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









                WHAT'S NEXT FOR THE U.S.-KOREA ALLIANCE

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


                                HEARING

                               BEFORE THE

                  SUBCOMMITTEE ON ASIA AND THE PACIFIC

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                              JUNE 6, 2012

                               __________

                           Serial No. 112-151

                               __________

        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              deceased 3/6/12 deg.
STEVE CHABOT, Ohio                   BRAD SHERMAN, California
RON PAUL, Texas                      ELIOT L. ENGEL, New York
MIKE PENCE, Indiana                  GREGORY W. MEEKS, New York
JOE WILSON, South Carolina           RUSS CARNAHAN, Missouri
CONNIE MACK, Florida                 ALBIO SIRES, New Jersey
JEFF FORTENBERRY, Nebraska           GERALD E. CONNOLLY, Virginia
MICHAEL T. McCAUL, Texas             THEODORE E. DEUTCH, Florida
TED POE, Texas                       DENNIS CARDOZA, California
GUS M. BILIRAKIS, Florida            BEN CHANDLER, Kentucky
JEAN SCHMIDT, Ohio                   BRIAN HIGGINS, New York
BILL JOHNSON, Ohio                   ALLYSON SCHWARTZ, Pennsylvania
DAVID RIVERA, Florida                CHRISTOPHER S. MURPHY, Connecticut
MIKE KELLY, Pennsylvania             FREDERICA WILSON, Florida
TIM GRIFFIN, Arkansas                KAREN BASS, California
TOM MARINO, Pennsylvania             WILLIAM KEATING, Massachusetts
JEFF DUNCAN, South Carolina          DAVID CICILLINE, Rhode Island
ANN MARIE BUERKLE, New York
RENEE ELLMERS, North Carolina
ROBERT TURNER, New York
                   Yleem D.S. Poblete, Staff Director
             Richard J. Kessler, Democratic Staff Director
                                 ------                                

                  Subcommittee on Asia and the Pacific

                 DONALD A. MANZULLO, Illinois, Chairman
RON PAUL, Texas                      ENI F.H. FALEOMAVAEGA, American 
BILL JOHNSON, Ohio                       Samoa
DAN BURTON, Indiana                  FREDERICA WILSON, Florida
EDWARD R. ROYCE, California          GARY L. ACKERMAN, New York
STEVE CHABOT, Ohio                   BRAD SHERMAN, California
MIKE KELLY, Pennsylvania             GREGORY W. MEEKS, New York
JEFF DUNCAN, South Carolina          DENNIS CARDOZA, California











                            C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

Mr. Jim Zumwalt, Deputy Assistant Secretary, Bureau of East Asian 
  and Pacific Affairs, U.S. Department of State..................     5
Victor Cha, Ph.D., senior adviser, Center for Strategic and 
  International Studies (former Director for Asian Affairs, 
  National Security Council).....................................    20
Mr. Daniel S. Lipman, senior vice president, Westinghouse 
  Electric Company...............................................    31
Mark Peters, Ph.D., deputy laboratory director for programs, 
  Argonne National Laboratory....................................    37

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Mr. Jim Zumwalt: Prepared statement..............................     7
Victor Cha, Ph.D.: Prepared statement............................    23
Mr. Daniel S. Lipman: Prepared statement.........................    32
Mark Peters, Ph.D.: Prepared statement...........................    39

                                APPENDIX

Hearing notice...................................................    58
Hearing minutes..................................................    59
The Honorable Mike Kelly, a Representative in Congress from the 
  Commonwealth of Pennsylvania: Material submitted for the record    60

 
                WHAT'S NEXT FOR THE U.S.-KOREA ALLIANCE

                              ----------                              


                        WEDNESDAY, JUNE 6, 2012

                  House of Representatives,
              Subcommittee on Asia and the Pacific,
                              Committee on Foreign Affairs,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 1:30 p.m., in 
room 2172 Rayburn House Office Building, Hon. Donald A. 
Manzullo (chairman of the subcommittee) presiding.
    Mr. Manzullo. The Subcommittee on Asia and the Pacific will 
now come to order. On Sunday, June 25, 1950, the armies of 
North Korea attacked South Korea in a misguided attempt to 
forcefully alter the future of the Korean peninsula. Sixty-two 
years later, we continue to grapple with the consequences of 
that war. Much has changed for South Korea, however, since that 
faithful day so many years ago.
    South Korea has undergone a dramatic transformation from a 
developing nation to one that is modern, vibrant, and full of 
promise, and opportunity. The Korean people deserve our full 
praise and admiration for their role in building a nation that 
is not only an economic powerhouse, but one that serves as a 
beacon of democracy and freedom for those oppressed around the 
world. This is the South Korea of today. A country that is 
standing on its own right, alongside advanced democracies in 
Western Europe, Japan, and even the United States. Given the 
positive changes in South Korea, it is only proper for us to 
consider real ways to improve the U.S.-Korean alliance beyond a 
security-focused relationship.
    The future of the U.S.-Korea alliance remains largely 
unwritten. It is an opportunity for us to decide whether we 
shoot for the stars or embrace the status quo. If we choose the 
path of the status quo, then we forfeit a tremendous 
opportunity to forge a lasting, mutually beneficial 
relationship for generations to come. This is why I urge 
President Obama, and policy makers on both sides of the 
Pacific, to think big when it comes to the future of the U.S.-
Korean alliance.
    First, we must not shy away from having a real discussion 
regarding the importance of South Korea's application for a 
broader 123 Agreement on civilian nuclear energy. It is in our 
own interest, in the best interest of the United States, to 
enable Korea to develop a reliable source of domestic energy, 
particularly given the positive impact on American jobs in our 
own manufacturing sector. Korea has come a long way since the 
Cold War and it is my strong conviction that we must negotiate 
an agreement that reflects not only the current situation in 
South Korea, but one that is flexible in the future.
    Developing a closer, more integrated economic relationship 
with South Korea is also in the best interest of the United 
States. I dare say we in the U.S. can learn something from 
Korea's intense focus on research and development, and its 
continuing effort to deliver excellence in manufacturing. 
Indeed, Korea's global brands are now at the forefront of the 
marketplace and there is nothing wrong with developing a closer 
partnership so that we can also benefit from their best 
practices. This is why I believe we should issue more H-1B 
visas so that highly-skilled professionals from South Korea can 
work side-by-side with Americans to help propel America's 
economy into the future.
    Finally, I want to make clear my stance on an issue that is 
very important to Koreans and Americans of Korean descent, 
namely the issue of the East Sea. I believe it is important for 
the United States not to take sides in a debate between Korea 
and Japan. Both nations are close friends and allies of the 
United States and we should honor both countries by saying once 
and for all that both the name ``East Sea'' and ``Sea of 
Japan'' should be used side-by-side.
    The story of Korea is nothing short of a miracle when one 
considers the progress the nation has made in the past 60 
years. I recently traveled to Korea to examine for myself the 
extent of Korea's development. Let me tell you, I was not only 
impressed by the warmth of the Korean people, but I was blown 
away at how advanced and refined that country is today. The 
people of Korea have taken full advantage of the peace and 
security guaranteed by the alliance to build a remarkable 
nation.
    As we celebrate the 60th anniversary of D-Day and the 
sacrifices of the great generation, let us also take a moment 
to recognize the sacrifices of Korean veterans on this 
important occasion of Memorial Day in Korea. I now recognize 
the ranking member for his opening statement.
    Mr. Faleomavaega. Thank you, Mr. Chairman, and I thank you 
for holding this hearing about the expanding U.S.-Korean 
alliance and I commend the Obama administration for their 
successful passage of the U.S.-Korean Free Trade Agreement 
which will create about 70,000 jobs for American workers. The 
U.S.-Korean Free Trade Agreement also promises to increase U.S. 
gross domestic product somewhere between $11 billion to $20 
billion in new U.S. exports annually.
    It will also expand U.S. businesses' access to the $1 
trillion South Korean market. For now, the U.S. continues to be 
South Korea's third-largest trading partner and South Korea is 
the United States seventh-largest trading partner. Two years 
ago, trade between the U.S. and South Korea totaled over $86 
billion. Given the historic nature of the passage of the U.S.-
Korean Free Trade Agreement last year, I want to publicly 
acknowledge the grassroots efforts of Mr. Dong-Suk Kim, founder 
and former president of the Korean-American Voters' Council.
    Mr. Kim gathered Korean-American business leaders from all 
over the country, urged Congress to pass the U.S. Free Trade 
Agreement, and I applaud him for all that he has done for 
increasing Korean voter turnout from less than 5 percent in 
1996 to over 65 percent in 2008, and also for his work during 
the 110th Congress, which led to the successful passage of 
House Resolution 121; a resolution calling upon the Government 
of Japan to issue a formal apology for the Imperial Armed 
Forces coercion of some 200,000 Asian-Pacific young women into 
sexual slavery during World War II.
    Many of these young women were Korean. They are still 
awaiting their apology from the Government of Japan. 
Particularly, I want to thank my colleague, Congressman Mike 
Honda of California, for introducing the legislation, and on a 
bipartisan basis, the late Chairman Tom Lantos was also very 
much a part of that legislative activity. Also want to thank 
Mr. Tom Kim for his tireless efforts in representing the Korean 
Embassy here in the United States. All of us know how hard Mr. 
Kim had worked to garner support for the passage of this 
legislation.
    I especially commend Korea's Ambassador to the United 
States. He is actually a former Prime Minister, Han Duck-soo, 
for his leadership in resolving differences in getting the deal 
done. Also want to express my appreciation for Chairman Kim 
Seung-youn of the Hanwha Group who personally made the time to 
visit Washington and rally support for passage of the U.S.-
Korean Free Trade Agreement. Once more, I thank you, Mr. 
Chairman, for holding this hearing and I look forward to 
hearing from our witnesses this afternoon.
    Mr. Manzullo. Thank you. Congressman Kelly, do you have an 
opening statement?
    Mr. Kelly. I do, Mr. Chairman, and thank you for holding 
this hearing. First of all, I think the relationship between 
the United States and Korea could not be stronger. The Republic 
is so strong with us right now. We have one of the strongest 
relationships in that part of the world and I think the 
passage, of course, is a good example of how we are working 
closely and geopolitically, how important it is to the United 
States and the Republic, and, Mr. Kim, thank you so much for 
your tireless work on that. I appreciate it.
    We also have another opportunity to strengthen our trade 
partnership and advance national security interest in the area 
of energy. In our second panel today, we are going to hear from 
the Westinghouse Corporation. I got to tell you, after 40 years 
of our really close partnership in nuclear energy, it is now 
time to renew our 123 Agreement with Korea to strengthen our 
cooperation in this area.
    A solid 123 Agreement will create good jobs for Americans 
in a key industry. I am talking about red, white, and blue 
jobs. I am talking about evening the playing field for American 
energy companies that are competing with foreign companies and 
ensure American global leadership through energy exports with 
strong domestic energy companies such as Westinghouse. So, 
Chairman, I want to thank you. And again, this is very timely 
with Memorial celebrations in Korea.
    And this is a partner. The Republic has been a partner with 
us since 1950 in every endeavor we have had militarily. They 
don't wait for the call, they don't wait for somebody to say, 
we need your help. They are there and they stay until it is 
over. So I want to publicly thank you for that commitment and 
you need to get that same commitment back from the United 
States, and I think we can provide that for you. So, Mr. 
Chairman, thank you so much.
    Mr. Manzullo. Mr. Burton.
    Mr. Burton. Thank you, Mr. Chairman, and I, along with my 
colleagues, will congratulate Tom Kim for all of his hard work 
in regard to the relationship that we have with Korea. I don't 
want to be redundant, but a lot of my colleagues here are too 
young to remember the Korean War, but I remember it, and 
millions of people had to be killed, or wounded, or left their 
homes when the Communists invaded from the North, and when the 
Chinese then came in as well.
    And we, along with the United Nations' allies, fought and 
made sure that South Korea remained free. And if you look at 
that country after the decades since the Korean War, you see 
what a great economic miracle that has taken place in South 
Korea and you go just north of there to North Korea, we were 
just up there on the 38th Parallel at Panmunjom just a couple 
weeks ago, and there is no comparison. It is just a disaster. 
You got a line here and on one side you have got complete 
poverty, and tyranny, and dictatorship, and on the other side 
you have got a miracle that took place since the war ended.
    And as my colleagues both have had, or my others have said, 
they have been a friend and an ally forever. We value that 
friendship. We are committed and will remain committed, I hope, 
as an ally and a supporter of Korea to make sure that we don't 
see a revisiting of the Korean War. And I hope that 20, 25, 30 
years from now our relationship has even grown stronger 
economically as well as militarily. So thank you, Mr. Chairman, 
for having this hearing and I really appreciate you yielding to 
me.
    Mr. Manzullo. Thank you. Mr. Royce.
    Mr. Royce. Thank you, Mr. Chairman. I think all of us 
realize that South Korea has been a long ally, an important 
ally, for the United States and I think relations between our 
two countries stand to become even stronger as the benefits of 
KORUS, as the benefits of this trade agreement, are realized. I 
think passage of the legislation was historic and it is going 
to bring benefits to both the American and Korean economies. 
Unfortunately, it took years for the administration to act and 
that allowed the European Union to gain a foothold in the 
Korean market at the expense of U.S. businesses.
    And I think that took away U.S. marketshare that won't be 
easily regained. But now that the legislation is in force, this 
is an important point. I would like to just speak for a minute 
about another important challenge and that is North Korea, 
because I think it is disappointing that we do not have a 
proactive policy to change the regime in North Korea. Success 
cannot be built on wishful thinking about a regime that has 
shown a desire only to extract concessions from us and from 
South Korea.
    I think we need to make human rights a central part of our 
agenda. This committee is long focused on the atrocities 
carried out by the regime against its own people. We have heard 
from numerous North Korean dissidents who have told us of 
unspeakable cruelties that they have undergone themselves and I 
am glad that South Korea has placed an even greater focus on 
North Korean human rights as was evidenced by the massive 
street demonstrations against China's repatriation of North 
Korean refugees.
    Human rights needs to be a centerpiece of this alliance and 
we have yet to fully explore how we can push a human rights 
agenda formed together with our South Korean ally. I think 
working together with South Korea on this mission, given the 
suffering that is occurring in the North, is very important. I 
thank you and I yield back, Mr. Chairman.
    Mr. Manzullo. Thank you. Our first witness is Deputy 
Assistant Secretary James Zumwalt with the Bureau of East Asian 
and Pacific Affairs. He previously served as the Embassy Tokyo 
Deputy Chief of Mission. I met Jim in Beijing a few years ago 
at the home of the Ambassador, when Ambassador Kelly had just 
returned from the initial six party talks and briefed us there 
at that time. Mr. Secretary, we look forward to your testimony.
    Your testimony and the written testimony of all the other 
witnesses will be made part of the record.

   STATEMENT OF MR. JIM ZUMWALT, DEPUTY ASSISTANT SECRETARY, 
 BUREAU OF EAST ASIAN AND PACIFIC AFFAIRS, U.S. DEPARTMENT OF 
                             STATE

    Mr. Zumwalt. Thank you, Mr. Chairman. I have submitted a 
written statement for the record. Mr. Chairman, Mr. 
Faleomavaega, members of the subcommittee, thank you for 
inviting me to appear before you today to discuss our 
relationship with the Republic of Korea. The alliance between 
the United States and the Republic of Korea remains a lynchpin 
of security and prosperity in Northeast Asia. This alliance has 
never been stronger. It has served us well in countering the 
threats from North Korea.
    Before discussing our partnership with the Republic of 
Korea, I would note that the greatest challenge our alliance 
faces continues to be North Korea, and the United States is 
fully committed to the defense of the Republic of Korea, and we 
will continue to stand shoulder-to-shoulder in the face of 
North Korean provocation. We will continue to coordinate 
closely with the Republic of Korea and other allies and 
partners on North Korea policy.
    We are committed to the de-nuclearization of the Korean 
Peninsula, but we also remain deeply concerned about the dire 
human rights situation in North Korea. And I agree with the 
members' comments that we need to work very closely with our 
allies on addressing North Korean human rights issues.
    The U.S.-Republic of Korea comprehensive strategic 
partnership is based on our common values, our shared 
interests, and trust built up over decades of cooperation. Our 
common values of commitment to freedom, democracy, and the rule 
of law, along with the close ties between the Korean and the 
American peoples, form a foundation of an increasingly global 
partnership between our two great nations.
    The Republic of Korea embraces its role as one of the 
world's wealthiest nations with the capacity and the 
responsibility to contribute to resolving global problems. The 
United States and the rest of the international community 
benefit from Korea's growing global leadership and engagement. 
Our bilateral ties are growing and deepening. In the last 3 
months, our relationship marked three major milestones.
    The first, as many of you mentioned, was the coming into 
force of the U.S.-Korea Free Trade Agreement. The second was 
President Obama's third visit to Korea as President. And the 
third was the Republic of Korea cementing its status as a 
country with global interests when it hosted more than 50 world 
leaders for the 2012 Nuclear Securities Summit.
    The United States and the Republic of Korea already enjoy 
one of the world's most vibrant economic relationships. The 
entry into force of the U.S.-Korea Free Trade Agreement will 
lead to even more trade and investment between our two 
countries. Extensive people-to-people relations, including 
robust flows of Korean travelers and Korean students to the 
Untied States, form a strong base for our bilateral 
relationship. Recent polling shows that 72 percent of Koreans 
hold favorable views of the United States and an even larger 
number see the alliance as strong.
    In closing, I would like to mention that we announced 
yesterday that the United States will host the second ever 
meeting of our foreign and defense ministers in Washington on 
June 14th. This meeting will enhance our solidarity as our 
alliance takes on an increasingly global scope. This so-called 
two-plus-two dialog among Secretary Clinton and Secretary 
Gates, Korean Foreign Minister Kim Sung Hwan and Korean Defense 
Minister Kim Kwan Jin, will even further strengthen our 
alliance, advance our partnership on a broad range of global 
and regional issues, and enhance our close coordination on 
North Korea.
    Thank you for inviting me to testify on this important 
topic. Congressional support for the Republic of Korea and for 
our alliance and partnership has been critical to the success 
of our relationship. I look forward to your questions. Thank 
you.
    [The prepared statement of Mr. Zumwalf follows:]
    
    
    
                              ----------                              

    Mr. Manzullo. Thank you, Mr. Secretary.
    Could you inform us of the status of the administration's 
negotiations with South Korea regarding civilian nuclear 
cooperation and what happens if an agreement cannot be reached 
by 2014 when the current 123 Agreement expires?
    Mr. Zumwalt. As you mentioned, we are talking with the 
Republic of Korea about a successor agreement on civil nuclear 
cooperation and I agree with you that negotiating, 
successfully, a successor agreement is very critical and we 
share the desire to see a vibrant South Korean civil nuclear 
industry. And there are several reasons for that; one, of 
course, we want to see Korea's economy prosper, but also, the 
U.S. nuclear industry is very closely tied with counterparts in 
South Korea, so the success of South Korea's civilian nuclear 
industry is also a success for the United States.
    And a good example of that was when South Korea 
successfully got a contract to export nuclear reactors in the 
Persian Gulf and that Korean proposal included many components 
manufactured here in the United States. So this was an example 
of how success in the South Korean nuclear industry really is a 
win-win; a win, also, for the United States. So we share that 
goal to negotiate a successor agreement that will lead to 
Korea's nuclear industry continuing to prosper.
    We also, of course, and South Korea shares this concern 
with us, have concerns about proliferation of material that 
could be used in manufacturing nuclear weapons. So we are now 
in the process of negotiating an agreement that will meet both 
of these objectives at the same time. We are in the middle of a 
negotiation. I hesitate, a little bit, to answer your question 
about what would happen if we fail because we don't plan on 
failing. We plan on succeeding and I think, right now, all of 
our attention is on negotiating an agreement that will be a 
worthy successor to the agreement we presently have.
    Mr. Manzullo. Let me rephrase that second question. If the 
agreement expires on its own in 2014, what is the impact of 
that?
    Mr. Zumwalt. Yes. I think we agree that having a successor 
agreement is very important and so our intention on both sides, 
I think, is to negotiate so that we can have an agreement and 
we realize that time is short, so we need to work on this very 
closely. But success is very important to the United States and 
important to Korea.
    Mr. Manzullo. Congressman Faleomavaega.
    Mr. Faleomavaega. Thank you, Mr. Chairman, and I want to 
thank you, Mr. Secretary, for your testimony this afternoon. It 
is quite obvious, Mr. Secretary, that we cannot talk about 
U.S.-Korean relations without also including North Korea. A 
couple of months ago we had a hearing on the situation dealing 
with North Korea. We had all kinds of experts that came and 
testified and how well they were very familiar with the 
situation in North Korea, and what we should do, and what the 
other countries should do, but no one ever mentioned the fact 
that maybe we ought to consult, also, with South Korea as part 
of the equation and the problems that we are faced with.
    And let me ask you, Mr. Secretary, is the administration 
seriously consulting with South Korea on all aspects dealing 
with the Korean Peninsula?
    Mr. Zumwalt. Cooperation with regional partners is very, 
very important and I agree with you completely that it is very 
important for us to consult closely with South Korea, also with 
Japan, China, Russia, and other countries on North Korea. We do 
consult very closely, in fact, Chairman Manzullo, when you were 
in Seoul, actually, I was there as well with Ambassador Glyn 
Davies, our special envoy for North Korea, who was meeting in 
Seoul with Korean and Japanese counterparts for a trilateral 
discussion on what we should do regarding North Korea.
    He went on to Beijing and then on to Tokyo as well. 
Ambassador Robert King, our Ambassador for North Korea human 
rights issues, was just in Brussels for meetings with friends 
on North Korea human rights issues and his counterparts from 
Republic of Korea, from Japan, and other places, had good 
discussions----
    Mr. Faleomavaega. Mr. Secretary, I didn't mean to interrupt 
your statement, but I just want to cut to the chase of what I 
am trying to say expressing my sense of concern. There is a 
feeling amongst some of our Asian allies that we do things but 
sometimes they don't seem to be consulted fully as an equal 
partner in the process. I remember years ago when there was a 
big debate in the Philippines whether or not we should continue 
having Subic Bay and Clark Air Force Base, and guess what, the 
Philippine Senate decided not to have us around because they 
felt our real purpose for being in the Philippines was to 
provide the strategic and military capability to defend Japan 
and not necessarily the Philippines.
    So I just wanted to get to that idea. Are we really serious 
in looking at South Korea as a co-equal partner in the process, 
and not only at our convenience, and not seriously as a co-
equal? That is the basis of what I am trying to suggest to you 
or ask you here with this question. Are we serious? Is South 
Korea an equal partner in the process?
    Mr. Zumwalt. Thank you for that clarification. I agree with 
you that we need to consult very closely with our friends and 
counterparts in the Republic of Korea about North Korea policy. 
The next opportunity for us to do so will be next week when the 
Korean foreign and defense ministers come to Washington for 
meetings with Secretary Clinton and Secretary Gates. And one of 
the main things we will be talking about is our policy----
    Mr. Faleomavaega. Secretary Gates? Is he still----
    Mr. Zumwalt. Sorry. Excuse me. Secretary Panetta. Excuse 
me. So that will be the next opportunity for us to have these 
consultations. But I agree with you completely that full and 
complete consultations with our counterparts in the Republic of 
Korea is very important as we address North Korea.
    Mr. Faleomavaega. The question about the six party talks, 
and quite obviously, it hasn't gotten anywhere. Do you think 
that perhaps the negotiation process should actually involve 
China, the United States, North and South Korea? Why is Japan 
and Russia included in the process? Do they have a, literally, 
direct interest in this process? It seems to me that North 
Korea really wants to deal more with China and the United 
States, and as well as with South Korea. Why include Russia and 
Japan in the process?
    Correct me if I am wrong, but would you say that the six 
party talk has been a failure? Why do we continue if it is a 
failure?
    Mr. Zumwalt. I think we are all very frustrated with our 
lack of progress in talking with North Korea about seeking a 
different path, but we remain determined. If North Korea 
chooses a different approach, we remain prepared to engage with 
North Korea. But really, the problem is not Russia or Japan, or 
including certain people, the problem really has been in North 
Korea. And so I think our attempt has been to engage regional 
partners----
    Mr. Faleomavaega. Mr. Secretary, I hate to interrupt you. 
My time is about ready to go and I just want to say to the 
chairman as a matter of observation. How do you de-nuclearize a 
country that is already nuclear? I just want to leave that with 
question. Okay? Because my time is up. I am sorry. I yield 
back, Mr. Chairman.
    Mr. Manzullo. You are not going to attempt to answer that 
question, so I will go on to Congressman Kelly.
    Mr. Kelly. Thank you, Chairman. Mr. Zumwalt, I know the 
implementation of the course was a big accomplishment. I think 
it took much too long, but we can't do anything about what 
happened before. So the implementation right now, is it going 
smoothly and is it improving the relationships that we needed 
to have with the Korean people?
    Because I know in the elections, it hurt the conservative 
party, the fact that we couldn't get there quicker to the 
agreement, and so since the implementation now, just kind of 
give us a thumbnail sketch of what you see happening and the 
State Department working with South Korea to make sure that we 
get the maximum benefit for both countries out of that 
agreement.
    Mr. Zumwalt. I think implementation of the U.S.-Korea Free 
Trade Agreement is a very important issue going forward because 
we want to make sure that both sides get the benefits that were 
promised from this agreement. We have a system setup whereby 
there is an oversight committee looking at problems with 
implementation and the first meeting of that, which was chaired 
by U.S. Trade Representative Kirk here in Washington, occurred 
just last month.
    And actually, this week, we have three committees looking 
at various issues regarding implementation. All reports are, so 
far, the implementation is going well. But another issue in 
addition to implementation, obviously, is making sure that the 
benefits of the agreement are understood by the business 
communities in both countries. And so one other area we want to 
work on very closely is making sure that U.S. companies 
understand the benefits and can take advantage of the benefits 
that KORUS implementation will make available to them.
    Mr. Kelly. And I understand the relationship we are 
developing. Is there anything else you think we can do? Is 
there anything that State Department is looking at? Anything 
else, other than what you have already talked about? I know 
that that was a tough hurdle to get over and really, it was our 
dragging our feet on it that caused the problem in the 
Republic. So I like the fact that we the have open dialog, but 
the opportunities are really off the charts for job creation in 
both countries and that region of the world.
    It is just really, with a lot of emerging economies, we 
have a tremendous opportunity right now.
    Mr. Zumwalt. I agree with you. We do have a tremendous 
opportunity. Another area where I think the U.S. economy will 
benefit is, I think we will be successful at attracting 
additional investment into the United States because of the 
additional opportunities that KORUS provides. I was just 
talking with a third-country company and they are investing in 
pork production in the United States, partly to export to their 
home market, but also, they see the benefits of KORUS, and see, 
potentially, the U.S. as a place from which to export to Korea 
as well. So I think there will be benefits, also, in the area 
of investment as well as trade.
    Mr. Kelly. Okay. Excellent. Thank you. I am going to yield 
back, Mr. Chairman.
    Mr. Manzullo. Thank you. Mr. Burton.
    Mr. Burton. You know, I sometimes wonder why we even talk 
to these guys. We talked years ago with Mengistu in Ethiopia, I 
don't know if you remember him or not, and we sent truckloads, 
tons, and tons, and tons of food, and he couldn't distribute 
the food to the people who were starving to death there. Well, 
he could, but he didn't. So because he couldn't distribute it 
the way he wanted to, we gave him the trucks to distribute the 
food, and then he sold it, and the people just starved. You 
can't trust these tin-horn dictators.
    And what really bothers me about our negotiations with 
South Korea is like that--or North Korea rather, this food aid 
program that we had last year. It smacks of the same thing. You 
give them the food aid, and it goes through the government, and 
Lord only knows where it goes; certainly, probably doesn't get 
to the people it is intended to help. And these negotiations 
with them really bothers me.
    You know, back in the Clinton administration, we negotiated 
with them on some nuclear reactors and they were going to 
curtail their nuclear program and they didn't. They lied again. 
And we keep negotiating with them. I just don't understand it. 
It seems like we ought to draw a line in the sand and say, this 
is it. We are not going to negotiate anymore. Here is what you 
got to do and if you don't want to do it, you know, you take 
the initiative and we will respond, and we will respond very 
strongly.
    But it seems like that is the way politicians and leaders 
do anymore. We negotiate, negotiate, negotiate, like 
Chamberlain, until something like 50 million or 60 million 
people get killed, then we say, oops, we made a little mistake 
there. You can't negotiate with these dictators; these tyrants. 
You got to let them know that you are not going to go any 
further with them.
    And then North Korea, with their new constitution, this 
revised constitution which proclaims their country as a nuclear 
armed nation. They no longer try to veil it. They are now 
saying, we are a nuclear armed nation. So this facade that we 
have dealt with all these years that they were going to start 
cutting back on their nuclear program was just a wasted amount 
of time.
    So let me just ask one question, I don't have a lot, I have 
already got my opinions made, so you are not going to change 
them, I don't think. I don't like those Communists. I never 
have. I think they destroy everything, but have we thought 
about, and some people have talked about this, or have we 
talked to anybody in the South Korean Government about us 
putting some of our nuclear weapons on the South Korean 
Peninsula as a deterrent, under our control, or have we 
negotiated with them at all in their potential ability to 
develop weapons of their own?
    I just like to know what the administration's position is 
on that and what you think about it.
    Mr. Zumwalt. Thank you very much and I realize I may not 
change your mind, but I would agree with you that we don't want 
to talk to North Korea just for the sake of talk. And so, 
unless we see a change of policy on the part of North Korea, we 
are not interested in negotiations just for the sake of a 
negotiation. So I would agree with that comment. Concerning the 
deterrent, one of the purposes of our alliance is to deter 
North Korean provocation. And obviously, the deterrent that we 
provide, including the full range of possibilities on the part 
of the U.S., is very important to us.
    I don't believe we have had discussions about nuclear 
weapons on the Peninsula because I think the deterrent and the 
commitment we have made to South Korea is very clear, and we 
are able to meet our security alliance commitments with the 
present array that we now have. Thank you.
    Mr. Burton. Make one more comment real quick. We have been 
talking to, off and on, the tyrants in Tehran, and it isn't 
working, and it is not going to work. They just buy more time. 
And I can't remember any place where we worked and talked with 
tyrants we ever achieved a great deal and I don't think we are 
going to there either. I think at some point you have to show 
strength and just say, hey, that is it. You want to mess with 
us, you are going to be in big trouble. I know that is a hard 
line and I know that most people wouldn't agree with that.
    I mean, you have got to be diplomatic. I just don't think 
it is going to work.
    Mr. Manzullo. Mr. Royce.
    Mr. Royce. Thank you, Mr. Chairman. One of the things that 
is changing in North Korea are the attitudes of people as a 
result of watching the DVDs, this influx of DVDs that you have 
heard about, and that brings up this issue of public diplomacy. 
As people watch these South Korean DVDs, we already here the 
reports from studies that show the North Korean Government now 
has to back away from the--you know, they say, well, you live 
in a worker's paradise and everything is really, really bad in 
South Korea.
    And now, people know that that is the opposite of being 
true. They know that things are really rough. I have been in 
North Korea. Things are really rough in North Korea, but in 
South Korea, the standard of living is quite high. And so it 
shatters the myth and this gives people second thoughts about 
the regime they are living in. And they are also, of course, 
learning about what is going on in China, the changes in China, 
but the hermit kingdom is not going through any of this.
    How can we better use technology to bring information to 
North Koreans? I know that Lech Walesa and Vaclav Havel both 
said that it was the radio broadcasts that they and their 
people were listening to in Poland, in Czechoslovakia, that 
created this change in attitude where, after some months of 
sort of changed approach that occurred under the Reagan 
administration, the reports back that I have gotten from those 
that were involved at the time were that, people just changed 
their attitude, and it was time for change, and time for 
evolution. How do we tap into that?
    Mr. Zumwalt. I agree with you that the more contact that 
citizens in North Korea have with the outside world, the more 
likely that you will see change occurring. You had mentioned 
the advent of DVDs and people watching DVDs. I think two other 
noteworthy developments are the increase in the use of cell 
phones, some of which have some contacts with ethnic Koreans 
living in China, for example. And the other important vehicle 
may be medium-wave radio broadcasting and----
    Mr. Royce. And RFA and VOA, we need to do more in terms of 
medium-wave and we need to be a little more provocative, 
because if you will notice, we changed our approach in Eastern 
Europe when we decided it was time to really let people know 
the truth about what was going on and to try to change those 
regimes.
    And with all the information we are getting from defectors 
now about conditions in the concentration camps, or work camps, 
whatever you want to call them, getting that information about 
the regime in real time, and the mistakes being made by the 
regime, as kind of a surrogate news broadcasting service, is 
really crucial in terms of waking people up about the 
conditions they are living under, and the opportunity to change 
those conditions.
    I am not just talking about people who are farmers. It has 
a marked impact on civil service and on the military. I have 
talked to colonels who have defected and senior civil service 
who have defected as a result of listening to these broadcasts. 
But it takes a certain change in attitude about what we are 
going to be willing to push and it takes using ex-pats from 
North Korea and getting them, like Mr. Shin, up on the air 
talking about what they have experienced and contrasting that 
with what they are seeing with their eyes in China and South 
Korea today in order to get people to recalibrate their 
thinking. Could more of that be done?
    Mr. Zumwalt. I think you point out a very good opportunity, 
both government broadcast, like VOA, but also, as you point 
out, they are in South Korea. There are many non-governmental 
organizations who are also doing broadcasts about information 
from North Korea. And so I think both of those avenues are very 
important and things that we should continue to support.
    Mr. Royce. And how could you help advance that?
    Mr. Zumwalt. I think, obviously, that is a very important 
area that we need to consider how we can advance more because I 
do think that radio broadcasting is one of the most promising 
channels for getting more information to people inside North 
Korea.
    Mr. Royce. Yes. Maybe we can talk later about some 
additional ideas. Maybe you all could come up with some. Maybe 
go back and talk to some of the people that handled Eastern 
Europe, and see how they did it, and come up, maybe, with a 
little bit more aggressive plan for communication with people, 
and for more DVDs; ways to get those into the country in order 
to enlighten people in North Korea. Thank you very much, Mr. 
Chairman. I yield back.
    Mr. Manzullo. Thank you, Mr. Royce. Thank you, Secretary 
Zumwalt; I appreciate it.
    If we could have the staff get the next three witnesses and 
while they are being seated I am going to read their 
biographies. Dr. Victor Cha is Director of Asian Studies, holds 
the D.S. Song Chair in the Department of Government and School 
of Foreign Service at Georgetown University. In 2009, he was 
named as senior advisor and the inaugural holder of the new 
Korea Chair at the Center for Strategic and International 
Studies in Washington.
    He left the White House in May of 2007 after serving as 
Director for Asian Affairs at the National Security Council 
since 2004. At the White House, he was responsible, primarily, 
for Japan, the Korean Peninsula, Australia, New Zealand, and 
the Pacific Islands national affairs. Dr. Cha is also the 
Deputy Head of Delegation for the U.S. at the six-party talks 
in Beijing and received two outstanding service commendations 
during his tenure at the NSC.
    Mr. Dan Lipman assumed his position in September 2009 as 
senior vice president of operation support at Westinghouse 
Electric Company. He's responsible for corporate operating 
groups, which includes the global supply chain, quality 
assurance, and continuous improvement, IT, corporate strategy, 
risk management, environmental health and safety, 
sustainability, and anything else that has to be done at 
Westhinghouse. From 2005 to 2009, Mr. Lipman served as senior 
V.P. of nuclear power plants, responsible for managing the 
global deployment of new power plants. He has served as 
president of Westinghouse Asia, with regional duties for China, 
South Korea, and Taiwan.
    Dr. Mark Peters is the deputy laboratory director for 
programs at Argonne National Laboratories. His responsibilities 
include management and integration of the lab's science and 
technology portfolios, strategic planning, the Laboratory 
Directed Research and Development program, and technology 
transfer. His duties also include technical support to the 
Department of Energy Fuel Cycle R&D Program, where he was 
previously national technical director for used fuel 
disposition.
    Prior to his current position, Dr. Peters served as the 
deputy associate lab director for the Energy Sciences and 
Engineering Directorate. The responsibilities of this position 
included the management and integration of the lab's energy R&D 
portfolio.
    We are going to start with Dr. Cha. Dr. Cha, I understand 
you have a train that leaves at 4 o'clock, and so any time that 
you want to leave to catch that train you can feel free to get 
up and leave. How does that sound? Go ahead.

  STATEMENT OF VICTOR CHA, PH.D., SENIOR ADVISER, CENTER FOR 
STRATEGIC AND INTERNATIONAL STUDIES (FORMER DIRECTOR FOR ASIAN 
              AFFAIRS, NATIONAL SECURITY COUNCIL)

    Mr. Cha. Thank you, Mr. Chairman. Mr. Chairman, Mr. 
Faleomavaega, members of the committee, it is an honor to be 
here with you today. I have submitted a statement for the 
record and I will offer a brief summary of my remarks. I have 
testified before this committee before, and I would say without 
hesitation, the challenges of dealing with Korea remain quite 
difficult. But in terms of the alliance, which we are here to 
talk about today, as you have said, it is at an all-time high. 
The relationship between the Presidents could not be any 
better.
    The tone in the relationship is very good, but it is not 
just the personalities that are involved, it is the issues. 
South Korea has really stepped up to be a global player, 
whether the issues have to do with climate change, or non-
proliferation, or overseas development assistance. Korea has 
really become a big player and that has been very important for 
the overall relationship. The North Korea threat has also 
brought the two leaders much closer together and the two 
governments much closer together.
    With regard to the future, I would hazard a guess as to say 
that, you know, with elections, we have elections here, but 
there are also elections in Korea. Congressman, you were there 
a couple of weeks ago and saw what the atmosphere was like over 
there; quite intense politically. But I think in terms of the 
overall alliance relationship, it is going to be okay. I think 
the outer bounds, whether it is the progressives or the 
conservatives that get elected, the outer bounds of the agendas 
in which the two sides could go, I think, has narrowed quite a 
bit and moved much more to the center.
    The tone won't be as superlative as it is today and I think 
that is just politics. As a new administration comes in they 
are going to want to distance themselves from the previous 
administration, so the tone will go back to normal, but 
overall, I think it will be okay. Having said this, I do think 
we need to think about a new framework for the alliance as we 
go forward.
    I was in Seoul a couple of weeks ago, as you were in Seoul 
a couple of weeks ago, and the South Koreans were pressing on 
issues, but they are outside of a broader framework. And I 
think we really need to think about the broader framework as we 
contextualize these different negotiations. So what I would 
offer; three things.
    The first is, I think we need to think about this alliance 
in terms of its global scope. The U.S. and Korea not only deal 
with issues on the Peninsula, they operate in the world 
globally, and both of them contribute to the public goods of 
the international system, whether that is climate change, G-20, 
nuclear security, proliferation security initiative, all these 
sorts of things, Korea and the United States are working 
together. And I think it is in this context that they should 
work together and think about how they can, together, help to 
promote a global civil nuclear energy regime that is 
transparent, that is accountable, but one in which South Korea 
can be a leading supplier of global nuclear energy.
    Second would be the regional role. And here, the alliance 
and its main mandate is try to shape a region in which China 
will make the right choices. South Korea, in many ways, is the 
frontline state. It is the only real ally of the United States 
that is connected to the continent and Asia has always been a 
maritime relationship and a continental relationship. And Korea 
has always been sort of the frontline continental state for us. 
In that sense, it is critical. And so I think in this regard, 
it is very important for the United States and Korea to work 
with Japan, the three countries together, in terms of shaping 
an environment that helps to make China make the right choices.
    Specifically here, more cooperation between Japan and Korea 
on certain security agreements that they are now working on, a 
military information sharing agreement, and a couple of other 
agreements that should be finished, because I think that is 
good for both countries as well as good for the United States.
    Finally, the third aspect would be the Peninsula scope of 
the alliance. And here, the critical issue, of course, is how 
the alliance deals with a nuclear North Korea. It is a U.S. 
responsibility that as it goes through military transformation 
on the Peninsula, to create a force presence and an alliance 
that fits with dealing with the new challenge of a nuclear 
North Korea. And again, it is in this context that I think the 
United States and Korea should look at the NMG, the new missile 
guidelines, and come up with a solution that will help to 
enforce and ensure deterrence on the Peninsula to deter a 
nuclear North Korea. Thank you very much.
    [The prepared statement of Mr. Cha follows:]
    
    
    
                              ----------                              

    Mr. Manzullo. Congressman Faleomavaega. Oh, I am sorry. 
Forgive me.
    Mr. Lipman.



   STATEMENT OF MR. DANIEL S. LIPMAN, SENIOR VICE PRESIDENT, 
                 WESTINGHOUSE ELECTRIC COMPANY

    Mr. Lipman. Thank you, Mr. Chairman, Mr. Faleomavaega, 
members of the subcommittee, and of course, subcommittee staff. 
I am pleased to be here today. Unlike Dr. Cha, this is my first 
time testifying before Congress, so forgive me in advance if I 
am a little tense. I would say that I am not at all anxious, 
however, in forthrightly testifying in support of the U.S.-
Korean 123 Agreement. I consider it a vital part of the 
strategic relationship with benefits that, of course, relate to 
jobs, but also, in the areas of nuclear safety and strategic 
partnership.
    It is important that we allow this 30-year technical 
cooperation to continue uninterrupted. I think commercial 
nuclear trade between our two countries has been very 
significant. Nineteen of the 23 reactors in Korea are based on 
Westinghouse technology. I find it helpful to characterize the 
nuclear trade in, sort of, three main areas. The first would be 
exports that come directly from the United States to Korea. 
That has been a very healthy export trade.
    The second area that has really emerged, only in the last 
decade, have been Korean exports into the American nuclear 
program. I know you are aware of nuclear power plants being 
built now in South Carolina and the State of Georgia. Those do 
have many manufactured goods, large nuclear components, that 
are fabricated in Korea. A very important part of the nuclear 
renaissance is our partnership with Korea and Korean companies.
    And the third aspect is something that was touched on 
before, it is kind of new twist in the relationship, and it 
involves third countries. So this would be countries other than 
Korea and the United States where we partner with Korean 
companies to take advantage and derive value out of those 
export markets. Deputy Assistant Secretary Zumwalt mentioned 
the United Arab Emirates. That was a contract won by KEPCO, but 
there is very significant American scope in that contract in 
the United Arab Emirates.
    There are approximately 1500 full-time jobs in 14 different 
states involved in manufacturing, and engineering, and other 
technical jobs that will continue for 6 or 7 years. To me, that 
is a trade and a value worth keeping.
    Finally, I think one other impact well beyond the trade 
agenda has to do with nuclear safety. This is a non-partisan 
issue. Certainly, in the post-Fukushima environment, nuclear 
safety is on the top of everyone's agenda. And really, allowing 
Korea, but also other markets, access and continued access to 
American nuclear technology, which in my view, is the most 
advanced, the safest, with the best operating practices, is 
something that is very important to continue to reinforce.
    In summary, I think the 123 Agreement is something that 
needs to be focused on, that needs to be expeditiously 
negotiated in Korea, and of course, I think this subcommittee 
will hear, in the coming months and year, about other nuclear 
cooperation agreements in the region as well. Thank you very 
much.
    [The prepared statement of Mr. Lipman follows:]
    
    
    
                              ----------                              

    Mr. Manzullo. Thank you.
    Dr. Peters.

STATEMENT OF MARK PETERS, PH.D., DEPUTY LABORATORY DIRECTOR FOR 
             PROGRAMS, ARGONNE NATIONAL LABORATORY

    Mr. Peters. Thank you, Chairman Manzullo, Ranking Member 
Faleomavaega, and the distinguished members of this 
subcommittee for your invitation to testify here today. My name 
is Mark Peters and I am the Deputy Laboratory Director for 
Programs at Argonne National Laboratory, however, today I am 
speaking on behalf of the American Nuclear Society. Mr. 
Chairman, I ask that my full written testimony be entered into 
the record and I will summarize it briefly here.
    I appreciate this opportunity to present the views of the 
American Nuclear Society, or ANS, on used nuclear fuel 
recycling as a means to achieve an integrated solution to 
energy and waste management policy. The ANS is a not-for-profit 
international scientific and educational organization with 
nearly 12,000 members worldwide; our core purpose being to 
promote awareness and understanding of the application of 
nuclear science and technology.
    We also wish to acknowledge our longstanding professional 
collaboration with the Korean Nuclear Society. For more than 40 
years, our two organizations have worked together to promote 
the safe and secure use of nuclear technology and materials. 
For decades, the United States has grappled with the multiple 
challenges of crafting a long-term solution for the management 
of used nuclear fuel. These persistent challenges have taken on 
new urgency in the wake of the accident at Japan's Fukushima 
Daiichi Nuclear Power Plant, which has focused international 
attention on used nuclear fuel storage.
    Although the challenges of waste management require close 
scrutiny, these issues are most effectively considered within 
the context of a integrated policy for nuclear energy and 
nuclear waste management. Unfortunately, the United States is 
unique in its lack of such an integrated policy. Most other 
nations that rely on nuclear energy, including France, Russia, 
China, Japan, and the Republic of Korea, have policies in 
place, or a plan, that promote development of used fuel 
recycling and advanced fast reactors in order to ensure the 
long-term sustainability of their nuclear investments.
    We must consider our nuclear energy technology 
collaborations and partnerships within this global context. At 
present, the United States' strategic investments in advanced 
nuclear energy technologies are lagging. As a result, we rely 
increasingly on collaborative arrangements with foreign 
research institutions to conduct research in these areas. These 
collaborations provide advantages to both parties and the 
United States has benefitted from them.
    However, close alignment between the government and nuclear 
industries in these nations speeds the international deployment 
of these cooperatively developed technologies, such as used 
fuel recycling and fast reactor technologies, while the United 
States has moved much slowly in its option. The Republic of 
Korea has publicly expressed its interest in incorporating 
electrometallurgical reprocessing technology, commonly known as 
pyroprocessing, into its long-term nuclear fuel cycle plans. 
Pyroprocessing offers several potential benefits over current 
aqueous recycling techniques, such as the PUREX process being 
used in France and Japan today.
    These include the ability to recover minor actinides, which 
otherwise contribute significantly to long-term radiotoxicity 
in used nuclear fuel, fewer releases of fission gases in 
tritium, and the lack of production of pure plutonium, which, 
with proper integration of safeguards, helps to address 
proliferation concerns. Clearly, there will be engineering 
challenges inherent in the development of pyroprocessing 
technology, as there are with any advanced manufacturing 
process. However, these challenges can be addressed through 
joint research and development activities, and solving these 
challenges will have important implications for the United 
States as well as the Republic of Korea.
    The American Nuclear Society believes that nuclear fuel 
recycling has the potential to reclaim much of the residual 
energy in used fuel currently in storage as well as used fuel 
that will be produced in the future, and that recycling offers 
a proven alternative to direct disposal of used fuel in a 
geologic repository. In other nations, recycling nuclear fuel 
with proper safeguards and materials controls, under the 
auspices of the IAEA, has demonstrated that high-level waste 
volumes can be reduced safely and securely while improving the 
sustainability of energy resources.
    It is the opinion of the ANS that the United States should 
begin planning a thoughtful and orderly transition to nuclear 
fuel recycling in parallel with the development of a geologic 
repository. Recycling would enhance the repository's 
efficiency, eliminating the need for more complex and expensive 
engineering barriers, and reducing the time frame of concern 
from more than 100,000 years to a few hundred years. The ANS 
also believes that the United States should accelerate 
development of fast spectrum reactors, which are uniquely 
capable of generating energy while consuming long-lived waste.
    Six decades ago on December 20, 1951, scientists and 
engineers from Argonne National Laboratory started a small 
electrical power generator attached to an experimental fast 
reactor, creating enough energy to power four 200 watt 
electrical bulbs. That historic achievement demonstrated the 
peaceful use of nuclear energy and launched today's global 
commercial nuclear industry. It should not be overlooked that 
the first electricity generated through nuclear energy was 
produced using a fast reactor.
    In closing, let me reiterate that the ANS believes that 
nuclear energy has a significant role to play in meeting the 
global energy demands of the 21st century and the global 
expansion of nuclear energy can be achieved safely and 
securely. And I look forward to your questions. Thank you.
    [The prepared statement of Mr. Peters follows:]
    
    
    
                              ----------                              

    Mr. Manzullo. Thank you.
    Now we are ready for Mr. Faleomavaega.
    Mr. Faleomavaega. Thank you, Mr. Chairman. Dr. Cha, I noted 
with interest you made a very interesting observation about 
thinking outside the box as you had suggested. And you 
mentioned three areas about global scope of the U.S.-Korean 
alliance, the importance of, also, the regional geopolitical 
impetus of this whole thing, am I correct in reading that, 
currently, our South Korean neighbors are only allowed to fire 
missiles that can go only a distance of 123-something miles, 
and in the meantime, North Korea is capable now of firing 
missiles that can 2500 miles?
    Our we willing to help South Korea to give a deterrent 
capability in that regard or is South Korea totally dependent 
on the U.S. for its security as well? I am a little fuzzy on 
this.
    Mr. Cha. Well, thank you for the question. I think that it 
is a difficult issue between the two countries. It is a 
difficult negotiation right now. And I think the South Koreans 
do feel like, as you said, with the North Koreans pushing for 
missiles in ranges of 2000, 3000 kilometers, the South Koreans 
are limited by MTCR guidelines and seek some sort of exception 
to that, not that they would export, but for their own defense 
and deterrence. And so it is a problem in the sense that South 
Korea wants a credible deterrent. As they move to OPCON 
transition in 2015, they want a credible deterrent against 
North Korea.
    You know, I think the problem right now is that the issue 
is just, we are at the end of two administrations, and so the 
two sides are fighting over issues without putting them in a 
broader contextual frame work, and I think that is what we 
really need right now if we are going to move forward on NMG 
guidelines between the two countries.
    Mr. Faleomavaega. I had raised the question earlier with 
Secretary Zumwalt about the idea that sometimes we have become 
a little paternalistic, or what is another word, patronizing, 
that we don't really share in a way that our Asian allies feel 
that we are truly co-partners rather than just someone lesser. 
The idea that we tend, sometimes, to talk down to these people 
and not say, hey, you are just as important as we are. And am I 
correct in, right now, the sense of the Korean people that, if 
I am correct, 63 percent of the people said they are sick and 
tired of the intimidations they get from North Korea and just, 
somehow, they are not able to return the favor, so to speak, if 
they keep making this intimidating conduct against the people 
of South Korea. What do you think of that?
    Mr. Cha. Well, I think at a military level, if there is 
another North Korean provocation there is no doubt in my mind 
that this time the South Korean military will respond 
kinetically, point of origin, supporting systems and maybe even 
command systems. I mean, I think after the events of 2010, it 
is pretty clear that is what they are going to do. And so they 
have a response to the next North Korean provocation, but for 
various reasons, they feel the need to do things new on the 
Peninsula that enhances their deterrence as the North Koreans 
continue to push for more nuclear capabilities and more long-
range missile capabilities.
    So in that sense, it is an understandable demand on the 
part of the South Koreans. I think that one of the problems is, 
is that, from a U.S. perspective, we want to see them, if they 
want to have this capability they have to also have some of the 
bridging capabilities in terms of intelligence, ISR, C4I, 
command and control capabilities that would allow them to 
efficiently operate these systems, and that if they were to 
have such systems, they should be under some sort of joint, 
sort of, command and control guidelines between the U.S. and 
ROK within the alliance.
    Mr. Faleomavaega. Mr. Lipman, I am interested that you 
mentioned something about nuclear safety, and I am very 
curious, how many nuclear reactors has Westinghouse built for 
Japan as well as with South Korea; if there is that data 
available?
    Mr. Lipman. The earliest Japanese nuclear power plants that 
were pressurized water reactors were built by Westinghouse 
directly. Soon thereafter, that would be in the 1970s and '80s, 
the Japanese began to take a Westinghouse design, Kansai 
Electric Power Company----
    Mr. Faleomavaega. I hate to interrupt you, but my time is 
killing me. I just wanted to make an observation. We are 
concerned about nuclear safety if we are to export in South 
Korea, but isn't it just as important an issue that we can't 
even find a place to put our own nuclear waste? Yucca Mountain 
in Nevada and all the issues that we spent a $100 billion in 
setting up this Yucca Mountain that we can't even export 
nuclear waste to. Isn't that a very serious issue even within 
our own country?
    Mr. Lipman. I think, certainly, the U.S. domestic nuclear 
program would benefit greatly if there were a waste repository 
in America, sir. Yes, sir.
    Mr. Faleomavaega. And I am sorry, Mr. Chairman, I just 
wanted to mention to Dr. Peters, you have Three Mile Island, 
you have got Chernobyl, you got Fukushima, and I wanted to ask 
ten more questions about that, but I will forego my time. Thank 
you, Mr. Chairman.
    Mr. Manzullo. Mr. Kelly.
    Mr. Kelly. Thank you, Chairman. And I want to direct most 
of my questions to Mr. Lipman because I am very familiar with 
Westinghouse. In fact, I have some slides that I would like 
people to take a look at. This is an area in Western 
Pennsylvania. I think the footprint is about 104 acres, 105 
acres, Mr. Lipman, and if you were to see it today, and I think 
we can show it today, what the end product was, this is the new 
Westinghouse facility in Cranberry Township just north of 
Pittsburgh.
    And so my point is, we talk about the global economy, we 
talk about global opportunities, we talk about our energy 
strategy, we talk about all these things, but I think to the 
average American, they don't understand what we are talking 
about because opportunity is only there for so long and you 
either win the prize or you come in second, and nobody gets an 
award for second place. So, Mr. Lipman, I have watched 
Westinghouse over the years, and the impact that it has had, 
and the global opportunities. And in a country that now is so 
desperately looking for jobs and looking for opportunities.
    Maybe you can just take a few minutes to tell people the 
importance of our relationship with the Republic of Korea, and 
the expiration of Section 123, and the fact that it takes so 
long for us to get things done, and time is of the essence. And 
I would agree that, you know, it is good to talk about it, and 
it is good to vet it, and it is good to get it out there for 
everybody to have a chance to talk, but in the meantime, you 
don't compete--I am an automobile dealer, so I compete against 
the guy next door to me, or the guy down the street, you 
compete against countries.
    Your company, Westinghouse, competes against Russia, 
competes against France, and until we begin to understand the 
relationship that we better start to have, and understand who 
it is that we are competing against, because quite frankly, I 
don't want to be in a fair fight with anybody. I want to make 
sure that we win and we have everything right now at our 
disposal. If you could just talk a little bit about 
Westinghouse, and what Westinghouse has done, and the 
tremendous global opportunities for a country that is aware and 
has a strategy to aggressively go after what is out there.
    Mr. Lipman. Thank you, Congressman. And in fact, those 
pictures you saw, it dawned on me that, we built that 
headquarters because we beat the Russians and we beat the 
French in an open competition in China, okay? We would not have 
built that facility, we would not have moved, and we would not 
have hired several thousand new employees, both young folks and 
mid-career folks, had we not won in China. And the point that 
you make is germane, not just to Westinghouse, Congressman, but 
to all of the nuclear industry, which is, we can never forget 
that, as private companies in America, this is, what I would 
simply call, smashmouth international competition.
    We are against the Russians. We are against the French. We 
will be against the Chinese some day. And everything that we 
can do as a country to coordinate our international export 
policies, to put in place concerted government effort for 
advocacy in these export markets, to leverage our technology, 
to put in place these agreements, not just this Korea 
agreement, but the other agreements to which I referred, which 
may be coming up in front of this subcommittee for Taiwan, for 
Malaysia, for Vietnam, the latter two being new markets, 
getting in place an export control policy, which is the purview 
of the Department of Energy, that is not as complex, that makes 
it easy for American companies to participate, and also, 
supporting nuclear liability regimes for insurance and so 
forth.
    This is a global nuclear industry. This is not like the 
Cold War where two countries had nuclear power and basically 
could sell and stipulate conditions whenever and to whomever 
they wished. This is a highly dynamic market. If this agreement 
is allowed to lapse, or if we cannot conclude agreements with 
other countries for one reason or another, other countries will 
step in and take that. It will be like taking food out of our 
mouths.
    And so the kinds of policies that we need involve 
significant U.S. Government coordination, the use of financing 
and other strategies, and the best advocacy that we can put 
together or we won't be having that kind of economic 
development in this country. Thank you.
    Mr. Kelly. I appreciate your comments, but listen, we are 
in a battle, globally, and would you want to just explain the 
global market to Westinghouse. Where is your market right now; 
percentage-wise?
    Mr. Lipman. Sure. We have gone from being a, what I would 
say, purely domestically-oriented company where 80 percent of 
our work was derived here in the United States to we are 
approaching just the converse. That is to say, three quarters 
to 80 percent of our business come from outside the United 
States, by the way, not all in new plants, but we sell nuclear 
fuel. We provide nuclear services and engineering in Europe, 
and Latin America, and in other parts of Asia, and frankly, 
that is where the growth is going to be.
    The growth in electricity demand is much more outside the 
United States, sir, than inside. And any company wants to 
position itself to where the market growth is. So this is 
really about international competition and international growth 
driving the health of American companies.
    Mr. Kelly. Okay. Thank you. And we are much too close to 
midnight to debate this much longer. We have got to get this 
taken care of, and get the 123 back on the board and ready to 
go. Thank you so much. Could I have time? Is that possible?
    Mr. Manzullo. I will recognize Mr. Burton then you can 
yield.
    Mr. Burton. I would be happy to yield some time to my 
colleague.
    Mr. Kelly. Well, I appreciate that because, again, and I 
apologize to the other two witnesses, but a lot of times we 
talk down here. And the talk that we have may make sense to 
very few people in the room because that is what you do every 
day, but the American people are looking for jobs right now. 
And we are looking for jobs everywhere possible and we are 
looking for markets that are open to us and that we can lead 
in. And I really think when you talk about nuclear safety, when 
you set the pace, you also set the standard. And so the rest of 
the world has to keep pace with you.
    They can't come out with an inferior product and say, well, 
we are going go ahead and push this out. So I think the 
criticalness of everything that we are doing right now and the 
alliance that we have, right now, with South Korea is so 
critical both from a business standpoint and a geopolitical 
standpoint, and my worry, constantly, is that sometimes we miss 
the bigger picture. We concentrate on one small thing and we 
think, this is the thing that really is the driver behind it 
and we forget about where our success would be, and it is the 
world. It is the world.
    And domestically, I think we have kind of looked beyond 
that, but we do have an opportunity right now in this 
relationship that we have had with the Republic of South Korea 
is so strong and so important. And I think that this 
opportunity is like this, when you can shed a light on that and 
the American people can understand, and when you bring that 
together, you know, American innovation and American 
leadership, the upside of this is so phenomenal. There is no 
reason for this country, ever, to be in second place to 
anybody, anywhere in the world.
    So again, I thank you for your leadership and I thank you 
for the aggressiveness of your company. And any way that I 
think that we can be helpful, just let us know. I think 
sometimes we get caught up in the minutia. We forget about, at 
the end of the game, we want to win. So thank you again. And I 
yield back. Thanks, Mr. Burton.
    Mr. Burton. Mr. Kelly, I like the way you talk. A kinetic 
response. You know, a lot of people in the audience are 
wondering, what in the hell is he talking about? So why don't 
you define a kinetic response?
    Mr. Cha. Well, as you know very well, in 2010, the North 
Koreans sunk a South Korean Naval Vessel----
    Mr. Burton. Oh, I know all that. Yes.
    Mr. Cha [continuing]. On a South Korean island.
    Mr. Burton. Yes.
    Mr. Cha. And the South Koreans have basically done a 
complete bottom-up review of how they respond militarily to 
these things. And basically, they are going to strike back.
    Mr. Burton. Well, I know, but I want you to define the 
kinetic response. I mean----
    Mr. Cha. They are going to blow up stuff.
    Mr. Burton. There you go. There you go. We appreciate that. 
I just want to make sure everybody understood what you were 
talking about.
    Mr. Kelly. And I like the way you talk, Mr. Burton.
    Mr. Burton. Some of these people around here don't have a 
Ph.D. in physics and stuff, so you know. Let me ask you this, 
about a week ago, I was up at Panmunjom on the 38th Parallel up 
there, and the Communist soldiers came out of that building up 
there, and came sticking their nose in the window, and trying 
to take pictures of all of us. I don't know why. I don't think 
I look that good anyhow. But nevertheless, they were taking 
pictures, and glaring at us, and making signs, and everything, 
and we understood we couldn't make a sign back. We might start 
a war. So it was kind of interesting.
    But what do mean by a credible deterrent? They are 40 miles 
from Seoul and by the time Seoul could respond, they could have 
half the city destroyed and those people are crammed together 
in that city in these high-rise apartments like you wouldn't 
believe. It is very densely populated. What I would like to 
know is, how can South Korea defend itself and respond if there 
is another movement like we saw with the ship and the other 
land?
    Mr. Cha. Well first, the core of deterrents has been the 
U.S.-ROK alliance and in that sense, the North Koreans have 
attempted these small-scale provocations, but they have not, 
since 1950, tried another all-out invasion. And I think that is 
largely because they know that if they tried an invasion like 
that, they could do a great deal of damage to Seoul, but this 
would be a war they would lose.
    Mr. Burton. Yes. Well, but, you know, you talk about a 
credible deterrence, and I am not sure you can answer this, but 
I would like to know what you think, and that is, you know, 
they attacked the ship, they have made a couple of attacks, 
they have killed a number of people, and there hasn't been much 
of a response other than, you know, if you do it again we are 
going to poke you in the nose. And that usually doesn't sit 
well with those people. Like I said before, tyrants like that 
only react to strength. And we had a peace through strength 
under Reagan.
    And I just wondered, you know, what would be something that 
would deter them from doing that again? They have done it 
twice. They have got this new young guy up there who is 20-
something years old. I would just like to know what, in your 
opinion, would be a credible deterrent to really stop them from 
doing that sort of thing that would provoke and cause another 
exchange?
    Mr. Cha. Well, I think the most credible deterrent would be 
to punish them for the next time that they do it. Short of 
that, I think very credible deterrents are things like ASW 
exercises, anti-submarine warfare exercises, in that part of 
the region, better counterfire artillery on the part of the 
South Koreans, and all these things have been developed between 
the U.S. and the ROK since the provocations of 2010.
    Ultimately, the test of deterrence, really, is their 
behavior. And if they don't do anything, then we can say 
deterrence succeeded. But if they do take another action, the 
only way to uphold deterrence is to punish them.
    Mr. Burton. Well, okay. I think that at least was an 
attempt to answer my question, so I appreciate it. Thank you.
    Mr. Manzullo. Punish them kinetically.
    Mr. Cha. Kinetically.
    Mr. Manzullo. Kinetically. Mr. Sherman from Sherman Oaks, 
California.
    Mr. Sherman. It is, indeed, America's best named city. I am 
hearing reports of goods being manufactured in Kaesong in North 
Korea, and being shipped to South Korea for relabeling, and 
then designed for export to the United States. What systems do 
we have in force that would even catch that? I don't know if 
any of our witnesses has a response.
    Mr. Cha. Congressman Sherman, you know the KORUS agreement 
better than I do. I think what was intended by the KORUS 
agreement was if there are activities related to Kaesong that 
are being sent to the United States, that would have to come 
under review as a part of the deliberation mechanism if either 
of us have problems with the implementation of KORUS. My 
understanding is that there may be--I mean, in Kaesong, there 
may be some packaging that is done by these workers in Kaesong 
of South Korean products, but I don't know where the ultimate 
export destination for those products go.
    Mr. Sherman. Would they be eligible for favorable treatment 
under the trade agreement if the packaging work, or any other 
work on the product, was done in Kaesong?
    Mr. Cha. I don't have an answer to you for that question.
    Mr. Sherman. Got you. There is a lot of press coverage of 
this, but which gentleman here can describe how powerful is the 
current arsenal of nuclear weapons of North Korea according to 
unclassified information, and the weapons they have tested, how 
do they compare with the two weapons that were used in anger; 
Hiroshima and Nagasaki?
    Mr. Cha. I think the unclassified's assessment is that they 
have enough plutonium for, maybe, 8 to 12 weapons. The first 
test, October 2006, was, I think, technically described as a 
fizzle.
    Mr. Sherman. There was a detectable explosion. I don't know 
enough about nuclear physics to know how you have a nuclear 
explosion that is a fizzle, but that is the description I have 
had.
    Mr. Cha. That is the description. Yes. And the second one 
was more than a fizzle. I mean, there are aspects of this that 
we can talk about. We can't talk about it in this forum.
    Mr. Sherman. Got you.
    Mr. Cha. But the second one was more than a fizzle and was 
determined to be a nuclear test as well.
    Mr. Sherman. Do you see North Korea as developing its 
nuclear weapons for its national security or as a lever to get 
aid and benefits from the Western World?
    Mr. Cha. I don't think North Korea is building weapons to 
give them up. I think they are building them to keep them and 
to use them for coercive bargaining purposes. And we have been 
engaged, really, since Ronald Reagan, in a dialog with North 
Korea to try to get them to give up their nuclear weapons and I 
don't think they are going to give them up.
    Mr. Sherman. Now, one thing that the North Koreans had 
wanted was a non-aggression pact with the United States. I 
think they were rebuffed on the theory that the U.S. doesn't 
sign non-aggression pacts. Is that something they still want 
and why in the hell didn't we put that on the table as a 
possibility in the negotiations?
    Mr. Cha. In the last round of six party talks, we did put 
on the table something called a negative security assurance, in 
which we put in writing that the U.S. would not attack North 
Korea with nuclear conventional weapons. A non-aggression pact 
really doesn't solve any problems because, that negative 
security assurance was the first time the United States has 
ever given a negative security assurance to a country, and it 
got us nowhere. The North Koreans simply pocketed that and 
moved on to the next thing that they wanted.
    Mr. Sherman. We didn't give it to them. We indicated we 
might give it to them, so they weren't able to put it in their 
pocket.
    Mr. Cha. Well, it was in the text of the 2005 joint 
statement, not a non-aggression pact, but the negative security 
assurance.
    Mr. Sherman. Yes, but a negative security assurance, with 
all due respect to the Executive Branch of Government, is 
pretty meaningless without it being a treaty. With that, I 
yield back.
    Mr. Manzullo. Mr. Royce.
    Mr. Royce. Yes, for Mr. Lipman. A South Korean consortium 
recently signed a contract that will provide for commercial 
nuclear reactors to the UAE and that consortium includes 
Westinghouse. What factors helped South Korea win the UAE deal, 
if I could ask?
    Mr. Lipman. In other words, Congressman, why did they win 
it?
    Mr. Royce. Correct.
    Mr. Lipman. Okay. And there was a bit of a discussion 
before you walked in. They have a very aggressive commercial 
diplomacy which puts nuclear exports at the forefront of their 
foreign commercial policy. And that included visits by the 
President of Korea to the United Arab Emirates to discuss this 
deal with the Emirates. It included a very good financing 
package, which the Korea Electric Power Company were able to 
offer. I would also say that the Koreans have been very active 
in the Middle East in conventional construction and 
desalination. In other words, they have big footprint in the 
region. Korean companies are very active, not just in energy, 
but non-energy too.
    So you put those things together and they had, also, U.S.-
origin technology. As I said earlier, their commercial reactor 
offering is an older type of Westinghouse nuclear power plant. 
And all things put together, it was a pretty powerful 
commercial package which they were able to offer the Emirates, 
which the Emirates took.
    Mr. Royce. I see. I see. I was going to ask, also, Dr. Cha 
a question. Thinking back to the time that you spent at the 
White House in looking at this issue of trying to engage North 
Korea, would you say more time was spent in negotiations, or 
planning negotiations, with the North Koreans, or more time 
spent trying to figure out how to get information into the 
country that would change the regime? I am just trying to 
figure out on the top of the to-do list, how much pure energy 
is spent thinking outside the box in order to change the 
equation versus how much time is just managing the crisis and 
figuring out how to continue the negotiations?
    Mr. Cha. Congressman, I would probably put the balance at 
90 percent negotiations and 10 percent thinking out of the box 
in terms of information input.
    Mr. Royce. Because, since the '94 framework agreement, and 
we were here for the '94 framework agreement, the same strategy 
has been deployed, and yet, the reports that I hear from 
defectors coming out of North Korea that indicate some hope for 
change in the calculus, really, to go to some of the quotes 
that we received from some of them.
    One North Korean defector said,

        ``I like the dramas that we are now watching in North 
        Korea, because they depict everyday life in South 
        Korea. It is not that I am curious, but it is more that 
        you can see how much South Korea has developed. It is 
        easy to compare the living standards of North and South 
        Korea when watching these dramas. And this then, causes 
        people to rethink their support for the regime.''

    Another quote we had from another North Korean defector,

        ``North Korea only shows beautiful images, but in South 
        Korean dramas, there is fighting and I think this is 
        realistic.''

I think he is talking about in a family setting here.

        ``This is realistic. There is also poverty. But in 
        North Korea, they only show you good things so it is 
        not real. It does not seem real.''

So there is a disconnect for people between what their 
government is telling them about the society they are in and 
they are now realizing the reality of what is happening 
outside.
    And yet, the amount of effort that I have ever been able to 
uncover being invested in this, when we look at non-
proliferation, I just remember how effectively the North 
Koreans managed to build that reactor on the Euphrates River 
and attempt to give Syria nuclear weaponry. And that all went 
on without us--we were sitting there in negotiations not even 
understanding that, not only were they breaking their agreement 
on that accord, but also, they were dual-tracking their weapons 
program, and we were late to pick up to any of that.
    But the fundamental answer would seem, to me, to be the one 
deployed in Eastern Europe and in the former Soviet Union in 
Russia. It is to think outside the box and change the equation. 
Would you say in retrospect that, going forward, that might be 
where we want to put more of our energy?
    Mr. Cha. I think that very well may be, Congressman. You 
know, I think back now and I think I was maybe in a 100 
meetings on six party related to de-nuclearization and maybe 
two on getting information into the country. I think one of the 
operational problems that we had is that, this has to be 
something that your body and others push upon the agencies that 
are responsible for this in the U.S. Government to take as a 
serious issue rather than as a side project, because, when it 
is a side project, the agencies that are in power to do these 
things keep wanting to push it off of one another because they 
don't want to handle it.
    Mr. Royce. Well, if I could close, that is one of the 
things that was communicated to me by some who were involved 
during Reagan's tenure in the effort to have this impact in 
public diplomacy. There was a single-minded focus from the 
administration on down that we were going to get people the 
information that changed their attitudes and changed the 
balance in those societies. And it seemed to work like 
clockwork.
    Once the communication began to deliver the message that 
really resonated. Once they got the pulse of Eastern Europeans, 
and I was over there in Eastern Europe. I remember interviewing 
people. I was in Eastern Germany. I remember the way that 
caught on. I mean, in the polling, it shows how quickly the 
society's attitudes changed. I would hope that we could rethink 
some of this. Thank you very much to the panel.
    Mr. Manzullo. I have a question. Mr. Cha, your train leaves 
at 4 o'clock.
    Mr. Cha. There are other trains.
    Mr. Manzullo. All right. Thank you. I didn't want to be 
responsible for you missing your train. I would call, Mr. 
Lipman, your attention to Page 4 of your testimony, if you want 
to take a quick look at it, where it talks about benefits of 
the 123 Agreements, and ask you the question, what happens if 
the United States and Republic of Korea do not come together on 
an agreement? What is the impact?
    Mr. Lipman. So I was very heartened to hear Deputy 
Assistant Secretary Zumwalt say that they were committed to 
closing the agreement, more or less, on time.
    Mr. Manzullo. They have had one round.
    Mr. Lipman. Yes. So I am a nuclear guy, so we always think 
about what goes wrong. So on the assumption that the agreement 
goes on, what could go wrong? What would happen? My view, even 
if he indicated that it won't go uninterrupted, I thought he 
said, but my response would be this. Many of the things that 
are subject of nuclear trade are long-lead items. What does 
that mean? That means you have to identify them, and order 
them, and put a contract in place, often, a few years in 
advance.
    So I worry, I could be concerned that as the deadline 
approaches, that there could be lost business opportunities. 
There could be contracts which are under negotiation, or could 
be under negotiation, that might not be consummated based on 
this agreement not being renewed.
    As I mentioned, one of the most fruitful parts of our 
cooperation with Korean companies has been in third markets. So 
when, as there are right now, potential deals out in the 
international marketplace, it could be that there is a desire 
to move away from American companies, not just Westinghouse, 
but away from American companies because we don't have an 
overarching treaty which would govern commercial nuclear trade. 
Those are some of the things that, potentially, could go wrong.
    I also wonder, I mentioned the importation of Korean 
nuclear equipment to U.S. projects, I actually don't know what 
the absence of a treaty would do to those imports. That would 
be something I would be keen to look at. So the bottom line is, 
there could be, as you say in this town, unintended 
consequences of this treaty not being renewed, and so I urge 
its rapid conclusion.
    Mr. Manzullo. Dr. Cha or Dr. Peters, do either of you want 
to comment on that?
    Mr. Cha. I will speak about it from the perspective of the 
alliance. I think it would be a disaster for the alliance, 
because it would send the message, one, that we, the U.S., 
don't trust the Koreans, and it would cause the Koreans to feel 
like they are a second-class ally when they have been stepping 
up all over the world; hosting the G-20, hosting the Nuclear 
Security Summit, sending troops to Afghanistan, really, in many 
ways, replacing Japan as sort of the key country in the region.
    So I think, from an alliance perspective, it would be a 
real disaster, and although this is not my area, I think it 
would also, basically, leave the field open to China, and 
Russia, and other countries, to basically, define the terms of 
the global civil nuclear energy regime, which we don't want to 
happen.
    Mr. Manzullo. Dr. Peters?
    Mr. Peters. I can't comment on the policy aspects, but I 
would stress the importance of the cooperative R&D that we are 
talking about between the Republic of Korea and the United 
States, and that----
    Mr. Manzullo. Could you expand upon that, please?
    Mr. Peters. Yes. So there is currently a cooperative 
project in pyroprocessing, which is a particular kind of 
reprocessing where you actually are looking at taking spent 
fuel that comes out of a reactor and reprocessing it using an 
electrochemical process where you have molten salt, you chop up 
the fuel, it goes into the solution in the salt, and you do 
chemistry, and you are actually able to extract uranium, 
plutonium, and higher actinides, and make new fuel for 
recycling in reactors, and then take the residual waste and 
dispose of it in a repository.
    And the Koreans have been interested in exploring 
pyroprocessing, as I said in my summary, and there is a joint 
study between the United States, DOE, and the laboratories in 
the United States, Argonne and Idaho in particular, and KAERI, 
within the Republic of Korea, on a joint fuel cycle study. So 
that started, but the sensitive nuclear technology agreements 
and associated things with the renewal of the 123 would impact 
that if it didn't continue.
    Mr. Manzullo. So there are two tracks going on. One is the 
diplomatic track with the 123 and the other one is, what would 
be the outcome of the 10-year study with the Republic of Korea 
and the U.S.; the study being carried by Argonne and the Idaho 
nuclear lab? The Koreans obviously want to be in the same 
position as the Japanese, with the ability to reprocess their 
spent nuclear rods. My understanding is that it is possible 
there could be a diplomatic agreement restructuring the 123 
with an open door for a possible change in the event that the 
10-year study comes up with a new method of disposing of the 
fuel. Would that be correct, Dr. Peters?
    Mr. Peters. I can't speak to that directly, because I am 
just not in the know on the----
    Mr. Manzullo. That is a diplomatic question. Dr. Cha, did 
you want to answer that?
    Mr. Cha. I think that has been the U.S. proposal.
    Mr. Manzullo. Is that viable? Is that acceptable to the 
Koreans?
    Mr. Cha. As far as I understand it, it is not acceptable to 
the Koreans. The Koreans are pushing very hard, basically, for 
advanced consent for ENR, uranium enrichment and reprocessing. 
They want it; we don't want to give it to them. And that is 
where we are deadlocked.
    Mr. Manzullo. But yet, are we not dependent upon South 
Korea with regard to certain components? Is that correct, Mr. 
Lipman?
    Mr. Lipman. It is. There are components for nuclear plants 
here in the United States which could be impacted, I don't know 
the legalities, frankly, to comment completely, if the treaty 
goes into abeyance or goes away, but Dr. Cha mentioned 
something very critical, which is, you really lose leverage. 
You lose market opportunities, which countries such as France, 
and Russia, and eventually China, are going to fill with--by 
the way, I think, you know, much less emphasis on areas of 
nuclear safety and nuclear security of the type that we have 
and is covered in these agreements.
    Mr. Manzullo. Dr. Peters?
    Mr. Peters. Mr. Chairman, one thing on the technical 
aspects, you correctly pointed out that the fuel cycle study 
that I referred to is looking at options. So it is looking at a 
variety of different options within the pyroprocessing 
flowsheet, I will call it, for different ways of treating the 
waste. And so there will be a technical outcome at the end of 
10 years that will provide some options for policy 
consideration.
    Mr. Manzullo. Okay. Well, very interesting and very 
fruitful discussion this afternoon. I want to thank each of you 
for coming. As I said before, your entire written statements 
will be made part of the permanent record and this subcommittee 
is adjourned.
    [Whereupon, the subcommittee was adjourned at 3:50 p.m.]
                                     

                                     

                            A P P E N D I X

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     Material Submitted for the Hearing Record




   Material submitted for the record by the Honorable Mike Kelly, a 
       Representative in Congress from the State of Pennsylvania





                                 
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