contracts negotiated are, in fact, implemented consistent with the contract.

In other words, as we would plan if KEDO negotiates in the first instance a contract with the DPRK entity and then in the second instance negotiates a contract with the South Korean entity, which we expect would be KEPCO, as the Executive Director of KEDO authorizes payments under the contracts, he would need technical advice to assure that the contracts were, in fact, being performed. He would look to an architect, an engineering-type firm most likely, to assist in that technical role.

The Program Coordinator could also facilitate contacts between utilities and vendors as necessary. It's a technical function that would be available to the Executive Director so that he could do his job.

There's a second part of the question from Jeff, and then I'll come over here.

Q I'm just wondering if you haven't in retrospect thought about the possibility that the premise of the deal itself was flawed insofar as it was basically based on the expectation that the North could be persuaded to accept from the South reactor technology and assistance of the sort that would, to them, confer an image of differing status between the two countries; and whether you have thought in retrospect that some of other kind of deal or some other basic structure to the deal might have been more appropriate?

AMBASSADOR GALLUCCI: I, of course, Jeff, constantly engage in self-examination and critique. But after having done that, I remain convinced that the structure of the Agreed Framework is a viable one and a reasonable one. It turns on the DPRK's interest in opening up economic contacts with the United States and the rest of the world. It turns on their being ready to open themselves up to negotiations with the Republic of Korea. It turns on the willingness of the rest of us to provide assistance in the form of heavy fuel oil during an interim period; our willingness to support politically and financially a very large light-water reactor project.

In other words, there are interests and equities on both sides. I believe it's balanced and fundamentally in the interests of all of those involved, even certainly the DPRK.

There are elements of this that are politically difficult. We never anticipated that this would be a smooth road. This is an agreement, or an Agreed Framework with North Korea. I just need to keep reminding people of that and that anybody who expected that this was going to be easy hasn't been paying attention for the last 50 years.

Q When the talks ended, what was our understanding from the North Koreans as to their willingness to maintain the freeze? And what is our level of confidence that we would know were they not maintaining a freeze?

AMBASSADOR GALLUCCI: The talks ended, you mean in Berlin?

Q Yes.

AMBASSADOR GALLUCCI: As you know -- and I believe the North Korean negotiator in Berlin today at a press conference made reference to appropriate steps -- we don't know exactly, of course, what the DPRK will do next. They have made reference in the past to the significance of April 21 as for them a deadline.

We have made clear that if you look at the language of the Agreed Framework, it is a target date for the resolution of the -- literally, it says "target date" -- for the resolution of the issues surrounding the light-water reactor contract. We have showed, I think, good faith in trying to resolve those issues.

I can't predict to you what the DPRK will do next. I can tell you that inviting the DPRK to join us in Geneva to try to resolve these issues, it was said that this is something we think would be appropriate and useful at this point, and something we're prepared to do just so long as the freeze remains in place.

With respect to the question of verification, if I can put it that way, "How will we know if the freeze is not in place?" As I think you're aware, there has been now for over a year in continuous presence International Atomic Energy Agency inspectors who are at a relatively small nuclear facility and will know immediately -- I think I speak pretty accurately when I use the word "immediately" -- if there is a move to break the freeze, for example by refueling the 5-megawatt reactor.

So I don't think there's any question about whether we'll know about it. I can't predict whether they'll do it or not. We certainly hope they do not. We do think this is a solvable problem if they will show good faith and if we can continue to discuss it.

A follow-up?

Q Let me follow up on that.


Q In the talks -- the most recent talks, what did they say they would do if nothing were resolved by April 21? Did they say that they viewed the Framework as invalid and that the freeze would not necessarily have to be maintained?

AMBASSADOR GALLUCCI: I think if you want to know the DPRK's position, you ought to ask the DPRK. I will tell you that at various times they have said that they might take some steps. They have referred to the possibility of refueling the 5-megawatt reactor.

I am not predicting what they're going to do. All I am telling you is that, certainly, they have allowed as that's a possibility. We have said we would prefer to keep talking, and this time at Geneva.

Q Who did propose the high-level talks to? Was it Kim Jong U in Berlin or someone in Pyongyang? And has there been any reaction?

AMBASSADOR GALLUCCI: We didn't propose these talks until the talks in Berlin were declared by Kim Jong U to have broken down. That didn't happen until yesterday, so it was only yesterday or last night that we sent a message through the usual channel -- through the New York channel -- proposing Geneva.

Q Let me follow on Andrea's question. There were reports in the press -- several -- that on the 21st the North Koreans were setting that as a deadline to take some kind of action to defrost their program. You just stated that they had said something to this effect. Did they say it officially to the delegation? Did they say it indirectly? Do you believe, in fact, this is a real problem?

And then, secondly, I noticed in the latest wires the U.N. inspectors have seen no unusual activity.

AMBASSADOR GALLUCCI: What the North Koreans have said to us privately I will leave private. What they've said publicly is available on the record and you can look at it. What I'm trying to tell you is that I do not know what they're going to do. We hope that we can continue talking rather than face a situation --

Q (Multiple questions.)

AMBASSADOR GALLUCCI: Excuse me, excuse me. -- rather than face a situation in which they take a step which makes it impossible for us to continue talking at Geneva.

Q Did they say anything to lead you to believe that, in fact, these talks have broken down and they were going to take some actions to defrost?

AMBASSADOR GALLUCCI: I say again, I do not know what the DPRK will do next.

Q Another yes or no question. Do you take seriously the North Korean threat to refuel its 5-megawatt reactor?

AMBASSADOR GALLUCCI: When the DPRK speaks officially, we certainly listen to what they have to say. I don't know what they're going to do. I just would prefer to say that we will wait and see what they do; and as we have in the past, we'll respond to what they do.

MR. BURNS: One more question, please.

Q Mr. Ambassador, when you proposed to the North Koreans further meetings in Geneva, are you putting anything new on the table, anything that is different from what you put on the table in Berlin? First question.

Second question: Have you spoken to the Chinese about getting their assistance in this?

AMBASSADOR GALLUCCI: On the first question, I may soon end up being the negotiator again in Geneva, and I don't think it makes a lot of sense for me to talk about what I'm going to do as a negotiator other than to describe to you what I did in the beginning, which I suspect you don't need to hear again, in terms of what our objectives are, which is --

Q (Inaudible)

AMBASSADOR GALLUCCI: Excuse me. -- which is to seek to get the Agreed Framework implemented.

The second part of your question was China. As you may know, the Secretary had discussions with Qian Qichen in New York. This issue did come up, and it was discussed. We've been in contact with the Chinese about it. We, of course, hope that they will be helpful in resolving the issue.


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