Good morning. Welcome to the Brookings Institution. My name is Carlos Pascual. I am the Vice President and Director of Foreign Policy Studies here at Brookings. We are extremely pleased to have you at this event, which is jointly sponsored by the Brookings, the Korea Economic Institute and the Asia Society, so that we have an opportunity to host Assistant Secretary of State, Chris Hill, who has been the principal negotiator in the Six-Party Talks which has led to an agreement that is setting up a process to end North Korea's nuclear program. As I think all of you are aware, this agreement was announced in Beijing on February 13th by diplomats from China, Japan, Russia, South Korea, North Korea and the United States. It calls on North Korea to shut down its main reactor complex at Yongbyon and allow international inspectors to verify the process. It would be a first step toward disclosing and dismantling North Korea's entire nuclear infrastructure. In exchange, North Korea will receive international economic and humanitarian and energy assistance. There are obviously lots of questions and unanswered points that we will want to explore today such as what happens with the HEU Program that led to the collapse of the 1994 agreement framework to begin with, what happens to the existing nuclear weapons that are in North Korea. But at the same time, it is an extremely important starting point that will halt the plutonium program and will get IAEA inspectors back into North Korea. We will also want to consider the diplomatic process that was involved. Chris Hill, in a recent statement to ABC News said, "This whole Six-Party process has done more to bring the U.S. and China together than any other process that I am aware of." And the implications of that for future diplomacy are also extraordinarily important In sponsoring this event, we are joined today by my colleague from here at Brookings, the Director of the Center for Northeast Asia Policy Studies, Richard Bush; the President of the Korea Economic Institute, Jack Pritchard . Jack also was one of Chris' predecessors in the sense as the chief negotiator in the Six-Party Talks and is also finishing up a terrific book which will be published by the Brookings Press on the process, so we are looking forward to that . and, finally, by the Executive Director of the Asia Society, Joseph Snyder. Thank you for joining us and sponsoring the event. We are joined today as well by our colleagues in New York, in particular Jamie Metzl and the Asia Society in New York in a live video teleconference, and we will have an opportunity to go back and forth in questions with them. Finally, just to say a couple words about Chris Hill, as I said, he is the Assistant Secretary of State for East Asian and Pacific Affairs and the head of the U.S. delegation to the Six-Party Talks. Chris has previously been the Ambassador to the Republic of Korea. He was Ambassador in Poland. He was Ambassador in Macedonia. He served on the National Security Council Staff. He was one of the key negotiators in Kosovo. In my own career, I have had the opportunity to be neighbors with Chris on two occasions, once when we shared offices next door to each other at the National Security Council Staff and once when he was in Poland and I was the Ambassador to Ukraine. And from both of those experiences, one of the things I can say is that he is really a colleague's colleague. He is smart and thoughtful and honest. He has a brutal determination. He just does not let go. In addition to that, he has a reputation for being one, having the best wry sense of humor in the career foreign service. So we will expect an appropriate joke at some point, Chris. On that note, let me give you Chris Hill. Chris, thanks very much. Carlos, thank you very much. I remember very well, in fact, we actually shared a balcony at the Old Executive Office Building. Then in Poland and Ukraine, we did not have a balcony, but we certainly did have a perch there on some rather extraordinary changes in that part of the world. Great to see you. Great to see you here. I want to especially thank you all. As you know, this event today follows the successful outcome of an extremely complex and multilateral discussion among several parties, group of parties who, to be sure, share a number of goals but have a very different perspective in a number of areas. It was not easy to assemble these interconnecting steps and then to try to do this in such a short timeframe, that is, the next 60 minutes. Of course, I am referring to the agreement among Brookings, the Asia Society and KEI. So, congratulations, on what you were able to put together there. Anyway, I want to thank Joe Snyder from the Asia Society and Richard Bush, who was also a colleague of mine. Richard and I were together in Congressman Solarz' office, in fact back in 1988 1989, I guess before history ended. Anyway, good to see you again, Richard, and of course Jack Pritchard, with whom . we have never worked together, but certainly I know a lot about Jack's work. It is a great opportunity here to come and talk about this, what is known now as the February 13th Initial Action Agreement, to tell you what it is and what it isn't . because to be sure, there has been a lot of commentary on it. From the right, we have heard people like John Bolton who said this is nothing but the Agreed Framework. From the left, we have heard this is nothing but the Agreed Framework. And so, I would like to explain that, in fact, it is different from the Agreed Framework. But in explaining that, I do want to say that those people who worked on the Agreed Framework worked on a different agreement in a different era and worked under extremely challenging circumstances. Indeed, if you look back to what was going on 1993-1994, people were actually talking about war on the Korean Peninsula, and I think those of us who work on negotiations have a great deal of respect for those who worked on them before and who will work on them in the future. There is a reason these problems have a tendency to stick around. They are tough problems, and they do require successive generations of people to work on them with the understanding that what we are all trying to do is to achieve the same objective. I felt that our Six-Party process has been the right approach at the right time. I think getting the September 19th, 2005 agreement on the denuclearization of the Korean Peninsula was a very important agreement, because it is the fulfillment of that agreement that we are all aiming toward. That is, nothing is finally accomplished until the objectives of the September, 2005 agreement are accomplished. Now we looked at how to proceed with September 2005, and the North Koreans gave us a considerable amount of time to reflect on how to proceed with September '05. And so, in looking at it and in working together, for me, it is a very true statement that this process has brought us closer or very close together with the Chinese. We ultimately decided that even though North Korea does need to make a strategic decision to get out of this nuclear weapons business, to realize that decision is going to require a step-by-step process. It is unlikely that the North Koreans will roll out of bed in the morning and say we are going to make a strategic decision to get out of all of this. More likely, they are going to make decisions to move on a step-by-step basis. And as they move one step, they will look back and say, this is a better place than we were yesterday, and that will encourage them to take still another step. So we are on a step-by-step basis. And if one wants to stop the video and look at any one step, one can certainly find much to criticize . because by no means have we resolved some of the underlying problems. By no means, have we achieved the final step. What we have done is, we have tried to keep a very short deadline, 60 days. That, too, required a considerable amount of negotiation and discussion. But I thought what we could do in 60 days was quite doable, and that was we need the North Koreans to shut down and seal the Yongbyon reactor and invite IAEA back in to verify and monitor these actions. Now, of course, the first criticism of that is well, what about the 50 kilos or so of plutonium already out there? If you look at the fact that plutonium has a half-life of some 700,000 years, we thought maybe it would be a good idea to keep the 50 kilo problem a 50 kilo problem . , not a 55 or 100 kilo problem. So we thought shutting down the reactor was a good first step. Since we are also looking in the subsequent step to disable it and then to dismantle it and finally to cart it away, we looked at the difficulties of trying to dismantle something while it was still running and thought maybe we should shut it down first. I think if you just stop to think of the logic, it was necessary to get it shut down first. We thought it was important to get IAEA back in there. This is not say we can't monitor the shutdown by national technical means. We have the ability to know whether the reactor is working or not. But we think it is important to get the international community on the ground and monitoring and verifying that the North Koreans are doing what they are supposed to be doing. So we thought that was important, to get IAEA back in. The other thing we have agreed to do in these first 60 days . and we have set up a number of working groups to try to deal with this . is to discuss the list of all nuclear programs that they have agreed to, that the North Koreans have agreed to do away with, to abandon, to use the term of art in the September '05 agreement. We want to begin to have a discussion of that list and to go through what programs there are. because we don't want to just say to the North Koreans, give us your declaration, and have it be an incomplete declaration. We want that by the time they provide a complete declaration of the nuclear programs to be abandoned, that that declaration is complete. Now, to be sure, there are will be problems in coming out with that declaration. But, again, we thought, as a logical first step, we ought to have a discussion about it. Of course, in this discussion, we will face the problem, in fact, the very serious problem of the highly enriched uranium program. We have information, and I have seen the information a number of countries have seen the information that the DPRK, the North Koreans, made certain purchases of equipment which is entirely consistent with a highly enriched uranium program. Of course, it's a complex program. It would require a lot more equipment than we know that they have actually purchased. It requires some production techniques, some considerable production techniques that we are not sure whether they have mastered those. But, certainly, we need to have a discussion about where they are on this, because we need some explanation of what was purchased. For example, we know that they attempted to purchase some aluminum tubes from Germany. In fact, there was a court case with respect to these aluminum tubes. We have some indications that they were successful in getting some of these tubes elsewhere. By the way, these are tubes that we know have the fit, the type of Pakistani designed centrifuges that we know they have also, which we know from Pakistani sources that they have also procured. So at some point we need to see what has happened to this equipment. If the tubes did not go into a highly enriched uranium program, maybe they went somewhere else. Fine. We can have a discussion about where they are and where they have gone. I have raised the issue of highly enriched uranium with the North Koreans on just about every occasion we have met with them, certainly on all the Six-Party meetings, and we've agreed that we can discuss this. I want to make very clear, though, that the North Koreans have not acknowledged having an HEU program. They have not acknowledged that, but they have been willing to discuss what we know and to try to resolve this to mutual satisfaction. We don't know whether we are going to be able to do that, but we have agreed to have this discussion. Now, in addition to these undertakings by the DPRK, by the North Koreans and by the way, I often use the term, DPRK, because frankly the North Koreans prefer to be called by their proper name. But I know it is very frustrating to journalists, because you have to have a whole separate graph to say the DPRK is the official name of North Korea. But please accept it in synonymous terms. I will, for ease of expression, use the term, North Korean, but I am not insulting the North Koreans with that. The concept of the Six-Party approach is not just to deal with the nuclear issue or to deal with energy. It tries to deal with some of the underlying causes of tension in the region. Whether we are ultimately successful with those, time will tell, but certainly we would like to make a start with some of those issues. In addition to a working group to discuss denuclearization and a working group to discuss North Korea's energy needs, we also expect and will have a working group on the U.S.-North Korean bilateral relationship. The purpose of this is to begin a process that if we can get through the full implementation of the September '05 agreement the full implementation meaning denuclearization there are other elements of that September, '05 agreement that we must live up to, and that includes normalization. So the U.S. is prepared to begin that process now and to begin talking to the North Koreans about how we could end up with a normalized relationship which would happen at the end of the process. In addition, the North Koreans have been very interested in getting off the state sponsors of terrorism list. Again, we are prepared to begin that process, with the understanding it is going to take some time to get through that, and it also going to be an iterative process. We need to talk to the North Koreans. We need some answers from them. We need a dialogue with them. So we are prepared to do that. In addition to our bilateral talk, we're going to need . there is also envisioned a Japanese-North Korean bilateral negotiation. And here too there are some issues that are especially very important on the Japanese side, issues for which the Japanese Government and, frankly, the Japanese people need some closure. Most importantly, from Japan's point of view is, of course, the issue of abductions. And so this has to be addressed. We're not expecting this problem to be resolved immediately, but certainly there needs to be a mechanism that Japan and North Korea can agreed on to address these issues. Again, it's not going to be easy, but it clearly is a very important issue, especially important issue from the point of view of the Japanese public. The families of people who were abducted for various purposes 25 years ago, they need some clarity on what happened. As Japan and North Korea sit down together to address the prospects of normalizing their relationship, they're going to have to deal with these outstanding issues of concern. In addition, finally, there will be a working group to discuss some of the future relationships that we would hope to address, that is, future relationships in the overall region. And so, we are looking at having a working group to begin to chart out how a Northeast Asia peace and security working group can look at overall problems in the region and can look ahead to see how we can begin or to strengthen multilateral processes in the region. I have said on many occasions and I strongly believe that Northeast Asia is truly one of the most exciting and successful parts of the world, and yet there should be a greater sense of and greater development of multilateral institutions. We hope that the Six-Party process can be a kind of embryonic structure, that if we can get through this very difficult task in front of us, that is, the denuclearization task, it can move on and do some other tasks. Often, people in Northeast Asia say, well, you have no idea the difficult history we've had in Northeast Asia. Well, we do have an idea of the difficult history Northeast Asia has. By the way, there are other parts of the world that have also had very difficult histories, and I must say Europe comes to mind. When you look at what has been done in Europe in terms of multilateral structures, it is truly impressive, and I think it is an inspiration to those of us in North America but also should be an inspiration to Northeast Asia. So we would like to do some more on these things. We will try to get all of these working groups started within 30 days. That is an undertaking in this February 13th agreement that everything gets going within 30 days. There is one other undertaking that the United States has agreed to do, and that is within 30 days the United States will resolve its role in the matter of Banco Delta Asia, this bank that is located in Macau. We will complete what has been an 18-month investigation, 18-month U.S. action to warn U.S. banks against dealing with this bank . because, frankly, we had reason to believe that this bank was not living up to international banking standards with respect to money-laundering and other activity. So we are resolved to complete our part of that within 30 days, and we have so informed the Chinese of our intention to do so. All of these, it's an ambitious agenda for a 60-day period. And what we look forward to is during the week of March 19th and perhaps even on March 19th itself, which is a Monday, we would get together and review our 30-day actions. We would make sure that the denuclearization group has met. We would make sure that the economic and energy cooperation group has met, the Northeast Asia peace and security group and also the two bilateral processes, that is, the U.S. and Japanese bilateral process with the DPRK. We would ensure that those have met, and then we would see how we are doing or how we expect to do in the remaining 30 days, so that at the end of the 60-day period we would expect to see the reactor shut down and sealed. We would expect to see international observers on the spot. We would expect to have, through the denuclearization working group, discussions with the North Koreans that can lead us toward receiving from them a finalized list of their programs that would be abandoned pursuant to the September agreement. We would look to see whether the bilateral working groups have met and whether they have made progress and how they would proceed beyond that. Finally, we would look to see that, by the end of the 60-day period, we would have the first shipment of fuel oil, some 50,000 tons of fuel oil, delivered to mainly power stations in the DPRK. Looking beyond, after the 60 days, we will be into a next phase. And here the next phase calls for a considerable amount of fuel oil on our part, so we need to figure out how we will sequence that fuel oil. We're talking about an additional 950,000 tons of fuel oil, which is something on the order of about $220 million at current market prices. We have a burden-sharing agreement among Russia, China, ROK South Korea and the U.S., with the understanding that if Japan feels it is making progress on its issues, it can also join in this process. And so, we have a considerable amount of fuel oil to figure out how to allocate, how to get into North Korea in a sequence that makes sense from a technical point of view, but is also sequenced with some additional undertakings that the North Koreans have agreed to make. Those undertakings have to do with a couple of things. One is, of course, giving us a completed list of the nuclear programs to be abandoned, pursuant to the September agreement. The second issue, and this is a very important issue for us, is that the North Koreans have agreed in this phase to the disablement of all existing nuclear facilities, including graphite-moderated reactors and the reprocessing plant. For that disablement . and disablement means these are put out of commission, not just shut down and sealed but actually put out of commission . in short, the next stage on the phase toward the dismantlement and complete abandonment of these facilities. On the North Korean side, there are two main undertakings: a complete list, a finalized list of what programs need to be abandoned and, secondly, an agreement for disablement of all their nuclear programs. On our side, we need to sequence tranches of fuel oil totaling 950,000 tons, that is, together with the 50,000 that comes at the end of the 60 days. That would be a total of one million. It is going to be a very busy time, and I think everyone is also agreed that we need to, above all, avoid missing deadlines. When you start missing deadlines, it's like a broken window theory. If one window is unrepaired, before you know it, you will have a lot of broken windows and nobody cares. We care about deadlines, and therefore we really have to make sure these all happen. I think there is a real sense among all the parties that we have a process going. We are very mindful of the fact that we have a long way to go. We are very mindful of the fact that we have 50 kilos, some 50 kilos or so, of plutonium which we know the North Koreans have used some of that in order to make a nuclear device in October. So we are very mindful that that is still out there, and we need to address that plutonium. We are also very mindful of the need to come to clarity and closure on the issue of the highly enriched uranium program and, finally, of the need to disable and finally dismantle these nuclear power, these graphite-moderated technology power plants that, in the case of Yongbyon, have been producing the plutonium. At the end of the 60 days, if we're successful with all this, our plan is to then have a ministerial, where U.S. Secretary of State Condi Rice will go out to Beijing. And she will meet with her other five counterparts, including the North Korean Minister of Foreign Affairs, and review the first 60 days and review how the next tranche is working . and, we hope, provide a kind of renewed and continued momentum really to this process. We would anticipate that such a meeting of the Six-Party ministers would happen in April, that is, following the 60 days. Again, we are dealing with a really tough problem in some respects, a kind of relic of the mid 20th Century. Here we are in the 21st Century, dealing with still a divided Korean Peninsula, a division that I think is one of the saddest legacies of the mid-20th Century. It is our hope that through the progress in the Six Parties, this can spawn the creation of a group of countries, probably four countries China, the U.S., South Korea, and North Korea to try to sit down and end the Armistice and replace the Armistice with a peace mechanism on the Korean Peninsula. Indeed, our Six Parties is really an effort to address broad problems in the overall region of which the denuclearization issue is but one. With those opening comments, perhaps I could go to some questions.
member. 
