[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]

                           INTERESTS IN ASIA



                               BEFORE THE


                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES


                             SECOND SESSION


                           SEPTEMBER 27, 2016


                           Serial No. 114-233


        Printed for the use of the Committee on Foreign Affairs


Available via the World Wide Web: http://www.foreignaffairs.house.gov/ 

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                      COMMITTEE ON FOREIGN AFFAIRS

                 EDWARD R. ROYCE, California, Chairman
ILEANA ROS-LEHTINEN, Florida         BRAD SHERMAN, California
DANA ROHRABACHER, California         GREGORY W. MEEKS, New York
STEVE CHABOT, Ohio                   ALBIO SIRES, New Jersey
JOE WILSON, South Carolina           GERALD E. CONNOLLY, Virginia
MICHAEL T. McCAUL, Texas             THEODORE E. DEUTCH, Florida
TED POE, Texas                       BRIAN HIGGINS, New York
MATT SALMON, Arizona                 KAREN BASS, California
DARRELL E. ISSA, California          WILLIAM KEATING, Massachusetts
TOM MARINO, Pennsylvania             DAVID CICILLINE, Rhode Island
JEFF DUNCAN, South Carolina          ALAN GRAYSON, Florida
MO BROOKS, Alabama                   AMI BERA, California
PAUL COOK, California                ALAN S. LOWENTHAL, California
RANDY K. WEBER SR., Texas            GRACE MENG, New York
SCOTT PERRY, Pennsylvania            LOIS FRANKEL, Florida
RON DeSANTIS, Florida                TULSI GABBARD, Hawaii
MARK MEADOWS, North Carolina         JOAQUIN CASTRO, Texas
TED S. YOHO, Florida                 ROBIN L. KELLY, Illinois
CURT CLAWSON, Florida                BRENDAN F. BOYLE, Pennsylvania
REID J. RIBBLE, Wisconsin
DAVID A. TROTT, Michigan

     Amy Porter, Chief of Staff      Thomas Sheehy, Staff Director

               Jason Steinbaum, Democratic Staff Director

                  Subcommittee on Asia and the Pacific

                     MATT SALMON, Arizona Chairman
DANA ROHRABACHER, California         BRAD SHERMAN, California
STEVE CHABOT, Ohio                   AMI BERA, California
TOM MARINO, Pennsylvania             TULSI GABBARD, Hawaii
JEFF DUNCAN, South Carolina          ALAN S. LOWENTHAL, California
MO BROOKS, Alabama                   GERALD E. CONNOLLY, Virginia
SCOTT PERRY, Pennsylvania            GRACE MENG, New York

                            C O N T E N T S



The Honorable Daniel R. Russel, Assistant Secretary, Bureau of 
  East Asian and Pacific Affairs, U.S. Department of State.......     4


The Honorable Daniel R. Russel: Prepared statement...............     6


Hearing notice...................................................    34
Hearing minutes..................................................    35

                    THE U.S.-REPUBLIC OF KOREA-JAPAN
                        MUTUAL INTERESTS IN ASIA


                      TUESDAY, SEPTEMBER 27, 2016

                       House of Representatives,

                 Subcommittee on Asia and the Pacific,

                     Committee on Foreign Affairs,

                            Washington, DC.

    The subcommittee met, pursuant to notice, at 2:50 p.m., in 
room 2172, Rayburn House Office Building, Hon. Matt Salmon 
(chairman of the subcommittee) presiding.
    Mr. Salmon. The subcommittee will come to order.
    Members present will be permitted to submit written 
statements to be included in the official hearing record.
    Without objection, the hearing record will remain open for 
5 calendar days to allow statements, questions, extraneous 
materials for this record subject to the length limitation in 
the rules.
    When officials say that the United States is a Pacific 
power, they are not just making an empty talking point. Our 
country has deep and enduring interests in Asia Pacific, from 
business and trade deals with the world's fastest growing 
economies to serious national security threats from both rogue 
States and great powers alike.
    To conduct these important affairs, we have created a hub-
and-spoke system of like-minded allies and partners throughout 
the region, a bloc of friends who can mutually reinforce each 
other's best interests.
    The Republic of Korea and Japan are perhaps the United 
States' most constant and important partners within the system. 
Economically developed and militarily capable, these two 
nations share our democratic values and national security 
interests, which drives strong bilateral relations. Going 
forward, I believe these shared positions will ensure that 
these alliances coalesce into a comprehensive trilateral 
    As we all know, earlier this month, North Korea launched 
multiple missiles toward Japan and detonated its largest 
nuclear device to date. Our current sanctions-based approach to 
deterrence has little to no effect on North Korea's nuclear 
program, and we need to work closely with our allies to meet 
this challenge.
    Following North Korea's most recent provocations, Secretary 
Kerry met with his counterparts, Foreign Minister Kishida of 
Japan and Foreign Minister Yun Byung-se of Korea. Deputy 
Secretary Blinken has made great strides in promoting and 
facilitating a greater trilateral relationship as well. The 
increasing security threat posed by North Korea's rogue regime 
underscored yet again this trilateral relationship's 
    U.S. foreign policy is subjected to the transitional period 
of elections and a change of administration over the coming 
months. It is imperative that the value of this trilateral 
cooperation is not neglected and that the positive trend of 
closer cooperation continues.
    Korea and Japan have long endured legacy issues that have 
created domestic friction that hindered their relationship and 
limit their own bilateral cooperation. But over the last year, 
the world has witnessed Prime Minister Abe and President Park 
leading their countries in historic steps toward a closer and 
more productive relationship. I commend each of them for their 
courage to take those important strides, resulting in a 
positive influence on the strategic outlook of the region and 
demonstrating even more promise for the future. The past year 
has seen improved military diplomacy and intercommunications, 
including a new hotline between Defense Ministers and the first 
trilateral missile defense exercise with the U.S., and I hope 
there is more to come.
    In late May, President Obama traveled to Hiroshima, where 
he met with survivors of the atomic explosion and made nuclear 
policy recommendations for the future. This summer, the 
Japanese First Lady Akie Abe visited Pearl Harbor and paid her 
respects to those who died in the surprise attack that pulled 
our Nation into war with Japan. This type of diplomacy, quietly 
working to heal old wounds without getting hung up on explicit 
apologies, is commendable and can serve as a model to our close 
allies, the Republic of Korea and Japan.
    Today's Asia poses innumerable challenges to those who 
believe in personal liberties, free markets, Democratic 
governance, and peaceful dispute resolution. We face nuclear 
belligerence, territorial aggression, and serious competition 
from an ideology that supposes a less free society and economy 
brings greater success. In each of these realms, our national 
interests are aligned with those of the Republic of Korea and 
of Japan, not through any coercion or persuasion, but because 
we fundamentally agree.
    By encouraging these two allies to cooperate more closely 
in the context of our trilateral relationship, we will be able 
to address mutual challenges in a more united and robust 
manner. To this end, I hope that we will continue to see closer 
cooperation between the Republic of Korea and Japan, including 
meaningful dialogue between national leaders and increasing 
military exercises. I also strongly urge our allies to 
implement the terms of the agreement on comfort women quickly 
and to the satisfaction of both sides.
    And finally, I hope that the parties involved work to 
promote better relations among Japan and Korea's populations at 
large. We are grateful that Assistant Secretary Russel joins us 
here today, and I look forward to hearing his expertise 
firsthand and his suggestions on strengthening this critical 
trilateral relationship.
    And with that, I recognize Mr. Sherman before we hear from 
our witness.
    Mr. Sherman. Thank you, Mr. Chairman, for holding these 
    Our relationship with the Republic of Korea and with Japan 
are the bedrock of U.S. economic and military interests in the 
East Asia-Pacific region. And we have intense person-to-person 
ties, since 1 percent of all Americans are either Japanese 
Americans or Korean Americans, Japanese American population of 
our country being 1.3 million, Korean American population being 
1.7. And I am proud to say that, by far, the largest contingent 
of Japanese and Korean Americans are in California.
    As to North Korea, this year marks the 10th anniversary of 
the North Korean nuclear tests. We have seen expansions in 
their missile program. The easiest thing for the State 
Department and the rest of the foreign policy bureaucracy to do 
is to advocate that we continue the same policies, that we 
embark on new show of force, that we get the predictable 
reaction from South Korea and Japan. Of course, over the last 
10 years, this has not been accompanied by a change in North 
Korean policy, unless the expansion of their nuclear arsenal 
and the expansion of their missile capabilities constitutes a 
    What is even more worrying is that now with 12 nuclear 
weapons and the ability to produce additional fissile material, 
North Korea may believe that it has enough nuclear weapons to 
defend itself from us and is free to sell a surplus. We see 
that North Korea has cooperated with Iran on missile 
technology, but even more to the point was that over a decade 
ago, North Korea transferred to Syria or Syria and Iran, in 
effect, a kit to build nuclear weapons. This was destroyed by 
Israel in eastern Syria in 2007. But now, North Korea is in a 
position, not just to transfer a kit on how someone else may 
create their own fissile material, but rather they are in a 
position to transfer the fissile material or to transfer a 
completed weapon.
    We need Japan and North Korea to join us in increasing 
economic and diplomatic pressure on China, because without a 
change in China's behavior, we will not see a change in North 
Korea's behavior. While we have to respect our mutual security 
treaties, and especially the nonproliferation treaty, we do 
need to see a better balance in our relationship with Japan and 
South Korea, balance in defense spending and burden sharing and 
balance in trade.
    As to defense spending, South Korea spends 2.6 percent of 
its GDP on its defense, even though it is on the frontline 
literally, with property in northern Seoul selling for less 
than southern Seoul simply because of how close it is to the 
frontline. Japan spends 1 percent of its GDP on military 
expenditures. Certainly, countries that close to the threat 
should be spending more than those who--than a country 
protected by the Atlantic and Pacific Ocean as part of its--as 
a percentage of its GDP.
    As to trade, through July of this year, we are looking at a 
$40-billion trade deficit with Japan, $19-billion trade deficit 
with South Korea. And, of course, that deficit with South Korea 
is considerably higher since we adopted the KORUS Free Trade 
Agreement. Obviously, those trade deficits translate into job 
loss. Some economists would say 10,000 jobs for every $1 
billion of trade deficit.
    So I look forward to a policy that nudges the Japanese and 
South Koreans into a more balanced relationship with the United 
States on trade, more balance in terms of defense spending, and 
a balanced and coordinated effort to push Beijing into a policy 
that changes North Korean behavior.
    And, with that, I yield back.
    Mr. Salmon. Thank you.
    We are joined today by Assistant Secretary Danny Russel of 
the Bureau of East Asian Affairs. And for the record, I am a 
big fan of his. I think he does a really great job. And we are 
grateful for your willingness to share your expertise with this 
committee, and I will turn the time over to you, Mr. Russel.

                      DEPARTMENT OF STATE

    Mr. Russel. Thank you.
    Chairman Salmon, Ranking Member Sherman, members of the 
subcommittee, thanks very much for holding this very timely 
hearing on the U.S.-Japan-Republic of Korea trilateral 
cooperation. Thank you also for your recognition of the 
diplomatic work that we are doing. And, most importantly, thank 
you for the strong support you provide to our Asia policy.
    Our trilateral cooperation reflects the increasingly 
network nature of America's alliances and partnerships in the 
Asia Pacific under President Obama's rebalance. It is also 
worth mentioning our longstanding trilateral security dialogue 
with Australia and Japan and a separate process with India and 
Japan as examples of trilateral cooperation with important 
democratic partners in many areas where our interests align.
    Mr. Chairman, as you pointed out, we are bound to Japan and 
Korea by treaties, by thriving economic relationships, shared 
values, common threats, and, as the President said in March 
after a trilateral leaders meeting here in Washington, by the 
enduring bonds between our people. And I am pleased to report 
that our trilateral cooperation has helped to foster improved 
ties between Japan and Korea. As you alluded to, their December 
2015 agreement on comfort women marked a courageous step to 
promote healing and reconciliation. And this has paved the way 
for us to do much more together.
    Our trilateral engagement overall has evolved into a global 
partnership, helping to maximize our ability to address the 
interconnected challenges of an interconnected world. For 
example, just last week, Vice President Biden held a trilateral 
meeting on his Cancer Moonshot Initiative in New York with the 
Japanese Ministers of Health and the Korean Minister of Health.
    The President, Secretary Kerry, the Secretary of Defense, 
Deputy Secretary Blinken, have each held trilateral meetings 
with their Korean and Japanese counterparts this year on issues 
ranging from trade and climate change, cybersecurity, violent 
extremism. In fact, there is a trilateral women's empowerment 
forum meeting taking place in Washington today. We are 
strengthening our capacity in Asia and beyond by coordinating 
the assistance programs of the three countries. This is a good 
way to avoid the costs of intervening later after a crisis.
    But countering the threat from North Korea's growing 
nuclear and missile program is our most important area of 
trilateral cooperation. Our three countries have increased 
military interoperability, a highly cost-effective force 
multiplier. We have increased our diplomatic and defense 
coordination through a variety of mechanisms, including an 
information sharing agreement.
    At the Deputy Secretary level, Tony Blinken maintains a 
regular, in-depth trial log. We have instituted trilateral 
military exercises like Pacific Dragon, a missile warning 
exercise we just conducted this past June. And we hold chiefs 
of defense and other important coordination meetings. We move 
in lockstep to counter North Korea's proliferation activities, 
including outreach to all members of the United Nations to help 
them fully implement their obligations under Security Council 
    And the net effect of this effort is we are disrupting the 
north's arms trade, we are deflagging their ships, we are 
cutting off their external revenues, such as that generated by 
overseas workers. We are using multilateral fora to obtain 
clear international condemnation of North Korea's dangerous 
    So together, our three countries are imposing higher and 
higher costs on North Korea, not to bring Pyongyang to its 
knees, but to bring it to its senses. The pressure will mount 
until the north agrees to return to negotiations on 
denuclearization and comply with its international commitments. 
But, let me be clear, the door to a diplomatic solution remains 
open. North Korea can choose a better path as Iran, Cuba, Burma 
have done.
    Lastly, Mr. Chairman, and importantly, we are standing up 
for universal values and the rule of law. And I am convinced 
that over the long term, the greatest force multiplier in 
foreign affairs is the support of a network of like-minded 
democracies. Our trilateral cooperation grows out of these 
shared interests and adherence to democratic principles.
    Before I end, Mr. Chairman, allow me on behalf of the 
Department of State to please express our deep thanks to you 
personally for your dedication, for your contributions to 
American foreign policy in Asia, for your leadership as chair 
of this subcommittee. You have been a great leader and a great 
partner. Thank you very much.
    [The prepared statement of Mr. Russel follows:]

    Mr. Salmon. Thank you.
    Mr. Russel, Mr. Sherman and I, and I think a couple others 
up here on the dais, were able to get a classified briefing 
last week on the North Korea nuclear proliferation issue. And I 
think we all left pretty unsettled with what has been going on.
    One of the mitigating factors that is being touted or 
considered is THAAD. I know that, as I have talked to some of 
my South Korean counterparts about the commitment and 
deployment of THAAD, they have had some political hurdles to 
get through to ultimately get it accomplished. What is your 
prognosis for when we believe that THAAD will be able to be 
deployed in South Korea?
    And the other sideline question of that or adjunct question 
to that would be, you know, the North Koreans are testing 
nuclear-delivered ballistic missiles. THAAD wouldn't really do 
anything to counter that. What are their capabilities to defend 
themselves if North Korea chose to actually deploy one with a 
nuclear warhead?
    Mr. Russel. Well, thank you, Mr. Chairman.
    The alliance, the U.S. and the ROK, have made the decision 
to deploy the THAAD system purely as a defensive measure 
against the threat to the particular area where the U.S. 
military and ROK military are deployed. This is a defensive 
measure aimed not at China but at North Korea. It is a defense-
based decision, not a political decision. And it is part of a 
layered system of defense that will augment the many military 
installations and systems currently in place.
    I will have to defer to my colleagues in the Department of 
Defense for a more authoritative answer to the question about 
our missile defense overall. But deterrence and defense is a 
critical component of our overall strategy toward the DPRK. It 
is balanced by diplomacy on the one hand, of course, and 
serious pressure on the other.
    But as North Korea accelerates its efforts to develop and 
perfect a missile technology that is capable of carrying a 
nuclear device as it accelerates its provocations, including 
the ballistic missiles that it has fired in violation of the 
Security Council resolution, including into the economic 
exclusive zone of Japan, our defensive systems are being 
upgraded. And a key part of that, of course, is the information 
sharing and the interoperability among the three allies: Japan, 
the Republic of Korea, and the United States.
    Mr. Salmon. Do we believe that, I mean, optimistically, 
that that can be deployed by next year?
    Mr. Russel. I can't speak as the Assistant Secretary of 
State to the timeline. Perhaps our colleagues in the Defense 
Department and the Republic of Korea can. But, given the 
accelerating pace of North Korea's missile tests, we intend to 
deploy on an accelerated basis, I would say, as soon as 
    Mr. Salmon. So, are all the political barriers that have 
heretofore been up in South Korea, are they--I mean, have they 
politically made the decision that they are firmly committed to 
this? And do you believe that pretty much--I mean, do you 
believe it is a done deal?
    Mr. Russel. Yes, I do, Mr. Chairman.
    Mr. Salmon. Okay. That is really what I was looking for 
more than anything. And, I think optimistically, I have heard 
from some of our military folks that it can happen pretty 
    I am going to shift quickly to the sanctions that we have 
on North Korea right now, which haven't been incredibly 
effective, mostly due to China's lack of resolve in the 
implementation. Many experts propose that maybe the next step 
is to impose sanctions on specialized financial messaging 
services, which allow communications and transactions to banks 
that would fund North Korea's nuclear program.
    This was done in the past with respect to Iran banking 
systems with great success, and I think it is past time for 
North Korea to be blocked from this kind of access as well. 
Adding to a long list of reasons in favor of this, analysts 
point to North Korea's recently having hacked specialized 
financial messaging services to steal upwards of $81 million 
from Bangladesh's central bank.
    Is the administration sympathetic to the idea of pushing 
this kind of an idea forward? I am actually going to be 
introducing legislation tomorrow along these lines, and we 
would love to work with the administration to try to get it in 
place. Is this something you might be interested in helping us 
    Mr. Russel. Thank you, Mr. Chairman. The SWIFT system, 
which is what I think you are referring to----
    Mr. Salmon. Right.
    Mr. Russel [continuing]. Is not a U.S. system and therefore 
not under our direct control. I believe it is an EU system 
housed in Brussels. We are in discussions with our partners, 
including the EU, about tightening the application of sanctions 
and pressure, including and particularly to deny North Korea 
access to the international banking infrastructure that it has 
abused and manipulated in furtherance of its illicit programs.
    I think that our hope is that we will, in fact, ultimately 
be able to reach an agreement that would further restrict North 
Korea's access. At the same time, the U.S. Government, and in 
particular the Department of the Treasury and OFAC, looks at 
North Korean banks, North Korean banking activities with a view 
to shutting down anything that might contribute to the illicit 
programs or otherwise violate the Security Council resolutions 
or our own laws.
    Mr. Salmon. I think that we are going to have to step 
outside the paradigms that we have had in the past and try to 
figure out newer and more improved ways of putting the pressure 
on North Korea. I think most people realize that China poses a 
lot more leverage over North Korea than anybody else combined. 
But, with their reticence to really step up the pressure on 
North Korea, we are going to have to get, I think, more 
creative in finding other ways that we can limit their 
    My last question is, what are the chances that the Park 
government negotiates with a military information-sharing 
agreement with Japan?
    Mr. Russel. Well, Mr. Chairman, there is now a trilateral 
information security agreement, which dates back 1\1/2\ or 2 
years. There are other steps and legal agreements that could be 
entered into by the two governments. This is something that, of 
course, we look forward to.
    I can't speak for either of the two governments, but there 
has been a steady increase in practical cooperation and a 
willingness between the two governments and between the two 
militaries that is driven by clear-eyed recognition of the 
accelerating DPRK missile and nuclear threat. And I think that 
the logic of that threat is persuasively in favor of an 
additional agreement between the two militaries.
    Mr. Salmon. It is my understanding that the General 
Security of Military Information Agreement is something that 
the administration has been very supportive of between Japan 
and South Korea. And let me just express our support here for 
accomplishing that as well, and anything that we can do to be 
    But, I think, like you just said, necessity is always the 
mother of invention. And, with what is going on with the 
expanded tests from North Korea, I think that it is going to 
push them to work more closely--all of us to work more closely 
together to deal with this great threat. But I thank the 
gentleman for his comments and I recognize Mr. Sherman for any 
questions he might have.
    Mr. Sherman. Back in 2008, I believe it was, we took North 
Korea off the State Sponsors of Terrorism list. Since then, I 
can't say their behavior has improved. As a legal matter, the 
question is, do they still engage in terrorism? And I would 
point out that, at a minimum, we have got to focus on their 
    They kidnapped some to make movies. They kidnapped other 
innocent civilians to teach their spies etiquette. These 
kidnappings may have occurred decades ago, but they are still 
holding the kidnapped victims or their bodies. That is, of 
course, a continuing act of terrorism. Terrorism is not just 
dated on the date when you kidnap somebody; it continues until 
they are released.
    Given the fact that they are still engaged in terrorism in 
that and other ways, given the fact that their nuclear behavior 
has hardly been modified, why isn't North Korea on the State 
Sponsor of Terrorism? You still have got a few months to get it 
    Mr. Russel. The requirements under the legislation for 
listing or relisting a country, North Korea, under the State 
Sponsor of Terrorism provisions are set out in statute, and 
that is not something that we can change.
    Mr. Sherman. I think the statute authorizes you or 
virtually directs you to list them as a state sponsor of 
    Mr. Russel. We look regularly for evidence that would 
warrant, that would justify placing the DPRK on that list.
    Mr. Sherman. Kidnapping civilians and continuing to hold 
them, not to mention shelling South Korean territory. These are 
recent actions of the North Korean Government. Is there some 
provision that I am misreading in the legislation?
    Mr. Russel. Well, I can provide you, after double-checking 
exact language, with the----
    Mr. Sherman. So you think that--would the administration 
support a legislative fix here simply designating North Korea 
as a state sponsor of terrorism? Would you oppose that?
    Mr. Russel. What we would do is to list North Korea under 
that provision if and when we had adequate evidence. Now, the--
    Mr. Sherman. But, if we change the provision, then you 
don't have to do all that work.
    Mr. Russel. The kidnapping of Japanese citizens, of South 
Korean citizens, and the unwarranted detention of American 
citizens, all serious and unresolved problems, are high 
priorities for the administration.
    Mr. Sherman. I am sure they are high priorities, but--we 
don't have enough time to deal with the statute. But it is very 
clear. You took--they have as much a right to be on that list 
as they did 10 years ago. But let me move on.
    We have urged countries to give up their nuclear programs. 
Qadhafi and Saddam Hussein did. They are both dead. We might be 
able to get North Korea to give up its entire nuclear program, 
but only if we were able to exert regime-threatening pressure 
on the regime. And China is absolutely opposed to the regime 
buckling or coming close to buckling.
    So we might consider a lesser objective, and that objective 
would be that we limit--that we freeze their nuclear program 
and freeze their missile test. That would be freezing them at a 
level that we found utterly unacceptable 10 and 15 years ago, 
but it is a lot better than not freezing it.
    Secretary Kerry recently talked of a nonaggression pact and 
other concessions to the North Koreans. What does North Korea 
want? What pressure can we put on China in order to get not a 
non-nuclear North Korea--I don't think you can achieve that--
but a frozen program?
    Mr. Russel. We believe, Mr. Sherman, that freezing North 
Korea's missile and nuclear program is a necessary first step 
in a longer process that leads to a rollback of their program 
and ultimately dismantlement of their program.
    We agree that giving up the nuclear program is the last 
thing on Earth that North Korea's leader wants to do, and we 
are using robust and incremental application of sanctions to 
make that effectively the last thing that he can do. Part of 
that is to work with China to encourage the Chinese to use more 
of the very substantial leverage that we have. We have seen 
some progress on that foot.
    Mr. Sherman. I want to try to sneak in one more question. 
Japan and South Korea both claim the islets known as the 
Liancourt Rocks. We have applauded the Philippines for going to 
UNCLOS with their dispute with China. We basically have said 
that the ruling of UNCLOS is final or binding there. What have 
we done to get Japan and South Korea to submit to UNCLOS or 
other international formal and binding adjudication of this 
    Mr. Russel. Because UNCLOS doesn't address the issue of the 
underlying sovereignty claims anywhere, in the Liancourt Rocks 
or in the South China Sea, it is not a remedy to the dispute 
between the Republic of Korea and Japan over those----
    Mr. Sherman. Well, there are other international tribunals 
that could be granted jurisdiction.
    Mr. Russel. Right. Both parties would have to agree to 
    Mr. Sherman. Are we pushing them to agree?
    Mr. Russel. We are pushing them to pursue a peaceful 
process for resolving their differences. Whether it's a legal 
mechanism or a diplomatic mechanism is entirely up to them.
    Mr. Sherman. We should clearly support whichever one is 
willing to submit to a legitimate adjudication, binding 
adjudication. Otherwise, they will just continue to disagree 
and it will continue to fester.
    I will yield back.
    Mr. Salmon. Thank you.
    Mr. Rohrabacher.
    Oh, I am sorry, Mr. Brooks. Apologies.
    Mr. Brooks. That is all right. I understand. I am way down 
here on the end.
    Mr. Russel, I am not sure if you are familiar with some of 
America's financial situation advice we are getting. But I 
would note for the record that year after year now the 
Congressional Budget Office has warned Washington, Congress, 
White House, that our current financial spending habits are 
unsustainable. ``Unsustainable'' is their word.
    Similarly, the comptroller general of the United States of 
America has in writing warned us that our spending habits are 
unsustainable, both of which suggest to me that, unless we 
change our ways, we are going to suffer a debilitating 
insolvency and bankruptcy of the United States of America.
    In accord with that, way back in 2010 and 2011, the 
chairman of the Joint Chiefs of Staff, Admiral Mike Mullen, 
came before the United States Congress, House Armed Services 
Committee and testified twice that the greatest national 
security threat America faced was our deficit and accumulated 
    With that as a backdrop, in my judgment, we need to try to 
find ways we can either be more efficient or where we can 
reduce our defense spending in different parts of the planet so 
that our core ability to defend the United States of America 
remains viable. If we go into insolvency and bankruptcy, we 
would not have that ability to defend our country.
    So, with all that having been said, I note that we probably 
spend somewhere in the neighborhood of $7 billion, $8 billion, 
$9 billion defending Japan and South Korea, a substantial sum 
of money. Similarly, we spend a substantial sum of money--I am 
not sure the exact amount--concerning the South China Sea and 
disputes related to that. I think it is clear that there is 
still remnants of a schism between Japan and South Korea going 
back to World War II.
    And my question is, if the United States were to reduce its 
involvement in the Western Pacific or Southeastern Asia because 
of these financial constraints being imposed on us, do you 
think that might force Japan and South Korea to work more 
closely together and to better defend not only their homelands 
but also that region of the world inasmuch as if we reduce our 
presence, they are forced to increase their presence or face 
increased unsatisfactory risk? What is your judgment in that 
    Mr. Russel. Well, thank you, Congressman Brooks.
    Nature abhors a vacuum, and I think the same thing applies 
in geopolitics. Significant reduction of American presence, 
resolve, or necessary spending for defense, I think, would have 
a very destructive impact on both regional stability and the 
national interests of the United States. The Asia-Pacific 
region is the driver of economic growth. That rests on a 
foundation of stability that the U.S. has----
    Mr. Brooks. Well, I appreciate this insight you are 
sharing, but that is not answering my question. My question 
was, would that tend to force South Korea and Japan to start 
taking over a greater share of the burden of their own 
countries, the cost of defending their own countries, and 
perhaps taking a greater role in Southeast Asia and the Western 
    Mr. Russel. I think that that reduction on the part of U.S. 
spending and presence would open the door, frankly, to China to 
assert itself more vigorously. I think that----
    Mr. Brooks. Are you saying then that, in your judgment, 
Japan and South Korea would acquiesce to whatever China wanted, 
that they would not rise up and defend their interests?
    Mr. Russel. No. I think it would shake their confidence, 
however, in U.S. leadership and badly undermine both our 
deterrence and the credibility of American resolve.
    Mr. Brooks. Okay. You still haven't gotten to my question. 
My question is, would it force South Korea and Japan, in your 
judgment, to increase their spending? Yes or no?
    Mr. Russel. Right now, Japan spends in the neighborhood of 
$50 billion a year, plus a very significant amount in host 
nation support that allows us at a discount to----
    Mr. Brooks. I asked for a yes or no. Do you think it would 
force Japan and South Korea to spend more on national defense 
if they were not so able to rely on the United States of 
America to defend their homelands for them?
    Mr. Russel. It might have that effect, but that would be 
offset by the phenomenal consequences.
    Mr. Brooks. I didn't ask for the offset. I understand what 
the offsets are.
    Same situation with respect to the South China Sea. If the 
United States were to reduce its presence there, would that 
tend to force Japan, South Korea, Taiwan, Vietnam, the 
Philippines, and Malaysia, even Brunei, to spend more on their 
national security needs and be more self-sufficient as opposed 
to their current reliance on the forces of the United States of 
America and the tax dollars of struggling Americans?
    Mr. Russel. I believe that a withdrawal of the U.S. 
presence from the South China Sea would result in a tactical 
accommodation by the countries of Southeast Asia with China.
    Mr. Brooks. Would that be good or bad if they started 
working more closely with Mainland China?
    Mr. Russel. It would not serve the U.S. national interest.
    Mr. Brooks. Why not?
    Mr. Russel. Because the Chinese strategy for the 
relationship of Asia would, in that circumstance, badly weaken 
America's ability to exercise our rights, everything from 
freedom of navigation to lawful commerce. It would contribute 
to the emergency of----
    Mr. Brooks. Well, let me interject. How would that 
interfere with our ability to ship goods back and forth between 
America and South Korea or Japan and the Philippines? We don't 
have to go through the South China Sea to get to any of those 
nations. Aren't those shipping lanes predominantly used by 
those Southeastern and Western Pacific rim countries, not the 
United States of America, particularly with respect to, say, 
shipments of oil?
    Mr. Russel. Well, shipments of oil, certainly, may 
originate, or natural gas, may originate from the United 
States, but they don't come to the United States. Something on 
the order of $5 trillion of global trade----
    Mr. Brooks. Well, I was thinking more of Middle Eastern oil 
being shipped to Japan, South Korea, and the other Western 
Pacific rim countries.
    Mr. Russel. There is some of that, but globally, 
Congressman. But, particularly in an area of such economic 
importance to the United States, our ability to ensure both for 
ourselves and for others the unimpeded right to navigate, to 
conduct lawful commerce is at the heart of our economic 
interests as well as our national security interests.
    Mr. Brooks. Mr. Chairman, if I could just have one last 
question. Are you saying that the United States should continue 
to spend all this money we don't have, we have to borrow to 
get, we can't afford to pay back, regardless of the 
consequences, and we should make no effort to force any of 
these other Asian nations to increase national defense spending 
that is in their own interest?
    Mr. Russel. Well, other countries will decide what is in 
their own interest. Our relationships with our partners is not 
one of force; it is one of cooperation and one of persuasion. 
And the benefits and the funding that we obtain directly from 
our five treaty allies and our other security partners in the 
Asia-Pacific region is of immense value to the American people 
and the American Government.
    Mr. Brooks. Thank you, Mr. Chairman, for your indulgence.
    Mr. Salmon. Thank you.
    Mr. Bera.
    Mr. Bera. Thank you, Mr. Chairman.
    And thank you, Mr. Russel, for, you know, being in front of 
this committee once again.
    I am going to choose to take a different approach. As I 
think about the Asia-Pacific region, it is of immense strategic 
importance to the United States and our national interests. You 
know, as a region on the rise, as the fastest growing economic 
region, but one that also poses significant threats to us and 
North Korea, you know, we can't withdraw from the region. I 
think there would be disastrous consequences.
    It is also a region where the countries in that area are 
watching what our commitment to the Asia-Pacific region are and 
whether we will stand by those commitments. That is why, 
whether you support the TPP or are against the TPP, these are 
countries that we are going to have to trade with, and these 
are countries that we have significant economic interests in.
    If you support engagement in the South China Sea or don't 
support engagement in the South China Sea, we are not talking 
about what is going to happen today. We are talking about 
setting the stage for what may happen a decade from now or two 
decades from now.
    When you look at the relationship between United States, 
Japan, and Korea, you know, these are some of our deepest 
relationships and deepest allies, countries that have like 
values, countries that are democratic countries, countries that 
we have deep economic relations with. We have to stand by those 
allies and our commitments there.
    Having visited our troops in Korea, you know, having gone 
through the DMZ, watching the complexity of how you approach 
North Korea, that is a major threat to us and that is a major 
threat to stability in the region. And, the stronger our ties 
with Korea and Japan, as well as the surrounding countries in 
Southeast Asia along with the burgeoning relationship with 
India, it does give us the opportunity to leverage what role 
China wants to take in the 21st century.
    Certainly they are moving in a more autocratic 
confrontative direction, but it is not a given that we can't 
change that trajectory, and it is not a given that it is not in 
China's interest not to change that trajectory. In fact, you 
know, through economic engagement with our partners there, I 
think we can help China become a more responsible player in the 
21st century.
    And it is not lost on all of us that it is going to be very 
difficult to change North Korea's behavior, and there is no way 
to do that without Chinese cooperation and Chinese partnership 
and leadership in changing North Korea's behavior. The last 
thing we want to do is squander these opportunities today and 
end up in a kinetic war, or worse, a decade or two from now, 
because the cost of that would be much greater than the 
investments that we are making today.
    You know, just in terms of--a few questions. If we look 2 
years ago, 3 years ago, the relationship between Japan and 
Korea was not necessarily at its high point. We have seen Japan 
and Prime Minister Abe make some overtures, and it does seem 
like the relationship is at a much stronger place right now. I 
would be curious about your sense of where that relationship 
is, Mr. Russel.
    Mr. Russel. Well, thank you very much, Congressman Bera.
    First, let me say, I fully agree with everything that you 
said. Secondly, I would like to say, lest I leave anyone with 
the impression that our strategy is in any way anti-China, that 
both our trilateral cooperation with Japan and Korea and our 
overall rebalance aims for a constructive, cooperative 
relationship with China. We do not seek to contain China. We 
probably couldn't if we tried. China couldn't expel us from the 
Pacific region. So finding constructive ways to cooperate and 
to manage our differences is and has been the top priority for 
the Obama administration. I think we have a good record there.
    Similarly, both President Park and Prime Minister Abe have 
made great strides in establishing more constructive 
relationships with Beijing. In the case of South Korea, the 
extraordinary decision by President Xi to visit South Korea 
more than a year ago without ever having had any contact at all 
with the North Korean leader speaks volumes for the shift in 
the dynamics and the geostrategic alignment.
    Prime Minister Abe had his senior staff negotiate, last 
year, a four-point agreement with China that established some 
principles for their bilateral relationship. He has assiduously 
made efforts to build a better relationship, better lines of 
communication, and find ways to deal with their bilateral 
disputes in a constructive, peaceful, and lawful manner.
    The Chinese, I would say, have been hot and cold. Sometimes 
things have looked like they were improving or there had been a 
standoff. The fact is, however, that Prime Minister Abe and 
President Xi Jinping have met in some fashion several times in 
the last year. I believe that there have been and will be 
meetings not only at the Foreign Minister level but also with 
the Chinese Prime Minister.
    So I think it is fair to say that the trend line is 
positive, notwithstanding some very significant territorial and 
other disputes in the East China Sea.
    Mr. Bera. Great. Thank you.
    I will yield back.
    Mr. Salmon. Thank you.
    Mr. Rohrabacher.
    Mr. Rohrabacher. Thank you very much for being with us 
    And thank you, Mr. Chairman, for this hearing. This is a 
very important discussion.
    Let me ask you just a few things about the nature of North 
Korea. Does North Korea have major universities for engineering 
and electronics and nuclear physics and things such as this?
    Mr. Russel. North Korea has certainly a major university, 
Kim Il-sung University, that has within it a variety of 
technical disciplines, and they may well have other programs.
    Mr. Rohrabacher. I guess what I am going to do, have they 
had the capacity within North Korea in order to develop this 
nuclear program that they have, or is it dependent on help from 
    Mr. Russel. Well, I think that the opinion of most analysts 
is that the North Korean nuclear and missile program is largely 
based on technology know-how and material, either bought, 
stolen, or otherwise obtained from a variety of sources, 
including China----
    Mr. Rohrabacher. All right.
    Mr. Russel [continuing]. Combined with a great deal of 
resourcefulness and technical skill on the part of the North 
    Mr. Rohrabacher. Right. So we do recognize that this 
nutcase regime up in North Korea is not capable of actually 
building the missiles and the rockets and the nuclear bombs 
that they seem to be developing. And we also acknowledge that 
China has played some role in that, but we don't know how much 
of a role.
    Is it adequate to say, if China really wanted to say, ``You 
will not be able to produce these nuclear weapons or these 
rockets,'' is it accurate to say that then the North Koreans 
would not be able to accomplish that goal?
    Mr. Russel. I don't know that we could say that with 
certainty, Congressman Rohrabacher, in part because the missile 
technology that North Korea has obtained over the years from 
Russia, for example, or the nuclear technology that it has 
obtained, whatever the source, it now forms a platform on which 
North Korean engineers continue to innovate and to moderate. So 
I don't think we can get them back to zero merely by choking 
off cooperation.
    However, we have made great strides--and I believe that the 
Chinese themselves are now quite motivated--to try to prevent 
any additional nuclear technology or material from making its 
way into North Korea in support of their program.
    Mr. Rohrabacher. Just a couple more questions about the 
nature of the regime. This supreme leader, is he actually--we 
heard reports that he has murdered long-time staffers or people 
who had actually been advisers to his father. He murdered them 
and threw them to dogs to be eaten? Did that actually happen?
    Mr. Russel. I can't speak to the veracity of the report 
about dogs, in part because we have no way of verifying----
    Mr. Rohrabacher. But we do know that he has murdered. So, 
what you are saying, we do know that he has murdered some of 
his--even his top echelon of people that had worked for his 
    Mr. Russel. Well, one of his relatively early acts was to 
order the execution of his own uncle.
    Mr. Rohrabacher. Of his own uncle. So what we have got is a 
monster, and he has everybody calling him the supreme leader. 
And this is obviously a horror story for his people. But, 
frankly, it is a threat to the world as well, and especially to 
Japan and to Korea, which are democratic countries.
    Let me just suggest, it is time that Korea and Japan make 
the maximum effort to overcome any difficulties between them. 
And we talked about the Rocks that they have a dispute over. I 
would suggest right now that Japan, who we need to move forward 
in a rearmament program in order to thwart these forces that 
are at play in that part of the world, that Japan just give up 
any type of demand or recognition of those Rocks to Korea as a 
sign of good faith. Then, it should proceed and become a major 
partner of the United States. Partner, not junior partner but 
equal partner, along with, hopefully, Korea, a democratic 
Korea, in providing stability, which we can no longer afford to 
provide for them.
    And my colleague was absolutely right when he talked about 
keep going the way we are. We are not going to be able to 
protect anybody 10 years from now because we will be bankrupt. 
So it is time we start doing these responsibly and equal 
partnership with Japan and then Korea, in providing a security 
blanket for that part of the world rather than American naval 
personnel having to do that, is the formula that works.
    And I would hope that today, this hearing that comes out of 
this, is understanding that China is playing a negative role 
instead of a positive role in Korea and that the Koreans are 
run by this maniac who could end up murdering not only his own 
people but, with nuclear weapons, millions of other people. And 
thus, we need to make--have a strong force, and that will only 
be possible in the years ahead with Japan and Korea playing a 
more important role.
    Mr. Russel. Well, Congressman, we have no better allies or 
partners than Japan and the Republic of Korea. We value greatly 
not only their defense budgets and their defense equipment 
purchases from the United States, but also the host nation 
support that they provide to our troops who they allow us to 
station there.
    Mr. Rohrabacher. Well, thank you very much.
    Thank you, Mr. Chairman.
    Mr. Salmon. Thank you.
    Mr. Lowenthal.
    Mr. Lowenthal. Thank you, Mr. Chairman. And I want to thank 
you, Mr. Chairman, for holding this hearing. And we have all 
heard, I think, of the importance of the U.S., South Korea, and 
Japan's trilateral relationship.
    And I want to thank you, Secretary Russel, as well as 
Secretary Kerry and Deputy Secretary Blinken for their work, 
all of it to deepen and strengthen this relationship. We are 
all democracies. We have already talked about that. We have 
strong alliances.
    The question I would like to know is, which we have touched 
on it a little bit. I kind of want to just kind of talk about 
some of the things that you have raised. You have talked 
about--besides our strong trilateral relationship with Japan 
and South Korea and the United States, I am interested in what 
you see in the trilateral efforts that are going on between 
China, Japan, and South Korea. What is your view on these? 
Where do they really stand? And how do they compare with our 
trilateral relationship between these countries?
    Mr. Russel. Thank you, Congressman Lowenthal.
    There is a longstanding trilateral trade process among 
Japan, China, and South Korea that has been frozen for 
approximately the last 2 years and is now only gradually being 
unfrozen as the Japanese hosted recently a foreign ministerial 
and are planning--are in the process of hosting a trilateral 
meeting at the Prime Minister's level. The process is 
significantly behind its intended schedule in terms of reaching 
an agreement on a free trade arrangement among these three 
    The view of the United States is to welcome this sort of 
flexible combination of what we call multilateral geometry, the 
notion that different groupings of countries can make common 
cause for constructive purposes, and we certainly would put 
free trade in that category.
    These are three of our major economic partners. For them to 
harmonize, rationalize, and improve their systems, certainly to 
move closer to the high standards that we advocate for is a 
desirable outcome. It is not moving with a great deal of 
rapidity, but we have no qualms about the prospect of their 
making progress. There is no political dimension to it, as far 
as I know.
    And, although we see some value in the ability of the three 
Foreign Ministers or the three leaders to talk and to interact, 
that is always going to be good. It bears no resemblance 
whatsoever to the extensive, in-depth coordination and 
cooperation that is the hallmark of America's trilateral 
cooperation, either with Japan and Korea or, for that matter, 
with Japan and Australia.
    Mr. Lowenthal. Let's talk about those others. What do you 
see then--you just mentioned Australia also--where these 
trilateral relationships that we have now with the United 
States, Korea, and Japan, where is it going in the future? Are 
there opportunities to bring Australia into that relationship? 
And can we imagine a time when it would make sense to also 
bring India into that relationship?
    Mr. Russel. The short answer is yes. And, in fact, we do 
have not only bilateral discussions but trilateral discussions 
with India and Japan. There have at different points been 
discussions of moving from trilateral to quadrilateral.
    Mr. Lowenthal. Quadrilateral.
    Mr. Russel. You know, the sky is the limit. As a practical 
matter, my own experience as a diplomat is that three is a 
pretty good number for sitting down and really thrashing out, 
with some candor and some depth, our policies. But the fact is 
that among the major democracies in the Asia Pacific, the 
countries that share values and goals, this kind of collective 
action is important. These are inclusive processes. They are 
not exclusive.
    And the fact of the matter is that the world would be a 
better place if there were more right thinking democracies in 
the Asia Pacific with whom we could deal, or frankly, if there 
were other countries, including one-party systems like Vietnam, 
like China, who would be willing, on the basis of high 
standards and international law, to engage in a constructive 
and a collaborative effort.
    There are times when we have, in fact, been able to make 
effective common cause not only with Japan and Korea but also 
with China. And Resolution 2270, the U.N. Security Council 
resolution adopted last year, that imposed landmark sanctions 
on the DPRK was, in fact, the result of that loose coordination 
among the four of us.
    Mr. Lowenthal. Thank you.
    Thank you, Mr. Chair. I yield back.
    Mr. Salmon. Thank you.
    Mr. Chabot.
    Mr. Chabot. Thank you, Mr. Chairman.
    It is great to have you back, Mr. Russel. I have enjoyed 
working with you over the years. And let me begin by a 
country--and I say ``country'' intentionally--that we haven't 
talked about this morning, and that is Taiwan, which is an 
American ally that is affected greatly by what happens in the 
Korean Peninsula and in the South China Sea, yet it remains 
outside of the conversation at least thus far this afternoon. I 
am going to bring it into the conversation.
    Shouldn't we include Taiwan in any discussion of the 
region's security architecture? You know, if we are talking 
South Korea, we are talking about Japan, shouldn't we really be 
talking about Taiwan? Isn't the relationship with all three of 
those countries of great importance to the United States?
    Mr. Russel. Well, thank you very much, Congressman. I am a 
big fan of Taiwan. Taiwan is a tremendous friend to the United 
States and a very important democracy in Asia Pacific, a great 
model for others, and a significant contributor to not only the 
economic well-being of the region but also the safety, 
security, the humanitarian relief. We admire and value Taiwan's 
    Our policy and our approach to Taiwan is rooted in our one-
China policy as informed by the three communications in the 
Taiwan Relations Act. We look for, and I personally engage on a 
regular basis with, to create opportunities for serious 
consultation and cooperation with the national security 
representatives from Taiwan.
    Number one, we see value in Taiwan's ability to participate 
in international affairs and particularly in international 
organizations for which statehood is not a prerequisite, 
because we think they have a lot to offer.
    Mr. Chabot. Let me cut in, if I could. I have only got--
half my time is gone, and I want to ask some other countries as 
well as Taiwan.
    So, respectfully, you know, I think the world disses 
Taiwan. I think they are left out of a lot of organizations 
they ought to be involved in, and it is because of bullying by 
the PRC, by the People's Republic of China, who still considers 
them a breakaway province, which is absurd. It is a de facto 
country, and they have been independent for a long time now, 
and I think will be some day. They really are now.
    But, again, China has been a bully, and the world has let 
itself be bullied by China, including the United States in 
this, which I think is pretty embarrassing. There seems to be a 
renewed movement, and we have seen some of the folks here on 
Capitol Hill, that China--excuse me--that Taiwan should be 
allowed to be a member of the U.N., for example, that it is 
    And the Olympics that we just saw, which was really 
exciting for a lot of us in the U.S. The U.S. did great. Our 
athletes were wonderful. And a lot of the other athletes around 
the world, you know, were a great honor to their country. But 
poor Taiwan has to come in as Chinese Taipei. That is 
ridiculous. That is embarrassing. And the world ought not to 
insist on that type of disregard for this country.
    The U.S.--you know, that is the world, but the U.S.--the 
President of Taiwan can't come to Washington, DC. The Vice 
President of Taiwan can't come to Washington, DC. The Defense 
Minister, the Foreign Minister--some years ago, Mark Chen, who 
became the Foreign Minister, I had met with him about a month 
earlier, and we were going to get together. But he had been 
made Foreign Affairs Minister--I had to drive to Baltimore to 
meet with him up in Baltimore, because we couldn't legally meet 
in the capital of the United States. That is ridiculous. It is 
outrageous, and it ought to be changed. So, any comment?
    Mr. Russel. We are bound by and as eight administrations 
have, faithful to our one-China policy. But I think Taiwan's 
security and Taiwan's democratic system, its economic autonomy, 
frankly, Congressman, are higher priorities for me, for us, 
than the issue of nomenclature.
    We are able to talk to the Taiwanese. We are able to 
consult and support and to accord them the respect and the 
dignity that they deserve.
    Mr. Chabot. They don't give them enough dignity, the 
dignity that they deserve. I agree that, you know, we are--with 
Taiwan Relations Act and other things, that we work closely 
with them, and obviously, they are a very strong ally, but the 
world needs to wake up on this. And there are so many other 
issues that are probably on the front burner, and to some 
degree I think the world looks at this as a back-burner issue. 
I don't think it is a back-burner issue.
    You know, you have got, what, 26 million people that freely 
and democratically elect their people and have a right to be on 
the world stage just like every other country. And to hell with 
the PRC on this. I think this bullying has to end, and we ought 
to be part of that. And I think the PRC depends on us a heck of 
a lot more than we depend on them, and I think we ought to 
start recognizing that. And thank you for your time.
    Mr. Salmon. Mr. Russel, I have another question. It is more 
related to North Korea's nuclear program. But the amount of 
fissile material that they have and the fact that they have now 
detonated, what is it, five nuclear weapons over the last 
several years tells us that they have significant nuclear 
resources, and they are not afraid to show the world that they 
have it.
    One of the big concerns that I have as they move toward 
actually putting together a workable nuclear weapon is the 
potential that they would have in selling that to another rogue 
state, such as Iran. So Iran's going to have a lot of money, 
and North Korea has nuclear--potentially, nuclear weapons. What 
kind of safeguards are in place to ensure that a transaction 
like that doesn't occur and that Iran gets a nuclear weapon 
through the back door from North Korea, or even more 
frightening, ISIS gets a nuclear weapon from North Korea or 
Pakistan gets a nuclear weapon from North Korea? What are your 
concerns about that and, you know, how can we effectively deal 
with those concerns?
    Mr. Russel. Well, thank you, Mr. Chairman. Look, four--you 
know, four consecutive administrations have grappled with the 
problem of North Korea's determination to develop a nuclear 
weapons program. And, particularly in the last 15 years, we 
have been increasingly focused on preventing or minimizing the 
risk of proliferation directly with the North Koreans in every 
diplomatic encounter dating back as long as I have been 
involved. We have made a very forceful warning of the risk and 
the consequences to the DPRK if they undertook to proliferate 
either technology, fissile material, let alone a nuclear 
    Secondly, our intelligence networks and those of our 
partners monitors intently to seek to detect any indication or 
telltale that the North Koreans were pursuing that. We do not 
have any evidence currently that North Korea is attempting to 
export technology or device, but we are not going to stop 
    What we are able to do under the U.N. Security Council 
resolutions as a result of both the North Korea Sanctions Act 
and, importantly, the executive order implementing that, is to 
create very serious headwinds; that is, by cutting off North 
Korea's ability to move its ships, to fly its planes, to get 
visas, or to allow its officials or, frankly, its 
pseudobusiness people to transit major international airports 
or to be allowed to enter foreign countries.
    In doing so, we have made it more difficult, not 
impossible, but much more difficult for the DPRK should they 
attempt to market nuclear material or technology. We are very 
attentive to this risk and have established and utilized a 
broad international network to try to ensure that the North 
Koreans are never successful, should they try.
    Mr. Salmon. I would think that potential should be 
something that, as a trilateral relationship that we have, that 
it ought to be on the minds of all policymakers from all of our 
nations. Because, given the fact that North Korea, to say that 
they are in the economic doldrums would be probably the 
misquote of the century. Their economy is in the tank, and the 
people are starving. And there are a lot of despots out there 
that would pay pretty top dollar for a nuclear weapon if they 
could get their hands on it.
    So it seems like the motivation could be there, and I think 
it is something we need to be really vigilant on and watching 
together with our allies to make sure that a transaction like 
that doesn't occur, because the results would be cataclysmic.
    Mr. Russel. We entirely agree. And I think that as 
frustrated and unhappy as all of us are at North Korea's 
ability to continue to develop its missile and its nuclear 
programs, the scorecard of the administration shows very 
significant successes in terms of alliance, coordination, 
including specifically on proliferation; a vast improvement and 
cooperation by China, even though as President Obama said very 
clearly when he was in China, there is an awful lot more 
tightening that the Chinese need to do, sanctions.
    And, similarly, through the international network, and that 
means in the Middle East, it means in Africa, it means in 
Eastern Europe, it means in Latin America as well, we have used 
both the tools of the executive order and the Security Council 
resolution to raise the hurdles to the DPRK, either to export 
technology or material or to obtain financing. And we have--
there is more coming in terms of sanctions.
    Mr. Salmon. I certainly hope I wasn't trying to cast 
aspersions on, you know, the administration's efforts to thwart 
this, because it is an age-old problem. It didn't just happen 
with the current administration. It's been something that past 
administrations, as you have aptly said, have grappled with.
    I think we should always be constantly looking for more 
alternatives to tighten the screws to make sure that we do stop 
this proliferation. But I am not sure without a much more 
robustly incentived China to get this problem taken care of, 
that anybody can get their arms around it. I think China is the 
100-pound gorilla. And, so far, I don't think they have even 
come close to doing responsibly what they could and should do.
    And so I am not laying blame. If there is any real blame, I 
think it is on China's acquiescence--or reticence, excuse me, 
to, you know, tighten the screws a little bit tighter with 
North Korea.
    With that, I am going to yield to the ranking member.
    Mr. Sherman. I want to pick up on the comments of the 
gentleman from Ohio briefly and then of the chairman.
    We at least ought to let the Taiwanese President refuel at 
BWI and explain to our friends in Beijing that the B stands for 
Baltimore, and that is the first. I realize that is a less 
significant change. It is odd for me to be arguing for the less 
significant change, but I hope you would move there.
    But I want to move to this, because I have been very 
concerned about the possible sale of a weapon or fissile 
material from North Korea to Iran. I had a chance--and this is 
a rare, very rare opportunity for me. I spent an hour with the 
President in the Oval Office on this a year ago--almost a year 
ago, and he gave answers consistent to yours on the fact that 
we have stopped North Korean ships. And, as you pointed out, 
there are sanctions on North Korean planes. So if this deal 
goes down, it will not be a North Korean ship, it will not be a 
North Korean plane. It will be an Iranian plane.
    And we just licensed the sale to Iran of planes that could 
easily go nonstop from Tehran to Pyongyang with, say, about 
$1.7 billion of currency, euros, and Swiss franks loaded on 
planes wrapped in cellophane, which they just happen to have.
    I don't think the sale will be to a terrorist group, 
because I don't think North Korea would part with this for just 
a few $100 million. And thank God there is no terrorist group 
that can really get its hands on $1 billion. So we are talking 
about North Iran--I mean, get its hands on $1 billion and 
continue to operate. Iran or a state sponsor of terrorism can 
get its hands on $1 billion.
    We saw in 2007, the Israelis destroyed a plutonium reactor 
in Syria. That was North Korean technology paid for by the 
Syrian, or more likely the Iranian Government, at a time when 
North Korea could not part with fissile material because they 
didn't have 12 nuclear weapons.
    I respect the chairman for not casting aspersions on this 
administration, but this is the first administration where 
North Korea has had--or was about to have enough nuclear 
weapons to defend themselves from us and still have more that 
they could sell. And to compliment the administration, you have 
got them in a situation where they really need some money.
    And there is also the North Korean-Iranian cooperation on 
missile technology. So we know they are talking. We know they 
are doing deals. We know one of them has money. We know another 
one needs money. We know one has a surplus or assumed surplus 
of fissile material. We know another one, Iran, would like to 
have an indigenous enrichment capacity, but I think would 
settle for a purchased nuclear weapon or two, given the fact 
that the two individuals who America hated most that didn't 
have nuclear weapons were Qadhafi and Saddam, and they are both 
    There is a question in here, because I would like you to do 
something. There is only one way to stop this, really, and that 
is to make it clear to the Chinese that they cannot allow a 
nonstop plane between Iran and North Korea, because if it is 
heading toward North Korea, it could have currency on it. If it 
is heading the other way, it could have fissile material on it. 
If it stops in China, I think China will inspect it.
    So what do we do to make it clear to China that if there is 
just one nonstop round trip plane, that the President of Taiwan 
will be giving an address to a joint session of Congress and, 
by God, stopping at Dulles Airport on their way to do it? What 
can we do to make it clear to China, one nonstop plane, one 
speech before Congress?
    Mr. Russel. Well, thank you, Congressman Sherman, for your 
very creative diplomatic proposal.
    Mr. Sherman. Feel free to say or a 10 percent tax on all 
Chinese imports or a ban on all shoe imports or whatever--well, 
you can substitute whatever you want. But if you don't lay this 
down, China will just relax as they have. And, by the way, I 
brought this up with Chinese--with the chairman of their 
foreign policy committee, et cetera, and they don't care. They 
are not going to act unless you make them.
    Mr. Russel. Well, thank you, Congressman. You will 
understand, there are limits to how far I can go in an 
unclassified open session. But I will say that I do think that 
the Chinese, in fact, care. My experience is that the Chinese 
have a self-interest in mitigating the risk of DPRK----
    Mr. Sherman. If I can interrupt. They also have a very 
strong self-interest in the survival of the Pyongyang regime. 
If that collapses, they get millions of refugees and they get 
an American army on their border, and we have not committed 
publicly and in a binding manner not to move north of 38 
parallel, something we probably should be doing as part of our 
overall discussions.
    So they have a very strong interest in the survival of this 
regime, and $1.7 billion worth of euros and Swiss franks 
wrapped in cellophane would go a long way toward assuring the 
survival of a regime. So China has interests on both sides.
    Mr. Russel. We are in regular discussion at multiple levels 
with the Chinese about the risk of North Korean proliferation. 
I think that my professional observation is that we currently 
have functional channels that allow us to flag both concerns 
and the potential for an action along the lines that you are 
describing where technology or money moves into or out of the 
DPRK with a reasonable expectation of Chinese cooperation.
    Mr. Sherman. I won't ask for anything that you shouldn't 
disclose in open session. But, please, make it very explicit, 
no nonstop flights.
    Mr. Russel. Thank you.
    Mr. Salmon. I thank the gentleman.
    Mr. Lowenthal, do you have another question?
    Mr. Lowenthal. Yeah. I am just going to follow up on what 
Mr. Sherman has talked about. And, you know, we talked about 
putting a lot of pressure on the Chinese, and I think the 
chairman talked about tightening the screws to the Chinese. 
Given that that is one approach, which we should be doing, I am 
not disagreeing with that, but I also want to follow up with 
what Mr. Sherman said about some of the reasons why it is too--
that China fears a weakened North Korea, that there are reasons 
that China now has some concerns about refugees coming across 
into China if there was a weakened collapse, a militarized 
Korea with the United States on its border, as he pointed out.
    Are there room for discussions around all of these issues?
    Mr. Russel. Yes, there are. And I think that one of the 
hallmark accomplishments of the Obama administration is 
building mechanisms that permit real dialogue between the U.S. 
and China at appropriately senior levels that allow for candid 
exploration of where our interests overlap or diverge.
    One such conversation was held just 2 or so weeks ago, 3 
weeks ago, in Hangzhou, China, between President Obama and 
President Xi Jinpin. And there, they discussed in considerable 
depth the challenge that we each face from North Korea and its 
science. The Chinese were able to put on the table very 
directly their concerns about some of our moves, defensive 
moves, to mitigate North Korean missile threats like the 
deployment of the THAAD battery.
    Mr. Lowenthal. That is right.
    Mr. Russel. The President was able to point out that the 
United States will not compromise with our security or with the 
security of our allies; that if China has specific concerns, we 
are happy to explore mitigating moves, but we are not prepared 
to stand down on necessary defense measures.
    Now, I think that the trend line overall is toward 
increased cooperation between the U.S. and China. I think that 
we share an interest in preventing North Korea from being 
accepted as a nuclear state, from continuing with a nuclear 
weapons and a missile program. The Chinese frequently say to us 
that they want to prevent war on the Korean Peninsula, they 
want to prevent chaos on the Korean Peninsula, and they want to 
prevent nuclearization; namely, North Korea's successful 
pursuit of its program.
    Now, as you point out, they have other concerns as well. I 
think it is a mistake to presume that the Chinese are so 
focused on either the threat from refugees or the risk of a 
U.S. presence in a unified Korea that they will not act in 
concert with the United States or at least be cooperative with 
the United States and the Republic of Korea. We have--we each 
have somewhat different interests and perspectives, but there 
is a very significant degree of overlap, a very constructive 
and honest, candid set of ongoing conversations. And I hope 
that you will see, as one of the products of that, real headway 
in the discussions in New York between our permanent 
representatives over the next generation U.N. Security Council 
resolution imposing even more sanctions on the DPRK.
    Mr. Lowenthal. I just want to say, I think that there is 
room for creative solutions here, and I encourage the going 
forward. I am not here to micromanage or say what they are, 
but, you know, as I pointed out when I first said, we can go 
down one road, and maybe it is an appropriate road to put 
pressure, but on the other hand, there are many other roads 
that also lead to a successful resolution that need to be also 
explored, and acceptance that some of the concerns that China 
has are real, need to be addressed, need not--and need to 
figure out together and probably with Korea--with Republic of 
Korea and also with Japan, some of these issues, because they 
will impact all.
    Mr. Russel. Definitely.
    Mr. Lowenthal. Thank you. And I yield back.
    Mr. Salmon. Thank you.
    I think we have probably asked you everything that is on 
our minds, at least for the last hour. And we will look forward 
to the next opportunity we have. Mr. Russel, thank you so much 
for your great work and everything that you have done.
    Mr. Russel. If I may, Mr. Chairman, the only point that I 
would like to add is that the unity of purpose between the 
Congress and the executive branch and the bipartisan solidarity 
in facing both the threat posed by North Korea and in grasping 
the opportunity to present it through trilateral coordination 
with our two close democratic partners in Northeast Asia is, I 
believe, a source of tremendous strength for the United States, 
and it serves the Republic very well.
    So, again, I want to thank you for the tremendous 
leadership that you have shown over the last 2 years. And it's 
been my honor to serve in my position while you were chairman 
of this subcommittee. Thank you.
    Mr. Salmon. Thank you very much, Mr. Russel.
    Without further ado, we will adjourn this subcommittee.
    [Whereupon, at 4:19 p.m., the subcommittee was adjourned.]



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