Tracking Number:  383179

Title:  "Gallucci: US Concerns Remain Regarding Agreed Framework." Remarks by Ambassador Robert Gallucci regarding US concerns over North Korea's willingness to uphold its end of the US-North Korea nuclear agreement. (950314)

Date:  19950314


03/14/95 GALLUCCI: U.S. CONCERNS REMAIN REGARDING AGREED FRAMEWORK (Transcript: 3/13/95 Worldnet with Robert Gallucci) (8800) Washington, March 14 -- Although the Agreed Framework and the international consortium to support it seem off to a good start, the United States still has concerns regarding North Korea's willingness to uphold its end of the agreement, according to Ambassador Robert Gallucci, the chief American negotiator for the pact.

Gallucci spoke with reporters and academics in Tokyo, Seoul, Canberra and Jakarta during a Worldnet satellite interview March 13.

He noted that under the Agreed Framework, signed by North Korea and the United States October 21, 1994, North Korea will receive modern light-water reactors in return for its cooperation in freezing and dismantling its gas-graphite reactor program, which could have produced enough plutonium for several nuclear weapons per year. Until these new reactors can be built, North Korea will receive heavy fuel oil to help meet its electrical needs.

The United States sent the first tranche of 50,000 metric tons to North Korea on January 21. But, Gallucci noted, the United States has some concerns that a small portion may have been used for steel processing instead of being devoted to the limited uses provided by the Agreed Framework -- namely, for heating and electrical energy generation. "We are concerned that the Agreed Framework be fully complied with," Gallucci said.

Gallucci also noted that the Agreed Framework provides that the North Koreans will proceed with the resumption of dialogue with South Korea. "That has not yet happened. And of course from our perspective that is an extremely important element in the overall settlement, and we need that to happen if we can expect full implementation of the Agreed Framework," he said.

A third concern, according to Gallucci, is North Korea's unwillingness to accept light-water reactors of South Korean design.

"We wish that issue to be resolved, because we do not wish it to interfere with the implementation of the other elements of the Agreed Framework," Gallucci said. However, he also made it clear that the South Korean reactors were the only political, financial, and technically viable choice available to the North.

While North Korea's nuclear program is the focus of U.S. security concerns, there are others that need to be dealt with, Gallucci said. These issues include improved U.S.-North Korean relations; North Korea's ballistic missile program; and, the forward deployment of North Korea's conventional military forces.

"The Agreed Framework does not directly address these concerns, but for the first time it gives us access to those issues," Gallucci said.

(begin transcript) WORLDNET UNITED STATES INFORMATION AGENCY Television and Film Service of Washington, D.C. GUEST:

Robert Gallucci, Ambassador at Large, U.S. Department of State TOPIC:

Korean Peninsula Energy Development Organization (KEDO) HOST: Jim Nash INTERACTIVE POSTS: Tokyo, Seoul, Canberra and Jakarta DATE: March 13, 1995 TIME: 20:00 - 21:00 EST MR. NASH: On March 9th, following the conclusion of the KEDO preparatory conference, Ambassador Robert Gallucci of the United States, Ambassador Tetsuya Endo of Japan, and Ambassador Choi Dong Jin of the Republic of Korea, signed the KEDO agreement. KEDO, the Korean Peninsula Energy Development Organization, will provide for the financing and supply of a light-water reactor project, as well as the implementation of any other measures deemed necessary to accomplish the objectives of the U.S.-DPRK framework.

Hello and welcome to today's program. I am your host Jim Nash. Today, to discuss the KEDO issues and concerns, I'm pleased to welcome the U.S. delegate to the KEDO meetings, Ambassador Robert L. Gallucci. Prior to assuming his position as ambassador at large in August of 1994, Dr. Gallucci was the assistant secretary of state for political affairs. Ambassador, welcome back to Worldnet's "Dialogue."

MR. GALLUCCI: Thank you very much. It's a pleasure to be here. MR. NASH: Now let's move directly to our international participants in Tokyo, Seoul, Canberra and Jakarta, who are standing by with their questions and comments.

Q. Let me start with the most confusing subject, that is the South Korean type reactor. Regarding the type or model of the reactor, did North Korea agree in Geneva last October to accept the South Korean model?

MR. GALLUCCI: We discussed the light-water reactor project at some length with the North Koreans over many weeks, and we made clear during that period that there was only one -- repeat, only one -- model for this arrangement, and that was a South Korean standard reactor that could be built. It was the only model that met the qualification of technically, politically and financially feasibility. And, yes, they did understand that.

Q. Did they accept that on the document, or did you agree verbally? MR. GALLUCCI: The document refers to the construction of a light-water reactor project, and it refers to the creation of an international consortium, in which the United States would play a leading role. The language is as it is in the agreement, without specific reference to the South Korean standard reactor, because we were all aware, as we have become now acutely aware, that there is a political problem for the North Koreans accepting a South Korean reactor. That is a large part of the reason for creating this Korean Peninsula Energy Development Organization; namely, to provide a political context, or an umbrella entity, to deal with the North Koreans to provide the reactor. It would have been, I would say, politically inappropriate to put into the Agreed Framework explicit reference. But I will tell you that it was well understood by both sides what was contemplated, and we have been proceeding consistent with the Agreed Framework.

Q. If so, do you think the DPRK will change its position -- (inaudible) -- ?

MR. GALLUCCI: I cannot really predict what the DPRK will do. We have done everything that we can to demonstrate that we are acting in good faith, that we intend to implement the Agreed Framework. We have delivered the heavy fuel oil on the date specified. We have had the conversations in anticipation of the opening of the liaison offices. We have had conversations on the terms and conditions of a light-water reactor project. And we have gone about last week creating the international consortium, KEDO. The North Koreans have no reason -- repeat, no reason -- to question our good will in this, and I hope they will recognize that the arrangement we reached in October of last year is in their interests, and they will get on with us in implementation.

Q. Why do you think the DPRK continues to refuse the South Korean type reactor? Is it a matter of pride or a bargaining tactic?

MR. GALLUCCI: Again, I am going to ultimately refrain from a characterization or interpretation of motivation for the DPRK. You have to address that kind of question to the North Koreans. I will say that we recognized all along that this was a politically sensitive move for them. We understood that. We have tried to provide an adequate political context.

There is also a certain reality here, and that is that the North Koreans have always had a certain approach to these topics, which you might call "brinkmanship-like." And in a sense we regret that certainly. We would much rather proceed in a straight-forward way. But we are making it clear that the position we have taken is consistent with the position that is contained in the Agreed Framework that we negotiated back in October of last year.

Q. As the bargaining tactics on our side, do you consider the possibility that if some U.S. company provides the North with their reactor, mainly, but South Korea contribute substantially in financing, in construction, and in maintenance?

MR. GALLUCCI: If I understand the question correctly, what we do anticipate is, as you know, the South Koreans have said they will play a central role in the construction and finance of the project. Japan has said that in that context it will play a significant role in financing. And we hope other countries will play roles as well. There will be a substantial amount of subcontracting work to be done on a project of this magnitude which we estimate -- actually, it's a South Korean estimate -- to be on the order of $4 billion. Some of that subcontracting might go to firms in countries that participate in KEDO; some of it might come from the United States. That's really a matter to be worked out between KEDO and the principal or prime vendor, which will be a South Korean entity.

Q. Regarding the liaison office in Pyongyang, when do you expect to have a liaison office there?

MR. GALLUCCI: I can't give you a date. I can tell you we have had good discussions with the DPRK in Washington and in Pyongyang, and we are continuing to do, again, what we committed to do in the Agreed Framework, which is to clear away the consular and other technical issues associated with the establishment of offices. We expect the DPRK to be looking at property in Washington soon. We have been looking at property in Pyongyang. So we are proceeding apace with that, but that's something I really don't feel comfortable making a prediction about with respect to a date. Q. Is the opening link to the reactor contract or to a North-South dialogue?

MR. GALLUCCI: We have said that we will abide by the terms of the Agreed Framework, and that's what we will do. The Agreed Framework says that when the technical and consular issues are resolved we will proceed to open liaison offices in each other's capital. This of course presumes that the Agreed Framework is indeed still in place, and that there is substantial compliance on the other issues.

Q. Japanese leading parties and the government, now seeking to resume talks with the North, for the first time in two years. If the talks start before the North signs the reactor contract, do you think there is any influence on the reactor negotiation?

MR. GALLUCCI: I myself would not anticipate a connection between the two. I would encourage Japan to do what it regards as appropriate. I am sure that in the past we have consulted together about such political moves, but I myself would not want to link bilateral moves by the government of Japan to the implementation of the Agreed Framework.

Q. So at present you welcome such movement in Japan? MR. GALLUCCI: As long as the Japanese government is comfortable with it, then I am comfortable with it.

Q. There are some reports that the heavy oil provided to the North in January might have been put to military use. How could you deter such diversion in the future?

MR. GALLUCCI: I'd really very much like to set the record straight on that. We, the United States, delivered 50,000 tons of heavy fuel oil on January 21st, as required in the Agreed Framework. We delivered that heavy fuel oil with the understanding, of course, that the heavy fuel oil would be used for the limited purposes permitted the DPRK under the terms of the Agreed Framework.

Those limited purposes are for use in heating or in use in the production of electricity. Any other use is prohibited.

Now, it is also true that heavy fuel oil was chosen as the material to meet DPRK interim energy needs, because it cannot be further refined or, as they say in the business, cracked, for the purpose of use in aircraft or in vehicles; in other words, for direct military use. So we are not concerned about that.

What we are concerned about is strict compliance with the Agreed Framework. And we have said we have reason to be concerned that a small portion of that initial shipment of heavy fuel oil may have been shipped someplace for a purpose other than that permitted in the Framework; for example, for the production of steel or the processing of steel. If that be the case, it would be inconsistent with the Framework. We have engaged the North Koreans on this subject, and we are in the midst of trying to sort that out. But let me say again we are not concerned about direct use for military purposes. We are concerned that we get off on the right foot in the implementation of this Agreed Framework, and we intend to get full compliance.

Q. Why is the United States waiting to provide a light-water reactor to the North, but at the same time opposing a Russian provision of a reactor to Iran?

MR. GALLUCCI: The situation in North Korea is quite different than the situation in Iran. In North Korea we -- Japan, South Korea, the international community -- face a situation in which the North Koreans have a nuclear program in place, and they have an operating power reactor. They have spent fuel containing up to five nuclear weapons' worth of plutonium. They have larger reactors under construction -- one of them nearing completion. They have a reprocessing facility. They have a full-blown nuclear program in graphite technology, which is extremely dangerous from a proliferation perspective. And all those facilities are permitted -- permitted under International Atomic Energy Agency safeguards, and permitted under the nuclear Non-Proliferation Treaty.

If we wish to remove those facilities from North Korea, and remove the threat to South Korea, Japan, and the international community, we have to take a step that goes beyond safeguards, beyond the NPT. That's why we proposed the arrangement where the international community would provide light-water reactors, a new and much more proliferation-resistant technology, to replace an existing program, and also draw the North Koreans back into the Non-Proliferation Treaty.

In Iran we face the case of a country that has no facilities of any significance to produce nuclear material. It wishes to acquire them. What we would like to avoid is recreating the North Korean situation in Iran. Now, it is true that Iran is an NPT party. But among the purposes of the establishment of the Non-Proliferation Treaty was not -- I repeat not, to provide a cover for the acquisition of material for a nuclear weapons program. And we believe Iran is bent on the acquisition of nuclear weapons, chemical weapons, biological weapons, and extended-range ballistic missiles, and has hegemonic interests in the region. Therefore we do not favor any nuclear cooperation with Iran.

Q. Recently it was reported that you received a letter from Mr. Kang Sok Ju of North Korea, stating that North Korea will activate now frozen nuclear facilities by the 21st if the U.S. keeps insisting on Korean type reactors. What is your response to this? And did you answer this letter? And how often do you guys send letters to each other?

MR. GALLUCCI: Vice Prime Minister Kang and I exchange letters fairly frequently. And you are quite correct -- I received a letter from Vice Prime Minister Kang, and I will tell you that I've already responded to him. You are also correct, in general, that he referred to his concerns about the South Korean standard reactor being the model to be provided in the context of the Agreed Framework. And he also, of course, referred to the rest of the Agreed Framework and the nuclear freeze which is in place.

You will not be surprised to learn that when I wrote back I observed that the situation we were in last week when I received his letter -- namely, that we were in New York City having a conference with some 20 countries -- it was in the interest of putting together the international consortium envisioned in the Agreed Framework -- namely that we were doing just exactly what we said we would do; moreover, that our position that the South Koreans would be the ones to provide the reactor in terms of the building of the reactor and a central role in financing, was exactly what we had anticipated when we were in Geneva, and that there should be no surprise about that. Moreover, I indicated that we had every hope that the North Koreans would, as we had, abide by the terms of the Agreed Framework. They have much in it to gain if they do, as does the international community, and that we intend to continue on the course we were on, and we certainly hoped by the time our two experts got together in Berlin to talk about the terms and conditions of the light-water reactor project that we could make some headway in resolving this issue.

Q. Should the North Koreans break the freeze next month, will the United States still proceed with exchanging the liaison offices with Pyongyang? And will the United States be ready to take the matter to the United Nations Security Council? Can you say in no uncertain terms?

MR. GALLUCCI: If the North Koreans break the nuclear freeze, they will have gone to the very heart of the Agreed Framework. If they do that, they will have broken the essence of the deal that we made last October. If that happens we will undoubtedly consult with our allies -- the Republic of Korea, Japan, others members of the Security Council, other concerned states -- and we will determine in consultation with others exactly what we will do next. At this point I can tell you certainly among the options we will consider will be return to the Security Council and the consideration of sanctions. I cannot now predict to you exactly what the outcome of those consultations will be.

Q. A Japanese newspaper reported that Japan wants to provide Japanese reactor -- (inaudible) -- instead of spending their money to contract a light-water reactor. What's your opinion on this?

MR. GALLUCCI: What I have heard from the Japanese -- and I last spoke to them only a few days ago -- is that they are, as they were before, firmly behind the implementation of the Agreed Framework. They are prepared, in the context of South Korea playing a central role in the construction and financing, for themselves to play a significant role in financing. So I do not anticipate any change in the Japanese position whatsoever.

Q. Could you explain briefly what will be the exact role of the program coordinator or program manager in KEDO? And the second question is: Are there any differences on the role of the program coordinator or program manager between the United States and South Korea?

MR. GALLUCCI: The question goes to the consulting firm, or architecture and engineering firm, that will advise the executive director of KEDO, once one is selected, in the negotiation of contracts -- first with the DPRK on the one hand, and second with the principal vendor, the South Korean entity. The program coordinator, we anticipate, will be an American company. The role will be, as I said, to advise the executive director, provide technical advice. I mean, this project has, obviously, a very large political profile. It also has a very large technical profile. It is a $4 billion project, and two thousand megawatt light-water reactors are to be built. It is I think more than reasonable that the executive director would have the expertise to help him deal with this. It is a consulting firm that we anticipate will be providing this expertise, and it will -- it will be a firm that will be able to assure the executive director that the terms of the contract are being implemented, even as deliveries are made to North Korea on the one hand, and as payments are made through KEDO to the South Korean entity on the other.

I would add one more thing on this with respect to the last part of the question, which was are there differences about the role that the program coordinator would play. The exact role that the program coordinator will play is going to be worked out when there is an executive director and two deputy directors, and they begin, together with the members of the board of KEDO, to define that role. So it's a little premature of me to try to do that.

Q. The threat that the North Koreans issued recently seems to be -- the threat that they will break the freeze in the next months -- that threat does not seem to be an empty one and a hypothetical one either. Should the North Koreans make good on their threat, will you, the United States, still be ready to exchange liaison offices with Pyongyang?

MR. GALLUCCI: Let me make clear that should the North Koreans decide that they are going to unfreeze their nuclear facilities, break the freeze, that move would go to the very essence, the very heart of the Agreed Framework that we negotiated together last October. If they do that, then we will have to, in consultation with our allies -- the Republic of Korea, Japan, and others -- decide what we are going to do next. We will not regard the Agreed Framework as having been implemented, as having been complied with, if the North Koreans take that very, very serious move. Among the steps we will certainly consider is returning the matter to the Security Council for sanctions. I am not at this point predicting to you exactly what will follow if the North Koreans take that step, but they will, if they do that, will have broken the deal, and they would not or should not expect that the United States will proceed with any other part of the agreement.

Q. Do you remain confident that North Korea will eventually accept South Korean model reactors?

MR. GALLUCCI: I don't think I would leap to use the word "confidence." I believe that they should accept South Korean reactors, both because that was the model that we agreed to in Geneva, and also because it is in their interests to do so. But I'm not actually tonight making predictions. I hope that they'll see the virtue of proceeding with the Agreed Framework and with implementation. We are certainly planning to do that as long as they do, but we will be prepared to deal with the situation if they decide to break the agreement.

Q. On the day of KEDO's establishment, Australia, New Zealand and Canada joined the membership. But I think the members are much less than expected. How many countries do you expect to join the membership, and what role are they going to do in the future?

MR. GALLUCCI: Actually I would say that the number was somewhat greater than we anticipated. The meeting that we had in New York of some 20 countries was designed to provide information to a number of governments directly from the three of us to respond to their questions. We were very gratified to find those three countries on the occasion of a meeting to indicate financial support and to indicate their desire to join. Our hope, of course, is that over time other countries will decide to join and to provide financial or in-kind contributions to support the organization. So exactly how broad the political support will be, we'll just have to wait and see.

Q. You have the most frequent contact with North Korean officials since Kim Il Sung's death. In your opinion, what does North Korea want the most? And the second question is: Looking back at the past negotiations, who do you think has the real power in North Korea other than Kim Jong Il?

MR. GALLUCCI: I believe that the leaders of North Korea would like to remain leaders of North Korea. I do believe that they recognize that their country was in some financial difficulty. I believe that the economic miracle of the economy of South Korea provides a stark contrast. I believe that the leaders of North Korea are interested in an economic opening to the United States, and to the West generally. I believe they see that as a route to political stability for their regime. My own view is that we have security objectives that we sought to achieve in the Agreed Framework. If it is implemented, those objectives will be achieved. The Agreed Framework has the potential of providing a security context in which relations between North and South can improve. There is language in the Agreed Framework that requires the North to proceed with the North-South dialogue. So I am hopeful that the Agreed Framework, as it meets security concerns, will also contribute to an improvement in the political atmosphere and reduction of risk of conflict on the peninsula.

I can't myself suggest to you what is the political leadership setting in North Korea. I can tell you that it is our judgment that Kim Jong Il is indeed in charge. And beyond that I don't feel comfortable going.

Q. Mr. Gallucci, it has been reported that President Clinton assures to Mr. Kim Jong Il of North Korea that the United States will guarantee the smooth construction of the light-water reactor, even in case South Korea makes the construction is -- faces some problems, because of objections of other participating countries. In that case do you assume that the United States will take some unilateral actions to provide the light-water reactor, even in case South Korea does not want to pay or participate in the KEDO, because of the problems in North and South Korean relations?

MR. GALLUCCI: At the time of the signing of the Agreed Framework, on October 21st of last year, I passed a letter from President Clinton to Kim Jong Il, through Vice Prime Minister Kang, with whom I negotiated. That letter we had shared with the Republic of Korea and with Japan, and it was based on a substantial amount of consultations with both governments. The letter tells the North Koreans in essence that the President of the United States will make his best effort to provide heavy fuel oil to North Korea as an interim energy measure, as anticipated in the Agreed Framework, that the United States will make its best efforts to form a consortium to bring about the provision of two light-water reactors. The President also says that he personally will make his best efforts to assure that both these projects will proceed. If for some reason the consortium cannot be formed, provided the forming of the consortium fails for no reason that is the North Koreans' responsibility; in other words, through no fault of the North Koreans. In that circumstance he would make his own personal best effort to have the United States complete these projects. He adds in this letter that his own personal efforts, of course, would be subject to approval of the United States Congress. This was a political assurance which the President was prepared to make under the circumstances. But it was an assurance he made only after close consultation and assurances of the role that both the Republic of Korea and Japan would play financially and materially in both projects.

Q. I'd like to press you a bit more on this question of the agreement in regard to the purchase of light-water reactors from the South Koreans. You've confirmed in an earlier question that this was clearly understood during the negotiations. Now this does cause certain problems in that there are still many of us who remain skeptical about the ability of the North Koreans to honor contractual commitments. And now you are talking about it was clearly understood. I have seen, for example, the Paul Greenberg (sp) column in the Washington Times on the 7th of March, where he again made the same point: Is there anything in the history of North Korea which leaves you comfortable that they will honor agreements which are clearly understood rather than formally written out?

MR. GALLUCCI: Let me suggest to you that the answer to your question is embedded in your question. We were acutely aware of North Korea's history -- not only with respect to agreements, but also with respect to its international behavior over 40 years or so. We were also acutely aware that we were having a negotiation with the North Koreans at least in part because the last agreement they signed they had not honored; namely, the IAEA safeguards agreement negotiated under the nuclear Non-Proliferation Treaty. So it was not our thought that we would negotiate a new treaty and bind them through the treaty itself, as one might hope to bind Australia in an agreement.

Instead, our approach was to create an Agreed Framework: a series of steps that they would take, and a series of steps that we would take, provided they took their steps first. What we have done is to tell the North Koreans exactly what we expect them to do, and tell them exactly what we would do. We have a document which we have negotiated with them, which has a substantial amount of detail in it, but it is not the kind of document that one would negotiate were it a treaty. There is also a confidential minute, which has additional detail in it, which we have shared with our Congress, and of course with our allies -- the Republic of Korea and Japan.

That said, it is our view that in the course of negotiations, on the point you raise there really is no ambiguity. The North Koreans well understood what was intended. They understood that we would do what we could to create a political context that would be acceptable and supportable for them to proceed with the acceptance of essentially South Korean reactors. Now, that's what we have been doing. Now, the North Koreans may wish to say that that was not the understanding. I do believe they know better.

Q. Ambassador, but let me just go back to your own testimony before the House Subcommittee on Asia and the Pacific, on the 23rd of February, where you said that critical differences remain, and the most important is which country will provide North Korea with those reactors. Now, does that not in fact contradict what you have just said?

MR. GALLUCCI: It does not in fact contradict what I've just said, because what I said in that testimony was that critical differences remain. The North Koreans are taking the position that they will not now accept the reactor deal.

Now, the fact that they're taking that position doesn't mean that they understood this -- that they did not understand that this was the deal in October. In my view they did. And I am not at all surprised that they are back attempting to rewrite the bargain. What we are saying is that this bargain was reached -- substantially because we had no alternative. We had no alternative, because there was no other financially viable construct. There still is no other financially viable construct. The South Koreans' willingness to play a central role was then, as it is now, dependent upon the South Korean standard reactor. The situation hasn't changed. What I testified to was the fact that the difference is there. That difference on that issue or any other could be created by the North Koreans any time they choose. It doesn't mean that they were right about this -- what happened in October of last year.

Q. You mentioned earlier in response to a question -- and this I think came up in your testimony as well -- that the North Koreans have some political difficulty with accepting reactors from the South Koreans. Now, I wonder if the American commitment to the South Koreans being suppliers is a result of America's own assessments. Or is it in fact a deference to South Korean and possibly Japanese sensibilities and requirements?

MR. GALLUCCI: The American position follows from the reality that the light-water reactor project, as an element in the Agreed Framework, requires that three criteria be met. The three criteria are that the project be technically viable, it be politically viable, and it be financially viable.

As we looked around the world at how we could put such a project together, there was only one model or construct that met all three criteria, and that was a South Korean central role; in other words, a South Korean reactor. The South Koreans are not prepared to finance another country's reactor, and that seems to me not at all unreasonable a position. The Japanese position that they are prepared to play a significant role in financing is contingent upon the context in which the South Koreans play a central role. Our position is that we wish to put together a deal that would address our concerns about security raised by the North Korean nuclear program, and we did. And this was the construct that works technically, politically and financially. If you question the political criteria, based upon what the North Koreans are saying now, I'll refer you back to what I at least claimed was the clear outcome of our negotiations in October; namely, this deal was understood then. If the North Koreans wish to rewrite it now, it does not mean that we should accept the rewriting of the agreement now. We don't intend to do that. We intend to stick with a deal that would work if the North Koreans accepted it.

Q. Okay, now, agreeing your point about the political difficulty that the North has, or claims to have, is there a symmetrical counterpoint to this in the South Korean insistence in turn that they are only prepared to finance it if it is their reactors which are used? If there not technical barriers to other suppliers, why would the South Koreans be insistent on that point?

MR. GALLUCCI: In the end, of course, I would encourage you strongly to put that question to the South Koreans and not to me. I would suggest to you that to ask the South Koreans to finance the construction of another country's reactor in North Korea is to ask quite a lot of the government in Seoul. I think the position they are taking is a very statesmanlike position, being prepare to participate as they are in the construction of a reactor project to settle a nuclear non-proliferation problem. I wouldn't suggest that they should be financing a French, German, Russian or an American reactor in order to meet North Korean concerns about the political optics of a South Korean reactor in North Korea.

Q. From one point -- (inaudible) -- I think that is a sensible response. From another point of view, nonetheless, if it is such an important agreement, and it is so critical to the peace and security of the region, including the Korean Peninsula, if alternative suppliers were available -- say, from Germany -- or over the weekend in fact I read somewhere that the Russians were interested in supplying as well but they didn't wish to complicate the negotiations. If the security requirements are so great, and there are no technical impediments, and the South Koreans are - - (inaudible) -- the finance, if it came to that do you think they would be flexible and be prepared to commit funds? Or are you really ruling that out? Or are you going to redirect that question to the South Koreans as well?

MR. GALLUCCI: Sir, let me be clear about this. The North Koreans told us they were interested in a Russian reactor. They told us they were interested in a German reactor. They told us they are interested in a French reactor. Indeed, they told us they were interested in an American reactor. I told them that there was only reactor project that I was able to envision financing, and that was a South Korean reactor. That is the beginning and the end of the story. We are not going to be in the position of pressuring the people of South Korea to pay the French, the Germans, the Russians, or indeed the Americans, to build a reactor in North Korea. The South Koreans have taken a position which we have presented to the North Koreans. I do believe they understood it and accepted it in October, and it's not for the United States to change that.

Q. Another question unrelated to the previous set of questions. It relates to the date, the 21st of April date. Now, I can see the logic of that being six months from the date of signing of the Agreed Framework. Did it strike the negotiators at the time that puts it just a few days after the NPT extension conference has started?

MR. GALLUCCI: We were aware certainly of when the NPT extension conference started. The North Koreans were very interested in having a specific date. They wanted it as early as possible. Initially they wanted it to be a deadline by which time the contract with KEDO would have to be negotiated. We said of course that a deadline for any negotiation to conclude was not really a very viable concept. We were prepared to have a target date, and that's what we have. And we have shown every good faith, I think, in trying to meet that date, with the negotiations that we have conducted. Yes, we were aware of when the NPT extension conference convened, and we decided to go ahead with this notwithstanding that.

Q. Now, you said again in your testimony that you still have some concerns about the implementation of the agreement. Would you like to elaborate on any of those?

MR. GALLUCCI: There are two specific concerns that -- or three actually that I would mention. As I indicated, we do have some concerns about the use to which the heavy fuel oil is being put. We delivered the first tranche, the 50,000 tons, and we have said that we have some concerns about how a small portion of that fuel oil was used, that it might not have been used for the limited purposes permitted in the Agreed Framework -- namely, for heating and electrical energy generation; and may have been used in the processing of steel. Our interest is in clarifying that. We are not concerned about a direct military use for this oil, but we are concerned that the Agreed Framework be fully complied with.

The second area, of course, is the North-South dialogue. The Agreed Framework provides that the North Koreans will proceed with the resumption of the dialogue. That has not yet happened. And of course from our perspective that is an extremely important element in the overall settlement, and we need that to happen if we can expect full implementation of the Agreed Framework

And third, of course, as you are well aware, there is the reactor issue. And we wish that issue to be resolved, because we do not wish it to interfere with the implementation of the other elements of the Agreed Framework.

Q. The first concern in the text of the KEDO agreement, which was signed on the 9th of this March -- Article 4, Section C, goes back to saying this organization shall obtain formal assurances from the North Koreans about these various things that you are mentioning. In retrospect, would you have preferred to have had that written into the earlier agreement? Do you think that's an oversight?

MR. GALLUCCI: I'm not sure that I am following your question. I wonder if you could repeat it for me.

Q. Certainly. Your first concern was that you want to ensure that the energy that you will supply will not be diverted to purposes other than those for which they are meant. That concern has been written into Article 4 of the KEDO agreement, which was signed formally on the 9th of March. I wondered if in retrospect you would have preferred that contractual commitment to have been written into the earlier Agreed Framework.

MR. GALLUCCI: I cannot fully go into an answer to your question, for some reasons you may be able to appreciate, in terms of some of the portions of the Agreed Framework, which I described to you as containing a confidential minute. I will tell you that there is no ambiguity about the limited purposes to which the heavy fuel oil is to be put. I will tell you that I think there is no ambiguity about our intention of having that issue resolved. We have raised it with the DPRK, and we are discussing it with them, and we expect to be able to resolve it.

Q. It looks that President Clinton's nuclear deal with North Korea does not deal with (totality ?) threat in the peninsula after the post-Cold War. It gives a good fortune in favor of the Pyongyang government in getting political and financial concessions from the U.S. government. As such, North Korea -- (inaudible) -- their nuclear facilities instead of nuclear disarmament. The peninsula -- (inaudible) -- still remains a security dilemma, as a dangerous flashpoint and a threat of nuclear proliferation. The question is: How far is the implementation of Section 3 of the October 21st agreement? And how does the Pyongyang (copes ?) to implement for a better substantive and rapid progress in reducing tensions in the Korean Peninsula?

MR. GALLUCCI: That's a long and complicated question. Let me try to break it into some parts. First, does the Agreed Framework deal with all dimensions of our security concerns in the Korean Peninsula? The short answer to that is no -- at least not directly. The Agreed Framework is intended, from our perspective, to principally deal with the nuclear issue. We are concerned with the accumulation of large amounts of plutonium over a period of years in North Korea -- certainly they already have 25 to 30 kilograms of plutonium contained in spent fuel in their storage pond. That's enough for about five nuclear weapons. So, without respect to what the North Koreans may have or may not have as a result of earlier separation of plutonium, over which the issue that we had before the Security Council initially arose. So our focus was on the nuclear facilities that produce and separate that plutonium. That's a central focus to begin with. And the Agreed Framework, if implemented, fully deals with that concern. Those facilities are frozen. And they are frozen now. They were frozen right after the agreement was signed. The IAEA inspectors are on the ground ensuring that. And over the life of the agreement, all those facilities would be dismantled, the spent fuel containing the plutonium would be shipped out of the country, and the North Koreans would be required to do whatever the IAEA says they must do to resolve the question of how much plutonium they produced in the past. So the nuclear issue is, as I said, completely dealt with if the Agreed Framework is fully implemented.

But the security situation on the Korean Peninsula -- as your question suggests you are well aware -- is much broader than that. It extends to our concern that the North Koreans are building extended-range ballistic missiles, that they have been exporting ballistic missiles and ballistic missile technology to other countries, including Iran and the Middle East; that they have deployed conventional forces along the demilitarized zone quite far forward -- as many as 600,000 troops forward deployed. A concern to us because South Korea is of course a treaty ally. We ourselves have some 37,000 Americans deployed there.

So there are these security concerns and others that need to be dealt with. The Agreed Framework does not directly address these concerns, but for the first time it gives us access to those issues, because the political language in the Agreed Framework, referring to an improvement in relations been the DPRK and the United States indicates that our willingness to go from liaison offices, to fuller diplomatic relations at the ambassadorial level, will depend upon the North Korean willingness to deal with other issues of concern to the United States. And other issues of concern begin with the ballistic missile program, the conventional force deployment, and other issues that we have that we will wish to talk to the North Koreans about. So I would suggest to you that a Framework exists here for in the Agreed Framework to deal with other issues, as well as the central one, the nuclear one.

You correctly note, secondly, that the North Koreans get many good things as a result of this agreement, and that bothers very many people -- I suspect in your country as well as in mine. Why should the North Koreans get a $4 billion light-water reactor project? Why should they get delivery of heavy fuel oil? The short answer to that is that the North Koreans have facilities which are of concern to us and to others. These are not facilities that are illegal under any international regime, but they are threatening because they are gas-graphite nuclear facilities which produce a lot of separated plutonium, from which a lot of nuclear weapons could be manufactured. Under the Agreed Framework they will give this up -- in exchange for something, not surprisingly -- and those are the good things that you mention. That's the deal -- a more preferable, a more desirable way to deal with these facilities then some others that one might think of in terms of risks and costs.

With respect to the conclusion I think that you drew that we are solving this problem by enriching their nuclear capability -- I would dissent from that characterization. It is true that light-water reactor technology is more advanced, more sophisticated, than gas-graphite technology, and that we would propose to provide them, along with our allies -- South Korea, Japan, and others to join in KEDO with this advanced nuclear technology. Advanced it is. But it is also more proliferation-resistant. And that's the name of the game. So that we are meeting some legitimate energy needs, and we are proposing to go ahead and provide them with sophisticated but more proliferation-resistant nuclear technology.

The security dilemma continues, you observe, and that is certainly true. We do not believe that any of the issues that I mentioned to you is now solved. The nuclear issue is in a better state right now than it was last year at this time, or as it was six or seven months ago. It is frozen right now. It can be unfrozen -- indeed, the North Koreans are threatening to unfreeze it. That would break the deal, and send us back to consider the kinds of options that we talked about last year, including a return to the Security Council. So we don't regard these problems as solved. But we regard ourselves as being on a path that could result in a peaceful resolution of these problems, and ultimately lead to a political context that will allow the South and the North to reconcile themselves.

Q. My question relates to KEDO's membership. I would like to know why KEDO hasn't more actively sought to gain the participation of China. South Korean Foreign Minister -- (inaudible) -- in late February said that he did not expect China to participate in KEDO for, in his words, financial and political reasons. Now, I can understand the financial aspect of this, but don't you think that Beijing, being Pyongyang's closest ally so to speak, could do a lot in helping to promote the diplomatic negotiations with Pyongyang, especially for instance in this case don't you think China could do a lot in playing a convincing role?

MR. GALLUCCI: I have a great deal of sympathy with the thoughts that lie behind the question that you pose. I need to tell you, first, that we invited China to our conference in New York. They were the only government that we invited that declined to attend. We understood or anticipated that they probably would not show up, because they told us that they believed that they could support the Agreed Framework better by remaining outside KEDO than by joining KEDO. They have said they do support the Agreed Framework. Now, they have made a political calculation, and I am not here to second-guess it. I will tell you that we would have welcomed them, and we still would welcome them within KEDO. We hope that they will play a helpful role. We believe in the past they have as well. They have every interest in preventing the spread of nuclear weapons anywhere -- particularly to a country that is on their border. They have every interest in maintaining stability in North Asia, particularly on the peninsula that is contiguous to their country. So we expect they will play a useful role. They are welcome to join KEDO. We did invite them.

Q. What will be the future of the nuclear devices? While the Asia-Pacific is becoming an arms bazaar from the West and the former Soviet republic, China and India, is becoming again -- it's rising back again as a traditional power, and there is a strong impression that the U.S. is giving more priority -- Europe first, and set a viable concept for a stable and prosperous Pacific community. Realizing the economic prospects, the U.S. government sees this area as more fortunate instead of Europe. So what's your comment?

MR. GALLUCCI: If I understand the thrust of your question, I would like to offer that the Clinton administration well appreciates the importance of Asia, that there is an emphasis upon our relations with states in Asia. We are quite concerned about not only maintaining stability in Asia, but contributing to the continued prosperity of Asia. We are intent on maintaining a presence in Asia. And we have, through the visits of our principals from the United States government, from this administration, been very active in Asia.

With respect to the suggestions regarding conventional weapons sales to the region, conventional weapons have been sold to the region, and they will in the future. The world that exists after the end of the Cold War is not a world in which all states' security are guaranteed. We have many friends that have legitimate security concerns. We intend to help them meet those concerns, wherever appropriate, without contributing to destabilizing transfers.

Q. Among the 20 participants during the meeting in New York, there were also the six ASEAN countries. Now, I would like to know your perception of what the ASEAN countries, and in particular Indonesia, could play in this KEDO arrangement. Or were they just there to be, as you put it earlier, to be informed on the proceedings?

MR. GALLUCCI: All of the countries were invited to New York to be informed about our intentions in terms of why we were creating this international organization. They were there to be encouraged to join the organization. They were there to be encouraged to support the organization in some material way. We promised the countries that this was not a pledging conference, that we would not ask them to pledge while they were present. We would not press them to join while they were present. But we did wish for a free and open exchange of ideas, and we certainly were hopeful that countries would conclude that it was in their interest to politically support the organization, and to then do so also materially. And I would say that certainly in true of Indonesia. Indonesia is in a position to help with heavy fuel oil that needs to be provided under the terms of the Agreed Framework, and financially directly. We would be very interested in an active Indonesian role, politically and substantially.

Q. Mr. Ambassador, (will there be a perception for the future ?) for the United Nations to play a much more pervasive and security role while it failed to maintain (peace and end conflicts ?) since the end of the Cold War?

MR. GALLUCCI: It is my view that the role of the United Nations, in the post-Cold War world, has yet to be fully defined. Many of us have high hopes for the United Nations, for the Security Council, for the General Assembly, and we will have to see over time the extent to which it is able to play the role that some of us think it can. It will have to adjust to the realities of international politics. It will have to become an effective body itself. And we will just have to see whether it can bear a substantial burden in securing peace and stability in the world I am afraid at this point it is just simply too early to tell.

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File Identification:  03/14/95, EPF215; 03/14/95, EUR221
Product Name:  Wireless File; Worldnet
Product Code:  WF; WO
Document Type:  TRA; INT
Thematic Codes:  1EA
Target Areas:  EA; EU
PDQ Text Link:  383179