[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]





                       NORTH KOREA'S SEA OF FIRE:
                  BULLYING, BRINKMANSHIP AND BLACKMAIL

=======================================================================

                                HEARING

                               BEFORE THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 10, 2011

                               __________

                            Serial No. 112-6

                               __________

        Printed for the use of the Committee on Foreign Affairs


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                      COMMITTEE ON FOREIGN AFFAIRS

                 ILEANA ROS-LEHTINEN, Florida, Chairman
CHRISTOPHER H. SMITH, New Jersey     HOWARD L. BERMAN, California
DAN BURTON, Indiana                  GARY L. ACKERMAN, New York
ELTON GALLEGLY, California           ENI F.H. FALEOMAVAEGA, American 
DANA ROHRABACHER, California             Samoa
DONALD A. MANZULLO, Illinois         DONALD M. PAYNE, New Jersey
EDWARD R. ROYCE, California          BRAD SHERMAN, California
STEVE CHABOT, Ohio                   ELIOT L. ENGEL, New York
RON PAUL, Texas                      GREGORY W. MEEKS, New York
MIKE PENCE, Indiana                  RUSS CARNAHAN, Missouri
JOE WILSON, South Carolina           ALBIO SIRES, New Jersey
CONNIE MACK, Florida                 GERALD E. CONNOLLY, Virginia
JEFF FORTENBERRY, Nebraska           THEODORE E. DEUTCH, Florida
MICHAEL T. McCAUL, Texas             DENNIS CARDOZA, California
TED POE, Texas                       BEN CHANDLER, Kentucky
GUS M. BILIRAKIS, Florida            BRIAN HIGGINS, New York
JEAN SCHMIDT, Ohio                   ALLYSON SCHWARTZ, Pennsylvania
BILL JOHNSON, Ohio                   CHRISTOPHER S. MURPHY, Connecticut
DAVID RIVERA, Florida                FREDERICA WILSON, Florida
MIKE KELLY, Pennsylvania             KAREN BASS, California
TIM GRIFFIN, Arkansas                WILLIAM KEATING, Massachusetts
TOM MARINO, Pennsylvania             DAVID CICILLINE, Rhode Island
JEFF DUNCAN, South Carolina
ANN MARIE BUERKLE, New York
RENEE ELLMERS, North Carolina
VACANT
                   Yleem D.S. Poblete, Staff Director
             Richard J. Kessler, Democratic Staff Director
















                            C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

Mr. Victor Cha, professor and director of Asian studies and D. S. 
  Song-Korea foundation chair in Asian studies and government, 
  Georgetown University..........................................     9
Bruce Klingner, senior research fellow, Northeast Asia, Asian 
  Studies Center, The Heritage Foundation........................    19
Mr. William Newcomb (former senior economist, Bureau of 
  Intelligence and Research, U.S. Department of State, and former 
  senior economic adviser, Office of Intelligence and Analysis, 
  U.S. Department of the Treasury)...............................    32
Mr. Robert Carlin, visiting scholar, Center for International 
  Security and Cooperation, Stanford University..................    45

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Mr. Victor Cha: Prepared statement...............................    12
Bruce Klingner: Prepared statement...............................    21
Mr. William Newcomb: Prepared statement..........................    34
Mr. Robert Carlin: Prepared statement............................    48

                                APPENDIX

Hearing notice...................................................    74
Hearing minutes..................................................    75
The Honorable Gerald E. Connolly, a Representative in Congress 
  from the Commonwealth of Virginia: Prepared statement..........    77
The Honorable Brad Sherman, a Representative in Congress from the 
  State of California: Letter to the Honorable Barack Obama, 
  President of the United States, dated February 9, 2011.........    78
The Honorable Christopher H. Smith, a Representative in Congress 
  from the State of New Jersey: Articles submitted for the record    85

 
    NORTH KOREA'S SEA OF FIRE: BULLYING, BRINKMANSHIP AND BLACKMAIL

                              ----------                              


                        THURSDAY, MARCH 10, 2011

                  House of Representatives,
                              Committee on Foreign Affairs,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10 o'clock a.m., 
in room 2172 Rayburn House Office Building, Hon. Ileana Ros-
Lehtinen (chairman of the committee) presiding.
    Chairman Ros-Lehtinen. The committee will come to order.
    As we address the threats posed by the North Korean regime 
to our nation's security interests, to our allies, and to its 
own people, I would like to take a moment to remember another 
brave people, the people of Tibet, as they commemorate the 52nd 
anniversary of the Tibetan National Uprising.
    At the recent White House State Dinner for the visiting 
Chinese leader, a Chinese pianist played a song from the long-
forgotten Korean War whose lyrics portray the brave American 
soldiers who fought for freedom in the Korean peninsula as 
``wolves and jackals.''
    Those depicted at our Korean War Memorial are no jackals. 
These are America's own boys. These are our beloved sons. ``Our 
Nation,'' as the memorial inscription reads, ``honors our sons 
and daughters who answered the call to defend a country they 
never knew and a people they never met. Having risen from the 
ashes of war, the Republic of Korea, a thriving democracy and 
an economic powerhouse, is the proud legacy for those who 
fought and died over 60 years ago.
    By contrast, in North Korea, a modern Caligula pursues his 
nuclear bread and circuses while he lets his own people starve. 
He plays a risky game of brinkmanship, sinking a South Korean 
naval vessel, defined as an act of war, and shelling South 
Korean island villagers with a sense of impunity.
    And why does he dare to do so? He is confident that his 
Chinese patrons will protect him, both on the ground in Asia 
and in the halls of the United Nations. And the leader in 
Pyongyang threatens to turn Seoul, ``the miracle on the Han 
River,'' into ``a sea of fire.''
    He also directed his hackers to try to disrupt joint U.S./
South Korean military exercises held recently by jamming GPS, 
Global Positioning System devices critical to South Korean 
military communications.
    But the evil deeds of this modern day Caligula do not end 
in Korea. He has attempted to ship arms to the brutal regime in 
Burma and the Tamil Tigers. News reports indicate that, with 
Chinese complicity and in defiance of U.N. sanctions, he 
shipped missile parts to Teheran via Beijing's airport.
    North Korea has attempted to ship arms to Hamas and 
Hezbollah, both proxies of the Iranian regime and both 
designated by the U.S. Department of State as foreign terrorist 
organizations. And it was North Korea that helped the Syrian 
regime build the nuclear facility that Israel removed in 
September 2007. The International Atomic Energy Agency is still 
investigating and seeking answers on this North Korea/Syria 
nuclear facility.
    All this in the midst of one failed round after another of 
the Six-Party Talks. These talks have proven to be little more 
than kabuki theater demonstrating only Pyongyang's duplicity 
and broken promises. Former Los Alamos National Laboratory 
Director Siegfried Hecker reported that ``his jaw just 
dropped'' when he saw a facility in North Korea last November 
with ``hundreds of centrifuges.'' He added that the world 
should take Pyongyang's apparent uranium enrichment program 
seriously. This revelation indicates that Pyongyang has had a 
covert second track to nuclear weaponry in defiance of the 
Agreed Framework and the Six-Party Talks.
    Assistant Secretary of State Kurt Campbell is en route to 
Seoul as we meet to discuss this critical Highly Enriched 
Uranium issue with our South Korean allies. North Korea 
promised to accept a transparent verification of its 
denuclearization when it was removed from the list of state 
sponsors of terrorism by the Bush administration in October 
2008.
    Pyongyang reneged on that promise and withdrew from the 
Six-Party Talks after getting what it wanted. In January of 
this year, a court in Seoul, South Korea sentenced a spy to 10 
years in prison for planning to assassinate a leading North 
Korean defector on direct orders from the regime in Pyongyang. 
The U.S. criminal code defines such action as international 
terrorism. Is it not high time for the State Department to re-
list North Korea as a state sponsor of terrorism?
    Meanwhile, Pyongyang has requested further U.S. food aid as 
reports indicate renewed food shortages in North Korea. There 
are some grave concerns about this proposal. There is the 
question of the American food aid remaining in North Korean 
warehouses when Pyongyang expelled American humanitarian NGOs 
in the spring of 2009. Pyongyang distributed this food without 
monitoring. There must be a full accounting of these 20,000 
tons of food aid requested.
    Lest we forget, in December 2008, U.S. shipment of food aid 
to North Korea via the World Food Program was suspended due to 
growing concerns about diversion by the North Korean military 
and regime elite and the World Food Program's lack of effective 
monitoring and safeguards.
    Fast approaching is the 100th anniversary next year of the 
birth of Kim Jong Il's father, and there is a danger that aid 
provided would be diverted for this spectacle.
    Much has occurred since the last full committee hearing on 
North Korea that was held in early 2007. I look forward to 
receiving the witnesses' insight on North Korean actions in the 
last 4 years and their recommendations for U.S. policy moving 
forward.
    I now turn to the distinguished ranking member, my good 
friend Mr. Berman, for his opening remarks.
    Mr. Berman. Thank you very much, Madam Chairman. And thank 
you for calling this hearing. And my kudos to the individual 
who thought up the title of this hearing. I think there is a 
literary career ahead for that person.
    For over two decades, successive American administrations 
have wrestled with the puzzle called North Korea. Every 
President since Reagan has tried to put the puzzle pieces 
together. And just when it seems like they are going to fit, 
North Korea pulls the rug out from under us.
    Today, a peaceful and permanent resolution of the North 
Korean nuclear issue remains as elusive as ever. Pyongyang 
desperately wants to be recognized as a nuclear power, and 
refuses to fulfill its commitment to abandon its nuclear 
weapons program under international inspections and safeguards.
    At the same time, North Korea's reckless and provocative 
actions have dramatically increased tensions on the Korean 
Peninsula. In the past year alone, North Korea has sunk a South 
Korean naval ship, shelled a South Korean island populated with 
civilians, and revealed to the world what we already believed, 
that it is pursuing a uranium enrichment program as well.
    While North Korea poses a serious threat to the stability 
and security of East Asia, it has also, as the chairman 
mentioned, exported its destabilizing influence to other 
regions of the world. Surpassed only by A.Q. Khan's network as 
a source of illicit weapons technology, Pyongyang has supplied 
ballistic missiles to Iran and built the now-destroyed nuclear 
reactor in Syria. It could easily begin exporting uranium 
enrichment equipment, nuclear weapon designs, and even nuclear 
weapons material.
    The perennial challenge is how to change the North's 
behavior. Is there a new approach we should take in dealing 
with Pyongyang? Is it even possible to reach an agreement with 
North Korea that will lead to a verifiable end of its nuclear 
program, especially now that the regime is undergoing a second 
dynastic succession?
    North Korea has now indicated that it wants to return to 
the negotiating table, more than 2 years after the last round 
of Six-Party Talks. But in light of the regime's previous 
behavior, it is hard to view this as anything other than a 
thinly-veiled effort, like so many previous cycles of 
aggression and negotiation, to mitigate international 
sanctions, regain economic aid, bolster ties with China, and 
resume bilateral negotiations with Seoul and Washington, while 
continuing to stall on the nuclear issue.
    Nevertheless, while a healthy dose of skepticism is 
certainly in order, it would be a mistake to completely write 
off a policy of tough engagement. At the present time, there is 
simply no other viable alternative to that approach.
    Despite our differences with China on a whole range of 
issues, we can't afford to ignore the role that Beijing plays 
on the North Korea nuclear issue. As a result of its close 
political and economic relationship with Pyongyang, China holds 
considerable leverage over the regime. Regrettably, China has 
been very reluctant to fully exercise that influence.
    The Chinese leadership apparently believes that coddling 
its neighbor will preserve stability in the region and perhaps 
enhance Beijing's own prestige and influence with the West. But 
this is a dangerous game Beijing is playing, one that it may 
come to regret. Every day that Beijing fails to pressure 
Pyongyang is a day that brings the North closer to having a 
deliverable nuclear weapons capability, one that could directly 
threaten China and cause other states in the region to consider 
pursuing their own nuclear weapons programs. Continuing to 
enable Kim Jong Il's truculence is the surest route to 
instability in China's immediate neighborhood.
    While the threat of a nuclear-armed North Korea is a 
critical issue that deserves our urgent attention, we must not 
overlook the horrendous human rights situation in North Korea. 
Millions of North Koreans live in desperate conditions, many of 
them facing starvation. They live in constant fear of arbitrary 
arrest and know they could be tortured or executed at any time.
    We should make every effort to provide humanitarian 
assistance and food aid to North Korean people but only if we 
can get adequate monitoring to ensure that such aid is not 
diverted or misused.
    I look forward to the testimony of our panel of experts 
today and to hearing their views on possible creative solutions 
to the very serious North Korean problem.
    Thank you, Madam Chairman.
    Chairman Ros-Lehtinen. Thank you, Mr. Berman.
    Unfortunately, the chairman of the Subcommittee on East 
Asia and the Pacific, Mr. Manzullo, is ill today. Thus, I am 
pleased to recognize the chairman of the functional 
Subcommittee on Terrorism, Nonproliferation, and Trade, Mr. 
Royce, in his stead for a 3-minute opening statement and will 
allow the members of our committee for a 1-minute opening 
statement as well.
    Mr. Royce is recognized for 3 minutes.
    Mr. Royce. Madam Chair, thank you very much.
    This is very serious. Last fall North Korea revealed its 
highly enriched uranium facility. Experts estimate that these 
centrifuges are four times as powerful as those spinning in 
Natanz, Iran. Raising the stakes, exporting centrifuge 
technology can be very easy to cloak. One witness predicts a 
third nuclear test in the near future in North Korea.
    Since I came to Congress in '93, our North Korea policy has 
been a bipartisan failure in terms of both at the 
administrations level, and what we have done.
    Even the former chief proponent of the Six-Party Talks has 
said those talks are of no use. Only a new government in North 
Korea is going to get us closer to peace and security. And this 
crisis comes as the administration is considering a request for 
food aid.
    Now, let me say this about the $800 million in food aid we 
have already given. A top North Korean defector told the Wall 
Street Journal last week, ``We must not give food aid to North 
Korea. Doing so,'' he said, in his words, ``is the same as 
providing funding for North Korea's nuclear program.''
    And, according to this defector, who spent a decade in a 
top position of power, if the regime cared about the people, 
they would take money out of the nuclear program and spend it 
on food. The opposite is happening. The money is going to fund 
their build-up. So, looking at it through this defector's lens, 
that is $800 million that we have given the North Korean 
regime. And they have pilfered that, and they have not had to 
spend it on feeding their military and their cronies.
    We had a French NGO sit here and tell us that that money 
goes into the hand of the military base because it is sold, the 
food aid is sold, on the Pyongyang food exchange. The French 
NGO traced it back. That is the report we get.
    Believe me, they are not asking for food to help the 
starving. I was told by the former minister of propaganda that 
money never goes to the outlying areas. That never goes to 
those areas. It goes to prop up the regime.
    So it is really hard arguing that our aid doesn't support 
this brutal regime and, secondly, doesn't support its nuclear 
weapons drive. I think the administration is on the wrong 
course in this request for food aid to North Korea.
    As we are sitting here pointing out all of the failures of 
the past policy. My question is, when are we going to learn? We 
have been feeding North Korea for decades. The plight of the 
average North Korean gets worse and worse. We should basically 
be blocking their access to hard currency and helping to put 
enough pressure on this regime from the officer corps, who 
won't get paid if we do that. So we change the regime.
    Thank you. I yield back.
    Chairman Ros-Lehtinen. Thank you very much, Mr. Royce.
    And now I am pleased to recognize the ranking member on the 
Subcommittee on East Asia and the Pacific, Mr. Faleomavaega, 
for his 3-minute statement.
    Mr. Faleomavaega. Madam Chairwoman, thank you for calling 
this important hearing.
    For the 22 years that I have been serving as a member of 
this committee, it seems that the more we hold hearings on the 
crisis in the Korean Peninsula, the more I feel a real sense of 
either hopelessness or sheer frustration, wondering if we are 
ever going to resolve the critical issues that confront our 
nation and our allies toward the people and he leaders of North 
Korea.
    At the same time, Madam Chairwoman, while it is very easy 
for us to be throwing spears and daggers and even labeling 
North Korea as an axis of evil, one cannot discuss the issues 
of North Korea without including the concerns and also the 
frustrations on the part of some 42 million South Koreans who 
live in this current division, sheer frustrations on the part 
of both North and South Korea, a most profound social and 
political division that took place following World War II, not 
of their choosing, Ms. Chairwoman, but even before there was a 
North and South Korea.
    The Korean people were caught in the middle of the 
geopolitical rivalry between two superpowers that started the 
Cold War. And, even though the Cold War may have been over, we 
are still working on the remnants. And, as a child, I supposed 
that the crisis in the Korean Peninsula was never part of the 
solution.
    History sometimes, Madam Chairman, can do nothing but 
deliver misery to people. Let's not forget there for some 60 
years before the World War II, Korea was a colony of the 
imperial Japanese empire. The pain and suffering of the Korean 
people during that period of time is still being felt by many 
of the people in Korea.
    I will never forget what the South Korean friend of mine 
told me when we were in meetings in Seoul. He said, ``Eni, the 
United States is our friend, but the North Korean people are 
our brothers and sisters. Please don't forget that when you 
discus the Korean issues.''
    Let me just say, Madam Chairman, on the brighter side of 
things, I would like to urge my colleagues let's move forward 
in approving the proposed free trade agreement with South Korea 
that has been carefully crafted to increase our export markets 
to South Korea between $12-20 billion and will add some 70,000 
jobs for the American people. Let's not play yo-yo politics 
with this, Madam Chairwoman. And I say I am confident the 
administration will also bring the Colombian and the Panama 
free trade agreements for us to consider.
    I look forward to hearing from our three distinguished 
witnesses this morning, who know a lot more about Korea than 
me. Is it me or I, Madam Chairman? I am still learning how to 
speak English.
    Chairman Ros-Lehtinen. Than I.
    Mr. Faleomavaega. Anyway, I yield back.
    Chairman Ros-Lehtinen. Thank you so much.
    Pleased to yield 1 minute to our subcommittee chair on 
Middle East and South Asia: Mr. Chabot of Ohio.
    Mr. Chabot. Thank you, Madam Chair. I will be brief.
    I particularly like your comparison of North Korean 
leadership to Caligula. I think that is exactly right.
    And, as usual, China, I believe, is the problem behind the 
scenes here. They essentially shield North Korea from any 
ramifications from any consequences of their actions. So, you 
know, North Korea sinks a South Korean ship, killing 46 
sailors, nearly half the crew. They shell a South Korean 
island, killing civilians and burning 70 percent of the corps 
and the forests on that particular island, essentially with 
impunity.
    Our Stanford professor comes back and indicates how they 
are moving forward. He is stunned with how they are moving 
forward with their nuclear program. China is the real problem. 
North Korea is their vessel. They are, in essence, the tool 
that the Chinese use just to stir up mischief. That is the real 
problem here.
    I yield back.
    Chairman Ros-Lehtinen. Thank you very much, Mr. Chabot.
    I am pleased to yield to Mr. Payne, the ranking member on 
the Subcommittee on Africa, Global Health, and Human Rights.
    Mr. Payne. Thank you very much, Madam Chair.
    I couldn't agree more that China could certainly be more 
helpful. I think that we have to convince China. You know, we 
have bent over backwards for China. We took them from most 
favored nation status to permanent trade relations.
    And we are certainly increasing China's modernization. I 
think the least we could do is ask them to--and it makes sense 
for them to have a stable region. I do feel that we should 
continue to give food aid. We do find that there are flaws 
sometimes in our program, but I think many more people will be 
helped with the food aid than those we feel should not be 
participating in it.
    And I believe that we have a humanitarian responsibility. 
We shouldn't blame the people. They have double jeopardy from 
their leaders and from our lack of support.
    So I thank you very much. I yield back.
    Chairman Ros-Lehtinen. Thank you, Mr. Payne.
    Ms. Schmidt of Ohio?
    Ms. Schmidt. Thank you, Madam Chair.
    And I want to voice some of my concerns with North Korea. 
First, we have known since July 2006 when North Korea first 
tested its nuclear device, that they are not just accumulating 
separated plutonium, but they are also creating gas centrifuge 
uranium enrichment, which will give them the means of producing 
nuclear weapons.
    In addition, North Korea is also developing a long-range 
ballistic missile program capable at some point in the future, 
possibly, of hitting the United States.
    It doesn't end there. We know that they have been very, 
very aggressive with their neighbors. On March 26th, 2010, a 
North Korean submarine fired at a South Korean vessel, 46 
fatalities. On November 23rd, 2010, the North Koreans, again 
without provocation, lobbed dozens of artillery shells into a 
South Korean island. And, again, South Korean civilians were 
killed.
    And, against this, we know that Kim Jong Il's health is 
failing and his likely successor, his youngest son, Kim Jong-
un, is untested and may be more nervous to the West than his 
father.
    Our policy has been a little unsure in the United States 
regarding this administration and North Korea. And I worry very 
much about where we are going to go with the future talks.
    I yield back.
    Chairman Ros-Lehtinen. Thank you very much, Ms. Schmidt.
    Mr. Cicilline of Rhode Island?
    Mr. Cicilline. Thank you, Madam Chair.
    I just look forward to hearing from the four distinguished 
panelists and thank the chair for convening this meeting on a 
very important issue.
    Chairman Ros-Lehtinen. Thank you, sir.
    Pleased to yield to the Subcommittee on Africa, Global 
Health, and Human Rights, the chairman, Chris Smith, for 1 
minute.
    Mr. Smith. Thank you very much, Madam Chair.
    I would hope that our distinguished witnesses would address 
a number of news reports and as well as the Agency for Defense 
Development briefing for members of Parliament in Seoul that 
said that the North is believed to be nearing completion of an 
electromagnetic pulse bomb that if exploded 25 miles above 
ground, would cause irreversible damage to electrical and 
electronic devices, such as mobile phones, computers, radio, 
and radar, experts say. They also have said that this could be 
used, obviously, in warfare. Kim Jong Il made it one of his 
priorities, according to numerous reports, to pursue electronic 
warfare. I hope you would speak to that.
    Secondly, very briefly, the issue of religious freedom, and 
human rights in general, remains a serious concern in North 
Korea. The U.S. Commission on International Religious Freedom 
has said that negotiations with North Korea will not succeed 
unless rooted in a broader framework that includes agreements 
on humanitarian and human rights concerns. I hope that you 
would address that as well. They should not be decoupled, 
notwithstanding our concerns about the nuclear issue.
    Chairman Ros-Lehtinen. Thank you very much, Mr. Smith.
    Mr. Sherman, the ranking member on the Subcommittee on 
Terrorism, Nonproliferation, and Trade, is recognized for a 5-
minute opening remarks.
    Mr. Sherman. The U.S.-Korea free trade agreement will open 
our markets to North Korean goods. Keeping this concealed until 
Congress approves the agreement is critical to the strategy of 
getting it passed.
    Goods that are, say, 65 percent North Korean content and 35 
percent South Korean content have the right to come into this 
country duty-free under this agreement. If we block those 
goods, as we may if we enforce our national security laws, then 
South Korea gets to raise tariffs. And we lose all of the 
advantages we negotiated for under the agreement.
    Furthermore, the Kaesong slave labor camp will be eligible 
for treatment as if it is part of South Korea. And all the 
goods, 100 percent Kaesong-made goods will come into this 
country with the workers being paid maybe $7 a month without 
future congressional approval. The agreement is carefully vague 
in appendix or annex number 22.
    I have asked the USTR to clarify this. They have refused. 
They have ignored my letter for the last month and longer. And 
it is clear that there is enough vagueness there so that future 
executive branches could act and let those slave labor goods 
into the United States.
    Chairman Ros-Lehtinen. Thank you, Mr. Sherman.
    Mr. Johnson of Ohio is recognized.
    Mr. Johnson. Thank you, Madam Chairman. And I, too, applaud 
setting up this hearing.
    I am particularly interested today to hear our panel 
members talk about the security implications. You have heard my 
colleague talk about the trade agreement. I am interested in 
hearing your opinion of the security implications were we to 
not move forward with that trade agreement.
    I would also be interested to hear your thoughts on China 
and whether or not China is essentially benefitting from this 
perceived standoff with North Korea and does it not, in fact, 
give China significant leverage that these barriers persist. So 
I would be interested to hear the panel members talk about 
those kinds of issues.
    And, with that, I yield back, Madam Chairman.
    Chairman Ros-Lehtinen. Thank you very much.
    Thank you to all of our members for their opening 
statements. The Chair is pleased to welcome now our panel of 
witnesses. Victor D. Cha has been the Korean chair at the 
Center for Strategic and International Studies since May 2009. 
He is also a professor of government and director of Asian 
studies at Georgetown University and has academic degrees from 
Columbia and Oxford.
    From 2004 to 2007, Mr. Cha served as the director for Asian 
affairs at the National Security Council. At that time, he 
worked closely with former Ambassador Chris Hill in the George 
W. Bush administration on North Korean policy and served as 
deputy head of the U.S. delegation to the Six-Party Talks.
    Dr. Cha, thank you for attending.
    Bruce Klingner is the senior research fellow for Northeast 
Asia at The Heritage Foundation. He has a 20-year career at the 
Central Intelligence Agency and the Defense Intelligence 
Agency, including serving as deputy division chief for Korea at 
the CIA.
    Mr. Klingner has written numerous articles on the Korean 
Peninsula and received degrees from Middlebury College and the 
National War College.
    We welcome you as well, sir.
    William J. Newcomb is a former U.S. Government economist. 
From 2005 to 2008, Mr. Newcomb was the senior economic adviser 
to the assistant secretary for intelligence and analysis in the 
Treasury Department.
    Prior to holding that position, Mr. Newcomb spent over 20 
years as the State Department's Bureau of Intelligence and 
Research senior economist for North Korea. During 2003 to 2005, 
Mr. Newcomb served as the deputy coordinator of the State 
Department's North Korea Working Group.
    Mr. Newcomb is a graduate of Colorado College and has done 
graduate work at St. Mary's and Texas A&M.
    Glad to have you here, Mr. Newcomb.
    And our final witness, Mr. Robert Carlin, is currently a 
visiting fellow at Stanford University's Center for 
International Security and Cooperation. He is also as veteran 
of the State Department's Bureau of Intelligence and Research, 
where he worked for 13 years on North Korea.
    Mr. Carlin served as a senior policy adviser to the North 
Korean Peninsula Energy Development Organization from 2003 to 
2006, leading numerous delegations to North Korea.
    Mr. Carlin holds a degree from Claremont Men's College and 
Harvard University.
    Welcome, Mr. Carlin. And thank you for this excellent set 
of panelists. I kindly remind our witnesses to keep your oral 
testimony to no more than 5 minutes. And, without objection, 
the witnesses' written statements will be inserted into the 
record.
    So we will begin with you, Dr. Cha. Thank you.

 STATEMENT OF MR. VICTOR CHA, PROFESSOR AND DIRECTOR OF ASIAN 
STUDIES AND D. S. SONG-KOREA FOUNDATION CHAIR IN ASIAN STUDIES 
             AND GOVERNMENT, GEORGETOWN UNIVERSITY

    Mr. Cha. Thank you, Chairwoman, Congressman Berman, and 
distinguished members of the committee. It truly is a pleasure 
to be here with you today.
    The challenges that are posed by North Korea have only 
become more complex from the past. In addition to the uranium 
enrichment program and the possibility of a third nuclear test, 
the sinking of the Cheonan and the brazen firing of 170 
artillery shells on Yeonpyeong Island are very concerning. And 
I think there are several theories that have been bantied about 
as to why the North is provoking in such a deliberate and rapid 
fashion having to do with the North Korean leaders' dislike of 
the South Korean Government, longstanding disputes over 
maritime boundaries, and the internal leadership transition. 
But I would like to draw the committee's attention to one other 
possible explanation.
    North Koreans have said to me in the Six-Party Talks that 
the United States attacked Iraq and it attacked Afghanistan 
because they did not have nuclear weapons and that we would 
never attack them or Iran because these countries have nuclear 
capabilities. Kim may be engaging in more provocative 
conventional attacks short of war because he believes his own 
rhetoric that he is now a nuclear weapons state and, therefore, 
feels invulnerable to potential retaliation by other parties.
    Now, we know that this is wrong, but this does not mean 
they may believe it mistakenly, particularly as they become 
less confident in their deteriorating conventional deterrent, 
including the degraded artillery that sits on the DMZ.
    I cannot overemphasize to you how dangerous a situation 
this is. The following scenario is not impossible. The North 
could provoke again because they believe their nuclear 
deterrent is sufficient to prevent retaliation. And Seoul 
cannot stand another attack. They cannot sit passively. And 
they respond with a military strike confident in their own 
minds that they could control the escalation ladder. This is 
the sort of miscalculation on both sides that could lead to 
war.
    So how do we deal with this? The Obama administration has 
been operating essentially with the same toolbox as the Bush 
administration: Sanctions, exercises, and counterproliferation 
activities. And I give the administration credit for pursuing 
trilateral coordination with Japan and South Korea and for the 
up tempo of military exercises, including Key Resolve and Foal 
Eagle, which finish up today.
    But one cannot help but wonder where this is all leading. I 
support sanctions, counterproliferation, and military 
exercises. But even a hawk has to acknowledge that a long-term 
policy of sanctions and military exercises in the end may lead 
to war before they lead to a collapse of the North Korean 
regime.
    A study I directed at CSIS did a time-series analysis over 
27 years back to March 1984 to chart on a weekly basis two 
pieces of data. One was DPRK provocations, and the other were 
periods of major negotiations involving the United States.
    Never once in the entire 27-year period was there a period 
in which the DPRK provoked in the midst of negotiations with 
the United States. This does not mean the Obama administration 
should dive right into negotiations today, but the cost of 
strategic patience, the administration's policy, is likely to 
be a third nuclear test and more North Korean provocations. 
That will elicit a South Korean military response and potential 
escalation.
    No administration wants to be recorded in history as the 
one that took the peninsula to war with a policy based for 4 
years on sanctions and exercises. So they need to think hard 
about their next steps.
    As a baseline, the U.S. must continue to intensify the 
sanctions and military exercising. They should also push 
forward with new consultations with the ROK on extended 
deterrence, both conventional and nuclear. The administration 
should seek innovative ways to enhance trilateral coordination 
with the allies, including a renewed effort at a collective 
security statement. And the parties should also consider U.N. 
authorization for U.S. and ROK use of force in self-defense in 
response to future violations of the armistice.
    While there is no movement on the nuclear negotiations, 
this should not discourage those who seek to advance the human 
rights agenda. And here the lowest hanging fruit is the food 
assistance program. It is my own view that the United States 
should consider providing food for North Korea if it is along 
the lines of a 2008 agreement that the Bush administration 
negotiated and if they can use that as an opportunity to try to 
push North Korea to make an apology on the Cheonan or on the 
Yeonpyeong Island shelling.
    North Korea is truly the land of lousy options. There are 
no good choices, and there are only bad choices and worse 
choices. Rewarding bad behavior may elicit more bad behavior. 
But the alternative is to do nothing on nuclear diplomacy or 
human rights, and that will buy you a runaway nuclear program, 
rampant proliferation, and now rumblings in South Korea about 
nuclear weapons.
    Thank you.
    [The prepared statement of Dr. Cha follows:]
    
    
    
    Chairman Ros-Lehtinen. Thank you very much.
    Mr. Klingner? Thank you so much for being here.
    And if you could summarize your statement?

STATEMENT OF BRUCE KLINGNER, SENIOR RESEARCH FELLOW, NORTHEAST 
      ASIA, ASIAN STUDIES CENTER, THE HERITAGE FOUNDATION

    Mr. Klingner. Thank you, Madam Chairwoman, Ranking Member 
Berman, and distinguished members of the committee. It is 
indeed an honor to appear before you on an issue of such 
importance to the United States.
    North Korea poses a multi-faceted military threat to peace 
and stability in Asia as well as a global proliferation risk. 
The disclosure last November of a previously unknown uranium 
enrichment facility validates earlier U.S. assertions that 
Pyongyang was pursuing a parallel uranium nuclear weapons 
program. It not only augments North Korean capabilities to 
increase its nuclear arsenal but also increases the risk of 
nuclear proliferation.
    Secretary of Defense Robert Gates recently warned that 
``North Korea is becoming a direct threat to the United 
States'' since it will develop an ICBM within 5 years. And 
Pyongyang has already deployed 1,000 missiles that can target 
South Korea, Japan, and U.S. bases in Asia.
    Pyongyang's two unprovoked acts of war last year were a 
chilling reminder that its conventional forces remain a direct 
military threat to South Korea.
    For years, many sought to absolve North Korea for its 
provocative acts and noncompliance by, instead, blaming U.S. 
and South Korean policies. They also claimed that simply 
returning to negotiations, offering concessions, and abandoning 
sanctions would resolve the nuclear issue and prevent 
provocations. Yet, dialogue did not prevent North Korean 
provocative acts nor resolve the nuclear stalemate.
    Last March, behind-the-scenes discussions were moving 
toward resumption of the Six-Party Talks, but that did not 
prevent Pyongyang's attack on the Cheonan. Nor did secret talks 
between North and South Korea last November, including 
discussions of humanitarian assistance, prevent the regime from 
shelling Yeonpyeong Island.
    During the last 4 years of the Bush administration, the 
U.S. engaged not only in multilateral negotiations but also in 
frequent direct bilateral diplomacy with Pyongyang, even 
removing North Korea from the state sponsors of terrorism list. 
But North Korean intransigence, noncompliance, and brinkmanship 
continued.
    In early 2009, there were euphoric expectations that the 
transition from George Bush to Barack Obama would lead to 
dramatic breakthroughs with North Korea. Instead, Pyongyang 
quickly sent clear signals that it would not adopt a more 
accommodating stance post-Bush. North Korea rejected several 
attempts by the new administration to engage in dialogue and, 
instead, engaged in a series of rapid-fire provocations.
    U.S. policymaking toward North Korea has been hampered by a 
binary debate over whether Washington should use pressure or 
engagement. The reality, of course, is that pressure and 
engagement, along with economic assistance, military 
deterrence, alliances, and public diplomacy, are most effective 
when integrated into a comprehensive strategy utilizing all the 
instruments of national power. Sanctions are not an alternative 
to diplomacy but are, rather, a component of a broader foreign 
policy strategy.
    I will quickly summarize some of the extensive policy 
recommendations I included in my testimony. The U.S. should 
continue the two-track policy of pressure and conditional 
engagement. Overall, it is a good strategy but has been weakly 
implemented to date. Stronger measures, both more pain and more 
gain, should be put into effect.
    Track one, increase punitive and coercive measures. We need 
to fully implement existing U.N. resolution requirements, 
including freezing and seizing the financial assets of any 
violator. We need to target both ends of the proliferation 
pipeline. To date, both the U.N. and U.S. have been reluctant 
to target any non-North Korean violator. We should maintain 
international punitive sanctions until North Korea complies 
with international law and U.N. resolutions. We should not 
negotiate them away for simply returning to the Six-Party 
Talks.
    Track two, simultaneously keep the door open for 
negotiations. It is not a question of whether to engage North 
Korea but of how to do so. Negotiations should be based on 
principles of compliance, conditionality, reciprocity, and 
verification. Create a strategic blueprint that clearly defines 
the desired end-state, objectives, and requirements for all 
parties, rather than continuing vaguely worded documents, and 
insist on an effective verification mechanism.
    Track three, strengthen defensive measures. Since 
international diplomacy and U.N. resolutions did not prevent 
North Korea from continuing its development and testing of 
nuclear weapons and ICBM delivery capabilities, the U.S. 
should: Continue to develop and deploy missile defense systems, 
augment nonproliferation efforts, and strengthen its alliances 
with South Korea and Japan.
    And track four, adding lanes to the road of engagement. The 
Six-Party Talks need not be the only focus of U.S. policy 
toward North Korea. Other issues that could be addressed are 
the missile threat, a peace treaty, the conventional forces 
threat, humanitarian aid, economic development assistance, 
human rights, and confidence-building measures. Yet, each of 
these lanes has a number of issues that must be carefully 
considered before going down them.
    The current two-track policy of pressure and conditional 
negotiations is an improvement over earlier approaches. Yet, 
when weakly implemented, strategic patience is insufficient as 
a long-term strategy. Simply trying to contain North Korea in a 
box is problematic.
    Thank you again for the opportunity to appear before you. 
And I look forward to your questions.
    [The prepared statement of Mr. Klingner follows:]
    
    
    
    Chairman Ros-Lehtinen. Thank you very much. You guys are 
wizards at being the under 5-minute guys. Thank you.
    Mr. Newcomb?

  STATEMENT OF MR. WILLIAM NEWCOMB (FORMER SENIOR ECONOMIST, 
BUREAU OF INTELLIGENCE AND RESEARCH, U.S. DEPARTMENT OF STATE, 
AND FORMER SENIOR ECONOMIC ADVISER, OFFICE OF INTELLIGENCE AND 
           ANALYSIS, U.S. DEPARTMENT OF THE TREASURY)

    Mr. Newcomb. Madam Chairman, Ranking Member Berman, and 
distinguished members of the committee, it is a privilege to be 
invited to speak here today about North Korea's illicit 
activities.
    I don't have a law enforcement background. I learned about 
these on the job. At the North Korean Working Group, I helped 
to develop and implement the illicit activities initiative, a 
multi-agency and multinational effort to restrict the DPRK's 
ability to conduct and profit from illegal activities.
    At Treasury, I worked on Banco Delta Asia affairs and 
assisted the Department's efforts to identify and counter North 
Korea's attempts to use the international financial system to 
launder proceeds from proliferation and crime.
    The statement I submitted to the committee briefly examines 
the history and the extent of North Korea's illicit activity 
and notes how it has compromised DPRK institutions and 
officials.
    North Korea continues to engage in manufacture and 
distribution of counterfeit cigarettes and counterfeit U.S. 
currency. It may have reduced its involvement in 
narcotrafficking. Neither Japan nor Taiwan has reported any 
major seizure of DPRK-sourced methamphetamines for 8 years.
    Methamphetamines and other drugs are perhaps being 
transshipped through China or sold in bulk there to criminal 
groups. Multiple reports of active drug trade on the DPRK-China 
border also suggest that China may have become North Korea's 
preferred market.
    Evidence is insufficient to gauge the size of this drug 
trade, but a recent press report contends the Chinese Minister 
of Public Security, Meng Jianzhu, probably expressed China's 
concerns about this matter last month, when he visited 
Pyongyang and met with Kim Jong Il.
    Executive Order 13551 issued last August labels DPRK 
counterfeiting, narcotics smuggling, and money laundering as 
constituting an ``unusual and extraordinary threat to the 
national security, foreign policy, and economy of the United 
States.''
    I would like to make four points about ongoing trends and 
the possibility that North Korea in the near term could choose 
to increase its involvement in illicit and proliferation 
activities in an even more threatening way.
    First, North Korea's economy is performing poorly, and food 
shortages again appear severe. Preliminary partner-country 
foreign trade statistics for 2009 show a falloff in DPRK 
exports and a sharp drop in its imports. The trade deficit was 
smaller than the average of recent years but exceeded $1 
billion. The trade results for 2010 are scant. Except for 
China, foreign trade last year with most partners likely was 
down again.
    Second, UNSCR 1874 is disrupting North Korea's arms trade 
and its general trade. The report of the Panel of Experts on 
Implementation of UNSCR 1874, issued last November, attributed 
the sharp decline in overall trade to the imposition of 
additional measures in June 2009.
    The recently released U.N. Combined Appeal for 2011 also 
linked the fall in total trade in part to ``stringent and 
increasing sanctions'' from major economies as well as to 
rising tensions with the ROK, the North's second largest trade 
partner.
    Third, North Korea is poor, financially isolated, and lacks 
capacity to borrow to cover chronic current account deficits. 
With trade down, risk rises that an increasingly cash-starved 
DPRK will attempt to boost earnings from illicit activities and 
ramp up exports of arms and proliferation-related items and 
know-how.
    Underscoring this danger are North Korea's past 
proliferation to Libya and Syria; troubling signs of extensive, 
although not well-understood, military trade and exchanges with 
Burma; and recently expanded trade in weapons and weapons 
development, including missiles, with its best customer, Iran, 
where rising demand for enriched uranium matches up with North 
Korea's apparent ability to supply it.
    Fourth, North Korea is adept at making counter moves to 
evade containment efforts, including deceptive techniques to 
conceal the origin and content of shipping containers and use 
of networks of overseas agents and front companies to manage 
acquisitions, sales, and banking arrangements.
    Most troubling, however, is the DPRK's potential ability to 
exploit close contacts with transnational criminal groups, with 
their own extensive networks and well-honed skills in smuggling 
contraband, to assist in transporting proliferation-linked 
items and acquiring restricted goods and weapons technology.
    Thank you for this opportunity, and I welcome any 
questions.
    [The prepared statement of Mr. Newcomb follows:]

    
    

    Chairman Ros-Lehtinen. Wonderful. Thank you so much.
    Mr. Carlin?

 STATEMENT OF MR. ROBERT CARLIN, VISITING SCHOLAR, CENTER FOR 
  INTERNATIONAL SECURITY AND COOPERATION, STANFORD UNIVERSITY

    Mr. Carlin. My thanks to the committee for letting me take 
part in this important discussion on North Korea. We start with 
bullying, brinkmanship and blackmail. I think we can add 
bluster and baloney----
    Chairman Ros-Lehtinen. Oh, well. Here we go. Dennis, did 
you hear that?
    Mr. Carlin [continuing]. Because North Korea has indulged 
in all of those things at one time or another.
    As we start a discussion on North Korea, I think it is 
useful at the outset to remind ourselves that North Korea is 
not an expansionist power. That is, it doesn't have designs on 
territory outside the Korean Peninsula. And in recent years, 
that is even putting unification very low on its list of 
priorities. However, it is engaged in a long-term violent 
political struggle with South Korea. And that makes this a very 
tough neighborhood.
    Where does that leave the United States? I am afraid it 
leaves us in the midst of a deteriorating situation that began 
in late 2002, when we stepped out of an airplane without a 
parachute. And we have been in policy free fall ever since.
    What should be our first priority, which is protecting the 
national security of the United States, has been diluted in a 
soup of bromides.
    Is the situation retrievable? It think that it is. I 
wouldn't have spent 38 years of my life working on it if I 
didn't think there was some hope. But there are several steps 
we ought to take, and I just want to highlight a couple of them 
in my remarks right now.
    The first thing we need to do is recelebrate our 
understanding of the problem. And the second thing we need to 
do is engage the North Koreans directly.
    For the past 20 years, Washington has looked at North Korea 
primarily as a WMD problem. It is not just that. It is a 
political problem with a WMD component. This is not 
hairsplitting. If we don't get the problem right, if we keep 
getting the problem wrong, we are going to keep wandering 
around in the forest, the wrong forest, looking for solutions 
to a problem that doesn't fit what actually is in front of us.
    Engagement. I know ``engagement'' is a dirty word in many 
quarters. But the goal of engagement is not to help the North 
Koreans. It is to advance our own national security interests. 
By itself and as Mr. Klingner pointed out, by itself, it is not 
going to solve our problems, but without it, we are not going 
to begin to solve any of our problems.
    Past experience. And here I would disagree perhaps with 
some of the statements made earlier. Past experience has shown 
that if it is intelligently and coherently carried out, 
engagement gives us influence on North Korean decision-making 
and influence in the region as a whole.
    For the past 10 years, however, there has been no serious 
and no effective engagement with the North Koreans. I say that 
because they have conducted two nuclear tests, developed their 
uranium enrichment capability, and worked to perfect their 
missile capability in those years.
    Well, doesn't engagement legitimate the North Korean 
regime? It does not. It doesn't compromise our interests. It 
doesn't compromise our values.
    Diplomacy has been and can be again with North Korea a 
powerful tool for advancing and protecting our national 
interests. And for us to let it rust unburnished is a mistake.
    What about Six-Party Talks? I say let them go to the 
elephant graveyard. They weren't anything more than a speed 
bump to the North Korean nuclear program. They have this 
industrial-scale centrifuge facility now. I know what it looks 
like. I saw it in November along with Sig Hecker. And, with 
that facility, they could in the worst case double their 
existing nuclear arsenal sometime in the not-too-distant 
future.
    This is not a future problem. However, it is a problem of 
the here and now. And we need to deal with it effectively. 
Effectively, what does that mean? It means realistically 
recognizing, realistically, what we can accomplish in the short 
term. It means stabilizing the situation, not just talking 
about it, stabilizing it to prevent it from becoming worse and 
preparing the foundations for long-term progress.
    This is going to be more difficult than it was 10 years 
ago. It is going to be more difficult still the longer we wait 
to get started.
    Thank you very much.
    [The prepared statement of Mr. Carlin follows:]
    
    
    
    Chairman Ros-Lehtinen. Thank you very much. Excellent set 
of panelists.
    Hezbollah and Hamas. In a visit to Tokyo last May, Israeli 
Foreign Minister Lieberman told Japanese authorities that he 
had evidence that a shipment of North Korean weapons 
intercepted at Bangkok Airport in late 2009 were headed for 
Hezbollah and Hamas-designated terrorist organizations. Israeli 
soldiers also reportedly found evidence of North Korean 
tunneling techniques in southern Lebanon after the 2006 war.
    Can you please comment on the extent, if any, if 
Pyongyang's ties to Hezbollah and Hamas? And then do you 
believe that North Korea has committed enough infractions to 
merit relisting it as a state-sponsored terrorism? What would 
the reaction in Pyongyang be to such a relisting? And how would 
it impact the negotiating process?
    Thank you. Anyone who would like to answer would be fine.
    Mr. Klingner?
    Mr. Klingner. I do believe North Korea should be returned 
to the state sponsors of terrorism list now. I earlier resisted 
such calls when it was based only on a reaction to the U.S. 
negotiator having the wool pulled over his eyes in negotiations 
in 2008 or for North Korea's unprovoked acts of war. Those did 
not fit the legal requirements for listing a country on the 
state sponsors list.
    However, I do think a South Korean court's conviction of 
two North Korean agents for attempting to assassinate Hwang 
Jang-yop as well as the intercepted conventional arms that were 
going to Hamas and Hezbollah as well as other indications that 
North Korea has been providing aid and assistance to terrorist 
groups do met the legal requirements for relisting them.
    North Korea's reaction will be strong, but I don't think we 
should hesitate from enforcing U.S. law due to the reaction of 
the recipient nation.
    Chairman Ros-Lehtinen. Thank you.
    Any others? Yes, Mr. Carlin?
    Mr. Carlin. I would like to note--and probably very few 
people remember it--that in October 2000, we signed a joint 
statement with the North Koreans on international terrorism. 
Nobody has paid any attention to this in the intervening years. 
Nobody has taken advantage of it to discuss the problem with 
the North Koreans. And so it is not a surprise to me in the 
least that the North Koreans have gone back to what we would 
consider their old tricks.
    We don't want them to do that. We should do what we can to 
stop it. But it seems to me that we shouldn't sign agreements 
with them and then let them fly away when, in fact, they 
provide tools for us to address the problem.
    Chairman Ros-Lehtinen. Thank you.
    Mr. Newcomb? Dr. Cha?
    Mr. Cha. Well, I would agree with Mr. Klingner's 
statements. I think they do now meet the legal requirements. I 
thought they met them before, but now they do really meet the 
legal requirements, especially after the conviction of these 
two individuals who tried to assassinate Hwang.
    I would also agree that their reaction will be negative, 
but at the same time I expect negative behavior from them this 
year anyway.
    Chairman Ros-Lehtinen. In the land of lousy options.
    Mr. Newcomb?
    Mr. Newcomb. About the seizure of the arms at Bangkok 
Airport, that shows the success of UNSCR 1874. And so my 
recommendation would be working closely with other member 
countries because North Korea has alternative ways to ship 
these weapons.
    But good cooperation and effective enforcement of and 
surveillance of these different shipping avenues I think would 
continue to put a crimp in these kinds of military earnings.
    Chairman Ros-Lehtinen. Thank you so much, gentlemen.
    Pleased to recognize Mr. Berman, the ranking member, for 
his set of questions.
    Mr. Berman. I am curious how you define this strategy of 
strategic patience. Is it a mix of sanctions and engagement or 
is it a sanctions with holding out the possibility of 
engagement? I don't know if any of you could just--I mean, is 
there a--what is your understanding of current U.S. policy?
    Mr. Cha. Well, Congressmember, I think that essentially 
strategic patience is an effort by the administration to 
maintain the baseline of these counterproliferation measures 
that Mr. Newcomb mentioned as well as other sanctions and hold 
out the possibility for negotiation, but I think they were 
seeking to wait for a period of time as economic pressures and 
other political pressures build up on the regime to try to find 
the right moment at which to negotiate.
    Now, I would say, quite frankly, that every administration 
has said that this has been their policy when they started on 
North Korea. And this administration has carried it for 2\1/2\ 
years, in no small apart because they started with the missile 
test and the nuclear test and, therefore, really did not have 
an opportunity to engage.
    So I think it is kind of a similar animal by a different 
name that we have seen in past administrations.
    Mr. Berman. Sort of a fundamental question the witnesses 
all pose, what elicits North Korea's concessions and 
cooperative behavior? We know several things happened. They 
decommissioned their plutonium, their reactor. They destroyed 
the cooling tower. They dismantled key portions of the 
reprocessing facility. They allowed U.S. to participate. At the 
same time, we heard inklings of it. And now you have seen it. 
They were working on a uranium enrichment facility program.
    Were those meaningful acts in retrospect? Do we get 
something through that 2007-8 period in terms of negotiations 
or is it right to say the wool was pulled over our eyes?
    Mr. Klingner. In response to your first question, sir, 
``strategic patience'' was not the administration's intended 
policy. Instead, they were going to be very forward leaning on 
engagement, even perhaps an unconditional summit with Kim Jong 
Il.
    They clearly in the campaign indicated they were going to 
be very forward leaning and even initiated several attempts to 
try to engage with North Korea, which were rejected by 
Pyongyang.
    After all of the provocations in the first 6 months of 
2009, the nuclear tests, the missile tests, threats of war, 
abrogation of the armistice, et cetera, the Obama 
administration reversed itself virtually 180 degrees and now 
adopted a much firmer policy. It is of much stronger sanctions 
and punitive measures as well as offers of conditional 
engagement.
    So it is a response to the provocations that North Korea 
did, despite the hopes that engagement----
    Mr. Berman. Wait a minute. What about to this last question 
in terms of the specifics we got? Did we really get something 
here?
    Mr. Klingner. The steps we received from North Korea in 
2007 and '8 were good steps. The problem was that the joint 
statements of the Six-Party Talks were so vaguely worded that 
we could not push North Korea when it did not comply because 
they could point to numerous loopholes.
    So that is one of the reasons why in any subsequent 
agreements that we have we must have more definitively worded 
agreements, such as the arms control treaties the U.S. had in 
order to assure that all parties know their responsibilities.
    Mr. Berman. I guess to the ``Yes'' or ``No,'' do all of you 
agree with the Six-Party Talks should be put in--what was your 
phrase, the elephants?
    Mr. Carlin. Elephant graveyard.
    Mr. Berman. Burial ground?
    Mr. Newcomb. No, I do not agree that they should be buried. 
I think Six-Party Talks have utility in their own right. 
Certainly five-party talks do, and so do three-party talks to 
strategize in the neighborhood about how to handle the North 
Korean problem.
    Mr. Cha. I would say that both the 2007 agreements as well 
as the 1994 agreements aimed to do two things. That was to 
freeze the North programs and to disable and dismantle pieces 
of it. And I would say that both agreements were able to do 
some of that.
    The '94 agreement was able to disable essentially the 50 
and the 200-megawatt reactors that were under construction. 
Those have been mothballed. They have not been restarted. And 
the 2007 agreement did result in the collapsing of the cooler 
tower at Yongbyon.
    So they have made incremental progress, but at the same 
time, as you say, the North has been doing things while these 
agreements were reached behind our backs. And that is the 
frustration of negotiating. You are negotiating pieces of this 
program but never certain in the end that you will get all of 
it.
    Chairman Ros-Lehtinen. Thank you very much, Mr. Berman.
    The chairman of the Subcommittee on Terrorism, 
Nonproliferation, and Trade, Mr. Royce of California?
    Mr. Royce. Yes. I wanted to ask Mr. Newcomb a question. I 
remember the evidence we were presented in this committee back 
in 2002 in terms of North Korea becoming the world's best 
counterfeiter of $100 bills using the same type of equipment 
and presses that we use on our currency. And they presented us 
also--the U.S. had evidence that the distribution to criminal 
groups typically occurred through senior officers at the 
Embassies and through state trading companies was routine and 
went all the way up to the top of the regime.
    And so, as it was called, this supernote conspiracy led to 
the concept of prosecuting some of these state officials with 
the idea that we could freeze the funds, freeze the funds under 
section 311 of the PATRIOT Act. And that, in fact, was done.
    In August of '05, arrests were made. The Justice Department 
was instructed by the NSC, however, to, in effect, bury the 
evidence and keep it out of court, mask the role of the North 
Korean Government. Why? We didn't want to embarrass it. We 
didn't want to embarrass it. We wanted to negotiate with North 
Korea.
    I just have a problem with the fact that the State 
Department took steps to eliminate the Working Group, the North 
Korean Working Group, and the North Korea Illicit Activities 
Group that developed this strategy because the strategy cut off 
hard currency into North Korea, right?
    The Ambassador at the time was convinced the pressure would 
get in the way of dialogue. We don't want to get in the way of 
a dialogue. But, frankly, it is the only thing that I have seen 
that has been effective.
    And then last June, traveling to South Korea, the Secretary 
of State began to articulate what she called new measures to 
target North Korea's illicit activity. I thought this was a 
good idea. They were going to go after cigarettes, drugs, and 
counterfeit currency.
    And, Mr. Newcomb, you were deputy in the group in the last 
administration that tackled this. And in a new report, David 
Asher, your partner on this, details a very robust approach to 
confronting North Korea on its illegal gains. It was State and 
Treasury but also the FBI and ATF on the cigarettes and the 
Secret Service on counterfeiting. Something like a dozen 
government agencies were involved. It had high-level support 
until again it was undercut by the diplomats.
    In your view, what is going on here? Is the administration 
even close to reconsidering this? I am not beating up on this 
administration. It has been every administration that has held 
back on the approach of freezing these funds, of doing what we 
temporarily were able to do with Banco Delta Asia and cut off 
the hard currency. And the people that I know that were close 
to this say that that brought a tremendous amount of pressure 
on this regime, but it was amazing how much pressure came the 
other direction to list those sanctions.
    Could you give me your views?
    Mr. Newcomb. Yes, sir. I think the circumstances and the 
developments are much as you described at the time. The August 
'05 arrests were a result of the well-publicized Smoking Dragon 
and Royal Charm sting operations that were run by the FBI with 
a lot of help from Secret Service and others.
    They had something like 89 indictments. And when it came 
time to publish the indictments, they dropped the original 
language and substituted ``country 1'' and ``country 2,'' which 
were China and North Korea it was later revealed. There were 
other developments as well.
    U.S. sought to arrest Sean Garland, an IRA terrorist, for 
his involvement in distributing supernote. So there was a very 
aggressive law enforcement program underway.
    We had achieved notable success cooperating on this with a 
number of foreign governments. They were starting to take steps 
on export controls that they had earlier resisted. We had great 
cooperation internationally among police agencies. And to get 
that, you have to have high-level political support, the 
diplomatic support that encourages police officers that are not 
accustomed necessarily to working with one another to go that 
extra mile and establish relationships.
    And, to be quite frank, the evidence that we use to 
convince folks about the seriousness of our alarm mostly came 
out of police reporting because of the suspicion a lot of 
intelligence reporting was held in at the time.
    Chairman Ros-Lehtinen. Thank you so much.
    Mr. Newcomb. Thank you.
    Chairman Ros-Lehtinen. Mr. Payne, the ranking member on the 
Subcommittee on Africa, Global Health, and Human Rights.
    Mr. Payne. Thank you very much. And let me thank the 
witnesses for your excellent testimony.
    In your opinion--and anyone could take a stab at it--what 
do you attribute the sort of aggressiveness of the North 
Koreans at this time, the sinking of the ship, the shelling of 
the island, you know, saber rattling? In your opinion, what has 
created or caused this?
    Mr. Klingner. All of us I am sure have theories, but one 
can also just jump over thinking of the motivations for this 
and, instead, look at the acts themselves. They have committed 
acts of terror, acts of war. We can figure our own reasons for 
those objectives, but I think we really have to focus on the 
acts themselves.
    That said, I think there are multiple reasons. And they are 
not contradictory for North Korea to engage in this behavior. 
It is a demonstration of military prowess to show that they are 
not weak, they will not be cowed, to ensure regime survival, 
reestablish relevance on the international stage.
    They don't want to be ignored. They feel that when they are 
not ignored, it gives them increased negotiating leverage and 
they create a dispute and escalate tensions in order to 
demonstrate a need for a peace treaty, which they feel they 
would be able to gain additional foreign policy objectives and 
economic benefits as well as to divert attention from the 
previous North Korean bad act.
    Some would say the Yeonpyeong-do attack may have been a way 
of diverting attention from its revelation of uranium 
enrichment facility, which is yet another violation of the U.N. 
resolution. So there are many reasons I think, sir.
    Mr. Berman. The only thing I would add to that is that, as 
I said earlier, I am concerned that they really do believe they 
are a nuclear weapon state now. And, therefore, they can act 
with impunity short of war, and they don't think the U.S. or 
other South Koreans or anybody else in the region will respond. 
And that, again, to me is a very dangerous thing because that 
is, of course, not the case.
    The South Koreans may respond or we may respond the next 
time. But if they go around believing they are a nuclear weapon 
state, they may start doing more provocations. And, you know, 
historically it is this sort of miscalculation that always 
leads to escalation and potentially war.
    Mr. Carlin. I think we should look at the West Sea as a 
particular problem. It has become a powder keg. And the 
tensions there are going to continue to rise. There is a 
dynamic that has been put in place in the West Sea of action, 
counteraction, mostly below the radar of international 
reporting, but it is what builds the tensions up until they pop 
over the top into something like an incident that we had.
    Those tensions have not been resolved. And I am afraid that 
the West Sea is going to continue to be a locus of clashes 
unless somehow someone can address the problems.
    Mr. Newcomb. I personally have concerns that succession 
politics also plays a role in how they decided to respond 
recently.
    Mr. Payne. Thank you very much. Interesting answers.
    The strength of their military--I am not talking about the 
nuclear potential, but they have a very large Army. But so did 
Saddam Hussein have a very large Army. I found out that a lot 
of them were old persons. They showed up in large numbers. But 
when it came to it, it was basically the Republican Guard that 
was about the only fit fighting unit.
    What about the in your opinion strength of their infantry, 
their land, soldiers that you see on display in so large 
numbers?
    Republican Guard
    Mr. Klingner. North Korea has approximately a million-man 
Army. And 60 or 70 percent of it is forward deployed near the 
DMZ. There are mechanized corps, armored corps, artillery 
corps, all very close to the demilitarized zone. They have 
thousands of tubes of artillery that can hit Seoul without 
further movement. They forward deployed a number of POL and 
other logistical issues, which reduces the U.S. intelligence 
community's ability to warn of even a short-notice attack.
    That said, there are credible reports that the capability 
has been declining. They have not deployed new modern weapons 
as well as the infantry themselves are suffering from the poor 
food conditions.
    That said, any U.S. war game and simulation still posits 
horrendous casualties, trillions of dollars of damage and that, 
even after the initial week of hostilities in these 
simulations, the situation is still very dire. We feel----
    Chairman Ros-Lehtinen. Thank you very much.
    Mr. Chabot, the chair of the Subcommittee on Middle East 
and South Asia, is recognized.
    Mr. Chabot. Thank you, Madam Chair.
    Given that virtually all of North Korea's imported energy 
and the large majority of its food comes through China--one 
report indicated that Beijing provides North Korea with 70 
percent of its food imports and 90 percent of its oil imports--
how can Chinese leaders credibly maintain that it has no 
leverage over North Korea, especially since its direct support 
and increasing investments over North Korea are crucial to 
keeping the North Korean economy functioning?
    Is there any evidence that Chinese has used its enormous 
influence to directly pressure Pyongyang to halt and dismantle 
its nuclear weapons program or, instead, limit its influence to 
occasionally and mildly advising Pyongyang to temporarily tone 
down its aggressive policies?
    And I would invite any of the panel. Maybe start with you, 
Dr. Cha.
    Mr. Cha. Thank you for the question. I think that you are 
absolutely right in terms of the metrics that you mentioned. 
China does have incredible material leverage on North Korea. 
And I think in the past, they have done things to help calm the 
situation down and push North Korea toward some of the 
agreements that we have reached in the past.
    I think the problem right now is that China has basically 
chosen its side. And the side it has chosen is the side of not 
allowing this regime to collapse because for them, that is a 
strategic buffer. Therefore, they are giving all of this fluid 
and energy. They are supporting the internal regime transition 
because as unstable as the situation is, a collapse of North 
Korea is more unstable to them.
    And, therefore, they are doing all of these things to help 
the regime because they think--I mean, this is China, their own 
parochial interest--it puts them in a better place when they 
come out of this transition tunnel that the leadership is going 
through in North Korea.
    So in the past, when we were doing Six-Party Talks, we 
relied on China a lot. We hoped that China could do a lot in 
terms of this leverage. These days, watching this from the 
outside, I don't think China is very helpful at all. And I 
don't think we can rely on them to help us solve this problem 
now.
    Mr. Chabot. Thank you.
    Mr. Klingner or any of the other witnesses?
    Mr. Klingner. I agree with Mr. Cha. I think China has shown 
itself to be part of the problem, rather than part of the 
solution. Despite the figure you mentioned, I think China has 
less influence over North Korea than many presume and has also 
shown itself to be less willing to use what influence it does. 
I had been somewhat encouraged when China did take some actions 
in the U.N. Security Council in response to the nuclear missile 
test.
    And I thought last year with the Cheonan and Yeonpyeong-do 
attacks that were so blatantly against the norms of 
international behavior, that China, of course, must not be able 
to ignore the evidence, let alone the need for action. And, 
yet, they did.
    So it was very discouraging that China was refusing to 
accept the clear, compelling evidence and was unwilling to 
agree to additional U.N. Security Council resolutions or even 
to fully implement the agreements that are in place.
    Mr. Chabot. Let me just ask my second question here because 
I am running out of time. Christopher Hill, former Chief, North 
Korea negotiator in the Bush administrator, wrote on February 
22nd, and I quote,

        ``More recently the North Korean regime proudly 
        unveiled a modern high-tech uranium enrichment 
        facility. The North Koreans lied in writing, not only 
        to the United States, which they have done repeatedly 
        in the past, but also to China, Russia, Japan, and 
        South Korea.''

    If even Chris Hill now thinks that the North Koreans lied, 
how can anyone else really trust them in further negotiations? 
And maybe I will go to Mr. Newcomb and Mr. Carlin at this 
point.
    Mr. Newcomb. I think trust is a hard commodity to come by 
in negotiations with North Korea. And I think China is just 
refusing to recognize what Mr. Carlin and others saw there so 
it doesn't have to deal with that particular matter.
    Mr. Chabot. Mr. Carlin?
    Mr. Carlin. We don't negotiate with the North Koreans on 
the basis of trust. We don't reach agreements with them on the 
basis of trust. If we can't verify an agreement with them, we 
shouldn't reach it. If we can verify, then we should, you know, 
place a lot of emphasis on that and make sure that they do 
follow through.
    We do have examples where they follow through with 
agreements. And we should try to reproduce that environment to 
make sure that we can get there again I think.
    Mr. Chabot. Madam Chair, I yield back. Thank you.
    Chairman Ros-Lehtinen. Thank you so much, Mr. Chabot.
    And now the ranking member on the Subcommittee on East Asia 
and the Pacific, Mr. Faleomavaega, is recognized for 5 minutes.
    Mr. Faleomavaega. Thank you, Madam Chairwoman.
    As I have said earlier in my statement, I am still learning 
how to speak the English language. And in the process, I have 
come up with some words that maybe our experts here can help me 
with: Deterrence, detente, multilateralism, unilateralism, 
preemption. Now it is hedge politics.
    And I must say I was very impressed with all of you 
gentlemen's statements and what we have here. What I have 
pointed out is that not one of you ever mentioned about whether 
or not South Korea is an important element of what we are 
talking about when we talk about North Korea, nothing. And I 
think it is critical because if there is a war, it is the 
Korean people that are going to end up dead, not as much as 
Japan or Russia or the United States or even China. It is the 
Korean people that are going to end up in the pot potentially 
if we are going to have a nuclear war.
    And I was just wondering, am I missing something here, the 
fact that we don't even talk about South Korea as an integral 
part of the whole issue that we are discussing here. Mr. Cha?
    Mr. Cha. Well, you point up correctly an omission in all of 
our statements. I think South Korea is a very important part of 
any policy puzzle with North Korea. The current 
administration----
    Mr. Faleomavaega. See, this is the problem. We only say it 
in passing.
    Mr. Cha. Yes, yes.
    Mr. Faleomavaega. So oh, yes. By the way, there is a South 
Korea.
    Mr. Cha. Yes. No. Point well-taken. The Obama 
administration actually in many ways has put the initiative for 
any future policies with North Korea in the hands of Seoul 
currently in the sense that the administration wants to see 
rectification of inter-Korean relations before they are willing 
to move forward on other tracks.
    The current government, as you know, is more conservative. 
It has more of a conditional reciprocity engagement policy. And 
the North Koreans don't like that. They got very used to 10 
years of sunshine policy under Kim Dae Jung and Roh Moo-hyun, 
which was unconditional in many ways.
    Mr. Faleomavaega. Well, the preconditions that I want to 
say that I agree with Mr. Carlin's statements that for the past 
10 years, they really have not had any real effective 
engagement process in dealing with North Korea. And what I mean 
by this is that--and, again, I have a different take from my 
colleagues about this whole thing--in this history, when Kim 
Dae Jung after 60 years of this political separation that was 
not of their doing was able to go up to Pyongyang and shook the 
hands with Kim Jong Il, to me that was a very important thing 
because why did this occur?
    The Koreans themselves are trying to solve the issues or 
the problems between North Korea and South Korea. What did we 
do? We criticized. We condemned Kim Dae Jung's initiative by 
saying, if anything else, can we at least let the Koreans 
encourage them in some way or somehow that they can solve these 
problems if we give them the tools that are the necessary 
support process because all we are talking about here, of 
course, we all know that our first priority is our national 
security interest in this region of the world, but the poor 
Koreans are caught in the middle of this geopolitical situation 
between China and the United States. And I am a little puzzled 
by this because I don't get a sense that we are really serious 
about including South Korea in this whole dialogue.
    Mr. Carlin?
    Mr. Carlin. I guess I would make two quick points. First, 
from where I sat anyway in the State Department, we were 
perfectly happy with Kim Dae Jung's trip to Pyongyang and 
supported it because it reinforced our own policies.
    Second point is we have got a range of problems in dealing 
with the interests of the South Koreans. Of course, they should 
take priority to a certain extent. It is their country. It is 
their people. It is their risk.
    On the other hand, as you know, we have got much broader 
concerns in the region. And those have to be balanced. When we 
are working truly with the South Koreans, I think everybody's 
interests get looked at. When the South Koreans are pulling in 
a slightly different direction, then it gets more difficult to 
make the policies work.
    Mr. Newcomb. I think I, too, agreed with the trip of Kim 
Dae Jung up to Pyongyang. I am not certain, though, that the 
North Koreans saw it in the same light. If you recall, North 
Korea required an advance $500 million payment before they 
agreed to----
    Mr. Faleomavaega. I'm sorry. I know my time is up, but let 
me just say this. The sunshine policy I adore and really with 
the utmost respect what Kim Dae Jung was able to accomplish for 
one simple reason, that the Koreans themselves are trying to 
solve a serious problem just to say hello. Give them the 
credits.
    Oh, shoot. I am sorry, Madam Chair. Time is up.
    Chairman Ros-Lehtinen. Thank you. Thank you, Mr. 
Faleomavaega.
    Mr. Smith, Subcommittee on Africa, Global Health, and Human 
Rights chairman, is recognized.
    Mr. Smith. Thank you, Madam Chair.
    Dr. Cha and Mr. Klingner, you both made strong reference to 
the need for food aid. And I would echo that call to the 
administration.
    The World Food Program has said that there is a severe 
problem with lactating women, pregnant women, and small 
children. Thirty-three percent of the kids are stunted. Twenty-
five percent of the pregnant women are malnourished. And TB, 
especially drug-resistant TB, which has a problem associated 
with malnutrition, is bad and getting worse.
    So I would hope, as you both said, as long as there is very 
good monitoring to ensure that those highly at risk get the 
food, this ought to be done yesterday. And I would add my voice 
to yours asking that there be movement on that by the 
administration. You might want to speak to that.
    Secondly, Mr. Klingner, you made a very good call as well 
on the human rights issue. There is no reason why we should in 
any way silence, both through the international work that we do 
at the U.N. as well as on our own, our voice on the egregious 
human rights abuses, whether it be religious freedom, a woman 
was executed simply for distributing Bibles last year or the 
ongoing incarcerations in the hideous gulags of North Korea for 
Christians especially needs to be confronted. When it comes to 
refugees, many women who make it out of North Korea are 
trafficked.
    I held three hearings several years ago on the human rights 
plight of those women. And we had women who were actually the 
lucky ones who got to South Korea through a very long, 
circuitous route. That, plus the fact that China, completely 
contrary to the refugee convention, sends people right back. 
And they go right to the gulag, where they are tortured and 
even executed. So you might want to speak to that.
    Finally, in my opening comment, I mentioned Defense 
Minister Kim and others who have been raising the alarm about 
the electromagnetic bomb that they seem to be working on. Any 
thoughts that you might have about that?
    As a matter of fact, it was pointed out in the Korea Herald 
yesterday that the jamming equipment, talking about electronic 
warfare, could pose serious problems to the South in case 
another armed conflict with their neighbor, with their northern 
neighbor. The North can use it not only to jam GPS signals, but 
also to disseminate misleading, fake signals so as to confuse 
its enemy's forces; in other words, South Korea and us.
    The equipment would also preclude the South from using GPS-
guided weapons to bomb its long-range artillery pieces that put 
the Seoul metropolitan area within striking range.
    The North is also thought to be seeking to develop 
electromagnetic post bombs and effectively paralyze computers. 
And you know that issue. So if you could speak to that as well?
    Thank you.
    Mr. Cha. Well, let me just address quickly your comments on 
food and human rights. And I will let others address EMP. On 
food, you know, the North Koreans have asked for basically the 
remaining 330,000 tons left from the 2008 agreement.
    And, as I said, my own view is that if they will agree to 
the same terms they did in 2008, the letter of protocol, that 
was a good agreement. It was the only time that we had access 
to every province except two, nutritional surveys as well as 
Korean speakers, as part of the A team. And that is much better 
than simply dumping the food at the port and then letting them 
divert 30 percent of it to the military. So I think if they can 
get those terms, it certainly is a good thing.
    And, as you know, sir, all of these bags go into the 
country with the American flag on it. And in Korean, it says, 
``Gift of the American people.'' So that is not a bad thing for 
us in North Korea.
    On human rights, I guess the one thing I would say is that, 
you know, the United States now has a refugee resettlement 
program for North Koreans. They have a special envoy for human 
rights. I would like to see this administration be a little bit 
more active on the human rights agenda.
    As you know, the previous administration did things like 
statement on this question of Chinese sending North Korean 
refugees back as well as having North Korean defectors in the 
Oval Office. And that really brought a high-profile nature to 
the issue around the world for others to see.
    Mr. Klingner. I would comment on food aid. Clearly there is 
a need. And, as a father, one can't help but be compelled by 
the reports and the pictures, particularly of children and 
babies that are starving and emaciated. So if we were to 
provide aid, at a minimum, we must have an effective 
verification and monitoring regime to ensure that it actually 
gets to the people who require it.
    Humanitarian aid is supposed to be divorced from politics, 
but we can't help overlook some other factors. North Korea's 
actions. It is hard to advocate having the UNDP and the World 
Food Program, which is part of the U.N., providing aid and 
assistance when North Korea is in violation of U.N. 
resolutions.
    And, even setting aside that, there are donor dynamics. In 
the 20 years we have been providing aid, there have been more 
recent horrendous natural disasters suffered by other 
countries. So one wonders with a limited pool of donor 
assistance whether it should instead be going to countries that 
are willing to make economic reforms and have suffered 
calamities more recently.
    Chairman Ros-Lehtinen. Mr. Sherman, the ranking member on 
the Subcommittee on Terrorism, Nonproliferation, and Trade, is 
recognized.
    Mr. Sherman. Yes. I am torn between the vision of hungry 
North Koreans overthrowing their government and the fact that I 
don't want to see people hungry.
    I want to focus my attention on this South Korea free trade 
agreement because that is something Congress will actually 
focus on. Right now we have got 40,000 workers there. Would the 
North Koreans have any difficulty providing 400,000 workers to 
Kaesong and similar export-oriented labor facilities? Is there 
any shortage of labor in North Korea? Mr. Carlin or Mr. 
Newcomb?
    Mr. Newcomb. In North Korea right now there is a shortage 
of jobs. But I don't know that they could supply the number 
that you indicated to replications of Kaesong scattered about 
the country. Personally I have never been a big fan of Kaesong 
because Kaesong requires South Korea to pay North Korea in U.S. 
dollars. I keep asking them, ``Why don't they use South Korean 
won?'' They don't have a good answer for that. And I also think 
it's sort of a----
    Mr. Sherman. No, it is not. Those U.S. dollars, I am told 
that the amount the worker actually gets--and worker, I mean, 
arguably, the word is ``slave'' because when you are forced to 
do work and your owner rebuts, you know, the national 
government is the one that receives the payment. It is by no 
means clear that that is a work relationship.
    Any idea how much they receive?
    Mr. Newcomb. It is possible that the figure is correct. I 
haven't looked at this in a couple of years. On the other hand, 
they line up for these jobs.
    Mr. Sherman. Look, the fact that it is better than other 
things available to North Koreans does not mean that even the 
word ``slavery'' is too strong. So certainly it provides 
foreign currency, U.S. dollars to the North Korean Government.
    Now, the agreement provides, the free trade agreement 
provides that we have to accept and do our country anything 
that is--in various categories, including auto parts, anything 
that is 35 percent made in South Korea, which means 65 percent 
of the work could be done in North Korea.
    Do any of you have any focus on the trade agreement that 
would contradict that?
    Mr. Klingner. Well, I would say, sir, the agreement I think 
has provisions that preclude the use of Kaesong goods as part 
of----
    Mr. Sherman. You haven't read the annex 22, which first 
says that there is nothing in the agreement that says that 
goods that are 65 percent North Korean, whether it be Kaesong 
or otherwise, and 35 percent South Korean are not given access 
to the U.S. market.
    Now, it is true that we have laws that might prohibit such 
import, which we would be violating the agreement and subject 
to sanctions by the South Koreans just as soon as we signed it 
unless the executive branch removed those restrictions.
    But if you also look at annex 22, you will see that the 
agreement envisions future discussions, in which Kaesong would 
be considered for purposes of the agreement part of South Korea 
so you could have 100 percent Kaesong-produced goods, rather 
than just 65 percent Kaesong-produced goods coming into the 
United States duty-free.
    And the agreement is cleverly drawn so you can't tell 
whether any such future decision to count Kaesong as part of 
``South Korea'' would require future congressional approval or 
not. And that is why in hearings from our subcommittee we asked 
that question in 2007, still haven't gotten an answer. I asked 
that question by letter on February 9th of this year to the 
current USTR, still haven't gotten an answer.
    And this is why the current Ambassador to the United States 
from South Korea is on record as saying at Kaesong when he was 
Prime Minister that this agreement will pave the way for 
Kaesong-produced products to come into the United States duty-
free.
    I just don't know which is worse: The national security 
aspect of huge dollars flowing to the Government of North Korea 
or the economic impact of telling American workers that they 
have to compete against products made at the labor rates that 
we find in Kaesong.
    My time has expired.
    Chairman Ros-Lehtinen. Thank you, Mr. Sherman.
    Ms. Ellmers of North Carolina.
    Ms. Ellmers. Thank you, Madam Chairman. And thank you to 
our distinguished panelists today.
    My question is also on South Korean free trade agreements. 
I am generally a free trade person, but there is great pause 
that I have on the national security issue. And I believe, of 
course, as many of us do, that national security trumps any 
possibility of trade with South Korea, especially in 
conjunction with the flooding of the South Korean market, with 
Chinese and North Korean goods. And that is particularly of 
concern to my North Carolinian textile industry.
    I would like to know, Mr. Newcomb and Mr. Carlin, how do 
you feel about the South Korean free trade agreement in 
relation to the national security issue. I will start with you, 
Mr. Newcomb.
    Mr. Newcomb. I am an economist. I love free trade 
agreements. I also think Kaesong poses a danger, that goods 
could be let in that are not produced up to acceptable labor 
standards.
    Ms. Ellmers. What can we do? What can the United States do 
to prevent that? What could we put in place in relation to the 
South Korean free trade agreement that might actually help us 
in this situation?
    Mr. Newcomb. Well, I mean, that is a question you have to 
ask of USTR because they are the ones that deal with this. They 
are the ones that have to strike the agreement.
    Ms. Ellmers. So, in your opinion, is it something that we 
should grapple with now or is it something that we should take 
pause and maybe hold off for a while until we get some of the 
answers that we need?
    Mr. Newcomb. Well, Kaesong does have advantages as well. 
South Korea invested in Kaesong partly because they thought 
they could gain some economic leverage over the North. I think, 
actually, it gives the North economic leverage over South Korea 
to a degree.
    But there is also a demonstration effect. You have well-
educated, well-dressed, highly trained South Koreans operating 
these factories. You have South Korean technology. You have 
South Korean goods there. They are exposing a large number of 
North Korean workers to what is otherwise denied information.
    So it is a two-way street here. And I don't want to dismiss 
the long-term corrosion of North Korea that association with 
people at Kaesong might bring.
    Ms. Ellmers. Okay. Mr. Carlin?
    Mr. Carlin. Under present circumstances, with the 
government that is in power in South Korea now, we don't really 
have a big problem about Kaesong because they are going slow. 
But I can imagine circumstances in which another election 
brings a government with different priorities, which, in fact, 
may reinvigorate Kaesong and maybe expand it.
    And then where are we going to be? We are going to be 
cross-wise with our South Korean allies on what they will 
consider to be a very important part of their policy toward 
North Korea. At that point we are going to have to weigh these 
things about U.S. economic interests, interests of our workers, 
and broader security problems.
    I am not an economist. I don't focus on these things. I 
just think I can see clouds on the horizon on this one.
    Ms. Ellmers. So you would say at this point that we really 
need to proceed very cautiously?
    Mr. Carlin. Yes, I think that is right.
    Ms. Ellmers. I do have about 1\1/2\ minutes. And I was just 
going to say to Mr. Cha and Mr. Klingner, if you would like to 
make a comment, that would be wonderful.
    Mr. Klingner. Begging the committee's indulgence for an 
advertisement, on April 1st in this building, The Heritage 
Foundation and Brookings Institution are having a joint 
conference that points out the geostrategic and economic 
benefits of all three free trades. So the two organizations are 
in agreement.
    On Kaesong, the U.S. negotiator in 2007, when the agreement 
was first signed, made very clear that the Kaesong goods before 
they were allowed into the United States would have to be 
discussed through a bilateral committee and that clearly the 
U.S. would not be in favor of that. And now we have a new 
conservative government in South Korea that I think also would 
be less willing to push for Kaesong goods, particularly after 
North Korea's actions in the last several years.
    Ms. Ellmers. Okay. Mr. Cha?
    Mr. Cha. Yes. I mean, the only thing that I would--I mean, 
in 2007, that is the way I recall it in 2007 in the 
administration that there were checks against sort of just the 
free flow of Kaesong goods into the United States.
    The other thing that I would add is that the goods we are 
talking about that come out of Kaesong--and they could change, 
admittedly, in the future--we are largely talking about things 
like chopstick sets, cheap watches, things of this nature, so 
not things that necessarily pose a national security risk.
    Ms. Ellmers. Thank you very much. I appreciate all of your 
input. And I yield back the rest of my time.
    Chairman Ros-Lehtinen. Thank you so much.
    Mr. Sherman. Madam Chair?
    Chairman Ros-Lehtinen. Thank you.
    Mr. Connolly of Virginia is recognized.
    Mr. Sherman. Madam Chair?
    Chairman Ros-Lehtinen. Yes?
    Mr. Sherman. If I could just have unanimous consent to 
insert here in the record my letter of February 9th to the 
President of USTR----
    Chairman Ros-Lehtinen. Without objection.
    Mr. Sherman [continuing]. That deals with the very issues 
these gentlemen were discussing.
    Chairman Ros-Lehtinen. Thank you.
    Gerry?
    Mr. Connolly. Thank you, Madam Chairman. And welcome to the 
panel.
    Perhaps starting with you, Professor Cha, in situations 
like this, often historically the military has played multiple 
roles, one of which is maintaining cohesion and order and long-
term stability for a regime. Given the transitional period we 
are apparently looking at in North Korea, how would you 
characterize the role of the military in this transition? And 
how should we assign responsibility when we look at very 
provocative actions, obviously the shelling of the island, the 
sinking of the ship of South Korea to the military versus 
civilian leadership if one can even paraphrase it that way?
    Mr. Cha. Thank you for the question.
    I don't think acts of that magnitude, the sinking of the 
Cheonan or the shelling of Yeonpyong--they are not random acts 
by, you know, a so-called mad colonel. These are remediated 
actions taken by the military as a group and I would imagine in 
conjunction with the party and political leadership going up to 
the top.
    So I don't see these things as a rogue military but as in 
many ways a unitary actor, the state acting together.
    What role would the military play in any possible 
transition? They will clearly play an important role. Since 
1995, Kim Jong Il has really raised the role of the military in 
North Korean decision-making. And as he tries to promote his 
third son, he is really now trying to balance that with an 
increasing role of the party in the management of the country.
    So I think we will see. We will have to watch very 
carefully the extent to which this creates competition between 
two units within the government or whether they are able to 
manage this in a way that allows for a smooth transition.
    Probably the most important variable in that sense will be 
the longevity of the current leader: Kim Jong Il. If he were to 
die suddenly tomorrow, next week, I would be much less certain 
that they could carry this off.
    Mr. Connolly. Is there evidence that there is unease or 
difficulty of acceptance of the passing on of the baton in 
terms of leadership in North Korea?
    Mr. Cha. We read about some of it in the newspaper, that 
there appears to be some unease. It is not just the passing to 
the son, but it is also the promotion of a group or younger 
generation of military leaders, generals that many may not see 
as being qualified.
    The young son himself, Kim Jong Il's sister were both 
promoted to the rank of four-star general last September. And 
they never served a day in the military. So I think that that 
also can create some tensions.
    Mr. Connolly. Anyone on the panel, but we were talking 
earlier about food shortages. Is it necessarily true that 
severe food shortages, in fact, can be destabilizing to a 
regime? And is there evidence it is destabilizing in North 
Korea?
    Mr. Cha. The assessment that the U.S. NGO group brought 
back this month said that there is clearly a need. There is 
clearly a confirmed need. But these are not conditions like the 
mid 1990s, that if we were not to provide food, it will not 
lead to a famine-like situation.
    This has led to periodic reported riots at food 
distribution centers, but the question as to whether it could 
create a larger revolution I think remains unanswered. It is 
very clear that the North Koreans are very sensitive to what 
was happening in Egypt and in Libya and in Tunisia and worked 
at their best to try to clamp down on any news with regard to 
them getting into their country.
    Mr. Connolly. Madam Chairman, I see I have 50 seconds left.
    There was a group of American experts that observed last 
November the construction of a light water reactor and new 
uranium enrichment facility at Yongbyon. Any evidence that the 
North Koreans have proceeded or included that construction and 
what it means in 30 seconds? Mr. Carlin?
    Mr. Carlin. They are a long way off from finishing the 
light water reactor. That is going to take them several more 
years. The centrifuge facility had, as far as we could tell, 
2,000 centrifuges. We could not tell whether they were 
operating standing there. And so I can't tell you at this 
moment whether they are actually producing enriched uranium or 
not. And until we get somebody in there, I don't think we are 
going to be able to answer that question.
    Mr. Connolly. Thank you, Madam Chairman.
    Chairman Ros-Lehtinen. Thank you so much.
    And we are so pleased to recognize Ambassador Han of our 
ally, the Republic of Korea, who is in our audience today. We 
welcome you, sir.
    And I am pleased to yield 5 minutes to the chairman of the 
Subcommittee on Europe and Eurasia, Mr. Burton.
    Mr. Burton. Thank you very much, Madam Chairman. I am sorry 
for my tardiness, but I had another committee hearing going on.
    I just wanted to ask you, particularly The Heritage 
Foundation but all of you, in your opinion, what would the 
security implications be in Northeast Asia of a failure by the 
U.S. Congress to expeditiously approve the free trade agreement 
with South Korea?
    Mr. Klingner. As strong advocates of free trade as well as 
a very strong relationship between the U.S. and our critical 
and indispensable ally South Korea, The Heritage Foundation 
sees the many benefits, economic and geostrategic, for approval 
of the KORUS FTA.
    I was particularly struck when I was in South Korea shortly 
after the Senkaku incident between China and Japan. I met with 
senior officials, including Presidential advisers, who said 
that they were very concerned about China's behavior, as 
exhibited there, because South Korea felt even more susceptible 
to Chinese pressure than Japan, particularly the export of rare 
earth materials. And they said, because South Korea has become 
more reliant on the Chinese economy, they are nervous of that 
pressure and that they advocated a free trade agreement with 
the United States because it would help the U.S. regain market 
share or at least the ability to compete better against EU and 
Chinese competitors. So they saw it as a way of reducing 
Chinese ability to influence an ally of the United States.
    Mr. Burton. So you think the free trade agreement is 
extremely important not only because of economic issues but as 
well because of other issues in that area?
    Mr. Klingner. Very much so, sir.
    Mr. Burton. Anybody else have a comment on that?
    Mr. Cha. Congressman, I would agree entirely with what Mr. 
Klingner said. I mean, historically the U.S. position in Asia, 
its leadership position, has rested on two legs. That is the 
security umbrella it provides and its support of free trade.
    And, quite frankly, until very recently, there were lots of 
concerns in the region about where the United States was on 
trade. And many saw it as the first indicator of a receding 
U.S. presence in Asia.
    So the free trade agreement, the biggest bilateral free 
trade agreement the United States has ever negotiated, has very 
broad strategic implications for the United States and how 
others in the region see the U.S. as a leader.
    Mr. Burton. Well, if you don't have any other comments 
about that, I appreciate your response. My colleague Mr. Smith 
of New Jersey had a question he would like to ask. So I am 
going to yield my time to him.
    Mr. Smith. Thank you very much, Chairman Burton.
    It was the other question about the electromagnetic bomb if 
any of you would like to talk about that as well as electronic 
warfare. What threat is that to South Korea and to our troops 
that are deployed there? So I yield to the witnesses.
    Mr. Klingner. The information on an EMP weapon is very 
sketchy. It has just come out this week. And, in fact, the day 
before reports of a North Korea EMP weapon, there were reports 
about a South Korea EMP weapon. So I wonder if perhaps there is 
some media confusion.
    And also the jamming of the GPS signals during the joint 
U.S.-South Korean exercise doesn't necessarily have to have 
been done by an EMP weapon. It could simply be by massive radio 
jamming. So I think we are very unclear, sir, at this point the 
extent of North Korean EMP capabilities, but we also know they 
do have cyber terrorism capabilities and units and that they 
very well may have been behind the cyber attacks, both this 
year and a year or 2 ago, in South Korea.
    Mr. Smith. Anybody else want to comment?
    Mr. Carlin. Mr. Smith, may I return real briefly to human 
rights and what you said. I can recall 30 years ago when there 
were members of this committee who were speaking out on human 
rights in Korea and nipping at the heels of the administration. 
And it was South Korea that they were talking about. And they 
were right to talk about it then. It was important to focus on. 
And we ended up with a better situation.
    I think it is equally important that this committee also 
continue to speak out on the question of human rights in North 
Korea but also continue to put it in perspective so that it 
enhances the policy and doesn't, in fact, turn out to be an 
anchor on it.
    Mr. Smith. If I could--thank you for yielding, Chairman 
Burton--I would ask unanimous consent that an ABC News piece, 
``North Korea Nears Completion of Electromagnetic Pulse Bomb'' 
as well as a Korea Herald article, ``South Korea behind North 
in Electronic Warfare''----
    Chairman Ros-Lehtinen. Without objection.
    Mr. Smith [continuing]. Be made a part of the record?
    And if any of our distinguished witnesses, because 
obviously a lot of this is breaking this week, have any 
additional thoughts that they could provide to the record, it 
would be most helpful.
    And I thank my friend for yielding.
    Mr. Burton. Madam Chairperson, I think this is a question 
that we ought to send to the State Department, the Defense 
Department to see if our intelligence----
    Chairman Ros-Lehtinen. We shall do so.
    Mr. Burton [continuing]. Has any answers on these.
    Chairman Ros-Lehtinen. Absolutely, very important. Thank 
you, Mr. Burton. Thank you, Mr. Smith.
    Mr. Marino of Pennsylvania?
    Mr. Marino. Thank you, Madam Chair.
    Gentlemen, if you would each respond to this if you have a 
response, starting with Mr. Cha? Given the wave of revolution 
in the Middle East today, what is the reality? What is the 
reality of an uprising in North Korea? And would South Korea 
facilitate that?
    Mr. Cha. Well, I would say that the chances of an uprising 
as we have seen of the magnitude in Tunisia, Libya, or Egypt is 
not very likely in the North Korea. The conditions are very 
different.
    I think in the case of North Korea, you have a population 
that literally is starving. And moms, dads, uncles, 
grandfathers are really just looking to see how to make it 
through the next day or the next week. And that is not the 
condition for revolution.
    Revolutions occur when people have access to outside 
information and their own situation starts getting better and 
they feel it is not getting better fast enough. That is what 
Montesquieu once referred to as the spiral of expectations. 
Those conditions don't exist in North Korea.
    Having said that, the North Koreans are incredibly, 
incredibly concerned about what they're seeing and, therefore, 
doing everything possible to block information. In many ways, 
this regime, though it blames the outside world for its nuclear 
weapons, is afraid of its own shadow.
    And in that sense, the people still offer a potential for 
the future, but I don't think at this point----
    Mr. Marino. Quickly, gentlemen, because I have a follow-up.
    Mr. Klingner. I would agree with Dr. Cha. At this point we 
don't see the likelihood of a mass uprising or revolution in 
North Korea to that extent, but that is I think another reason 
why North Korea is unlikely to open its country to outside 
influence, such as engagement.
    Mr. Marino. No. Please go ahead. Go ahead. I will come back 
with that question.
    Mr. Newcomb. North Korea has a lot of workers in the Middle 
East. They have nurses and construction workers in Libya. They 
have workers in the UAE. When they go back to North Korea, they 
will probably go to reeducation camps, but what they saw, what 
they learned, what they heard will be communicated over time. 
So while it may not prompt anything immediately, I think there 
is going to be a slow corrosion of society because of it.
    Mr. Marino. Mr. Carlin?
    Mr. Carlin. We usually find the precursors to revolutions 
and uprisings after they take place. So I am pretty cautious 
about predictions.
    Mr. Marino. And briefly what could the relationship be 
potentially between the United States and North Korea when its 
present dictator dies or steps aside, regardless if it is his 
son or another military leader? Mr. Cha?
    Mr. Cha. I mean, I think the United States over the past 25 
years has been pretty clear about what sort of relationship it 
would have. I mean, it would be willing to have one with fully 
normalized relations and exchange of ambassadors if the North 
nuclear question was addressed.
    I don't think the new leadership, the coming leadership is 
any different from the current one in terms of their nuclear 
ambitions, unfortunately. So I am not very confident.
    Mr. Marino. And I apologize for mispronouncing your name 
just now. I am very sorry.
    Mr. Klingner. I would agree. Some have hoped that because 
the third son was educated in Switzerland that perhaps he has 
more Western ideals of reform and governance, but I don't think 
there is any evidence for that. He is a product of the system.
    His legitimacy is not only from his bloodline but also 
continuing the policies of his father and his grandfather. So I 
don't see the likelihood of change in the North Korean policy 
after the transition.
    Mr. Marino. Thank you.
    Mr. Newcomb, do you concur?
    Mr. Newcomb. Yes, I concur.
    Mr. Marino. Mr. Carlin?
    Mr. Carlin. There was a time when the North Koreans were 
looking to us to protect them from the Chinese and the Chinese 
influence. And they thought that they might be a piece on the 
chess, on the U.S. chess board against the Chinese. I don't 
know if that is still in their thinking and if, in fact, in the 
strategic sense, the North Koreans would actually be helpful to 
us in sort of enhancing our influence in the region.
    Mr. Marino. Thank you, gentlemen. Thank you, Madam Chair. I 
yield my time.
    Chairman Ros-Lehtinen. Excellent questions. Thank you, Mr. 
Marino.
    And our batter-up, clean up, David Rivera of Florida. Thank 
you.
    Mr. Rivera. Thank you so much, Madam Chairman.
    The Cuban and North Korean regimes, spearheaded by the 
armed forces of each country, of Cuba and North Korea, have a 
well-documented history of cooperation and exchange.
    Most recently Cuban and North Korean authorities have 
reportedly signed a protocol in December 2010 to develop 
economic and scientific, technical partnerships, projects in 
2011. Given these regimes' open hostility toward the United 
States and Cuba's demonstrated pursuit of biotechnology 
capacities, what implications do you believe this type of 
cooperation may hold for U.S. national security?
    Now, I will begin with perhaps Mr. Carlin.
    Mr. Carlin. Since I really don't know the details of that, 
all I know is that the Chief of Staff visited in December, it 
is very difficult to try to predict what the influence will be, 
if it is just economic and scientific, even though it was 
signed by the military. I don't know how, what sorts of things 
they are going into.
    You know, it is worth looking at, I agree with you. It is 
very important. But I just don't have at the tip of my fingers 
the details.
    Mr. Rivera. Any other comments? Yes?
    Mr. Newcomb. Yes. I truly don't have any details on the 
agreement. I would like to note that they have been dealing 
with each other for 35-40 years. And from time to time, the 
Cubans have been very critical of the North Korean system and 
some of the measures it has taken.
    So the relationship can be a bit prickly. So how it plays 
out may well depend upon whether or not they can find a 
coincidence of economic interests. In the past, it has been a 
little tough. North Korea doesn't pay for anything.
    Mr. Rivera. Do you have anything to add?
    Mr. Klingner. I have not seen a lot of information about 
direct North Korean, Cuban military assistance, certainly not 
to the degree of, say, North Korea and Iran, where we know 
Iranian officials are present during missile tests and nuclear 
tests. And I think there is a much closer relationship between 
North Korea, Iran, Burma, Syria than we see sort of direct 
military ties with Cuba.
    Mr. Cha. I would agree that the countries that they have 
relationships with that pose the most security risk to us are 
countries like Iran, as Bruce said, and Burma at this point.
    The relationship with Cuba historically has gone back quite 
a bit of time. Kim Il-sung and Castro were quite close.
    But the relationship is prickly today. But I would add 
North Korea's relationship with every country in the world 
today is prickly, even China. I mean, even though the Chinese 
are very close to the North Koreans and protect them like a big 
brother, the two hate each other. I mean, they just despise 
each other. The mistrust and distrust is really quite palpable.
    Mr. Rivera. Well, since several of you have mentioned Iran 
and considering its increasing engagement in places in Latin 
America, like Venezuela and Cuba, perhaps that is also 
something that we should monitor in terms of some sort of a 
North Korea, Iran, Cuba or North Korea, Iran, Cuba, Venezuela 
axis developing.
    Also, is there any information from any of you that the 
Cuban dictatorship perhaps shares the results of their 
espionage efforts against the United States with North Korea? 
Maybe, Mr. Carlin, in your experience have you seen any 
espionage activity that may be shared between Cuba and North 
Korea, particularly anti-U.S. espionage activity?
    Mr. Carlin. That is a good question. And I am afraid I 
don't really recall anything, but that doesn't mean the answer 
is no.
    Mr. Rivera. Anyone else?
    [No response.]
    Mr. Rivera. Thank you, Madam Chair.
    Chairman Ros-Lehtinen. Thank you so much. And I think this 
is probably due to the repressive police states it is so hard 
to get information from either one of those two countries.
    Thank you for such excellent testimony. And thank you to 
the members for wonderful questions as well. And we will 
consider editing that to include ``baloney and bluster.''
    So the committee is now adjourned.
    [Whereupon, at 11:58 a.m., the committee was adjourned.]
                                     

                                     

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