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

U.S. Department of State
96/03/19 Testimony: Winston Lord on Policy Toward Korean Peninsula
Bureau of East Asian and Pacific Affairs

TESTIMONY OF THE
ASSISTANT SECRETARY OF STATE
FOR EAST ASIAN AND PACIFIC AFFAIRS
AMBASSADOR WINSTON LORD

HOUSE COMMITTEE ON INTERNATIONAL RELATIONS
SUBCOMMITTEE ON ASIA AND THE PACIFIC

MARCH 19, 1996

U.S. POLICY TOWARD THE KOREAN PENINSULA

Mr. Chairman, I appreciate your kind invitation to appear today. It is a pleasure to testify at this joint hearing on U.S. policy toward North Korea. North Korea poses major challenges to U.S. foreign policy, and the importance of Korean issues is well known to you, not least from your travels to South Korea at the end of last August. As you requested, I will focus on US-North Korean relations. But before I begin, I want to make clear that our approach to all Korean issues is founded on our rock solid relationship with the ROK, an ally of longstanding, a vibrant democracy, and a major trading partner.

U.S.-DPRK Agreed Framework -- A Major Achievement

Nearly a year-and-a-half after the U.S.-DPRK Agreed Framework was signed, the administration's policy of gradual engagement with North Korea is a major success. When the Clinton Administration first entered office in January 1993, it was immediately confronted with the problem of North Korea's nuclear program. Just eighteen months ago, North Korea, bent on development of a large nuclear weapons program, had one operational nuclear reactor and two larger reactors under construction, all of a type designed to maximize production of weapons grade plutonium. Left unchecked, this program would have been capable of producing enough plutonium for at least several nuclear weapons annually. Most immediately, North Korea was threatening to reprocess the spent fuel from its operational reactor to produce several weapons worth of plutonium, and then reload the reactor and produce additional plutonium. Such a nuclear stockpile in the hands of the North Korean regime would have been a grave threat to US Allies in the region and US interests around the world.

The Agreed Framework has frozen the North's nuclear program in its tracks. It has put us on a path to attain all our strategic objectives, supporting the international nonproliferation regime and enhancing security and stability in Northeast Asia. North Korea's operational reactor and its reprocessing facility are sealed, construction has stopped on the two new reactors, and very soon U.S. experts will begin, with North Korean cooperation, to place the plutonium-laden spent fuel in safe storage pending its eventual removal from North Korea. As you emphasized in your Resolution Relating to the Agreed Framework, Mr. Chairman, the eventual removal of this fuel from the DPRK is of major significance. The freeze is being effectively monitored by the International Atomic Energy Agency, which has recently agreed with North Korea on procedures for the resumption of ad hoc and routine inspections of nuclear facilities not subject to the freeze.

The Agreed Framework will produce a full accounting of the history of the DPRK nuclear program before the DPRK receives key nuclear components for the light water reactors we are committed to provide. When fully implemented, the Framework will result in the dismantlement of North Korea's dangerous gas-graphite reactors and related facilities, including the DPRK's reprocessing plant. These steps go far beyond what the DPRK would have been required to do under the Nuclear Non-Proliferation Treaty (NPT), which allows member states to reprocess spent fuel under IAEA safeguards. Ensuring that the Agreed Framework is successfully implemented is, therefore, a major goal, one we are pursuing with full knowledge that we may face serious challenges in the future.

The Korean Peninsula Energy Development Organization (KEDO) was founded one year ago by the U.S., Japan and the ROK to implement portions of the Agreed Framework, including the light water reactor project and the provision to the DPRK of interim energy supplies in the form of heavy fuel oil. KEDO, under the leadership of Executive Director Stephen Bosworth, is moving ahead purposefully to accomplish these tasks. After Ambassador Bob Gallucci was appointed the President's Special Advisor on Bosnia, Ambassador Paul Cleveland was appointed to serve as the U.S. representative on the KEDO Executive Board. The appointment of such a senior diplomat is another sign of the importance the Administration places on smoothly implementing the Agreed Framework.

On December 15, 1995, KEDO and the DPRK concluded an agreement for the supply of proliferation-resistant light water nuclear reactors to North Korea. The supply agreement follows up on the joint statement negotiated with the North Koreans by my deputy Tom Hubbard last summer in Kuala Lumpur, which makes clear that North Korea will receive South Korean standard model reactors, and that South Korea will play a central role in all aspects of the LWR project. It was this December agreement that triggered the North Korean commitment under the terms of the Agreed Framework to allow the IAEA to resume inspections on declared nuclear sites not subject to the freeze.

KEDO is now preparing for negotiations with the Korean Electric Power company (KEPCO), the South Korean firm with which it plans to conclude the prime contract for the LWR project. In the meantime, KEDO has already conducted four site survey visits to the proposed site in North Korea where the reactors will be built. A fifth KEDO team will travel to the DPRK in the near future to complete the evaluation, leading to a formal designation by KEDO within the next few months of the construction site. South Korean nationals have been included in each of the KEDO delegations, marking a modest step forward in North-South contacts. Contrary to rumors that were circulating in Seoul at the time of your visit last fall, Mr. Chairman, South Korean members of the KEDO site survey teams have received the same treatment as the members from the U.S. and Japan.

KEDO will soon begin negotiations with the DPRK on a series of implementing protocols to supplement December's LWR supply agreement. KEDO is also supplying the DPRK with 500,000 tons per year of heavy fuel oil, as stipulated in the Agreed Framework. These shipments replace the electric power potential the DPRK lost by freezing its nuclear program, and will continue until the first LWR goes on line. The DPRK has accepted our proposed method for verifying that this heavy oil is not diverted for uses other than those stipulated in the Agreed Framework.

Financing our commitments under the Agreed Framework is an important priority and a major focus of our work. The Administration has requested a very modest sum considering the importance to US security interests of implementing the Agreed Framework. The President will soon convey to the Congress a 614 waiver and Congressional certification package, as required by law so that we may use the money appropriated by Congress for KEDO projects in FY 1996. I hope the Congress will conclude its review of this matter as quickly as possible so that KEDO will continue to be able to meet its commitment to provide heavy oil to the DPRK. Japan has recently agreed to provide $19 million to help KEDO finance the purchase of heavy oil. Japan did this in anticipation that the US would soon be in a position to play its own, necessary role in financing this part of the project.

We are also working with our South Korean and Japanese allies to secure new members and new contributions for KEDO. KEDO is gaining increasing international support, with ten countries having joined or indicated their intention to join. Some twenty countries have contributed financially or plan to contribute. Most recently, the European Union has decided to make an initial contribution of $6.3 million for KEDO, while France and Germany will also make national contributions of $2 million and $1 million respectively.

U.S. Policy

It may be helpful to recall briefly the evolution of US policy through three administrations over the last eight years. Our approach toward the DPRK began to evolve in 1988, when the Reagan Administration undertook the so-called "Modest Initiative" to open the window for limited contact. This initiative marked the first break in the comprehensive US economic embargo on North Korea by allowing trade in humanitarian goods. It also included official US support for non-governmental, cultural and academic contacts between Americans and North Koreans, including the issuance of visas for such contacts. The next step came in January 1992, during a period of hopeful dialogue between North and South Korea, when the Bush Administration agreed to host the first ever high-level meeting between US and DPRK officials. While useful, this did not lead to further high level official contacts, and the US-DPRK dialogue quickly slipped back to working-level exchanges between our embassies in Beijing. Then, in March 1993, the DPRK announced it would withdraw from the NPT. Following up the UNSC's call for member states to do whatever they could to help resolve the crisis, this Administration decided to engage the DPRK once again at the political level in a process that eventually resulted in conclusion of the Agreed Framework.

In addition to achieving a durable peace on the Korean peninsula, the U.S. seeks to facilitate progress by the Korean people toward achieving national reunification. We look forward to the day when all Koreans will enjoy peace, prosperity and freedom as well as constructive relations with their neighbors. Since conclusion of the Agreed Framework, the Administration has not rested on its laurels. Recognizing the importance of stability in Northeast Asia to U.S. interests, we are maintaining a strong deterrent posture and pursuing relations with North Korea in close consultation with our allies in South Korea and Japan.

In dealing with North Korea, the Administration is moving simultaneously on three tracks:

-- We are implementing the US-DPRK Agreed Framework, as I have already described;

-- We are seeking means of reducing tensions on the Korean Peninsula, most importantly through substantive North-South dialogue; and

-- We are increasing contacts with North Korea in order to promote security and stability in the region.

Reducing Tensions

While the Agreed Framework has been successful, we are well aware that North Korea continues to pose serious challenges for American foreign policy. The DPRK remains a closed society isolated from the outside world with massive, forward-deployed conventional military forces and dangerous missile, chemical and biological weapons programs. As you pointed out in the report on your visit to Seoul last fall, Mr. Chairman, the Korean peninsula is rightly considered perhaps the most serious risk for full-scale conflict involving U.S. troops. Consequently, a key objective of US policy must continue to be the preservation of security and peace on the Korean peninsula. The cornerstone of our efforts is our alliance with the Republic of Korea. Forged in the crucible of war, our alliance with the ROK has been nurtured by long established patterns of close consultation and cooperation, as demonstrated throughout our negotiation with the DPRK over the last three years. The 37,000 U.S. forces in Korea supporting this alliance are part of the overall 100,000 troops the U.S. maintains in the Asia-Pacific area. Our alliance is commited both to continued vigilance and to exploring ways to reduce tensions on the peninsula.

With the North Korean nuclear program in check, we must continue to address the conventional military threat, and the threat posed by the North's other weapons of mass destruction. North Korea fields an army of more than one million men, most of it deployed in the immediate vicinity of the DMZ. In spite of severe economic problems, the DPRK continues to devote a huge percentage of its national wealth to maintaining and modernizing this military machine. The North also deploys long-range missiles and chemical and biological arsenals that are a threat to the peninsula and beyond, as exemplified by the North's missile sales to the Middle East.

The Military Armistice Agreement of 1953 has helped to maintain the peace for more than 40 years now. Over the last few years, the DPRK has engaged in a systematic campaign to undermine the armistice. This threatens peace and stability on the Korean peninsula. As it pledged in the 1991 North-South Basic Agreement, the DPRK should abide by the terms of the Military Armistice Agreement until it is replaced by a permanent peace.

It is important that military communications channels be in place in Panmunjom so that we can ensure that the armistice is maintained. After close consultations in Seoul, the UN Command has proposed talks at Panmunjom between general officers representing the Commander of UN Forces in Korea and the North Korean People's Army. Under this proposal, the U.S., ROK and DPRK would all participate fully. We continue to urge the DPRK to consider this proposal positively.

For its part, the DPRK has repeatedly sought to open direct, bilateral talks with us to discuss issues related to peace and security on the Korean peninsula. Most recently, the DPRK last month proposed the U.S. and DPRK conclude an interim agreement to maintain peace on the peninsula until the U.S. and DPRK can conclude a peace treaty. This approach is absolutely unacceptable to the U.S., as are all North Korean attempts to deal with issues of peace and security on a bilateral basis. It is the firm position of the United States that it is up to Koreans -- both North and South -- to create a stable peace in Korea. The United States will support fully any joint efforts by the North and South to create a new peace mechanism, and is willing to play whatever role the Koreans wish us to play. But the U.S. will not engage the DPRK bilaterally, over the head of our South Korean allies. The ROK must fully participate in any military-to-military contacts.

All of this illustrates the fundamental importance of improved North-South relations. The North-South Basic Agreement of December 1991 stipulates that it is up to Koreans -- both North and South -- to create a stable peace on the Korean peninsula. In the Agreed Framework the DPRK made a commitment to engage in North-South dialogue. This commitment was so central that the U.S. would not have concluded the Framework without it. North-South dialogue is an essential aspect of the Agreed Framework and a prerequisite for its full implementation. We have repeatedly urged Pyongyang to meet its commitment and begin direct governmental dialogue with the ROK, and will continue to do so at every opportunity. As we have in the past, we also stand ready to support constructive new South Korean initiatives.

Expanding Contacts

Expanding contacts with North Korea is an important means of reducing tensions and building a broader basis for peace and security on the peninsula. In close concert with our South Korean allies, we seek to engage the DPRK bilaterally on a number of issues in order to accomplish one of the basic goals of the Agreed Framework: to build a North Korean stake in responsible behavior. Towards this end, we also continue to work closely with Japan, China, Russia and others.

We encourage the DPRK to continue down the road of greater openess to the outside world. We seek to demonstrate to Pyongyang the benefits of acting in accordance with international norms in areas such as missile proliferation and terrorism. We are ready to cooperate with the DPRK on humanitarian issues such as relief for North Korean victims of last year's flooding and the return of the remains of US soldiers.

The U.S. has provided three tranches of assistance totaling $2,225,000 to international organizations to aid the victims of flooding in North Korea. The decision to provide this indirect assistance was made after responsible international organizations determined that a demonstrable humanitarian need exists in those parts of North Korea most severely affected by the flooding.

The first two tranches of assistance worth $225,000 were provided to UNICEF for a vaccination program and a program to provide nutritional supports to young children and nursing mothers. The most recent US decision to provide $2 million to the World Food Program for its efforts to assist flood victims in the North is a good example of our policy of maintaining close consultations and collaboration with our South Korean and Japanese allies. Before deciding to extend the $2 million of humanitarian assistance, we conducted talks bilaterally with the ROK and trilaterally in Honolulu with the ROK and Japan. We explained that this aid would respond to a real humanitarian need, keep the World Food Program engaged in North Korea and demonstrate to North Korea the benefits of permitting international organizations to operate there. Consequently, the ROK announced that it had no objection to our provision of emergency disaster relief assistance through the World Food Program. Japan also expressed support.

We favor the opening of private channels of communication with the DPRK, and encourage cultural, academic and other people-to-people exchanges. We welcome indications from American firms of their interest in exploring discussions with North Korea, within the context of US law.

Under the terms of the Agreed Framework, we will open a liaison office in Pyongyang and the DPRK will open one in Washington when necessary consular and technical issues are resolved. This would be the first small step in a diplomatic relationship, and would provide us with regular, dependable channels of communication. Since the conclusion of the Agreed Framework, we have held several rounds of talks with North Korea on the opening of liaison offices, and succeeded in resolving most, but not all of the outstanding issues. Last fall we put forward a proposal to resolve the final outstanding issues and are still waiting for the North Korean reply. We stand ready to open liaison offices as soon as these issues can be resolved. We will be happy to brief your committee or staff on our plans as we move forward.

We are also willing to move over time toward more normal relations with North Korea, but only as North Korea addresses issues of concern to us, including North-South relations. Without an improvement in North-South relations it is clear that the development of US relations with North Korea will be inhibited. We are well aware of your concerns in this area, Mr. Chairman, as expressed in the House Resolution on the Agreed Framework.

During last summer's dedication of the Korean War Veterans' Memorial, President Clinton pledged that we would not forget the American soldiers who perished in North Korea during the Korean War and whose remains have not yet been recovered and returned to the U.S. In January, a U.S. delegation led by Deputy Assistant Secretary of Defense James Wold addressed this issue in talks with a North Korean delegation, and we hope to continue these negotiations in the near future. We continue to press North Korea for talks on the issue of missile proliferation, particularly North Korean missile sales to the volatile Middle East. And we have also addressed with the DPRK steps we would like to see taken so that we would be able to consider removing North Korea from the list of state sponsors of terrorism. The DPRK has taken a modest step forward, issuing an official statement denouncing terrorism. We welcome this statement and look forward to seeing concrete evidence that North Korea is taking steps to support international action against terrorism.

We also believe it will be beneficial to all parties for the DPRK to expand its economic ties with the outside world so that its people can share in the East Asian economic miracle. We welcome the modest expansion of trade with South Korea, which has made Seoul Pyongyang's third largest trading partner. We took initial steps a year ago to ease US economic sanctions on the DPRK. These steps, while modest, have led to a small, but still significant increase in commercial contacts between the US and the DPRK. For example, direct telecommunications services have been established, US companies have signed contracts to import magnesite from the DPRK, and American NGO's have contributed humanitarian goods to the DPRK.

We are committed gradually to normalize economic as well as political relations with the DPRK as progress is made on the Agreed Framework and other issues of concern to the U.S. There have been recent steps forward -- particularly the signing of the LWR supply agreement and progress on spent fuel canning. The timing and extent of further sanctions reduction measures will in large part depend on DPRK willingness to engage constructively on the issues we care about, including missile proliferation, the return of war remains, the reduction of tensions and, most importantly, North-South dialogue. We will, of course, consult fully with the Congress as our policy on sanctions evolves.

Conclusion

In conclusion, I want to stress that on all issues concerning the Korean peninsula, the US will continue to coordinate closely with the ROK as well as Japan. Our pattern of consultations is intense and constant. President Clinton has visited Seoul. President Kim has made two visits to Washington. National Security Advisor Lake was in Seoul last month. Deputy Secretary Talbott met with his counterpart in December. Secretary Christopher, ROK Foreign Minister Gong and former Japanese Foreign Minister Kono decided last November to institute a series of high-level trilateral consultations to coordinate policy toward North Korea. I chaired the first such meeting in January, and look forward to further meetings.

The Agreed Framework has been a great success in dealing with the North Korean nuclear threat. It serves regional stability and global non-proliferation efforts. We will continue to do everything necessary to ensure the Framework's smoothest possible implementation. The key achievement of the Framework is that it freezes and, when fully implemented, will lead to the total dismantlement of the North Korean nuclear program. But the Framework encompasses more than just the nuclear issue. We are using it to promote a broader approach toward our long term goals: a durable peace on the Korean peninsula and the eventual reunification that the Korean people seek. These are issues on which Koreans will play the leading role. As a friend and ally, the United States stands ready to help.

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