The Permanent North Korean Crisis: What Should the Next Administration Do?

October 18, 2004

Unedited transcript prepared from a tape recording

1:45 p.m.	Registration
2:00	Panelists:	Nicholas Eberstadt, AEI
		Michael O'Hanlon, Brookings Institution
	Moderator:	Thomas Donnelly, AEI
4:00	Adjournment

Proceedings:
MR. DONNELLY:  Welcome to the American Enterprise Institute and welcome to our discussion today on the permanent North Korean crisis, and I'm not sure any panel at AEI has ever been more aptly titled for North Korea is surely the gift that keeps on giving to international politics.

But we're going to try to take a little bit of a look ahead because the North Korean crisis will certainly still exist after our presidential election and whoever wins the election will then inherit the question of what to do about it, and we have two exceptionally distinguished speakers today.

First of all, we'll hear from Mike O'Hanlon of the Brookings Institution.  I've known Michael for a decade or more and his work has always been outstanding on a wide array of strategic and military questions, and his most recent book on the issue is titled Crisis on the Peninsula, published in the past year.  I commend it to you, strongly.

Each speaker will speak for about 15 minutes or so.  Michael will be followed by my colleague, Nick Eberstadt, who is also a peripatetic scholar with an unhealthy taste for failing states and human catastrophe and that naturally makes him a North Korean expert.

I will not recite from Nick's long body of work but you all know why you're here and neither of these gentlemen really need any further invitation or "song and dance" routine from me.

So I'm going to just simply moderate the event.  After we have the presentations from the speakers, we'll have our normal question-and-answer session.  Again, I want to remind everybody of the ground rules.  The questions should be questions and not statements, and should be directed to either or both of the speakers as you wish.

But please identify your affiliation and keep the question in the form of a question.

So with no further ado, Michael, the microphone is yours.  Take it away.

MR. O'HANLON:  Thanks Tom, and thanks to all of you for being here.  It's an honor to be on this panel with a real North Korea expert, Nick Eberstadt, and I see people in the audience, like my colleague, Jack Pritchard, and members of the distinguished diplomatic corps and media, and others.  So I'll try to be brief enough that we hear a lot from you because I look forward to that interaction, and I'm not going to do a whole lot more than try to reprise the argument that I've made before about North Korea policy broadly defined, the basic logic for the Bush approach, why I think it hasn't worked, and why I think a fairly radical new approach is needed, that would envision a proposal of a broader negotiating agenda for the North Koreans.

There's a lot of room for discussion about how you would do that, how big it would have to be at first, what kind of deal you would settle for, but the broader logic of aiming for something that gets away from a narrow focus on the nuclear question is the main point I want to make today, and it's the point that Mike Mochizuki and I made last year, both in the Washington Quarterly article that's in your packets and in our book that Tom kindly advertised a second ago.

Let me just do two things with my presentation, one to say why I think the Bush policy is not likely to work and hasn't worked, and then secondly, to just lay out a little bit of the logic for the second approach, and I'll finish by concluding--there may not be complete disagreement, in fact I hope there's not between myself and Nick, because if our proposal fails, I could wind up, logically, with not much choice but to advocate a much tougher policy, and in fact I think that even as Victor Chow of Georgetown sometimes says, even a hawk may believe in this sort of an engagement strategy and the expectation that it would fail.

I advocate it in the hope that it would succeed, but I don't know, and I could wind up with Victor, and perhaps with Nick, and we'll know more about what he's advocating in a minute, depending on how those negotiations would proceed.

So let me start with the Bush policy.  I'm not going to try to sound like a campaign commercial for the Kerry campaign and talk about the problems in North Korea today and the problems with the nuclear arsenal, but the fundamental fact here is thank God we have no war on the peninsula, thank God, as best we can tell, the humanitarian crisis has not been as bad as it was in the late '90s, and thank God, as far as we can tell there's been no transfer of nuclear materials from North Korea to any other country or al Qaeda, heaven forbid.  So it could be worse.

Having said that, it's pretty bad to have a country that once had one to two nuclear weapons, now probably having eight, based on a sequence of events that was largely predictable, and I think really mistaken, fundamentally conceptually mistaken, I think has been a failure of policy.

This is not the Bush administration's finest accomplishment, and the reason, to me, is fairly simple, not to revisit all the history of the last three years, though I'm happy to do that if you like, later on.  But the basic point is we're focusing on a nuclear weapons question, that if you focus on that alone, is almost certain to lead to stalemate in negotiations.

The reason is simple.  President Bush is right to say we cannot buy out the North Korean nuclear program again with an even sweeter deal. This makes no sense.  it would be essentially giving in to appease--or it would be conducting appeasement, giving in to an extortionist demand, buying the same horse twice, setting a precedent for other countries to develop weapons of mass destruction programs, negotiate some kind of a price for them to be eliminated, and then if they decide later on they don't like the deal, just create the crisis again and negotiate a better deal.  It just is a nonstarter.

President Bush is right on principle.  You do not offer a sweeter deal to the North Koreans to get rid of the same nuclear program they already promised to get rid of once, and have three solemn, binding, international commitments require them not to have.  That's the North-South de-nuclearization agreement, the nonproliferation treaty and the agreed framework.

 So Mr. Bush is right in that logical, narrow sense.  On the other hand, the North Koreans, in their own twisted logic, or their own twisted worldview--I'm not sure if it would be right to say that they're correct in their view, but their view is logical, that you would not give up the nuclear weapons program for an uncertain and unclear promise of benefits.

This is one of the only good things you've got in your hand if you're a negotiator, if you're a North Korean.  Maybe the only one, apart from not starting a war as another potential offer that you can make to other countries if they negotiate with you.

And of course you're not going to give that up to an administration that says maybe some day, down the road, if you first give up all these weapons, we can have a talk later on about possible benefits.  That would be essentially failing negotiations 101, especially when there's no credible threat, and there may be ways to generate a credible threat without even using military force and I think Nick has been at the forefront, I think he proved some of these options over the years, but I don't think that there is a credible threat right now.

We all know the simple basic reasons why--the plutonium is no longer at Yongbyong, or whatever they've got they've got, and even though their arsenal can gradually increase over time, they've basically reached a point where they've got eight weapons, in all likelihood, somewhere that we are not going to ever know about.

We do not have a plausible ability to do regime change unless things get a lot worse.  For one thing, the South Koreans don't want that, they would not allow it, we would probably suffer tens of thousands of American casualties, hundreds of thousands of casualties on the peninsula, in general, if not millions, and by the way, we don't have the forces to do it anyway.

So it's just preemption or preventive war is really not a plausible option, so the North Koreans don't really feel scared, no matter what they say, to get sympathy from the international community.

They are really not afraid of the United States.  They might have been afraid two years ago and I say this of course with no direct contact or knowledge of the North Koreans, so I'm doing this based on speculation and logic, but it seems to me that if they have any kind of a read on our basic strategic position, they are not afraid that we're going to wake up tomorrow and decide to launch a preventive war or even a U.N. process that could lead to such a thing.  It's just not in the cards.

So for the North Koreans, there's no carrots on the table of any major note, and no sticks.  So of course they're not going to deal and I would predict that would be the basic problem in a second Bush term even after the election.  It's fairly clear why no one's dealing now, everyone's sort of hoping for a clearer or better picture come two weeks from now on various sides, and they may or may not be right to think they would get a better deal, but that's what people are hoping.

But once we have an election, I think that this basic Bush logic is not going to lead you too far.

Now let me get to the second part of my talk.  There may be a way--and I'll admit there's one caveat--there may be a way in which Mr. Bush can maintain a tough line and we can be the bad cops and the South Koreans and the Chinese and the Japanese can be the good cops, and we actually propose a sweeter deal without saying so ourselves, without having that be Washington's official position, and using the six-party framework, in that productive sense, to essentially maintain a firm position of resolve on the nuclear question while also offering North Korea a broader negotiating agenda, and that may be a way to "have your cake and eat it too" but first let me describe what I think that negotiation position should be, or what that agenda should be, instead of just getting into this endless debate of six versus two that we heard so much about in the second debate which doesn't do much for me.  I don't know how it feels to you.  But to me, the issue is the substance.

What substantive negotiating agenda can you propose that has a better chance of eliminating North Korea's nuclear arsenal in the end, because I do agree that is the chief issue in the end, even if it's not productive to focus exclusively on that in the short term.

So to improve the odds of getting rid of that, to garner greater international support for a tougher policy, should we fail, and to get to a point where we're not giving in to extortion, not setting a precedent that we would be unhappy about having in the rest of our international dealings.  What agenda do you propose?

Well, I don't want to itemize all the different things that are in Mike's and my book but the basic logic is we should test North Korea's willingness to reform the way Vietnam and China have.  We should test its willingness to do structural reform within a communist party system.  We'd all love it if North Korea's communist party and Kim Chong-Il went away but that's not going to be something you can negotiate, and therefore if you're accepting the logic of negotiation at all, as I do, I think you want to test the possibility that North Korea is serious about these fledgling market reforms that we've seen in the last few years and serious about thinking through the model that Vietnam and China have offered, which, to some extent, Kim Chong-Il and other North Koreans we know have studied, and made at least some limited visits to try to learn more about, and which, by the way, they have to know, if they have any economics understanding whatsoever--and I admit they don't have much--but if they have any, they have to know this is their only plausible long-term strategy.

If you are a communist planner in Pyongyang, you can pretend that your system really works and you don't have to change, or you can secretly hope that Kim Chong-Il is overthrown and that somehow your country develops a democratic and capitalist system through violent overthrow of the regime or you can do what I'm proposing.

I don't see any other plausible choices because they need to do major structural reform and if they're going to do it peacefully it's got to be within the communist system.  So that has to be the vision.

If that's the vision then we should propose tough steps to them that they have to carry out in order to get the benefits we would then offer to help with that structural adjustment, and that's the way you get away from buying the same horse twice or giving in to demands of blackmail or extortion.

You only give aid and lifting of trade sanctions to the extent the North Koreans are prepared to do structural reform of their economy in general, and what I mean by this is cutting their conventional military forces because they can't keep spending 25 percent of their GDP on their military and have any hope of reform.

You've got to do verifiable reductions in the conventional forces, maybe using the model of the conventional forces in Europe treaty we developed with the Soviets 15 years ago.

You've got to also demand reasonable steps such as elimination of their chemical weapons and release of the Japanese kidnapping victims because you've got to test their willingness to want to reach out and sincerely try to mend fences with the rest of the world.  There's no reason for them, for example, to hold on to the Japanese kidnapping victims except as a matter of pique and historical animosity.

If they're really interested in structural reform they should allow all the victims and their families to do whatever they want and go home whenever they want, and that should be one more element that should be part of the bargain.

And then beyond that you can be a little flexible about things, like just how many long-range missiles they have to destroy within a certain period a time and just how many short-range missiles they have to also stop producing.

Some of these sort of questions that Mike and I get at in our book are a little less central but we would insist on seeing structural reform in the economy, deep cuts in the conventional forces, verifiable, beginning of the de-nuclearization process, and in exchange for--and a release of the Japanese kidnapping victims.

In exchange for that, the international community would begin to provide a lifting of trade sanctions, and the aid would not just be humanitarian relief and it certainly would not be cash.

It would be infrastructural improvement to test the proposition that the North Koreans really want to do serious structural reform, and I'm getting into dangerous territory going before Nick Eberstadt, especially talking about the economy and the possibility of North Korean structural reform, he's suppressing a grim pretty nicely, and so I appreciate the politeness.

He may or may not think it's feasible but I do think we should test the proposition, and crazier things have happened in this part of the world within communist economies in the last 25 years or at least equally crazy things.

Who would have thought Vietnam and eastern China, in particular, could have done this same sort of thing that I'm proposing.  But they basically have.  So that's the proposal.

You have to be flexible about how fast the North Koreans can be asked or demanded to go in any given direction but to the extent they go slow, we go slow with the aid and the trade sanctions lifting as well, and you have to be somewhat flexible about exactly how many chemical weapons are eliminated in a given time period, but to the extent they go slowly on that, we can go more slowly on how fast we establish full diplomatic ties, what kinds of provisions are written into any regional nonaggression pact that would give them some symbolic confidence that we're not planning to launch a preventive war, although again I don't really believe that that's their worry and that may just be the sort of thing you have to do to satisfy some preexisting demand on the table that they're not willing to walk away from.

I think the Bush administration is right not to be offering a unilateral nonaggression pledge because that makes it sound like we were the problem all along, which we weren't, they were the problem all along, and we shouldn't even allow a symbolic victory for them.

To the contrary.  But if there's a way to couch a broader regional nonaggression pact, I think we can find a way to do that in which there's no harm done to our position.

So this is the basic logic of the proposal.  Get away from a narrow deal on the nukes or even a narrow deal on the nukes and the missiles the way that the second Clinton administration seemed to be headed, at least based on public press reports, and make it clear to the North Koreans that yes, we can be quite generous on aid, lifting of trade sanctions, diplomatic ties, and some kind of a formula for a regional nonaggression pact or community as long as you are serious about structural reform and changing your country and your economy.

We can live with the communist system if we have to.  We can live with the rule of this DPRK regime if we have to.  We don't like it but we will, provided that you take away its most egregious and horrendous manifestations--the way you've abused your own people, the way you threaten your neighbors, the way you kidnapped and held on to your neighbor's citizens, the way you've now developed nuclear weapons.

So if they're prepared to make progress on those things, we can be a partner in helping them reform their economy.  I think that gets away from the moral hazard of saying that we're just appeasing or that we are setting a precedent that the rest of the world can follow.

If there are any other North Koreas out there that want to do deep structural reform in exchange for a few hundred million dollars a year of American aid and lifting of trade sanctions, I'm prepared to have the same conversation with them.

I just don't want to establish the precedent that we'd give money for a weapons of mass destruction program.  That's what I want to stay away from and I think this kind of a proposal keeps us far away from that kind of danger.

A couple last points on the regional partners and I'll stop.

First of all, there is a way for the Bush administration to do what I'm proposing.  You all know that neither Democrats nor Republicans tend to like the kind of proposal I'm making today, or at least if you've read their positions, you know they're different from what I'm saying.

Democrats think it's overloading the negotiating agenda to try to go for all this at once, and I admit you have to be practical about how much you get in any one chunk.

But I would also point out Republicans have been, the Bush administration's been the party that has mentioned conventional force cuts and deeper structural reform in its early months in office as part of how you should approach North Korea.

President Bush has pointed out how distressed he is by the humanitarian plight of the North Korean people, their hunger, their starvation, the way they're treated by their regime.

So i think there actually is a certain way in which the Bush administration can claim this sort of agenda is not inconsistent with its own past thinking.

But if they want to maintain a very firm, principled American line, the way to do it I believe is to ask the Chinese and the South Koreans, at least in the short term, to provide more of the carrots, we maintain the firm line and we try to use the six-party construct not just to give a unified face of five countries squeezing the North Koreans, cause that ain't working, and that's not what the other four out of the five want to do, but use this to structure a system of carrots and sticks in which maybe the North--[audio out briefly] if they don't accept this kind of a framework, then I'm probably more inclined to go along with a lot of the hawkish views that we've heard from my friends, like Victor and perhaps Nick, I'll let him speak for himself in just a second, but i think you have to say as an American negotiator, to your regional partners as well, we are trying this, we cannot be patient forever.  The North Koreans are in a little period where they are not going to improve their nuclear arsenal very fast but we certainly cannot live with an indefinite increase in that arsenal if they ever start building a larger arsenal through an underground uranium program, or through these larger reactors, they could some day perhaps construct, you know, this is not an acceptable status quo and we have to fix and we are prepared to listen to what you're proposing in the negotiation phase of this strategy if you're prepared to listen to some of what we're proposing in the aftermath, which could be a much broader and tougher  proliferation security initiative, maybe more economic sanctions, maybe an attempt to use East Coast tools, to, if necessary, try to force North Korean regime collapse.

It's certainly not a route I want to go to now, for a lot of reasons.  I don't think there's any guarantee it'll work, is the most important one, and there's a real risk that it could lead to a North Korean reaction that would be very more dangerous than what we're seeing today.

But it has to be the logical alternative strategy if what I'm proposing doesn't work and I think the United States can make that clear to our regional friends and thereby get more of their cooperation in the short term cause they realize the alternative is really not something they want to live with.

So that's the basic logic of what I propose the next administration do.

As I say, I think either Kerry or Bush could do it in one way or another and I look forward to Nick's thoughts and then your own reactions later on.

MR. DONNELLY:  Michael, thank you very much.  Nick, over to you.

MR. EBERSTADT:  Thank you, Tom.  It's nice to see so many friends here in the audience and I'm really pleased to be able to share the podium with Mike.  Let me flak for his book for just a moment.  if you have not read it, you really must read Crisis on the Korean Peninsula.  I think that more than any other book that has been published in the last few years, it advances our thinking about what a possibly feasible deal would be like.

You don't have to subscribe to all of the premises to realize that this is very clearly thought through and is a help, it's a clarification of thought.

So those of you who haven't read it yet read it.

North Korea, to borrow a phrase from another place, another time, is a small country far away about which we know little.  But even though we may know little about the DPRK today, I think we know enough to say that the North Korean problem has gotten bigger, not smaller, over the last three and a half years under whatever one would wish to describe the Bush policy towards North Korea as being.

Just as the North Korea problem got bigger, not smaller during the several years of appeasement policy that the Clinton administration experimented with at the end of the second administration.

And I think that reducing the size of the problem depends critically upon making an accurate diagnosis of the problem at hand.

Little as we know about the North Korean problematique, I think we can offer the hypothesis that the North Korean problem is in fact the North Korean government, nothing more than that, nothing less than that.  It's the North Korean government itself, and we are going to have a growing North Korean problem on our hands until we have a new government in North Korea.

That's not a very nice conclusion to draw because it has very unpleasant implications.  But I think the burden of analysis and facts leads us in that direction.

The North Korean government isn't something that sprung up January of 2001 or even in January of 1993.  It's a government that has been in place since 1948 and it has a very consistent record of behavior and even of statements.

It sometimes is very useful to read what people say because sometimes they actually mean it, and what the North Korean government has had to say should give us pause, because the argument has been very consistent for over half a century.

The North Korean government, more than any other state in East Asia, maybe more than any other state in the world, is a revisionist government in profound opposition to the modern globalist project.

While some governments may have difficulties with the idea of expanded trade or democratization, the North Korean government is fundamentally threatened by both the modern trend towards democratization and the trend towards globalization, and in statement after statement that the North Korean government has made, it spells out that it sees both of these fundamental trends of our time as being inimically hostile to its survival.

All governments want to survive, there's nothing special about the North Korean government's wish to survive.  What is special is the list of particulars that the North Korean government spells out for its survival and it wants to avoid being integrated into international trade, it wants to avoid the American, the Pax Americana that has kept the peace and prosperity in East Asia, it wants that to be disassembled.

It wants South Korea to become part of Kim Chong-Il Inc. and there's very little doubt about that as well.  That's a nonnegotiable demand, although sometimes it is [inaudible] sotto voce.

And along with everything else, the North Korean government has spelled out, on more than one occasion, many more than one occasions, that fundamental economic form is seen as suicidal.

Tinkering at the margins is certainly going on today but fundamental reform is honeycoated poison and the government has said it any number of times we wish to find.

Now in dealing with a government like this, what sort of deal is possible?  I think as a prudential measure for free and democratic states, it's always important to attempt peaceful diplomacy as a first step or maybe a first, second, third and fourth step.

But one also has to take some sort of measure of likelihood of success in diplomatic initiatives and I see three serious problems that may make it ultimately unrealistic to hope for the deal, the voluntary peaceful deal which I think we'd all be pleased with, something that avoided the conflict voluntarily and got us to a joint agreement for de-nuclearization and other things in DPRK.

The first problem is the question of North Korean intentions and when diplomatists talk about probing North Korean nuclear intentions, I think that is all well and good.  That's unexceptionable.  The problem of course is that this isn't entirely fallow ground, it's not as if we haven't been there before.  In fact we've been in this ground for the last decade and a half, starting with the South Korean negotiations which lead to the joint declaration on de-nuclearization of the Korean peninsula, the end of 1991, then going into the U.S. negotiations that led to the agreed framework and then going into the sunshine policy and then going into the late Clinton era negotiations.  I think we have a pretty good idea of what happened during this whole period.

One thing that happened was that North Korea was happy to sign pieces of paper for de-nuclearization.  Another thing that happened is, as far as I can tell, they broke every single agreement they ever signed, ifs, ands and buts included.

So what one would have to draw as a specification of performance out of this spectacle is that North Korea will sign and agree to deals on de-nuclearization or perhaps other questions as well.  They just won't fulfill their promises and I don't see why we should think that this will change in the near future under the existing leadership.

A second problem, in particular on the nuclear side--Mike spoke about many other issues as well--on the nuclear side would be the sort of precedent that would be established by an agreement, either for what North Korea is asking for now, which they formulate as rewards for freeze or for some other renewed package of benefits.  More extravagant ones have been formulated by the ROK government, for example.

The problem here is that this sets a rather worrisome precedent or example for other would-be proliferators around the world, and there are some other would-be proliferators around the world, one of which governments is located in Tehran.  It's interesting to read the news from yesterday, there was a little story in Reuters, for example, Iran wants a guarantee of no regime change, diplomats--if you read this story, it's quite clear that diplomats and policy makers in Iran have been paying very, very close attention to the drama in North Korea, and are calibrating their demands according to the new performance specifications that are being revealed by the DPRK.

So the DPRK nuclear program or threat is not just a regional problem, it's an entirely global problem,and part of the problem is that solving the DPRK problem may make for more difficulties in other parts of the world.

A third and not entirely minimal difficulty in getting to yes with the DPRK is what we might describe as the personnel problem.  Whether you're trying to do a deal on a used car or on any other sort of negotiation, you have to have someone who is credible sitting on the other side of the table.

You have to have somebody you can shake hands with and have some minimal trust they'll follow through, and not to put the problem too bluntly, there isn't anybody like that in North Korea today.  There's nobody like that in the leadership.  Why do I say this?

Take a look at the latest round of the North Korean nuclear drama.  As I mentioned, it goes back a ways.  But the latest round started about two years ago when assistant Secretary of State James Kelly visited Pyongyang to confront North Korean counterparts with evidence that they had been violating the agreed framework with a covert HEU program.

The man who eventually told him that yes, this program is underway and yes, we view the agreed framework with the United States as void, is a man named Kung Sak Chu [ph].

Now for those of you who are North Korea inside baseball players, you'll already know Mr. Kung Sak Chu is the signatory on the agreed framework.  The North Korean who signed the agreement framework for the DPRK told the Americans that this HEU program was there and the framework was null and void.

In the next round of negotiations, presumably the U.S. and other countries won't want to be negotiating with Mr. Kung Sak Chu.  But who would you negotiate with instead?

A obvious suggestion would be someone at a higher pay grade, for example, Kim Chong-Il.  The problem there is that Kim Chong-Il is the chairman of the national defense commission which manages the nuclear program and has to be aware of the decisions about and the funding allocations for the expenditures that were the violations which brought us to the current impasse.

So there's a lack of credible personnel I think on the other side of the table here.

How would a successful policy towards dealing with this question of thinking about new governments for North Korea start to be formulated?  What would it look like?

Well, as I mentioned already, certainly there's a role for diplomacy and the six-party talks are one form of multilateral diplomacy which might be the diplomatic stage for this.  I don't  think Mike would disagree with me about this, and also from what he said, I don't think that he would disagree with me that important, actually essential in moving forward on six-party talks or any other sort of multilateral negotiations would be to define guidelines for defining failure.

As long as one never has guidelines for defining failure, there can't be failure.  You have to have very clear ideas, ahead of time, about what is the point of no return, and I think one has to be willing, at that point, to swallow hard and say diplomacy has failed, if you reach your defined red lines.

I think also a more effective policy would presuppose additional and, indeed, more intense negotiations, but this would be with some of our allies and possible collaborators, in particular with China and the ROK.  It's hardly a secret that relations between the ROK and the U.S have not been on the upswing these last few years.  Any sort of coordinated policy with the, dealing with the DPRK is going to, I think, be vastly enhanced by a stronger U.S.-ROK bond, and there's a big role for enhanced U.S. diplomacy with China.

Since China's actions are, at least to some of us distant observers, often very curious or opaque in dealing with the DPRK.

MR.          :  [inaudible].

MR. EBERSTADT:  Thank you, Tom.

I don't think the United States has any hope of changing Chinese viewpoints or pushing or forcing China to adopt any policy different from that which Chinese leadership wishes to embrace towards the DPRK.  Where U.S. policy I think could be perhaps more effective is in engaging Chinese leadership and in trying to think about what is actually in China's best interests.

I don't think it's a hard sell to argue that a nuclear North Korea is not in China's best interests, because if you think about the steps that happen after that, you don't get a happy storyline for Beijing.  A little bit more effort in that are I think could be very worthwhile.

There are a whole range of instruments for intensifying economic pressure on the DPRk that might more effectively be utilized than have been utilized today.  Not all of these necessarily involve sanctions or going to the United Nations.  Some of the first steps would involve reducing the allowance and the international aid that other bilateral actors, other governments are giving to the DPRK, and the DPRK may be much more uniquely vulnerable to economic diplomacy than many other governments from the past century.

Economic diplomacy is usually famously-- economic coercion through diplomacy is usually famously unsuccessful.  The North Korean economy is not a usual economy.

There's a question of human rights which Mike also mentioned, and I think that that would have to be part of an enhanced program.

One of the most important aspects of a broader human rights approach to the DPRK would involve taking a look at the South Korea constitution.  In South Korea, article 3 of the constitution declares that every person who lives in the Korean peninsula is a citizen of the ROK and the South Korea supreme court has interpreted that particular constitutional guarantee to mean that there is in effect a right of return to the ROK, to South Korea.

Any North Korean who is outside of the borders of the DPRK and raises his or her hand and says, "Take me home," has a right to go to Seoul, and this is, and their human rights I need not emphasize, are immediately radically improved by that little transit.  This is a very important and I think underappreciated aspect of a broader policy for effecting change in North Korea.

And finally, I think U.S. government and other governments around the area have to stop treating government change in North Korea, regime change in North Korea as thinking about the unthinkable.  It can be thought about, it can be prepared for.  The more it is prepared for, the less likely it is to end in tragedy and the more likely it is to be a transit to a successful, more prosperous, more peaceful Northeast Asia.

Thank you.

MR. DONNELLY:  Thank you both.

You've more than met expectations, certainly based on my consumption of your past work, but as a simple strategist, I confess being something of a slightly dissatisfied consumer in this regard.

I wonder why North Korea isn't one of those situations where, to paraphrase Ronald Reagan, the best policy is not to do something but just to sit there, in that Michael, what I want is the end that Nick proposes.  I think the problem is the government and ultimately regime change is the answer but I'm scared out of my pants by the risks that I have to run in order to achieve that, and Nick is quite right that a little preparation for thinking about what to do once the regime collapses or is stripped away, or however it disappears into the dustbin of history is a good question.

But getting from where we are now to that goal, you know, remains a conundrum and you quite rightly point out that maybe there are other carrots and sticks that we could offer up.

But I guess it's a question for both of you.  Look, I mean, maybe the policy of the last couple years has produced, unintentionally so, but has produced the best possible outcome in that, you know, maybe the measurement should be how bad things are getting worse, not the fact that they are getting worse, given the nature of the regime, and the only thing that American policy makers or even the rest of the world can really hope for is to mitigate the effects of, you know, the regime's own actions and then to think through the consequences, as Nick says, of what to do once it does go away and to try to avoid the risks associated with that situation.

So I guess it's a question for both of you.

How can I have regime change by other means?

MR. O'HANLON:  I'll start, Tom, and say I don't totally disagree, which is a good thing because I hate to disagree with you, it's usually a bad sign of my thinking, and B, my policy could wind up exactly where you are if negotiations for this broader framework fail, because the logic of how you deal with failure is you try to do whatever you can to--I'm not answering your question, I'm commenting on your premise, to start, and I agree that you may wind up in a position where you have no choice really but to try to keep the short-term damage from getting any worse and then hope that something lucky happens inside North Korea and that that's your long-term strategy.

And there's obviously reason to hope that that could, over time, play out.  And I agree, the last couple a years have not been horrific.  You know, what we've seen the last couple years has been very bad of course for the North Korean people but not as bad as what they had experienced in the late '90s and it has been totally acceptable for everyone else in the short term.

The counterfeiting we can live with, the drug--these are not the reasons you go to war, to risk hundreds of thousands of lives, to stop that sort of thing.  The missile trade is really not--you know, it's a factor of ten less than it was during the Cold War years.  The North Korean arms export dilemma is not that serious.  North Korea is not a state sponsor of terror right now even though they're still on our list.

That's because they hold some--they allowed some Japanese kidnappers from 1970 who, you know, basically decided to take their retirement in North Korea to remain on North Korean territory. That's the extent of North Korean state sponsorship in the last 15 years.  We can live with all that.

So my only concern is is this really sustainable and aren't the North Koreans going to "rock the boat" in a pretty big way if they become convinced that the current negotiation process is not leading anywhere and if their economy still seems to be failing?

So I would rather not resort to your approach until we have to, that's all I'm saying, and I think that there is an alternative that may or may not work.  We may wind up with the Donnelly dilemma, and if we do, how do we induce that regime collapse?  All I can do is give you a couple a things that would be moving in that direction.  I have no idea about their prospects for success.

One is you'd certainly try to convince the Chinese and the South Koreans to join the proliferation security initiative and start inspecting North Korean ships in their territorial waters for contraband, for weapons-related technology and so forth, and that puts a little bit more of the screws on.

As you continue the humanitarian relief, because let's try to avoid that starvation problem we had in the late '90s, if at all possible.

Beyond that, I suppose you can try to go to the U.N. and legislate tighter sanctions but I'm not quite sure what they would be in most cases, because most of ongoing trade with North Korea is humanitarian and not much else, but you could try to squeeze a little bit of their other exports that I've read about in Nick's book, which, for anyone who hasn't read that, you definitely should.

MR. EBERSTADT:  [inaudible].

MR. O'HANLON:  I've already read it.  Different topic but very good also.  So now we really are done.

But I would say, I don't see a lot of tools beyond those, and that's why I get nervous because I don't see how you can be very competent, success.  Meanwhile you've told the North Koreans what you're trying to do and you give them time to develop a strategy of more brinkmanship which I get nervous about.  But I may have to live with your scenario because I have no other choice, if this grand bargain proposal fails.

MR. DONNELLY:  Nick, do you want to take [inaudible].

MR. EBERSTADT:  I completely agree with Mike, that the current modus operandi doesn't seem to be sustainable.  This is just a classic example of a gathering storm in international security relations, and the modus operandi that we have at the moment is a North Korean government that seems utterly determined and very intent upon acquiring as large a nuclear arsenal as quickly as it can.  That's going on.  I don't think that anybody outside of the DPRK knows exactly how far along that program is but we know what is happening.

The other difficulty here is that any attempts at squeezing the DPRK over the last few years have clearly not worked because if you take a look at what North Korea's trade partners say they're selling to North Korea and what North Korea seems to be earning through legitimate commercial exports, that gap has widened and the non-China part of that gap is continually widening.

As long as we have this as kind of the fundamental givens of the situation, I don't think we can rest easy.

MR. DONNELLY:  Okay.  I'm going to give up the microphone to the audience but I promise not to--yes, sir; let's go there first.

QUESTION:  Joe Winder [ph] from the Korea Economic Institute.  Thank you both for very thoughtful, logical, rational presentations.

My problem is that it's sort a like someone once said, democracy's the worst system except for all the alternatives and it seems to me that the current situation with regard to North Korea is the worst possible situation except for all the alternatives.

Michael, you listed past couple of years, well, not so bad, and I think the South Koreans prefer this to chaos on the peninsula, the Chinese prefer this situation to chaos on the peninsula, the Japanese prefer this to chaos on the peninsula, and both of your, a fundamental premise of both of your proposals is that at some point you define, recognize clearly, failure, and nobody has an interest in that with the exception of the United States.

The North Koreans don't want it, the South Koreans don't want it, the Chinese don't want it, the Japanese don't want it, the Russians don't want it, and if nobody wants a definition of failure, then I don't see how you're going to find one, because the North Koreans--and Nick, you suggest that they're going hellbent for as large a nuclear program as possible as fast as possible.

Maybe.  But maybe what they're going for is as ambiguous a nuclear program as possible, just to keep people off-balance, and they don't want to have a failure, they don't want to have a deal--one of the suggestions is that we reach the answer that we can all agree, Is North Korea prepared to give up its nuclear program?

They don't us to be able to find that answer, so they're going to do everything they can to keep us from being able to find that answer.

So how do you get to a new stable situation when everybody is probably more comfortable with the current situation than the alternatives?

QUESTION:  If I could just dovetail that, it seems that there is one element of the agenda that the United States is uniquely worried about and that's the proliferation question and I would ask you both whether any of the other interlocutors in six-party talks has the same view of that as we do, and whether that gives us a slightly different agenda than others.

MR. EBERSTADT:  My impression is that no other actor in the six-party talks is as concerned about proliferation as the United States is.  It's asymmetric interests.  We're the global--we're the current totally global power and that can't be said about the other actors.  So yes, there is a big difference.

What I think we have to wonder about here, and this is unprovable at the moment, Joe, is whether, as both Mike and I, from slightly different perspectives are worrying, we may not be postponing a day of reckoning rather than averting a day of reckoning for a much higher bill later on down the road.

It is clearly true that at least five, and perhaps five and a half of the six-party talk members are not interested in regime change in the DPRK at the moment.

And it is, I think quite clear, that at least five, and maybe five plus, would like to see the situation continue along without too much turbulence, at least for the next number of weeks, whatever.

But this would not be the first time in living memory in which state actors badly miscalculated and what seemed to be a rationale process turned out to lead to tragedy, if things headed in a certain sort of direction, and what I'm thinking about obviously is the whole interwar balance in Europe, you know, in the '20s and '30s, where this kind of impetus for negotiation seemed to be able to postpone crisis but when crisis hit it was not terribly pleasant, and I do agree with you also that for the moment the most--

[Start side 1B.]

MR. EBERSTADT:  --[inaudible] maybe you'd call a virtual nuclear diplomacy, much bigger rewards for much lower immediate risks to try to build up a nuclear stockpile and do a kind of a, neither confirm nor deny, just talk more and more and more like a nuclear power.

MR. O'HANLON:  I'd just add one point.  I think you laid out a very compelling critique, at least where I was coming from, and I think that what I would say in response, we don't really know--what's the best way to put it?  Of course we don't know if the North Korean position really is sustainable in their own mind, because they've seen what's happened to their economy.

And also we're not asking the other members of the six-party talks to sanction U.S. preventive war at the end of the process any longer.

That may have been a thought back in the hawkish days of the first Clinton administration but it hasn't been such a thought in recent times.

MR.          :  [inaudible].

MR. O'HANLON:  Exactly.

Bill Perry was the last person to credibly threaten the use of force against the North Koreans, and we're no longer talking about that and therefore, if South Korea and China realize at the end--by the way, I think Japan could be convinced without--Japanese diplomats here may or may not want to agree.  But my guess is we have a little easier time with the Japanese, convincing them that some element of toughness is needed.

I agree with you, the South Koreans and the Chinese are a long ways away from that now.  But if the worst-case scenario is PSI and then basically trying to live with the problem, you know, because regime collapse may not happen even under a broader PSI, I'm not so sure that they would--I mean, the South Koreans and the Chinese that I talk to really want a different American negotiating strategy and really think it has at least some chance of success.

And so if we indulge them on that, I think there's a chance that we can get them to go to the stick I'm talking about, especially because it's not that horrible of a stick.

MR. DONNELLY:  Back here.

QUESTION:  Gordon Bare [ph], army, retired.  It seems to me that such successes as there have been in reversing proliferation, one thinks of widely different circumstances in Iraq, South Korea, Argentina, Brazil, Belarus, Ukraine, have been attended upon regime change of one kind or another.

I wonder if you would comment on this hypothesis, if either of you would comment on this hypothesis, does this lead to anything other than very pessimistic conclusions with regard to North Korea?

MR. O'HANLON:  I'll say a quick word.  It's a good, well-constructed argument.  I think there's a lot to it.  I agree that there haven't been many cases but I think if I look back at the South Korean and Taiwanese fledgling nuclear programs of yesterday, for example, I at least see continuity in the overall governing party.

There may have been--I don't know their histories well enough to say that you needed, perhaps you did need to have a chance from one leader to another to give an impetus to the shift in policy, but both those countries were thinking nuclear for a while and then stopped, largely within the continuity of a given broad ruling organization or party.

So I think there is some hope but I grant you, what I'm proposing at least, and what I'm hoping for would be a radical development.

Kim Chong-Il would have to say, you know, I am willing to run the risk that gradually opening up my economy could lead to a Ceausescu sort of outcome for me, you know, where I can't control the process any longer, because I think the alternative is worse, and I grant you, in a second, he may not come to that conclusion.

I think he would be nervous about the nuclear issue, he might be even more nervous about the kind of structural reform that I'm proposing, but I think we have to test him.

MR. DONNELLY:  Nick, you got any--

MR. EBERSTADT:  Mike brought up Taiwan and ROK and I think those are both very important examples.

I would interpret the main lesson from the ROK and Taiwanese experience as being the importance of American pressure and the American security guarantee.

In the case of those two particular countries, because they were so dependent upon the U.S. at that time for their survival.

North Korea is looking for a security guarantee from the United States today and that sounds unobjectionable, but as soon as you open the lid on this thing, exactly what they mean by a security guarantee is rather interesting.

The No. 2 man in the North Korea government visited the State Department in October of 2000, General Chong Sung-hun [?], and at a dinner toast to Madeleine Albright, he said that he was instructed by Kim Chong-Il to explain to Americans that Pyongyang was ready to go from confrontation to cooperation and from hostility to friendship with the United States as soon as the U.S. was willing to provide guarantees for the territorial integrity and the national sovereignty of the DPRK.

Now that is quite a mouthful and we may not be as skilled in semiotics as we were a few years ago, but if you try to deconstruct that phrase, it's quite interesting.  Start with the phrase the territorial integrity of the DPRK.  What does the DPRK define as its territory?

The entire Korean peninsula.  We can provide security guarantees to the DPRK, if we want to, but they'd be rather expensive.

MR. DONNELLY:  No one else?  Yes, sir?

QUESTION:  I want to be sure I understand what strategic options are out for consideration at this point, whether it's at your table or at the global table, and I think of them in terms of the grand bargain is a strategic option, a sort of Reagan "don't just do something, stand there," regime change in some form or another.

What does that list of strategic options look like, and what's the most likely to be pursued in the next four years, I'll say, irrespective of who gets elected, but I won't say who gets elected on November 2nd because that isn't clear either.

MR. EBERSTADT:  I would say there are four, I think there are four general sorts of strategic approaches or approaches that we can talk about and you listed three of them.  Grand bargain.  Containment.  Regime change.

A very important one to mention also is dreamworld, and I would say at the moment, the international approach is more a dreamworld than any of the three others that we've described.

MR. O'HANLON:  I think that's pretty well laid out.  I think that chances are, the lowest probability is military force of any kind, even surgical strikes, because what would they accomplish anymore?

The greatest likelihood, I think, is some element of a broader "carrots and sticks" negotiating strategy and if you just think through your options, you really can't sit on the current situation--you can resort to that and it may be kind of old but it's not what you would choose as your first approach.

So i think negotiation for some kind of  a broader agenda is the most natural thing, because first of all, Senator Kerry has said that's what he would do, and he spent at least as much time on process as on the logic of the broader agenda and I would have personally advocated reversing the emphasis in his public discussion but he said he would go for a broader agenda.

Mr. Bush, in the past, has talked about a broader agenda, at least in terms of the demands he would place on the North Koreans, not necessarily in terms of what he would offer, but there have been various hints over the months and years that if the North Koreans--you know, I can't remember, I think it was Condi Rice who said it--they'll be surprised at what's possible if they follow the Gaddafi route, and of course the analogy is quite imperfect for a lot of reasons.

But nonetheless, I think you're seeing that both these presidential candidates therefore have some element of a broader approach and if you're the Bush administration you have to know the diplomatic problems you've been having with the South Koreans and the Chinese over this hard line.

They've had two years, two and a half years to learn about that, and I don't think--Donald Rumsfeld and Dick Cheney may have wanted a regime change sort of approach, but I don't think they can make the argument, cogently enough, to convince President Bush because I don't think there is a clear enough way to do it, to convince President Bush.

So I think you fall back on regime change if you can't get something else in the interim.

So whatever the chance is of this kind of a negotiation working, I think it's the logical thing that either Kerry or Bush would try, in one form or another, at least for the next year.

MR. DONNELLY:  I'll just throw in two peripheral comments.

First of all, as much as anybody may want regime change by other means, it goes back to the previous question, what happens after that moment, whether it's achieved militarily or just because the regime collapses.  The process of reconstruction in North Korea is bound to make the process in Iraq or even Afghanistan look like child's play, plus it's in the middle of--you know, it's a great power flashpoint directly, in ways that even Iraq and Afghanistan are not.

Secondly, we have I think perhaps talked too little about how China plays a pacing role for American strategy.  Any successful American strategy for ending the North Korean crisis has got to figure out how to get People's Republic to play a constructive role and it's not clear that they're anywhere near, you know, themselves, being either in a, you know, process, leadership way or in a substantive, actually having a clear strategic goal from their perspective.

You know, the Chinese may be perfectly content with the status quo [inaudible] hard to read, but actually I would toss that back to the panelists to comment on whether we can solve this problem without getting the Chinese to play some role that they're not yet willing to play.

MR. O'HANLON:  Let me comment on that question, I hope it's a direct answer but at least it's on the same topic, which is that President Bush is essentially saying let's keep using the six-party format as the main approach and China should want to do more.

Senator Kerry is basically saying let's not rely on the Chinese as much because there are certain things the North Koreans really want to hear from us and they're not really going to believe that there is a serious process of engagement until they hear them directly from us, so the good cop/bad cop thing is less promising.

On that point I'll make one--I've been trying to be very evenhanded.  I do think Senator Kerry is closer to being right on this point.  I think the Chinese themselves don't really think they should be asked or can credibly deliver without Washington enthusiastically supporting whatever broader agenda is on the table.

And I don't think the North Koreans are going to be too happy to hear China saying, don't worry, we can control the Americans, when they hear President Bush still articulating prevention and preemption doctrine.

So I actually do think that the multilateral plus bilateral approach, that not only Senator Kerry but Jack Pritchard and others have advocated, I think that has a certain logic to it cause I think North Korea really does want to hear certain things from us, even if in theory China and South Korea could give all the carrots while we maintain a very firm line.

MR. DONNELLY:  Yes, sir?  And then we'll get you next.

QUESTION:  [Korean name] correspondent of [Korean newspaper name.]  Even though the North Koreans said that they have possess the plutonium, nobody knows if they really have the nuclear bomb or not.

So my question is isn't there any possibility that United States is going to be resigned to the North Korea's possession of a nuclear power, as far as North Korea doesn't export nuclear bomb to terrorist groups, and they don't--they neither confirm nor deny the nuclear power?  And the next question is what can you do, even though the negotiation succeeded, the six-party talks succeeded, how do you verify that they depose the older nuclear power?  How can you verify that?

MR. EBERSTADT:  Mr. Kim, I think that the only real reason for hope that North Korea may not have nuclear weapons is that North Korea has said it has nuclear weapons.  Otherwise, I think we've have to come to a rather pessimistic assessment of the current trends.

So how far along the program has gotten, I can't guess, I don't have the sort of information that would let me guess how many nuclear weapons the DPRk may have or how far along exactly the program has developed.

But you bring up a very important question, this question of verifiability, how would one verify de-nuclearization in a system like the DPRK's, which is premised upon strategic deception, in which there are, you tell me, 10,000, 12,000, 150,000 holes in the ground that are all very interesting.

Under those sorts of circumstances, with kind of adverse or reluctant help from the DPRk government, I think the verification program would look something like Douglas MacArthur in Japan.

MR. O'HANLON:  A couple additional thoughts.  I think you have to break down into two groups what you can easily verify and what you can't with the North Koreans.  What you can verify, first of all, you can tell when they're operating their nuclear reactors, and you can tell when they're building new ones.

Now there's always the possibility the North Koreans, in their obsession with underground activity and latter day James Bond fantasies, could want to build a reactor underground.  There's some remote possibility of that.  But that would be extraordinary difficult and I think the chances of them being able to pull that off in any finite time frame, you know, ten, fifteen years, are probably less than 10 percent.

We could watch a lot of activity going on near whatever underground cavern was being used, and I think we have a lot of reason to think--now we would not get human intelligence.  I think we'd have to assume there'd be no good human intelligence.

We'd have to have confidence that we could see all the preparation, all the materials being brought underground.  I think there's a good chance we could, or even if not, a good chance the North Koreans would fail to complete the reactor because doing this underground requires a huge space, a lot of cooling, other things that are tough to do in rock.

So i think that there's some worry about that but it's unlikely the North Koreans could ever have a nuclear reactor we wouldn't see.

On the other hand, the uranium enrichment capability is very hard for us to detect and the only way you can do so, absent human intelligence that we're not going to get in North Korea, is to monitor the import and export of famous components like aluminum tubes that we've all been reading so much about in the last couple, three years, in regard to Iraq in particular, and in fairness to U.S. intelligence I think they got this one right in regard to North Korea, even if some people got it wrong in regard to Iraq.

And I think that we can have some hope of detecting but no certainty of detecting.  The good news is underground uranium enrichment programs tend to be smaller than--you know, the worry is that maybe within a year or two North Korea could be theoretically producing one or at most two uranium bombs per year with all this effort they've made in producing the second program.

That's much different than being able to produce many weapons aboveground.  So I think with North Korea, just to summarize, you can verify what they're doing with their nuclear reactors, you can demand access to a certain amount of plutonium, that you can fairly accurately guess about how much they've already made.

We might be off by one bomb's worth of plutonium, I admit, but we can probably get pretty good intelligence on the eight bombs with the plutonium they've already got.

We can watch them cut up tanks and artillery, if you believe in this agreed framework or, I'm sorry, grand bargain concept that I've articulated.  You can verify that.

You can verify them destroying longer-range missiles and chemical weapons, but you can never know if they got rid of all their chemical weapons, you can never know if your original estimates of all their tanks and artillery were accurate to begin with, you cannot be sure that their manpower operating those tanks and artillery will actually be sent home to work in the fields rather than simply put into infantry units with smaller weaponry.

So even if you do eliminate the big weapons, the size of the army may not change and you may not be able to tell.

So there's some things you can verify and some things you can't.  I would submit that there are enough things we can verify, we can keep the nuclear arsenal to a very small number, even if we cannot be a 100 percent sure it's down to zero and we can make sure they cut up a lot of their heavy weaponry, even if we cannot be sure they're really dismantling the size of the army, and we can be sure they're getting rid of a lot of chemical weapons and missiles even if we can never know the numbers are going to be zero in either case.

MR. DONNELLY:  If I can have just 30 seconds or so on this.  What is perplexing to me is what the North Koreans think they're getting by nuclear weapons.  Is it really an attempt to deter the United States from waging a preventive of preemptive war against North Korea?

In some ways you have to be a North Korean to think that we were seriously going to go to war anyway, unless you think that your conventional power is so degraded and such a paper tiger, as actually both Nick and Michael have written, that it is not really very much of a useful deterrent against a military action.

So if you're [Korean name] and you think you're purchasing deterrence by the nuclear program, thenI will say I am less concerned about it, and we have lived with it and we can continue to live with it as long as it stays at, you know, at a reasonable level, whatever that may be.

The real danger, and what isn't necessarily solved by Michael's proposal necessarily, is this question of proliferation, particularly of nuclear materials, that's small enough and can be, you know, technologies can be concealed and the like.

So, you know, living with, you know, kind of a black hole on the peninsula is something that we've learned how to do over the past 50 years, and maybe it is not sustainable, I don't know, but we've been doing it for 50 years.

Again the thing that really worries me is whether--and this goes to Nick's question about North Korea intentions--whether they believe that they can continue to play a larger role and be more provocative, again, not so much in the sense of deterring us but in raising their profile, actually creating something of export value in a perverse kind of way.

Down in front.

QUESTION:  What can or should South Korea be doing differently?

MR. O'HANLON:  A couple of things.  One I think that--first of all, let me, not to avoid your question but as an American who thinks about iraq as well as do many of us, I'm very grateful to the South Koreans for showing that despite these tough times in our alliance relationship, they've become the third largest troop contributor in Iraq, and that's really a testament to the strength of the alliance and the importance of the alliance, but that's not very pertinent to your question, although I think it's indirectly related.

Secondly, I think that they should accept the logic of something that says if we're going to try to use a sunshine policy, you know, or a sunshine policy derivative, that it needs to be also a sunshine policy with teeth, and it can't be assumed to work.

The North Koreans are just going to be too happy to take all the good goodies, and the good parts of any kind of broader agenda and not make any changes.

That would obviously be your first choice if you were Kim Chong-Il.  Give me a few hundred million bucks a year, invest in a few little companies here and there, send some tourists who have to pay a thousand bucks to cross the border.  All this is good because it helps me keep my cashflow going, and that's all I have to do, and smile a copule of times to get the stuff--and the South Koreans are, you know, they're tough enough, street smart enough, realistic enough people, that a lot of them know this is the way the North Koreans see the current arrangemnt, which is why of course President Noh didn't get strong majority support when he won the presidency, and up until the last couple a weeks before his election we thought the other guy would win, who was a tougher line.

Their politics are almost as divided as oursin this country, and so I think that the South Korean left-of-center government should be looking to reach out to its own domestic opposition and find a policy that's a little bit more sustainable to that group as well, cause that also is a more realistic strategy and it's one that'll work better with the United States and present a tougher face to the North Koreans, even as it also gives them some incentives to reform.

MR. EBERSTADT:  I'd echo waht Mike says.  I think that's a very sound assessment.  The problem with the way that sunshine policy has been implemented--of course its name has changed several times but it's still the basic policy.

That in a very polarized domestic political context, and ROK is ceratinly that, arguing for the success of the policy has militated for also arguing that the North Korean threat is diminishing, so that the past two administrations in the ROK have argued that the proof of the success of their sunshine policy is that North Korea is no longer as great a threat as it was in the past, and naturally, to interested voters that begs the question.

If the North Korean threat is no longer so present, what are the Americans doing in our country except occasionally running over teenage girls?  And that question has to be answered, it has to be faced frontally and answered in a domestic context in the ROK.

There's one other aspect of the ROK policy over the last five years, that I think is most curious.  It's a dog that isn't barking.

We've had back to back human rights champions elected president in South Korea and we've heard hardly a word about human rights in North Korea.

It's as if the human rights for the Korean people end at the DMZ.  It's a very strange and conspicuous absence, and that again is something which I think needs to be worked out in a domestic political context in the ROK, but the proverbial man from Mars would notice that that's mighty peculiar.

QUESTION:  Yes.  Dave Fitzgerald, retired Foreign Service, now private consultant.  I was wondering if perhaps we're going at this problem with North Korea too directly and that maybe whatever administration comes in, there will be more emphasis on trying to build a new security community in northeast Asia, particularly with Japan and South Korea, and bringing more and more China into that, to try to have some sort of common context in which we're looking at security problems, that have changed quite a bit over the years, that will still be a preoccupation in the United States with its involvement with Iraq, and we're going to need more resources in northeast Asia, not just military but diplomatic and economic to try to address this question.

We need a sort of new agenda amongst our allies in northeast Asia, before you can start to really engage something with North Korea.

MR.     :  Mr. Fitzgerald, I would think that if there were anything that were a common security problem in northeast Asia, it could be called the DPRK, and I would think that that would probably be pretty near the top on any agenda that involved Russia, China, Japan, the ROK and the U.S.

It is so much more of an immediate and acute problem than the next order of issues, that I think that that would be the magnet, or at least the first item, you know, in discussion, that one would find there, and of course cooperation and deepening collaboration is all to be hoped for here.

But if the North Korea crisis can't do it, I'm not exactly sure what can.

MR.          :  Oh, I'll just toss a hand grenade [inaudible] the fun of it.  It may be--look--the Middle East crisis is also a crisis of northeast Asia, simply because of the energy dependence of the region on energy imports from the Persian Gulf.

You know, peculiarly, it may be that this is a problem that solves elsewhere first, if you're particularly talking about, you know, a bargain that includes the Chinese and the Japanese, and that, you know, Chinese may say, okay, we have problems with Pax Americana but we've got to live with it for a while and having the North Koreans continue to be a permanent crisis is not an acceptable solution.

So it's conceivable that, to me at least, that the strategic breakthrough may happen outside the region and then be imported into the region in a supertanker.

MR. O'HANLON:  I have one quick thing, which is--I'm sorry--I guess what I'm most concerned about is not that we have more regional meetings that would be handled by the assistant secretary level but that President Bush, if he is reelected--I think Senator Kerry's been very clear--he will try a new negotiating strategy and he would have to because he's going to be a first-time president.

Whereas Mr. Bush, my worry is not that he would choose the wrong strategy, because as I've argued earlier today, I think that the logic of his past position would push him into a "carrot and stick" negotiating approach as well.  I'm afraid he wouldn't make any decision at all because he's already proven, for the last couple years, that he's I think generally capable of not knowing how to decide between Rumsfeld and Cheney on this topic, and Powell and Armitage, and I understand his dilemma.   It's a hard one too chose.

But nonetheless, it's more comfortable, in some sense, just to essentially not make a decision.  So if there is a reason why in the end I'd prefer Kerry's policy to Bush's on this issue, as much as anything else, it's because I think Mr. Bush has already shown he's prepared not to force himself or his administration to a decision.

Having a regional meeting, which is inevitably the kind of thing that James Kelly goes to, not a George Bush, I don't know how it gets any closer to getting the president to actually decide, which is what we need in this administration in particular.

We need the president to make a decision, not for the regional specialists to know more of the options of have more conversations with the regional partners.

MR. EBERSTADT:  But Mike, when president-elect Kerry starts doing his planning books, please tell him that the idea of a special bilateral cut-out between the United States and the DPRK is a very unwise idea.

I'm sure that if he is elected president, that's something that he will put aside.  But at the moment, that seems to me to be one of the worrisome sides towards undermining the possible effectiveness of multilateral in dealing with North Korea.

MR. O'HANLON:  I'm sorry to go on with this but it's a very interesting question, Nick, and I'd love to actually--I'm not going to push this conversation too much further, but I'd love to hear more of your explanation of why.

To me, my hope is that, for Mr. Kerry, what he would meanby this concept of multilateral plus bilateralism, and Jack Pritchard's taught me a lot about this as well, is that ifyou go over to a six-party talk, you, as an American team, you've got, first of all, a roomful of about 20 translators, about five from each delegation.

Just to propose one idea requires a room larger than this, without even any backup, and I think the idea is how many conversations do you have on the side during the cocktail hour?

And under Mr. Bush, of course, there's been a lot of reluctance even to allow one on one conversation and the few that have happened I think have been sort of five and ten minutes, and they've been, you know, at the level of a NSC senior director, that sort of thing.  Whereas in a Kerry administration, my hope is not that we would set up a separate channel but that you would have more of those conversations on the side, maybe even visiting each other's hotel room, you know, after the hours were over, to work on tomorrow's agenda, that sort of thing, within a multilateral construct may be what Kerry is proposing.  But I really don't know.

MR. DONNELLY:  Was there a gentleman--yes.  One behind, and then we'll go to you.  Yes?

QUESTION:  I am [Korean name] Washington correspondent from [Korean name.]  I have a question to Mr. Michael O'Hanlon.  No matter how liberal and how conservative, is that North Korea should change from this moment, based upon your grand design, grand bargain, could you elaborate on, let's say, ten years from thereafter, what would the picture of the North Korea, after grand bargain, and my next question is how would you evaluate the North Koreans current change which South Korea government kept saying that North Korea's change are very positive way in direction, in terms of the direction, speed, their willingness to change?

MR. O'HANLON:  On the second question I think knows more.  I'll very quickly say I don't see nearly enough progress to consider us to be anywhere down the road towards meaningful reform.  I just see hopeful signs of potential interest and very little actual change so far.

On the point about what North Korea would look like, however, if they were to accept this sort of a proposal, in ten years time their military would be about half as large, some of it would still be near the DMZ, so they'd still have some ability to threaten Seoul, which I assume is going to be necessary for them to feel, getting to Tom's broader question about their worries about their conventional forces, I don't think they believe they can actually fend off an invasion.

Their only real deterrent is to be able to threaten Seoul and if we asked them to give up their nuclear weapons, we're going to have to accept some level of conventional artillery capability that remains against Seoul even at that point.

But I think their chemical weapons could largely be gone.  I wouldn't be surprised if they cheated a little bit and had a few shells here and there but I wouldn't care that much.

I think their long-range missiles could be largely gone but unfortunately, the shorter-range missiles threatening your country, we may not be able to count or eliminate completely.

I think that, let's hope the Japanese kidnapping victims would have gone home but I'm not sure how many family reunions would have occurred across the DMZ, even by then.

So what I look to is a North Korea that begins to resemble Vietnam in the 1980's.  that's about where I would hope to be.  It wouldn't be quite that benign because my guess is they might still have a little bit of the nuclear material left even after a 10-year process.  But I would have made that most of it was gone by that period of time, before agreeing to our end of the bargain which would include overtime, diplomatic ties, more and more permanent lifting of trade sanctions, and then building up these, helping them build up these special economic zones with infrastructural aid to the amount of maybe hundreds of millions a year in U.S. assistance, but again not in cash, in helping build up the infrastructure and maybe, over time, their educational and agricultural systems as well.

MR. DONNELLY:  Nick, do you want to--

MR. EBERSTADT:  That would be a much, much, much better world than the one we live in right now.  One of the things which I think makes it difficult to get there, or a critical constraint that would have to be broken to get there, would be a real bold switchover on the part of the DPRK government towards the question of whether North Korea is allowed to exist as a government, and if the North Korean government can make a bold switchover on that question any number of other things are possible.

MR. DONNELLY:  Then this gentleman here, and I think I saw some back there.

QUESTION:  Hi.  I'm Nate Seidman, affiliated with the Navy, and sort of the question I had follows what you were saying just a moment ago.  I think both panelists did a very good job looking at it from the U.S. and the West's perspective.

But if we take a look to the North Korean perspective for a moment, would you say that their strategic objective is to unite the peninsula to their government and if that is the objective, what kind of agreement would they be willing to agree to, unless one that fosters that strategic objective?

MR. O'HANLON:  I agree that Nick is right, that that's their ultimate goal, to reunify the peninsula and I don't claim to be able to tell you which members of the top-ranking advisory councils to Kim Chong-Il have accepted that's unrealistic, but my belief is that more and more of them have because they can see the strategic trends.

They certainly have no prospect of conventional invasion to reunify the peninsula in my judgment.  I think most of them have to know that.  They may still hope they can use the nuclear card somehow to intimidate the South Koreans into simply giving up without a shot being fired but I'm dubious that even North Koreans would think that way.

So I put that in the category of something they would love to do, just like I'd love to see the Red Sox come back and beat the Yankees in this series but they're not going to really spend a lot of time working towards, just like I'm not even going to watch the game tonight because I can't bare it.  And so my hope is if they can get economic recovery and reform and mitigate the Ceausescu scenario--that's the one that I think they worry about and will be hard--a little bit of reform, how do you keep the lid on a little bit of reform?  I think that's the big question for the North Koreans.

MR. DONNELLY:  Well, that's certainly how the rest of us look at Boston.  In the back.  Well, I guess we're down to our last couple questions, just by way of warning.

QUESTION:  Mr. O'Hanlon, what can the U.S. Congress do to help bring about your deal or make it more possible, if it's possible?

MR. O'HANLON:  Great question.  We all know the Congress has been a big player in U.S. policy in the last few years on this issue.

I think the Congress, you know, is entitled to ask tough questions as it did of--I think Congress went too far towards almost opposing the agreed framework but I think it was within Congress's rights to ask very tough questions of that and I also would have applauded Congress asking tough questions about the last couple years of Clinton policy, which I do think were a little bit too much in the direction that Nick discussed earlier, even if I wouldn't use quite the same words.

I'd agree that Congress had a role to play there.  You know, what are we doing with this aid?  Why is it going to really solve a problem as opposed to just papering over the problem in the short term?

So I think Congress needs to ask broad strategic questions but also give the next president-elect, whoever it may be, a chance to put together a serious strategy and if that requires offering some benefits to the North Koreans, to the extent they would agree to verifiable tough and far-reaching changes in their own military and economy, I would hope Congress would be prepared to consider, offering whatever American aid and a lifting of trade sanctions might be necessary, at least as a highly conditional element of whatever proposal we make to the North Koreans.

MR. DONNELLY:  Michael, can I ask two follow-up questions about your plan.  One, what's your sort of time horizon?  At what point do we know that a grand bargain will have fallen through?

And of the things that you would ask the North Koreans to do to demonstrate good faith, can you kind of rank order those.

Are political symbols or signs, such as recognizing South Korea or simple cuts in military forces the kind of benchmarks that mean the most to you?

MR. O'HANLON:  My time horizon is that if Martinez can win tonight and then it rains for the next five days there's a chance that Martinez and Schilling could pitch games six and seven.

But my--North Korea.  Sorry.  I got distracted.

MR. DONNELLY:  I've got a special shoe that I'm going to offer up as--

MR. O'HANLON:  I think that you would have to expect some progress in the next presidential term and presumably you should be able to see some in the first half of it, whether it's a finished deal or not, and again I would accept--some people have been kind enough to react to this grand bargain, have pointed out that, you know, it's a nice idea except it won't work in the real world and putting all this into one treaty with the North Koreans is just not doable.

You couldn't even do this with the Soviets and they knew how to negotiate.  And so I accept that you may not be able to put all this into one piece of paper but I think you're going to have to see meaningful progress in the next three or four years which, by the way, is sort of what I would define as the window during which the North Korean nuclear problem doesn't really get worse.

I mean they've got, presumably, we don't know of course, presumably eight weapons now.

Over those next three to four years they probably can't add more than four or five more, using the five megawatt reactor and whatever uranium enrichment they can do.

This is just based on the unclassified intelligence; but that's my guess.  Whereas over a longer-term period of time, they can become more of what you might describe as a nuclear power with a nuclear arsenal.

So I think I would look into that time horizon.  And your other question was about benchmarks?

QUESTION:  Which of these things is most important.  How do we know [inaudible]?

MR. O'HANLON:  Well, I mean, you know, probably the nuclear and the economic reform cause those are the two--I think the North Koreans are going to have to keep generating crises until they get some other way to earn money and so unless you find some way to start fixing the economy--so that plus the nuclear issue are the two most important.

MR. DONNELLY:  Nick, I will offer you the opportunity of final rebuttal or comment. Otherwise I'm going to gavel the proceedings to a close.

MR. EBERSTADT:  Let's leave the problems of the Red Sox aside just for a second.  The problem for the United States with the DPRK may be that the DPRk already thinks it knows how to negotiate very well.

MR. DONNELLY:  Well, on that very somber and sobering note, I will gavel the proceedings to a close.  Join me in a round of applause for our two panelists and on behalf of AEI, thanks for coming and we'll see you next time.

[END OF TAPED RECORDING.]