Tracking Number:  396455

Title:  "Gallucci: Agreed Framework 'Back on Track'." Speaking to reporters at USIA's Foreign Press Center, Ambassador Robert Gallucci claimed that the talks held with North Korea put the Agreed Framework "back on track." (950622)

Date:  19950622


06/22/95 GALLUCCI: AGREED FRAMEWORK 'BACK ON TRACK' (Transcript: Amb. Robert Gallucci at FPC 6/22) (5260) Washington -- Recently completed talks in Kuala Lumpur with North Korean officials have put the Agreed Framework "back on track," according to Ambassador Robert Gallucci.

Gallucci, chief U.S. negotiator for the talks between the United States and the Democratic People's Republic of Korea (DPRK), spoke June 22 to reporters at USIA's Foreign Press Center.

The most significant outcome of the Kuala Lumpur talks, he said, was that the North Korea acknowledges that the Korean Peninsula Energy Development Organization (KEDO) will select the reactor type for the light water reactor project to be built in North Korea. KEDO has selected the Korean Electric Power Company as the prime contractor for the project and the reactors will be of South Korean design.


MR. GREEN: Good morning and welcome to the Washington Foreign Press Center. My name is Arthur Green, the deputy director of the Foreign Press Center network.

We are very happy and honored to welcome back to the FPC podium this morning Ambassador Robert Gallucci, ambassador at large. Ambassador Gallucci's here to give us a status report on the U.S.- North Korean Agreed Framework. As you know, the ambassador was meeting with his counterparts in Kuala Lumpur just a week ago. Ambassador Gallucci has an opening statement to make, and then we will go straight into your questions.

AMB. GALLUCCI: Thank you, Arthur. Ladies and gentlemen, I just want to briefly state where I think we are at this point in the implementation of the Agreed Framework, on the heels of the joint press statement that was issued out of Kuala Lumpur between the United States and the DPRK and also the virtually simultaneous statement that was released in Seoul following the executive board meeting of KEDO.

As I think you all know, we had a period of some months, actually, of difficulty in terms of implementing the Agreed Framework, where the DPRK took the position, in general terms, that they were unwilling to accept the South Korean central role in the light-water reactor project and taking that position through the talks that we had conducted in Berlin -- that were headed by Gary Samore -- and during the period of the talks that went on for almost four weeks in Kuala Lumpur, headed on our side by Deputy Assistant Secretary Hubbard. During that period the other pieces of the Agreed Framework were not being executed -- that is to say, the activity necessary for the future deliveries of heavy fuel oil, the activity necessary to safely store the spent fuel, the activity necessary to move ahead with the opening of liaison elements. All the other elements of the agreed framework were also put on hold.

So as I describe that to you, I am also describing to you -- as a result of, I think, a successful outcome in Kuala Lumpur -- we are now moving ahead in all these areas.

Briefly, the outcome, I think, you're all familiar with, is that the DPRK, in the terms of the agreed press statement, acknowledges that KEDO will select the reactor type for the LWR project. KEDO will select the prime contractor for the light water reactor project, and it will be KEDO with whom the DPRK will conduct future negotiations dealing with the light water reactor project. And as you know, simultaneous with the release of this statement, the executive board of KEDO met in Seoul -- that is to say myself, Ambassador Endo and Ambassador Choi met -- and we released a statement in which the executive board announced that KEDO was indeed going to pursue the construction, as its charter says, of two Korean standard reactors of the Ulchin 3/4 type that discussions would begin soon with a candidate to be the prime contractor namely KEPCO, and that we were pleased with the outcome in Kuala Lumpur.

Following that announcement and the week now since then -- little more than a week -- we have had movement in all the areas in which we had not previously had movement. So we have a team right now in Pyongyang that has just come back from Songbong (ph) to talk to the DPRK about cooperative measures to ensure the proper disposition of future heavy fuel oil deliveries. We have a team on it in North Korea now on its way to their nuclear facilities at Yongbyon to talk about the stabilization of a pond for the safe storage of the spent fuel. We have had communications about next step in liaison offices but we have not moved to sending a team to North Korea there.

So, we are moving in each of the areas of implementation of the Agreed Framework, and at this point I would say we are back on track. And I think with that, I will be pleased to try to answer your questions.

Q. Ambassador Gallucci, are you confident that despite the Kuala Lumpur declaration or agreement -- do not specifically mentioning South Korea, although mentioning a reactor type which sounds like it can be nothing other than a South Korean, are you confident that the North Koreans will in fact accept the South Korean reactor -- (inaudible) -- because South Korea is not specifically mentioned.

AMB. GALLUCCI: Well, there are actually two parts to that question. The first part really has to do with whether we have succeeded in not only unambiguously -- not only unambiguously but explicitly naming the Korean standard reactor, naming a Korean prime contractor, ensuring a central role for South Korea. And I would say to you we have unambiguously and explicitly assured that, unambiguously because in technical terms of that statement there is only one reactor on Earth that fits that description, and that's the Ulchin 3/4 reactor. Moreover, to get to the explicit as well as the unambiguous part, the press statement has the DPRK accepting a KEDO decision. And, so there would be no ambiguity and we would make it explicit, KEDO decided at the same time it would be the Korean standard reactor and that there would be a central role for South Korea, a South Korean entity, and the first one that we will open discussions with will be KEPCO, will be the prime contractor. So I would say that issue, which we believed was settled in Geneva in October of 1994, we definitively settled in this last round of discussions.

But the second part of your question really goes to the character of discussions with the DPRK because what you're really asking me, I guess, is whether we will ever hear any more about this. You used the words, I believe, "weasel out of." Pardon me if I don't use the same words. My view of this is that I'm not willing to guarantee what the DPRK is going to do any time, any place. The DPRK has not been, I'll say quite frankly, particularly reliable in the past. I could say that all that one does when one engages in these discussions with the DPRK is makes a very clear record so there is no question internationally what has been agreed to. We have done that. Now you ask what will happen. Well, if the DPRK decides on one Monday morning they're not going to act consistent with that statement, then we'll have to deal with that when it happens, but we will have set a very clear record.

So I'm not making any predictions here except to say that the road now, at least on paper, appears clear. I'm not saying there won't be hurdles put in front of us in the future.

Q. Mr. Ambassador, there has been a report that some of the 8,000 spent fuel rods have been damaged and revealed some radiation. Do you have any updated information to share with us?

AMB. GALLUCCI: What I understand about -- we're talking about the spent fuel that's in the storage pond at Yongbyon, the some 8,000 or so rods that were discharged from the reactor roughly a year ago and the fact that this type of fuel has a cladding or an outer casing which deteriorates in water over time. That is a slow process. It is a process that can be slowed further by cooling the water and stabilizing the water chemistry, which is what our team has gone over there to work with the North Koreans to do. And the deterioration can be stopped by recanning the fuel, which is our ultimate intent, hopefully before the end of this calendar year -- hopefully.

As to whether there is some deterioration there, undoubtedly there is some deterioration. That's what happens chemically. The question is, is this deterioration such that it becomes unsafe to do the kinds of activities that we plan to do together with the North Koreans, and the answer is absolutely not.

Q. Ambassador, when do you expect the actual signing between KEDO and North Korea would occur? The agreement specifies that you will be sending a survey team to North Korea to the site where the LWR will be constructed. When do you expect the survey team to go? Is the survey team going before the actual contract will be signed?

AMB. GALLUCCI: It's interesting that you would ask when the contract will be signed. You might well ask when the negotiations will open -- before the contract would be signed.

I can't predict with precision under the circumstances when a contract negotiation will be completed. I'd like to think that we will be able in the next month or so, or month or two to have KEDO on the ground negotiating with the DPRK someplace in some city: in other words, contract negotiation has begun. I do not know how long they will take. We've had, you will recall, a target date for the contract which has come and gone. That was, we were told a long time ago, an unreasonable target date, but it seemed to us like a good idea to set an ambitious target. And indeed, I think if we had not run into the problems we did with the North Koreans fundamentally not accepting what we believe they accepted in Geneva -- namely South Korean reactors -- I think we would be further along the road.

I think now we're back on the road, but since we haven't really begun those negotiations -- that is to say, KEDO hasn't, although a lot of the preliminary work, I think, has been accomplished in the talks in Berlin and Beijing -- it's just impossible for me to predict when we will actually complete the negotiation. But we will try as soon as possible.

Was there another part to that question? Q. The survey team. AMB. GALLUCCI: The survey team -- the survey team -- I think it's conceivable that the survey team would go before the contract talks were completed, but I'm going to leave that, actually, up to KEDO, to the executive director and his deputies. But I think it's conceivable.

Q. I want to ask you, which kind of cap the major roles companies' engineers and the (constructors ?) put on when they play the -- accept the role --

AMB. GALLUCCI: Which kind of cap? Q. As cap -- AMB. GALLUCCI: Baseball cap. Q. But it -- yeah. (Laughter.) KEPCO cap or a KEDO cap? What kind of cap would they put on? (Scattered laughter.)

AMB. GALLUCCI: Hmm. It seems that they could have maybe a cap with just a big K. (Laughter.) I don't know, actually. I hadn't given much thought to that.

I think that is to be worked out between KEDO -- if KEPCO turns out to be the prime contractor, KEDO-KEPCO, and probably KEDO in the DPRK.

I don't think there is any chance, if this project is going to become a reality, that there won't be a lot of South Koreans going north to build this $4 billion construction project. And notwithstanding what color or insignia is on the baseball cap, I think it's going to be clear that KEPCO will be overseeing this project and that -- it may -- KEPCO may have subcontracts to other Korean -- South Korean companies or companies from other countries, but it's going to be -- prime contractor is going to be a South Korean firm.

So I think what I'm trying to -- I'm searching for here are the words behind the question and not get stuck on what color baseball cap.

I think there's no question but South Korea's guaranteed a central role. I don't want to underplay the importance of KEDO at the same time, because KEDO was for us from the beginning a very important political entity to be created, or it was an entity that was -- an international organization who had a very important political role. And I think it should be allowed to play that role, but I don't know how, in fact, it translates into the -- down to the level of what flag will be flown by the people who travel north for construction. I just -- I can't anticipate that. I'm sorry.

Q. When do you (project ?) for the exchange of the liaison office between the U.S. and North Korea, and -- (inaudible) -- framework and the -- (inaudible)?

AMB. GALLUCCI: The question goes to opening of liaison offices. Under the terms of the Agreed Framework, we said that we would be prepared to open liaison offices once consular and other technical issues were resolved. We have had, I believe, two sessions in Pyongyang, and they have been to Washington with teams twice to work on the consular and technical issues. They are not yet resolved.

We have made a specific proposal to send a team to Pyongyang to continue those discussions so that we can resolve these matters, but we do not yet have an agreement on the next round of talks. So it is unlikely to impossible to believe that it is going to happen within the next month, but I would say that within the coming months it is still quite plausible that we could make the progress necessary to open the liaison office.

We certainly are going to abide by the terms of the Agreed Framework, and they have been negotiating in good faith. We have made substantial progress in removing obstacles or settling issues, but we're not home yet, so to speak.

Q. Could you be more specific on some of the questions that has to be resolved before you open liaison offices? And secondly, could you try to guesstimate the timing of establishing liaison offices between the two countries?

AMB. GALLUCCI: I don't want to go into the details of the negotiation. I will tell you that -- something I suspect you already know, which is that before liaison offices can be opened, one has to acquire property, one has to determine where your liaison office is going to be located, the terms under which you will have that property -- compensation, for example -- you must determine, indeed, the communications that will be available, the movement that will be permitted to your diplomats in each other's capital. These are the kind of issues that still need to be resolved. And I can't go into any more detail about the negotiations.

With respect to timing, I -- I think I've said all that I can say in substance by excluding just in practical terms the possibility of opening the liaison office within the next month. It's just -- seems to me with the trip not yet scheduled to advance this and these issues still outstanding, you couldn't possibly do all that in a month's time. But I do want to say that it is -- this is not something that couldn't be accomplished within the coming months. So put a plural there. But I just can't be more specific than that.

Q. Ambassador, is the opening of the liaison office an independent issue, or is it linked to, for instance, North Korea showing a little more flexibility on the resumption of North-South dialogue, or -- ?

AMB. GALLUCCI: Under the terms of the Agreed Framework we said -- the language of the thing where it says that both sides would be prepared to open liaison offices once consular and other technical issues were resolved. In a separate portion of the Agreed Framework, the North Koreans take on an obligation in general terms to pursue the North-South dialogue. So I would say we are obligated once consular and technical issues are resolved to proceed with the opening of the liaison offices, and we have every intention of abiding by our commitments under the Agreed Framework to the best of our ability. Likewise, the North Koreans we expect to abide by their obligations, and we expect them to proceed with an opening of negotiations and discussions with the South on North-South issues. And I'm going to leave the answer right there.

Q. I'd like to ask you about financial issues. At the State Department briefing you said that KEDO has not yet got enough funds to pay for the second shipment of heavy oil to North Korea. And my first question is so when do you expect KEDO would decide how to pay for that, and do you expect Japan and South Korea or other countries would join that? And also, a light water reactor, which is much larger and four billion -- no more than four billion, and when do you expect to get agreement among you, United States, and South Korea and Japan or other countries from Europe and the Middle East? And in what way do you expect to complete that discussion? And one more question. There is some report from Pyongyang that Kim Jong Il is now inviting President Carter again to Pyongyang. How do you respond to that report?

AMB. GALLUCCI: Starting with the heavy fuel oil, we are aiming to provide North Korea by October 21st of this year an additional 100,000 tons of heavy fuel oil. That fuel oil could be delivered in phases between now and then. It doesn't have to be delivered in all one lump at a time -- and in fact it would be probably hard for the North Koreans to store and manage it if it was delivered in all one lump.

We need to work out a schedule of deliveries, practical schedule that turns on both the logistics of heavy fuel oil delivery and on the financial side of having the money available to pay for it and the ability of North Koreans to store and keep it and use it for the limited purposes. We haven't done that yet. That's one of the things that the team that's in North Korea is attempting to accomplish, as well as agree on monitoring measures to assure that the disposition is for the limited purposes permitted under the terms of the Agreed Framework.

You're asking the question about if we're not able to pay for all 100,000 tons right now, what are we going to do. Well, we're going to intend to raise the money for those shipments, as we have said all along, and have KEDO be responsible, and we are working at that. We have accepted a number of countries' membership, along with the commitment of funds, and we're seeking additional membership and additional funds. I don't have an exact figure for you, and there's a certain softness in the status of countries joining KEDO because there's a political commitment and there's a legal instrument also. And some have taken the political commitment and have not arranged a legal instrument; some have provided money already to KEDO, which is in the KEDO bank account, others have not. So there's a slight ambiguity here.

That said, I will stick by what I said at the news conference, that we don't have yet the money in the KEDO bank account to cover our obligations through October 21st. Our intention is to get that money and to raise that money by advising other countries that it is indeed in their interest to participate in this international organization and to support it not only politically but financially, and we intend to do that.

Your second question went to the light-water reactor project, which as you note is a bit more demanding financially, in the billions as opposed to millions of dollars. And you want to know when we're going to settle the questions of who's paying for what. And I think for some substantial period of time that issue is now settled. That is to say, it is settled at the level it could be for a project of this size, which is at this status, and by that I mean a project in which we have not yet even yet done a site survey which would begin to give us a more precise fix on the overall cost. Not surprisingly, neither Japan nor South Korea wants to settle on a number, or even a percentage, until they know a percent of what. And so we have political undertakings that are quite serious from both the Republic of Korea and the government of Japan for portions of the projection. And the South Koreans have said they will participate and play a central role -- as you know that phrase, a central role -- in the design, manufacture, construction, program management and financing of the project. And the Japanese have said they would play a significant role. And we have, I know, confronted the question of how much, if you add together a central and a significant role, of a role do you have? You have quite a large role, is the answer.

And we anticipate that we will be seeking additional funds from other countries to complement that, but that will be the lion's share of the funding will come from either in-kind or financially from South Korea and from Japan. At this stage, that's, I think, all we need. As we go down the road and funding is required and we get more information about the size of the project, we would expect to get more precise.

Your third question goes to a news report that President Carter was invited and/or intends to accept an invitation to visit North Korea and South Korea, I believe. I read a news report this morning that said that. I have not heard from either President Carter or from the Carter Center about whether this has been confirmed or not, and so I really don't have anything to say about that. I think before I would comment on it, I'd like to know the facts from the Carter people and then, you know, I might have a reaction.

Q. Could you tell me something about the prospect for further easing of sanctions against North Korea?

AMB. GALLUCCI: We took the position -- first of all, in the Agreed Framework we commit to doing -- taking some steps to ease some restrictions on our dealings with the DPRK. And by January 21st of this year, which was the three-month mark and the mark that had to be hit under the terms of the Agreed Framework, we did ease some restrictions in, I believe, the telecommunications and the banking area and in trade, I believe, as well. They were limited in scope, and we acknowledge that. That was a first step.

I believe you ask if there will be following steps. The answer is: that depends. We were quite clear with the DPRK, and indeed, the terms of the Agreed Framework suggest this. If you look at the Agreed Framework, there's language that says something like "both sides are prepared to move to full diplomatic relations at the ambassadorial level, once other issues of concern are resolved." Indeed, our willingness to further relax restrictions on trade, sanctions, et cetera, should be similarly conditioned on our ability to resolve other issues of concern. We have other issues of concern.

We have the full implementation of the Agreed Framework which, I note to you, includes a commitment which is explicit -- and, I would say, somewhat hard-fought to be (won/one ?) -- that the North Koreans get on with a dialogue with the South.

Beyond that, we have made no secret of our concern about the ballistic missile program that the North Koreans have -- extended-range ballistic missile program -- and their export of those ballistic missiles. We have made no secret of our concern about the forward deployment of their million-man army in a most threatening and destabilizing posture close to the DMZ.

I could go on, but that's probably enough. So in answer to the question, is there linkage, yes, explicitly in the Agreed Framework and explicitly politically by us in exchanges by the DPRK. This comes -- will not come as any shock to them.

Q. Ambassador, I know how much you enjoy dealing with Congress on this issue. Do you foresee any serious problems in implementation of the agreement on the U.S. side, particularly in light of the most recent House foreign affairs bill, which contains some fairly restrictive words on the North Korea situation?

AMB. GALLUCCI: Well, we, of course, are right now in the midst of both the House and the Senate making decisions on appropriations and the -- what language they may decide to include in the various bits of legislation that will bear upon the implementation of the Agreed Framework. It will not surprise you that we are arguing that we need all $22 million that we have asked for this year, that that amount of money, $22 million, is well within the range of what the secretary of state told the Senate Foreign Relations Committee in January, that it would be -- our request would be between $20 and $30 million each year. We are asking for $22 million next fiscal year, consistent with what I had told Congress earlier than that, in December, though we didn't have real numbers. I talked about tens of millions of dollars, and that's the range we're in. We want to be able to support all elements of the implementation of the framework: the heavy fuel oil, the headquarters of KEDO, the light water reactor project. And so we are hopeful that Congress will understand this is will provide the money and will not take any other action that would make it difficult or impossible for us to fulfill the steps -- or take the steps that we outlined in the Agreed Framework.

I'm not about to predict to you what the Congress will do. I spend a fair amount of time talking to congressmen, senators, and staffers about our requests and why we need money, and so do other members of the administration, including the secretary of state and Winston Lord. But we could use all the help we can get.

Q. Follow from meeting, President Clinton sent a letter to Kim Il Sung, President Kim Il Sung ensuring the central role of South Korea. There must be some reason for doing that. And in comparison to the one sent to Kim Jong Il last October -- will you please compare the difference between  theĦ two letters, one sent to Kim Jong Il and the other to President Kim?

AMB. GALLUCCI: One was sent to North Korea, the other to South Korea. (Laughter.)

The letter that was sent to Kim Jong Il in October of last year was designed to do some of what we have been continuing to do with the North Koreans, which is to assure and reassure them that the United States of America is indeed interested in the situation on the Korean peninsula and that once the nuclear issue was resolved we would not lose interest; in other words, that we would stay interested.

That's a general statement. More specifically, the president's letter, which is a matter of public record, to Kim Jong Il said that the United States of America would attempt to set up an international consortium that would provide the heavy fuel oil during an interim period from the Agreed Framework until the first light water reactor came online and that it would have this international consortium also be responsible for providing the light water reactor project. It went on to say that, if for some reason, not the fault of the DPRK -- in other words, DPRK was doing everything right in implementing the framework, the international consortium failed to do that, the president would make his best effort to have the United States take on those obligations, subject it said -- subject of course to the approval of the United States Congress.

So this was a political statement by the president, and it was an important one and it is meant to reassure the North Koreans, and it was also carefully crafted to be relevant only in such circumstances in which the North Koreans were fully abiding by the Agreed Framework. And it was also carefully crafted to acknowledge that the president of the United States cannot commit the United States of America to funding, that that would be subject to Congress. So that's one letter.

The letter to President Kim Young Sam recently in connection with Kuala Lumpur was to make sure that from the perspective of the government in Seoul looking at the government in Washington that there was no ambiguity about our commitment to the objectives that we had jointly agreed to in the implementation of the framework, namely that the light water reactor project would indeed be one in which South Korea played a central role; it would be the South Korean standard reactor. It would be the South Korean firm in the role of a prime contractor. The president wrote this letter certainly because -- and I don't mean to offend anybody here -- but the capacity of the press to ask the same question over and over and over again no matter how many nails have been put in the coffin amazes and astonishes and on occasion depresses me.

And this is a very political issue in Seoul -- it's not an apolitical issue in Washington, by the way -- but it is certainly a political issue in Seoul. And this letter, the gist of which has been made public, was designed to be an explicit acknowledgement by the president of the United States to the president of South Korea that we were going to stick by our position that we had jointly agreed to, and no more and no less than that.

Q. As you know, the South and North Korean rice agreement was announced the day before yesterday. If North Korea ask you to help them with rice for the -- supporting the complete implementation of the Agreed Framework, are you preparing to help them with rice?

AMB. GALLUCCI: You mean if -- let me see if I understand this question. If North Korea now came to us as well as to South Korea and Japan and asked for rice to supplement the heavy fuel oil and the light-water reactors, would the United States now throw rice over the transom?

The best thing to answer to that is that I don't answer hypothetical questions. But if I did answer hypothetical questions, I would think that I would not want to encourage a request.

(end transcript) NNNN

File Identification:  06/22/95, EPF404
Product Name:  Wireless File
Product Code:  WF
Document Type:  TRA
Thematic Codes:  1AC
Target Areas:  EA
PDQ Text Link:  396455