American Enterprise Institute

April 5, 2007

[Edited transcript from audio tapes]

9:45 a.m.	Registration
10:00	Panelists:	Dan Blumenthal, AEI
		John R. Bolton, AEI
		Nicholas Eberstadt, AEI
	Moderator:	Christopher Griffin, AEI
11:30	Adjournment

Proceedings:

Christopher Griffin:  My name is Chris Griffin.  Welcome to the American Enterprise Institute.  I’m a research fellow here in Asian studies and am delighted that you’re able to join us today for this panel on the February 13 agreement reached more or less through the six-party talks with North Korea on the question of that country’s denuclearization.

Looking for inspiration for this panel today, quickly went back and looked at some headlines from April 5, 1994, the first time that this crisis came to a culmination.  It seems that all that’s old is new again in Washington.  Just to quickly run through a couple of those and see how relevant they are to our situation today – first, “North Korea Spurns UN Nuke Appeal,” with a quote from a North Korean official that his country plans to normalize its nuclear activities.  The recent suggestion from Chief Negotiator Kim Kye-gwan that the United States should reach an agreement with it along the lines of that reached with India gives an indication of what normalization would look like, perhaps.

The second headline: “U.S.-Chinese Convergence on Korea,” an editorial from the Baltimore Sun, with a quote from a senior Western diplomat to the effect that China’s good faith on the North Korean issue can be assumed and its influence is being deployed.  Good to know.  Third, and my favorite, “Curtail Cash to North Korea, Urges Former U.S. Official.” 

Unfortunately, with all due respect to Karl Marx, what first occurred as tragedy appears to be occurring again as a tragedy.  In the 1990s, between hundreds of thousands and millions of North Koreans died in a famine.  Today, somewhere between tens of thousands and hundreds of thousands of North Koreans are living in exile in China, where they are treated as criminals and forced underground.

So the question appears to be whether or not the agreement reached on February 13th will get us to a point five or ten or thirteen years from now where we’re not having déjà vu all over again.  To discuss that question, I have a panel of my AEI colleagues today which I’m very delighted to share the dais with. 

First, Ambassador John Bolton, who has a long and distinguished career in government, most recently as the U.S. Permanent Representative to the United Nations; previously, in the first George W. Bush administration, as undersecretary for arms control and international security in the State Department.

Second, we’ll have Nicholas Eberstadt, who is the Henry Wendt Chair in political economy at the American Enterprise Institute.  He’s written extensively on South and North Korea, both the political economies and recent economic developments, in particular in North Korea.  He’s just published a book this spring, “The North Korean Economy: Between Crisis and Catastrophe.”

Finally, Dan Blumenthal, who joined AEI in late 2004, leaving the Department of Defense, where he was the senior country director for China, Taiwan and Mongolia.  At AEI he continues to follow those countries and the rest of the Northeast Asian region more broadly.

Without further ado, Ambassador Bolton.

John Bolton:  Thank you very much, Chris.  It’s a pleasure to be here and join the other members of the panel on this subject, which is obviously very timely given the terms of the February 13 agreement.  I’m especially happy to see how unashamedly Nick advertises his book because it gives me great comfort if and when I finish mine and it comes out that I should have no compunctions about advertising it just as shamelessly.  So I intend to follow his example if I can make it to the point he has made so many times already with so much excellent work that he’s produced.

I think that the question of North Korea’s nuclear weapons program is really one of the most profound that the United States faces in the world today.  Therefore the course of action that the United States is pursuing and that its close friends and allies in the region and around the world are pursuing is probably one of the most important questions we have not just now but, for U.S. purposes, for the 2008 election.  Because the issue is broader than just North Korea – it’s what other governments see as North Korea’s success in pursuing a nuclear weapons and ballistic missile program.  It’s how they read that in Tehran.  It’s how they read it in the capitals of other rogue states and in the shadowy headquarters of terrorist groups around the world.

I think that fundamentally while this is a very broad and complex issue, it can come down to one simple question in terms of our current policy: do you believe that North Korea will ever voluntarily give up its nuclear weapons program?  Do you think there is any circumstance, any combination of carrots and sticks, where that can happen?

If you do believe that that is a possibility, then obviously negotiation makes some sense – to see if you can arrive at that situation where North Korea actually not only commits to giving up nuclear weapons but actually follows through on it.  My experience at the State Department tells me that whenever you talk about a package of carrots and sticks, it’s heavy on the former and light on the latter.  Therefore what you’re looking for, if you answer the first way, is what it is that will induce North Korea to give up nuclear weapons.

On the other hand, if you believe as I do that North Korea will never give up nuclear weapons voluntarily, then the negotiations are ultimately not only going to be futile but potentially dangerous to those that are within range of North Korea’s nuclear weapons, or which can be subject to their use if North Korea transfers them to another rogue state or to a terrorist group or to anybody with hard currency, which is pretty much the way North Korea functions on a daily basis.  I don’t think North Korea will give up nuclear weapons because I think these weapons are integral to the survival of Kim Jong Il’s regime.  They’re the ultimate trump card against the United States, Japan, China.  Really the ultimate trump card for the North Korean regime itself against its own people, because North Korea cannot give those weapons up in a way that we would consider acceptable and verifiable without fundamentally undermining the regime itself.

So needless to say, I have little faith ultimately that the February 13 agreement is going to be implemented in any case.  While North Korea is happy to discuss giving up its nuclear weapons, and in fact while North Korea is happy to commit to give up its nuclear weapons – it’s done so before happily – it’s not going to follow through on those commitments when push comes to shove.

We now have though, within just a very few days, the first testing point of the February 13 agreement.  I think it’s pretty obvious – there were articles as recently as yesterday in the South Korean press – where high South Korean foreign ministry officials and Chinese officials are saying that with ten days to go until the sixty days run out, the North Koreans have not done much of anything toward coming into compliance with even their initial obligations. 

I just wanted to read to you a very interesting perspective on what the sixty-day deadline means and what we should think it means, from February.  “We need to avoid above all missing deadlines.  When you start missing deadlines, it’s like a broken window theory.  One window is un-repaired – before you know it, you’ll have a lot of broken windows and nobody cares.”  That was a statement by Chris Hill, assistant secretary of state for East Asia and Pacific affairs, from the State Department.  It was uttered at about the same time as another quote that I’d like to read.  “Those who say that the North Koreans have got to prove themselves by actually following through on the deal are right, and I’m one.”  That’s a quote from President Bush.

So now we’ll see in just a matter of days what happens with the North Koreans’ initial commitments, which are after all in this phased aspect of the February agreement quite minimal.  I think there’s every prospect that they will not comply, they will not seal the Yongbyon reactor and the reprocessing plant, that they won’t have done much of anything to meet their obligation.

So the question that the United States and the other participants in the six-party talks will have to face is: what do we do in response?  Having spent many years at the State Department, I will tell you right now what I predict the State Department will say the day after the 60th day has come and gone.  They will say, well, there’s been substantial compliance; the North Koreans are moving in the right direction. We’ve had excellent discussions in the working groups.  The process of the February 13 agreement is well launched and we don’t want to let the perfect become the enemy of the good.  We’re going to apply pressure to the North Koreas to make sure that they abide by that commitment, but we don’t want to be hung up on mere technicalities like the sixty-day commitment.

That is my prediction of what the State Department will say.  When I was in law school, we had a definition of a mere technicality – it was an irrefutable point made by your opponent.  The way the North Koreans are conducting themselves here I think is typical of the way North Korea has negotiated for the entire existence of the country.  First they put you through an arduous process of negotiation to reach the agreement itself, and then once the agreement is signed the North Koreans say – great, now let’s start negotiating again.  That’s what they’re doing.  Their objective here is to stretch out compliance with the terms of the February agreement.  Humanitarian assistance has already begun to flow again from South Korea.  Countries like Australia have sent back their diplomatic representation. 

North Korea has gotten itself out of the corner that it put itself in by the October nuclear test.  They have bought themselves space.  They have added to their legitimacy.  They’re going to try to stretch this out as long as they can to acquire the concrete political and economic benefits they expect to get from this deal, without in any way coming close to complying.

There are a lot of specific aspects of the deal that we will be able to get into.  I just want to concentrate on one more element of it here before handing over to my colleagues on the panel.  It’s been the subject of some attention in the press.  I think it’s extremely important to try to get the correct historical perspective on it.  That’s what North Korea may or may not be doing in the area of highly-enriched uranium.  Recently we have seen both on the part of some of our negotiators and on the part of the Washington commentariat an effort to rewrite history on the highly-enriched uranium program.  So let me just review a couple of things as they stood going back to 2002 and describe what I think that means for the future implementation of the agreement.

I very well remember in the early part of 2002, leading up to the spring and summer of that year, that there was a lot of disagreement in the intelligence community and the broader policy community about what North Korea was doing in terms of seeking a nuclear weapons capability through the enriched uranium route.  People thought they had a pretty good handle on Yongbyon and the plutonium reprocessing route to nuclear weapons but there was disagreement on what the evidence showed as to what North Korea was actually up to on the uranium side.  Nothing particularly new or unusual about that.

But in the spring and early summer of 2002, information came to the United States and others that effectively ended that discussion.  I remember a number of people in the intelligence community commenting to me how unusual it was that at a particular point in time information would come in that entered into an existing debate over a particular issue but that was so conclusive that the debate effectively ended.  But that is what happened.  I think a number of people who were in the intelligence community at the time, including John McLaughlin, the former deputy director of central intelligence, have said that publicly in recent weeks.

I don’t remember any disagreement on the conclusion that North Korea was pursuing the acquisition of the technology and materials that it needed for an industrial-scope uranium enrichment effort.  There was a lot at the time and since then that we don’t know about that effort.  We didn’t know where the locations were, we didn’t know what its capacity was.  But we could see from their external efforts what they were trying to achieve.  On the basis of that, the reason this was a particular issue at the time was to try to reach a conclusion on whether North Korea was in compliance with the Agreed Framework and whether, if we found them to be in material breach of the Agreed Framework – which I think they clearly were – whether we would terminate our obligations under the Agreed Framework.  If they weren’t meeting their obligations to denuclearize, we certainly shouldn’t have to comply on our side.

So the issue then was not negotiations.  It was about whether the Agreed Framework was going to survive.  There was fundamentally no disagreement in the policy community at the time or in the intelligence community that the North Koreans were in breach and that the framework should be brought to a halt, which certainly I had been seeking for some time before that and found this to be important evidence to that effect.

So for those who say there was uncertainty or we weren’t – that is an effort to rewrite history.  It’s simply inconsistent with the internal discussions that I recall at the time.

Second, once we considered the data carefully, once we had come to this conclusion, that was the point at which the decision was made to dispatch then-Assistant Secretary Jim Kelly to Pyongyang to confront the North Koreans with what we knew and to say to them: we think you have a highly-enriched uranium program to give you that route to nuclear weapons. 

Once again in the past couple months we’ve seen another effort to rewrite history on that, to say that the North Koreans really didn’t admit that they had a program.  There might have been a mistranslation or something like that.  Let me again try to bring this back to reality.  When Jim Kelly and his delegation went – which contained, I might say, on the American side people who spoke Korean quite well – they presented the evidence to North Korea on the first day of the talks, and on the first day of the talks the North Korean interlocutors on the other side of the table said: absolutely not, we don’t have any HEU program, you’re just flat wrong on that.  I remember when we learned that early in the morning of the same day of that meeting, I wasn’t at all surprised the North Koreans had denied it.  I think that’s pretty much what we expected.

It was the second day of the talks when the North Koreans came back at a higher level and basically told our people they had been up all night discussing this question, and that they were presenting the view of the party – forget the North Korean government, the view of the party – which is what’s really significant in North Korea, and which our people at the time took to mean that they had gone to the Dear Leader himself.  They said at that point, the second day, unambiguously, that they not only had such a program, they had it in response to the United States.  It was their way of defending against us.  So not only did they admit to it, they gave us the reason in their view why they had the program.

On that second day, I well remember Secretary Powell calling me down to his office early in the morning and showing me the cable that had been sent in from the British Embassy – obviously the United States didn’t have facilities in Pyongyang and the British had agreed to send it in secure channels.  He handed me the cable and he said: here, read this, you’re not going to believe this.  I read it and I have to say, I didn’t believe it, because it was pretty much what I’ve just recounted.  Later in the day there was actually another document that was a more word-for-word effort to recount what had happened in this meeting.

I know the way the State Department works.  I’ll bet you dollars to doughnuts that neither that cable nor the transcript went out unless every member of the American delegation looked at it and considered every word.  There wasn’t any doubt in anybody’s mind at the time what the North Koreans said.  So people can try to rewrite history all they want on this one.  You can try to spin this as the administration hyping intelligence and hyping what the North Koreans said.  It’s flatly contrary to fact.

The reason this is of more than historical interest obviously is the subject of what the North Koreans actually do on the HEU program is going to be critical on whether the six-party agreement is going to be implemented.  It is entirely possible that we will find, when IAEA inspectors get back to the Yongbyon reactor, that they will see that it is essentially at the end of its useful life and that the North Koreans, by agreeing to freeze it and dismantle it, may not have given up all that much.

So the issue will turn critically on whether they make full disclosure of their HEU program and perhaps even more critically whether the United States and others are able to verify that their disclosure is accurate.  So if the North Koreans take us to some cave somewhere in North Korea and show us a couple of rusty cylinders and a few pumps and whatnot and said: there’s our HEU program.  We tried, we weren’t very good at it and we abandoned it.  Those who will say we never had any evidence of what the HEU program was, they never confirmed it, this was all hype and spin, are going to be willing to accept North Korea’s declaration at that point. 

So arguing about history is really arguing about today.  I think it’s important to put this in context.  I will wait with great interest to see the North Korean declaration on their HEU program and we’ll see where we go from there.  Thank you very much.

Christopher Griffin:  Thank you, John.  Before we switch to Nick, just want to make a quick administrative announcement that on April 17 we’ll actually be holding a book launch event here for his book, so we’ll be discussing it – to further plug North Korean Economy: Between Crisis and Catastrophe.  And now its author, Nick Eberstadt.

Nicholas Eberstadt:  Thank you, Chris.  Thank you, John.  I think that Ambassador Bolton put his finger on what’s absolutely the central, critical issue here.  Can we plausibly imagine that the DPRK government – not some preferred DPRK government, but the real existing DPRK government, commanded by Dear Leader Kim Jong-Il – can we plausibly imagine that this government will enter into voluntary negotiations to scrap permanently its nuclear option – its nuclear programs, its nuclear weapons, its nuclear capabilities?  

Rather than get into the arcana of the current agreement, let me just offer the DPRK side the respect of taking them seriously, to look at their words and to look at their deeds over the past half-century.  I think that if we look at history, at the doctrine and policy of the state, and at the purposes that the nuclear program serves for this state, we get a very strong impression about the answer to that question.

Let’s just start with a moment of history about the North Korean nuclear quest.  The North Korean nuclear quest is not a passing fancy that suddenly emerged to give a regime a card for negotiation.  That program has been in process, in progress, now into its fifth decade.  That program began in the early 1960s.  It’s gone through more than forty years and is now entering its fifth decade.  Let me remind you: before his death, Kim Il-Sung stated to a reporter from The Washington Times in the early 1990s that his son, Kim Jong-Il, had been in charge of day-to-day policy in his country since the early 1980s. 

This means that Kim Jong-Il has been in charge of the North Korean nuclear program since the early 1980s.  He is going into his third decade of supervisory relationship with that program.  Kim Jong-Il has been officially the chairman of the highest military organization in the DPRK, the DPRK National Defense Commission, since the early 1990s.  He is entering his second decade of formal, official supervision of this program. 

This program has been pushed forward despite all of its obvious adverse consequences for apparent interests of state in North Korea.  Just to mention a few of these consequences that leadership has been able to accept while pushing this program – international diplomatic and economic isolation – not a plus; jeopardizing its relations with its only remaining possible ally in the world, China – also obviously not a plus; and no less significantly than either of those, accepting the consequences of a catastrophic famine in the 1990s while secretly and covertly pushing this program.  We don’t know exactly how many people died in North Korea in the 1990s in the famine.  It may have been in the hundreds of thousands.  It may have been over a million.  But it was an absolutely astonishing catastrophe to befall a literate, industrial society during peacetime.  But leadership was square with that too.

Let’s talk for a moment about North Korean doctrine and policy, because we can see that there’s more than an incidental relationship between the nuclear program and what the state says it is and says where it’s going.  Since 1998, the official banner that North Korean government has been upholding with the formal accession of Kim Jong-Il to the highest living position of state is [in Korean], translated often as “building a powerful and prosperous state.” 

What does building a powerful and prosperous state actually mean?  Fortunately, North Korean authorities have explained it to us word for word.  Let me quote to you the North Korean explanation of what a powerful and prosperous state is.

“Our theory on the construction of a powerful state is the embodiment of the profound truth that the base of national strength is military might and the dignity and might of a country hinges on the barrel of a gun.”

I don’t think I need to repeat that; it’s fairly straightforward.

The particular explication of policy in recent years has been called [in Korean], which is translated often as “military-first politics.”  What does military-first politics mean?  Fortunately, once again North Korean officials have spelled out for us what military-first politics means.  Let me read to you what this means.

“Once we lay the foundations for a powerful, self-sustaining national defense industry, we will be able to rejuvenate all economic fields, to include light industry and agriculture, and enhance the quality of the people’s lives.”

Listen to that phrase.  “Once we lay foundations for a self-sustaining national defense industry.”  Have you ever heard in the world of a self-sustaining national defense industry?  How does a national defense industry pay for itself?  How does a national defense industry earn enough additional dividends that it will be able to rejuvenate agriculture and light industry and enhance people’s livelihoods?  Good question.

Finally, not least to mention unification.  The DPRK has long insisted that there must be a unification of the entire Korean people under an independent socialist government.  I think that would mean under the tender, loving care of the Kim family of Pyongyang.  The DPRK government, just so that this doesn’t sound entirely fanciful, the further explication of the DPRK’s unification policy holds that the current South Korean government – this would be the Roh Moo-Hyun government in South Korea – are imperialist puppets supported only by bayonets from abroad.  That would be the U.S. military.  The longstanding claim to unify the country under North Korean unconditional rule has not evaporated.

Finally, purposes.  First and foremost, purpose of international military extortion – I think that one is fairly self-evident, I don’t need to elaborate upon that.  International military extortion brings in resources and serves a second purpose, and the purpose is forestalling economic reform and economic opening worthy of the name.  North Korean leadership has long worried about following the Soviet and Eastern European path.  They have indeed diagnosed the collapse of the USSR as being due to ideological and cultural infiltration, which they describe as taking place through cultural exchanges, economic exchanges and the rest.  So nuclear weapons programs not only afford revenues from military extortion, they also allow the regime to defer the prospect of genuine economic reform.

The nuclear weapons program also has a corrosive effect upon the U.S.-ROK relationship and the U.S.-ROK military relationship, since quite clearly nuclear weapons married to deliverable ballistic missiles undermines the credibility, at least to some degree, of the U.S. military commitment to the ROK.

Finally, not least there’s the question of unification.  Think of this.  If the DPRK were to announce and follow through upon a permanent verifiable nuclear disarmament, how would it go about the process of unifying the Korean peninsula on its own terms?  If the North Korean government no longer had any plausible options for unifying the Korean peninsula on its own terms, how would that affect the legitimacy and authority of the real existing DPRK state in the northern portion of the peninsula?  I think I’ll stop there.  Thank you.

Dan Blumenthal:  Thank you.  I’m tempted to just agree with my colleagues and open it up to questions but I’ve been asked to talk.  There is a debate out there about the advantages and disadvantages of this agreement and so I’m going to bring some of the proponents into this discussion.  I will quote former Deputy Secretary of State Robert Zoellick, who wrote a piece in The Wall Street Journal, to help us shed light on why we entered into this deal.  “President Bush does not view the move as another accord limited to nonproliferation objectives.  It opens the way for peace and reconciliation on the peninsula and a means to shape the future security arrangements in East Asia.  It is a recognition that America’s diplomatic toolkit for dangerous states involves more than threats of force and isolation.  The challenge is to avoid letting the process slip into minimalist tactical tradeoffs and to maintain a strategic vision guiding the diplomacy of opening North Korea.”  Wow.  This achievement really accomplished a lot, I suppose.

Phil Zelikow, a former counselor to the secretary of state, also with a big hand in policy, same type of thing.  Writing in The Washington Post: “Let’s not return to the old and painful patterns of peaceful nuclear bribery.  The diplomacy would move simultaneously on two fronts: scrapping the nuclear program and building normal economic cooperation, tackling the normalization of relations, and perhaps most engaging, getting at the unresolved issues of the Korean War.”  All in one agreement.

I’m a little bit more simple-minded.  I think that denuclearizing the Korean peninsula is, as my colleagues have said, the key to our effort and not merely a tactical tradeoff.  Why enter into this negotiation to begin with if you’re not first, at every stop of the way, asking yourself if you’ve achieved denuclearization of the North Korean peninsula, for reasons well stated by my colleagues, which is that the North Koreans have shown every willingness to sell anything to anybody and ultimately our security is at stake, in terms of North Korean willingness to perhaps sell a WMD to a terrorist nation or use it in some other way.

But let’s unpack this argument for the agreement, that in fact it lays out the strategic vision for Northeast Asia beyond just the “tactical” question of nonproliferation.  It’s been argued it’s going to lead to North Korean reform, enhance cooperation between China and Japan, and lead to eventual reunification and in fact redo the legacies of not just the Cold War but the Sino-Japanese and the Sino-Russian wars.  Again, an unbelievable diplomatic feat if it’s able to do that.

But the problem, as one of my colleagues has said, is that oftentimes the Bismarckians just aren’t Bismarck.  We’re going to end up with a peace treaty without peace and, from the evidence that’s been presented so far, no denuclearization on the Korean peninsula either.  You’ve heard that, just as predicted, the North Koreans are haggling over what exactly disarmament means.  As Chris Griffin has stated before, have asked the United States whether we can treat them more like India.  Have held up even going back to the talks next week on the issue of financial sanctions. 

So we’re in for a long process of haggling at each stage.  What do we mean by disarmament?  What do we mean by dismantlement?  What do we mean by nuclear programs?  At each stage of the way we’re going to get into this haggling.  As Ambassador Bolton pointed out, the way we practice these sorts of processes, we’re going to keep explaining that the process is in fact moving forward although the reality is that we’re not going to see real progress, meaning denuclearization.

Even if the North Koreans met the letter of the agreement, not an ounce of plutonium would actually leave the peninsula.  So in other words, the rewards would start to come – meaning more of an economic bailout – without an ounce of plutonium leaving the peninsula, meaning that the program can be restarted at any point that the North Koreans decide.  So even on the merits and letter of the agreement, it’s flawed.

On the strategic vision front – let’s look at that a little bit.  The administration has done some very good work in the last few years building our Asian strategy around the Japan alliance – upgrading the alliance, prodding and pushing Japan to take a more global role.  We’ve really decided – I think rightly so – that the alliance with Japan is the cornerstone of our strategic vision in Asia.

What have we done since and because of our dealings with the North Koreans?  We’ve essentially over the past year cut the Japanese off at the legs at every step of the way.  They have been very forward and very intensive in their diplomacy to try to get strong resolutions passed, after the North Koreans tested missiles and tested their nuclear weapon.  We’ve sided with China and to some degree Russia in watering down those resolutions.  We at first pretty much cut them out of bilateral negotiations with North Korea, something that they are too polite to say that they weren’t happy about. 

Let’s face reality here: they’re not happy with this deal.  Again, they’re not coming out and saying it publicly, but they’re left to deal with the issue of abductees all by themselves, which of course is going nowhere.  They are holding up assistance to the North Koreans until that issue is resolved.  Telling the North Koreans that we’re going to lift them from the list of state sponsors of terrorism is another slap in the face to Japan, because that in the Japanese view means that we are not taking their issue of abductees seriously.

Of course, the Japanese government, the prime minister himself, ran in Japan on the issue of a tough containment policy on North Korea and on resolving the abductee issue.  Of course, now that the United States looks like we cut him off at the knees, he is being hurt politically.  Again, keeping our eye on the ball in Asia, what our long-term interests in Asia are, and building around Japan, this deal and this process is having a very corrosive effect.

In terms of a real strategic vision, Japan has actually forwarded and advanced and tabled a vision recently, very unlike Japan in terms of taking a forward approach to diplomacy.  They call it the “Arc of Freedom and Prosperity Initiative,” starting with a ministerial meeting between Japan, Australia and the United States.  Guess what?  We told them no.  Why?  Because we didn’t want to anger China before the North Korea negotiations.  This is circular reasoning.  If we’re talking about a strategic vision for Asia and the Japanese are actually forwarding a strategic vision for Asia, what we’re actually doing is saying no, actually we’re paying lip service to a strategic vision for Asia, but in fact what we’re doing is saying our strategic vision for Asia goes through China.  I think that puts us in a very difficult situation.

To sum up, the process itself leaves us with endless haggling, at the end of which North Korea still maintains its weapons for all the reasons that Nick and Ambassador Bolton pointed out.  It takes our eye off the ball in terms of the work we have done with Japan and has slowly corrosive effects on that relationship.  It puts us in a position with China whereby each time the North Koreans begin to hold up the process because of technicalities, we’re in a position where we have to go back to China and ask them again to please put some pressure on the North Koreans in order to come back to the process itself.  For China, that’s a very good deal.  But unless you see our Asia strategy as being the same strategy as China’s strategy, it’s not a very good deal for us and it’s not a very good deal for our allies.

Christopher Griffin:  Thank you all very much.  This panel started out to some degree as a thought experiment, to see if everyone could come up with different yet cogent critiques of the deal.  I think we can declare the thought experiment a success at this point.

Before we transition to the Q&A segment, I’ll briefly abuse the prerogative of the moderator and ask one quick question.  As we approach the sixty-day deadline, the key question to some degree seems to be: what is our leverage with North Korea?  The HEU question has been undercut to some degree.  The focus of the controversy since February 13 has really been on the Banco Delta Asia question, which the North Koreans have articulated as a question of us not allowing them to get what we’ve agreed to in the deal.  So to some degree in the press we appear to be the ones holding everything back.  It’s only very lately that some focus has come up on the question of actually shutting down Yongbyon and them doing their part in denuclearization, which they seem to have a significant part to play.

So what leverage does the United States have, reaching the sixty-day deadline?

John Bolton:  Let me address maybe not exactly the question you put, but let me talk about BDA for just a minute and what that represents.  I speak as an alumnus of the Justice Department here as well.  While the investigation into BDA’s activities was being conducted by the law enforcement side of the Treasury Department, not Justice, I think there’s some equities that are at stake here that have been sacrificed unnecessarily.  I’m certainly not arguing that law enforcement always trumps other priorities. 

Obviously the president in his overarching capacity can make a judgment that law enforcement equities need to be subordinated to higher foreign policy priorities.  I don’t question that.  Nor do I question that under certain circumstances, when you have a truly comprehensive resolution of a major international issue, that investigations and prosecutions can be put aside because of larger objectives.

But that’s not what we’ve got here in the BDA situation.  The North Korean regime fundamentally rests on a criminal conspiracy.  It will do anything to acquire hard currency, which it uses for regime support and to pursue its programs in nuclear, chemical, biological weapons, ballistic missiles and other armaments.  It counterfeits American money so expertly that they call the counterfeits super-notes or super-bills because they’re so hard to detect, which makes it nearly impossible to estimate how much counterfeiting the North Koreans have done.  The North Koreans sell illegal narcotics through diplomatic pouches.  Until recently they controlled illegal gambling in Japan.  The very notion that their transactions in international financial markets can be distinguished between licit transactions and illicit transactions itself is delusional.

To say, as we have done, we’re not going to politicize existing law enforcement investigations, but then to trade away BDA as we have done, I think subverts both the law enforcement equities and the foreign policy equities.  I found this a very disturbing aspect of the whole transaction.  I would say and just remind everybody that the February 13 deal does not condition North Korean compliance in its sixty-day obligations with getting this money back from Banco Delta Asia.  So if the North Koreans say: we would have complied except it’s your fault again, as is – in the North Korean view of life – almost everything is the U.S. fault – it is not an excuse for them not to comply.

Our leverage is the candle that I still have lit on my desk every day, that when the North Koreans violate the February 13 deal, as they will – I’m sure they will, I have faith in the North Koreans – when they violate it, I hope the president repudiates the deal.  That’s the leverage we have.

Nicholas Eberstadt:  Any good policy decision serves a multiplicity of positive purposes for the government making it.  The same is also true for any bad decision.  The BDA decision serves a multiplicity of bad purposes for the United States and a multiplicity of good purposes for the DPRK.  By way of background, we have to understand that the only real non-military leverage that the United States has in dealing with the DPRK is economic leverage. 

All of you who’ve done your courses in international relations know that coercive economic diplomacy is famously unsuccessful in achieving results in the modern world, but the DPRK is not your average economy.  The DPRK depends for its very survival on constant inflows of subsidies from abroad.  When those subsidies get too low, when the oxygen support system of concessions from abroad get too little, they have things like mass famine occur, as occurred in the mid-1990s, when the DPRK was getting only about half a billion dollars of net subsidies from the outside world.

The DPRK pays a lot of attention to the possibility that economic penalties will be exacted upon the regime.  That’s why the BDA issue has been at the very forefront of North Korean diplomacy since the BDA closedown of accounts occurred and even before then, since the Treasury Department indicated that it was going to be pushing this issue.

As far as the particulars are concerned, this BDA decision has a number of beneficial implications from the North Korean standpoint.  For one thing, it complicates or possibly frustrates other U.S. efforts at economic penalties for the DPRK government.  It complicates the logic of the PSI initiative.  It is at least contradictory with some of the thinking – I defer to Ambassador Bolton on this, since he was a little bit closer to this – on the UN Security Council Resolution 1718.  It shows that the North Korean government is able to force the Bush administration into particular humiliating reversals on seeming issues of principle.  It also allows the North Korean government a precedent to be established, that it can link extraneous issues with its negotiations on this question at times of its pleasing.

Dan Blumenthal:  I guess the way I would answer this, since I too have faith that the North Koreans will violate the deal and this process is going to – if we look at it realistically, not make excuses and just keep peace processing for years and years – we have to be in a position where we’re prepared to protect ourselves, to defend ourselves and to start to squeeze again.  Let’s remember that the BDA sanctions were working.  The financial sanctions were working.  This was because, as Nick pointed out, this is a regime that is starved for hard currency. 

The economics of the regime, as Nick explains in his book, is very much based on illicit and criminal activity, on Kim’s ability to pay off his cronies with luxury items and hard cash.  So in fact the BDA sanctions as well as the larger efforts to stop the criminal economy from proceeding – and other countries’ actions in following suit – I think provided us with a great deal of leverage.

What did we do with that leverage?  We got into this deal.  We gave it away essentially.  But we have to be in a position, and since we’re in the business of pushing our own writings, I wrote something with Dr. Aaron Friedberg of Princeton a few weeks ago in The Weekly Standard about how we might get incentives in place to get China to really start to put the squeeze on North Korea, because China is obviously the country that provides the most aid, the most – shall we say – comfort also in terms of illicit activities.

In order to do that though we have to change things such that the Chinese once again believe that we’re serious about walking away if this doesn’t work out, we’re serious about taking actions to defend ourselves that will not be welcome in China, that Japan actually does have other options that China doesn’t like.  All of that has been taken off the table right now.  Again, if you’re China, you’re sitting there thinking to yourself: I don’t believe any of this.  I don’t believe the United States is going to do any of this, nor do I believe Japan is going to exercise any of its other strategic options, so what incentive do I have to take risky actions to squeeze North Korea, if none of the downsides are going to come to fruition anyway?

So we have to diplomatically be in a position, once this blows up, to rework things, to use those coercive measures.

Christopher Griffin:  Great, thank you.  Dan, you’ll be glad to know as recently as 1994, Chinese good faith could be assumed. 

Question and Answer

Question:  Rob Warne, I’m a consultant.  I am here to discuss the North Korea issue.  Ambassador Bolton and Dr. Eberstadt, I would particularly like to ask: assuming that you’re correct in your analysis that North Korea will not give up its weapons of mass destruction, what would be an effective policy to try to stop their production of plutonium and nuclear devices?

John Bolton:  Let me take a shot at that.  I think that there are a number of things that could be done to North Korea that would produce that result.  Principally, things that China could do.  We estimate that China supplies 80-90 percent of North Korea’s energy capacity.  If they were to stop supplying that energy capacity, I think it would get people’s attention in Pyongyang.  I think this though is the point at which we see the difference in objectives and priorities between China on the one hand and at least what I think the objectives and priorities of the United States on the other should be.  I take China to be serious when it says it doesn’t want a nuclear North Korea, because of the interference that would have in China’s own objectives of economic development and the risk that if other countries in Northeast Asia went nuclear that that would certainly be destabilizing to China.  So I just take that as a given.

Where the difference lies is that China likes North Korea.  China likes having North Korea.  China likes having a Kim Jong-Il regime.  It likes a buffer state between itself and the American and South Korean forces in the ROK.  Going back for millennia, obviously China has interests in the peninsula and it fears that if Korea were reunited it might see American forces on the Yalu River.  It’s seen that movie before and it didn’t like it the first time and it doesn’t like it the second time.  Leave aside the question whether in a reunited Korea there would be American forces still on the peninsula, China and the United States just have a disjunction on their view about how to handle North Korea.  China fears that it doesn’t know how to calibrate pressure on Kim Jong-Il.  If it applies too much pressure it might collapse the regime and reunification would follow.

But I think instead of thanking the Chinese effusively simply for convening the six-party talks, we need to raise the question of North Korea’s nuclear program higher in the Sino-American bilateral relationship.  We say that all the time.  We’ve been saying it for a number of years.  But we’ve never really done it.  So that would be one step.

I fundamentally, however, myself don’t think that things will change on the Korean peninsula until that regime comes down.  I say that not because I advocate the use of force to do it.  I think there are other ways to do it.  I think pressure from the outside can do it.  I think if the ROK adhered to its own constitution and treated all Koreans as citizens, welcomed refugees out of North Korea into South Korea, that that would be a way of exerting pressure.  I think there are a number of things that we can do. 

But all of this will be accomplished not through agreement by North Korea, because agreement by North Korea to give up its nuclear weapons is the equivalent of a suicide note for that regime.  I don’t think they’re serious about it.

Question:  Bill Dabaghi with Maxima International.  I’m struck that we started this session talking about Korea but what we really are talking about is U.S. policy toward China, as far as I can perceive.  Also our policy to Japan that we don’t want Japan to have – we, the U.S. – nuclear weapons under any circumstances, if Korea has ten nuclear bombs, a hundred nuclear bombs, if China has 10,000 nuclear weapons.  Aren’t those really the two issues?  What leverage are we going to provide against China to get this straight?  What are we willing to do to help Japan be able to balance the situation?  What will we really do?  Since MacArthur left, we’ve not been in direct contact with China in terms of a war and I think they perceive that we’re not going to do it under any circumstances.

Dan Blumenthal:  Yes, we did bring the discussion to those issues because it’s my area of expertise and I ended.  If we were to conclude that there was a chance that North Korea would give up its weapons, then I think there’s a lot of tradeoffs we would make and we would hold our noses and say this is an odious regime, and we’d pay the costs and probably decide that that’s what needed to be done.  But since I think the general consensus is that they’re not going to give up their weapons, you have to think about what costs you’re paying right now in terms of some of the corrosive aspects the deal is having on our relationship with Japan that I tried to lay out. 

A government that is trying to take a more global role, has been very forward in its diplomacy toward North Korea, a government that came into power on the issue of a tough North Korea policy, a government that’s taking unilateral sanctions as well as other measures to be with us in what they thought was a tougher stance and a containment policy toward North Korea – until we reversed our policy.  Again, I think slowly and incrementally you get a crisis of confidence in Japan about our alliance relationship.  That, to me, is a larger blow in terms of our geopolitical position in Asia, which we’ve decided is going to be built around Japan, than is worth paying for not getting a deal.

Again, I think the Chinese – the way I would put it, there are a few different games going on here.  One is the bilateral negotiations at this point with North Korea on denuclearization.  The other is geopolitical positioning, because of the competitive nature of the Asia security environment.  So China has positioned itself in a way that we have to go through them in order to get them to just convene the talks.  Again, as Ambassador Bolton said rightly, if we said to the Chinese: if this is actually going to define our relationship and you don’t deliver this, this does not portend well for our relationship – and then we actually saw them doing things to pressure the North Koreans, that’s a different matter. 

But now we have the talks as another battlefield in a strategic competition in Asia between Japan and China and to some extent the United States.  China has maneuvered itself into advantage in that competition, in the sense that they are dictating to us in essence what kinds of relationships we have, what kind of strategic vision we’re going to have.  We said no to the Japanese on a strategic vision they put forth, in order to keep the Chinese happy on the North Korea deal.  Again, you have to ask yourself, what is it getting us in the end?

Bill Dabaghi:  What should Japan do?  If you were advising them, if you weren’t an American, what would you advise them to do?

Dan Blumenthal:  I think Japan has said in the past, in the early 1990s, they used to talk very much about how easy and quick it would be to develop nuclear weapons.  Which is a fact.  I’m not advocating that they do it.  But the fact that the Chinese don’t fear it as an option anymore is, again, not lending itself to a situation of an incentive structure for China to do more.  The Chinese really have to believe that other countries, including Japan, whom they suspect, will take actions.  They’re not going to be the only country in Northeast Asia, the only major power, without nuclear weapons.

Again, I am not advocating that they do that, because there are reasons of U.S. policy that we don’t want them to do that at this point.  But if I were the Japanese, I would play that card, as well as the Japanese ability to shift to other types of military capabilities that the Chinese wouldn’t like either, which they’re perfectly capable of doing.

Nicholas Eberstadt:  My impression is that China’s policy toward North Korea is characterized by deep divisions between factions in leadership and isn’t very opaque.  I know that won’t sound familiar to anybody in Washington.

Bearing that in mind, the world that we face and the world that China faces is a little bit different from the world of October 1950, when Mao made the decision to cross the Yalu.  The Chinese Communist Party now invites millionaire capitalists to be members of the Party.  China is officially committed to a so-called “peaceful rise” international policy.  China is very dependent upon the functioning of the world capitalist economy, of globalization. 

Before the United States thinks about – while we’re in the pre-military phase of discussions about questions regarding the DPRK nuclear program, one of the things which perhaps should be on American policymakers’ minds are the costs and risks that China itself faces from the DPRK’s nuclear brinkmanship.  Northeast Asia is the most dynamic area of the world economy now.  If the DPRK pushes nuclear brinkmanship, as has been its MO for – brinkmanship in other areas – for let’s say the last fifty years – they are certainly familiar with this approach – this could have really dramatic negative consequences for China – for investment, for trade and – let me just spell it out – for urban unemployment in a country whose leadership is now very nervous about social tensions and domestic discontent.

So I would think that one of the things that U.S. policy should do is pay a little bit more attention to the domestic political concerns of the real existing Chinese state.  Maybe even better than that, maybe the United States should even have a policy towards North Korea.

Question:  My name is Kaori Iida, I’m with NHK Japanese Public Television.  Ambassador Bolton, a Treasury official has been in Beijing for almost two weeks trying to figure this out, the Banco Delta Asia issue, with the Chinese and North Koreans.  It seems clearly that it’s not going well.  What, in your view, is going wrong?  Also, how do you see this BDA issue being resolved ultimately?  Do you think the Treasury or the administration will need to further concede in some way?

John Bolton:  I fear that since we’re now in the mode of “save the plan – save the deal,” that further concessions are coming.  My understanding is that some of these difficulties here relate to the complexities of international financial transactions, especially the particularly Byzantine way that North Korea goes about it to engage in money laundering, which is basically what we’re talking about here.  I think it shows in a small way what the problems are with trying to politicize these kinds of law enforcement investigations.  I don’t know whether the substance of this can be worked out before the sixty days expire.

I do think that whatever happens here will have a negative impact on other law enforcement investigations being conducted against North Korea and it will have potentially and even more destructive effect in other areas as well.  That’s why what happens with respect to North Korea is not confined to North Korea.  The Treasury Department has had great success with European and Japanese financial institutions in excluding or limiting Iran’s access to international financial markets.  I greatly fear that these institutions will say: wait a minute.  You want us to do X, Y and Z with respect to Iran and yet you just turned around and gave BDA a pass.  Why should we go through agony on Iranian international transactions if in sixty days or ninety days you change your mind on that as well?

I think that the way the BDA matter has been handled was a mistake.  I think what we are seeing here with these apparently – the difficulties of resolving it is why it was a mistake to assume too easily that this was something that could just be thrown over the side in the interest of saving the agreement.

Christopher Griffin:  And of course with Iran it’s real money.  A completely different incentive structure.

Question:  David Ahearn with Space and Missile Defense Report and with Defense Daily.  Is it possible that despite what you have said is a strange willingness to believe that North Korea is credible, believable and therefore we can negotiate with them in good faith despite past experience, perhaps this stems from U.S. business interests and business interests in South Korea and China, which don’t want any military action because they have such an enormous investment in the region.  Therefore they want to say, okay, whatever we can do for a seeming peaceful solution to the situation, let’s do that.

John Bolton:  I’m not aware of any pressure from that side but I would say this.  There is an argument, and the president has made the argument, that the United States ought to go through at least some exercising of showing that we’ve tried to resolve this matter diplomatically.  I accept that, I understand that, even though I think, as I’ve said, it’s not going to succeed.  But let’s be clear.  We’ve been going down the diplomatic road for four years, just in this administration, let alone six or more years under the Agreed Framework before that.  We have continually seen North Korea is not prepared to live up to its agreement.

So I think whatever one can say about the importance of showing good faith, trying to arrive at a diplomatic solution, we have more than met our obligations in that regard.

Nicholas Eberstadt:  One thing I’d like to see, and I actually don’t know the answer to this question – it would be a really interesting point of information – if somebody did a research paper to show what agreements North Korea actually has ever abided by.  If you go back through the history of DPRK negotiations, we know that they don’t live up to the ordinary understanding of normalization of relations, because they run drugs and porno and fake watches and stuff through their consulates to pay for their embassies.  They never live up to their contractual relationships on debt.  We know that they’ve defaulted on their debt with capitalist countries but now that the Soviet archives are open, we know that they always defaulted on their debts with the socialist countries also.  It was nothing personal about the capitalist countries.

Maybe the North Korean government has adhered to its agreements with the International Meteorological Organization or the International Philately Organization or something.  But just as a point of information, if we could actually see if and where there were any cases in history where the government didn’t take a completely opportunistic approach to contractual agreements, that would be informative.

Question:  Christian Whiton from the State Department.  Nick, based on your knowledge of the North Korean economy, what effect do you think the aid that could be provided under this agreement would have?  Does it also open the door to other aid from countries like South Korea and China that wouldn’t necessarily be in the agreement?

Nicholas Eberstadt:  It’s a very important question and it forces me to speculate about the magnitude of the aid flows from South Korea or from China or from other potentially willing donors.  I think the South Korean government has already stated that it’s ready, willing and able to flood North Korea with aid.  So we can speculate about the exact number of zeroes that would be open after that but the intention has already been signaled.

One of the less noticed intricacies of the current negotiations have to do with the terrorist watch list that the U.S. government, the executive branch, keeps.  The North Korean government has been agitating for more than a decade to get off of the terrorist watch list and it’s not just because Pyongyang wants its good name back.  There’s a very specific reason for this, which is as long as the DPRK is on this terrorist watch list, the U.S. executive directors at the World Bank and the other international financial institutions are bound, are structurally bound to vote against North Korean membership or accession into these international financial institutions, or should they somehow become members of these international financial institutions, to vote against any loans or grants to the DPRK.

If the North Korean government gets off of the terrorist watch list, it is certainly possible to imagine an initial flow of several hundreds of millions of dollars of loans to the DPRK – at least for a first round of loans, until they default upon them.

Question:  Carl Sears with NBC News.  Ambassador Bolton, you said that North Korea will never give up its nuclear programs voluntarily so negotiation is futile.  Are you saying that no U.S. dialogue with the regime and that the Bush administration should take a much tougher stance, cutting off all economic and humanitarian aid?  Would that bring the result that North Korea would denuclearize?

John Bolton:  Yes, we should do those things, and no, those alone would not be enough to produce the result.  The issue, as I say, is whether you think realistically that there’s a prospect that North Korea can be talked into giving up its weapons.  If it were a normal nation, then you could at least make a reasonable argument that that prospect was worth the effort.

But I think it’s important to understand that diplomacy is not cost-free in this case.  People say, what’s the harm in sitting down and talking to North Korea?  What do you lose?  What’s the cost?  Well, there are costs.  In this case, the February 13 agreement let North Korea out of the corner that it had put itself in because of the nuclear test in October and the ballistic missile test in July.  It’s a classic North Korean example of when it really found itself in a corner, with humanitarian assistance from South Korea cut off, which as Nick said is very substantial, it decided to move to the side a little bit, get itself some breathing space, and get back on its feet.  So there’s a case where time works in North Korea’s favor and against our interests.

More importantly, time works in North Korea’s favor because it gives it additional possibility of perfecting the nuclear program and the ballistic missile program.  If the July and October tests tell us much, it’s that they have a long way to go in weapons design and ballistic missile design.  So simply having the North Koreans given the ability to stretch out bringing this to a conclusion means that they are better able to get a ballistic missile system, for example, that they have a higher degree of confidence can reach its target.  If it does reach its target married with a nuclear warhead, that the warhead will produce the desired result.  That’s not making us safer, that’s putting us in a more dangerous position.

So diplomacy is not cost-free here.  I think that needs to be emphasized because the longer this process stretches out, the graver the risk we face.  I think North Korea’s ultimate game plan here may be to stretch out compliance past the November 2008 presidential election and hope that it gets an even more compliant administration for the next four years after that.  It’s one of the reasons I think the 2008 election is going to be so consequential.

Question:  Ambassador Bolton, this is Serafin Gomez, Fox News.  This is a little bit off-topic but this is in regard to the Iranian story, the latest developments today.  Do you feel, sir – did Iran get away with an act of kidnapping?  Can they do this and pay no price?  Did the British give something away by negotiating with them?  Any response to these questions, sir?

John Bolton:  I’ll just keep this quick so we can get back to North Korea.  Prime Minister Blair was very clear yesterday and again today that he did not negotiate with Iran.  I think that’s right.  I think Iran released these prisoners as a completely unilateral action.  This gift, as President Ahmadinejad has said it, which is why unfortunately Iran has emerged from this in a win-win situation.  It won by taking the hostages in the first place and it won by giving them up.  It got the answer to the question it was posing by snatching the marines and sailors in the first place, which is, will Britain have a stiff response?  Once it knew the answer to that was no, it didn’t gain any more by prolonging the crisis beyond thirteen days. 

I think the real consequence is that the regime in Tehran will now be emboldened in its nuclear weapons program and its overall regional efforts to project power through terrorist groups like Hamas and Hezbollah and otherwise.  I’m very happy the sailors and marines are free and I’m glad for their families.  But in the broader political context this is going to cause grave damage to our interests and those of our friends and allies.

Question:  Bruce Klingner, Heritage Foundation.  If one sets aside for the moment the debate over whether North Korea will or won’t give up its nuclear weapons and whether it does or doesn’t have an HEU program, what verification regime do you think is necessary to resolve those questions, as well as the lingering questions going back to the two suspect sites in 1992?  To what degree do you think the U.S. will press for that?

John Bolton:  Let me take a shot at that first, and Nick and Dan may want to pitch in as well.  On the assumption that you’re going to have an agreement that goes forward and to respond to what the issue of verification is, I think you need a very invasive, very intrusive verification system.  It clearly is not sufficient to limit it to the IAEA.  If and when the IAEA goes back to Yongbyon and sits there and watches the reactor and the reprocessing plant, it’s like looking down a soda straw.  They’re very focused on one location.  The IAEA can faithfully report day after day that nothing is going on at Yongbyon.  That’s a tiny part of the story potentially but it’s a way for the North Koreans to make it look like they’re acceding to verification when they’re not.

The IAEA is very good at monitoring safeguards agreement but the notion that it’s a nuclear watchdog agency or an investigative agency is just incorrect.  The reason it knows much of what it knows is because it gets it from member governments that provide it with the information.

So while I think there’s certainly a role for the IAEA in verification, you have to understand that its effectiveness is limited.  I think we need something like, perhaps through the other five parties to the talks, a system of challenge inspections that allow us to go essentially anywhere in the country we want to go. 

Given the record of duplicity of North Korea throughout its entire history, anything less than that is a hunting license for them to continue to cheat on the agreement.  That’s another reason why I don’t think this is ultimately going to work out through diplomatic means.  I don’t think North Korea will ever accept anything like the kind of pervasive verification mechanism that we need to satisfy ourselves that indeed they are complying with the agreement, because such an openness would be contrary to the totalitarian basis on which the government maintains itself in power.

So I think this is a fundamental conundrum.  I do think it’s one of the reasons why people now are trying to rewrite the history of what we know about their highly-enriched uranium program.  If there isn’t an HEU program, you don’t need much verification for it.  So I think pooh-poohing what the North Koreans have in the HEU area is a way of explaining for those who are inclined to do it why our acceptance of a verification mechanism might be limited.  I think this is something we need to stay away from.  I can tell you from long experience in the arms control area, the negotiators hate to talk about verification mechanisms until the very end of the process and then they try to shove them in at the last minute.  I hope the verifiers at the State Department stand up and say that any respectable agreement has got to be verifiable.  I hope Japan and South Korea take the same position.  If this agreement does go forward, which I doubt, but if it does, we need real verification and not pretend verification.

Nicholas Eberstadt:  Bruce, let me make three points about verification.  Number one, the North Korean state is the world master of strategic deception.  The North Korean state’s mother’s milk is strategic deception.  I’m not just talking about the strategic deception that launched the Korean War on June 25, 1950.  More than any other government on the face of the earth today, the North Korean government pays great attention to what the Soviet Union used to call maskirovka.  They try to mislead outside potential adversaries about their strengths and weaknesses and intentions and capabilities.  That’s just a general first precept.

Secondly, according to open sources, the DPRK has something like 11,000 underground facilities that we’re aware of.  In and of itself, that suggests a rather broad mandate for inspectors.

Finally, the North Korean government has already to its own satisfaction established the precedent of an inspection fee for looking at suspicious underground sites.  In 1998, David Sanger of The New York Times broke the story about the Kumchangri facility in DPRK, a suspicious underground site.  After considerable negotiations, the United States government had some inspectors come to this site, look at it.  The United States also at that time awarded a grant of humanitarian food aid of half a million tons to the North Korean government.  The U.S. said there was absolutely no connection between the half-million-ton donation and the inspectors’ visit to Kumchangri.  The North Korean government has always stated that this was an inspection fee.  So get ready for more inspection fees.

Dan Blumenthal:  The other issue is, in terms of a verification regime that will work in a country such as this, is our intelligence capability.  At this point, if we have faith in knowing just when and just what North Korea has and just when they might use it for diplomatic purposes, I think we’re in grave danger there.

I remember last year I was in China when the North Koreans put the missiles up on their launcher and in the end launched.  I remember Secretary Perry and Assistant Secretary Ashton Carter of the Clinton administration wrote an op-ed saying we should take out the launcher.  It seemed insane at the time.  But this is a very real situation in terms of North Korean brinkmanship.  Next time there’s a launcher and the next time the North Koreans want to bluff and bluster, the idea that somehow we’re going to know whether or not there’s a weaponized or nuclear weapon tipped on the missiles – we couldn’t even verify that they did their nuclear test until weeks afterward.

That’s a very real and destabilizing possibility, that they do a test of that nature to get even more.  That’s what they’ve learned from this process.  Again, we’ve seen the problems with verification in totalitarian countries.  We’ve just gone through this in the last few years.  It doesn’t give you a lot of confidence.

Question:  Bob Copaken, energy consultant.  I would like to ask Ambassador Bolton how important an element or an incentive in reaching the agreement was the offer of fuel oil.  It seemed to have figured in the Clinton administration’s Agreed Framework, as well as in reaching this February 13th agreement.

John Bolton:  I think the supply of fuel oil is the beginning of the concrete benefits that they expect from the United States and others in the six-party talks.  This is to me one of the most troubling aspects of the subsidies that are provided, the assistance that’s provided, is that fundamentally it’s all a subsidy to the regime. 

The comfortable assumption that this is going to be put into a power plant that does something that has some benefit for the Korean people is illusory.  This is heavy fuel oil that the regime itself and its military-industrial complex needs to keep itself in power.  So not only are we rewarding North Korea for bad behavior, which the administration said for a number of years it was never going to do, it’s not even implicit, it’s essentially explicit that we’re keeping the regime the power.  I know the president feels very strongly that the regime exists to oppress the North Korean people and he feels very strongly about it.  So the notion that we end up helping to perpetuate that regime in power is very troubling.  I’m sure and I hope it’s very troubling to him too.

Question:  Satoshi Ukai from The Asahi Shimbun, Japanese newspaper.  My question is to Ambassador Bolton.  The Bush administration changed the North Korea policy after the mid-term elections dramatically and started putting more importance on dialogue rather than putting pressure.  What made this change?  Many people who have taken this strong position towards North Korea left the administration.  What is the reason for their departure and who is going to start to provide the different view from inside the administration now?

John Bolton:  There are still a lot of sound-thinking people in the administration, let me say that.  But Secretary Rice said that the February 13 agreement really was a logical follow-on to the September 5, 2005 declaration from the six-party talks.  I agree with that.  That’s one reason I was concerned about the September 2005 declaration when it took place.  I do think that this flows from that and was not occasioned by the November 2006 election.

I think it’s something – obviously I’ve expressed my views on the subject and I think the next stage, the next critical point for the administration will be to confront what I see as the inevitable North Korean violation of the February agreement.  One sign whether we’ll be in trouble there is whether anybody in the administration is ready to call it a violation or whether they call it non-compliance or apparent non-compliance.  I think this deal will inevitably fail.  I think it is inadequate in many respects and the fact that its coverage is really so limited – does not deal with existing North Korean nuclear weapons, does not really deal effectively with extracted plutonium, does not deal effectively with the HEU program, doesn’t deal with chemical and biological weapons or ballistic missile systems – actually helps to hasten the day when the deal collapses of its own weight.  That day cannot come too soon, in my view.

Christopher Griffin:  With that, we’ve reached the end of our allotted time.  Thank you very much for coming today.  I think we neglected to mention that on April 17 we’ll be holding the book forum with regard to Nick Eberstadt.  Thank you all and have a great day.

[End of transcript]