 It is my pleasure to introduce the moderator for this panel whom you have seen throughout the day, Patrick Cronin. Patrick is the director of our research and studies program at the U.S. Institute of Peace, handling a number of issues and juggling a lot of balls. He's able to integrate and oversee our research activities. He's played a key role in the development of today's program. So he shares much of the credit for some of the intellectual framework and identification of the issues. So we thank you for that, Patrick, and ask you to take over. Well, thank you, Harriet. I had a couple of pages of introduction to set the scene on Northeast Asia, but I can say it in the one sentence that appeared in today's wonderful essay by Chet Crocker and Dick Solomon when they say, if there is to be peace in East Asia, we need active and supportive allies in Japan and Korea and to cooperative China. Now, that's a lot easier to say than to do, but fortunately I have three distinguished practitioners and scholars to help us plow through these issues. Let me say very briefly that former Secretary of Defense William Perry's work as North Korea policy coordinator was statesmanship of the highest order. His comprehensive review of policy toward Pyongyang, calm the waters in Washington, solidified ties with Seoul and Tokyo, and resulted in a roadmap to a better future for Pyongyang provided that it adequately addresses our concerns over its weapons of mass destruction and missile programs. Michael Armacost has served with distinction in senior policy positions in both the Defense and State Departments, as well as ambassador to Japan. And as the president of the Brookings Institution, he knows the challenges of managing complex political dynamics, as well as anyone in Washington. And Stapleton Roy, who has just retired after a long and truly distinguished career in the Foreign Service, is an old China hand as former ambassador in Beijing, as well as ambassador to Singapore and ambassador to Indonesia. And he will address the central question of the China challenge. We will begin first with Bill Perry, who will take the podium. Since the ending of the bloody and the tragic Korean War, almost five decades ago, there has been no peace on the Korean Peninsula, only a dangerous armed truce. But what does the future hold? What baton do we have to pass on to this next administration? I will give you my views right up front. The good news is that we now have an unprecedented opportunity to achieve a real peace for the Korean people, and along with that, stability for the region. The bad news is that it is not assured. Indeed, the new administration faces profoundly difficult problems that could cause it to miss this opportunity. My talk today will focus on what they can do to seize the opportunities and avoid the problem. But I will start with a brief perspective of two historical events that profoundly influenced how we arrived at this hopeful stage, and therefore provide critical clues on how to sustain the present momentum. You are all aware that we faced a crisis from North Korea in June of 1994. But I want to briefly revisit this crisis because you may not be aware of just how dangerous it was. That crisis is forever ingrained in my memory because I was personally involved in preparations for a military conflict that would have been disastrous for all sides. Indeed, during my tenure as Secretary, that was the only time that I believed that the United States was in serious danger of a major war. You will recall that the North Korean nuclear facility at Yongbyon was about to begin processing nuclear fuel, which would have provided them with enough plutonium to make immediately about a half a dozen bombs. The United States, the Republic of Korea, and Japan all believed that this outcome would weaken deterrence on the peninsula and announce their intention to impose severe sanctions on North Korea if North Korea produced the plutonium. North Korea responded by saying they would consider the imposition of these sanctions an act of war and proclaim that they would turn Seoul into a sea of flames, like graphic language. Taking these threats seriously, I directed a review of the war contingency plan of the United States. General Shalikashvili and I met two solid days with the relevant commanders, the commander of Korean forces, commander of the Pacific forces, the commander of our transportation command, and our force service chiefs, going over every detail of our war contingency plan. We considered which brigades, which wings would go, how they would be transported, when they would arrive, and based on this, we estimated how soon and where we would turn around the postulated attack. This review indicated that in the event of a war, we would achieve a decisive allied victory, but there would be very high casualties to Korean forces, to American forces, and to Korean civilians. This was not going to be another desert storm. Our military leaders and I believed that we could significantly reduce those expected casualties by reinforcing our troops in Korea before any hostilities began. And therefore, I ordered the plans to be drawn up to augment our deployment in Korea with tens of thousands of American troops, and our embassy in Seoul prepared plans for the evacuation of non-essential civilians from Korea. President Clinton was within hours, literally hours, of authorizing those actions when he received word that Kim Il-sung was ready to freeze the activity of Jong-Bi-on and begin serious negotiations. In fact, I was literally in the cabinet room briefing the president on the reinforcement plan when a call from Pyongyang came through to the White House. This, I think you can fairly say, was a close-run operation. But in the end, the crisis was resolved not by war, but by a diplomatic agreement known as the agreed framework. This agreement called for North Korea to freeze and in time dismantle the reactors and processors of concern, and for the Republic of Korea, Japan, and the United States to provide replacement facilities that would provide the needed electricity without entailing the same risk of proliferation. There has been much criticism and second guessing about that agreement, and it will likely be reviewed by the incoming administration. But let me review for you the real alternatives that were available at that time. We could have confronted the North Koreans with a military ultimatum backed by deployed troops, which would have led to a real possibility of a devastating war. We could have ignored their reprocessing facilities, allowing North Korea to proceed with the production of nuclear weapons, which would have dramatically increased our danger in the next crisis. Or we could have engaged North Koreans diplomatically, which, of course, in fact, is what we did. I believed then that engagement was the right alternative. I believe it even more today. Today those nuclear reactors and the processing facilities that get turned to us so much remain frozen. That result is critical for security in the region, since during the last six years those facilities could have produced enough plutonium to make about 50 nuclear bombs. Consider how we would be handling the crisis over missiles today if North Korea had 50 nuclear bombs. But I must remind you that the dismantlement of those facilities awaits completion of the construction of the commercial reactor called for an agreed framework. And that is still a few years away. Therefore, production of plutonium could restart in a few months if the agreed framework were to be terminated. Now, two years ago, we appeared to be headed for another crisis like the one in 1994. North Korea had begun the serial production and deployment of a medium-range ballistic missile capable of reaching Japan. And they had undertaken the development of two long-range missiles, the Taekwodong 1 and the Taekwodong 2. These missiles, which could reach targets in parts of the United States as well as Japan, aroused major concern in both countries. That concern came to a head two years ago when North Korea flew a Taekwodong 1 over Japan. This test firing provoked a strong reaction both in the United States and Japan and in the American Congress and in the Japanese diet for a termination of the funding which supported the agreed framework. But this crisis was not just about missiles. For if the agreed framework had been terminated, there is no doubt that North Korea would have responded with a reopening of those frozen facilities. And this in turn would have enabled North Korea within a few months to produce the plutonium that would allow them to put nuclear warheads on those missiles. Thus, if we manifested our concern for the missile threat by terminating the agreed framework, we could actually be dramatically increasing the severity of that threat. While during this turbulent and dangerous period, President Clinton responded to the request from the U.S. Congress to establish an outside policy review. President Clinton asked me to head this review. I must confess to you that this request was not welcome. Nevertheless, considering how dangerous the 94 crises had been, I reluctantly agreed. Working with me on this study was Ambassador Wendy Sherman, Dr. Ash Carter, and a small expert team of Korean specialists. What alternatives were open to us for dealing with this crisis? Some in Japan believed that we should put pressure on North Korea by stopping compliance with the agreed framework, essentially terminating the agreed framework. Some in the United States believed that we should confront putting economic and political pressure on them, including the termination of the agreed framework, and backing this with an increase in our deployed military forces. Those critics believed that such pressure would cause the North Koreans to back off their missile program. My team and I did not share their optimism. Moreover, it was clear to us that this course of action would split the alliance. The new South Korean government had just embarked on new policy of engagement with the North and would certainly not want to abandon that policy before it had a chance to play out. So if the U.S. had pursued a confrontation strategy, it would have been pursuing it alone. And it was clear to us that the United States could not have a successful strategy for dealing with North Korea. It was fundamentally different from the strategy being pursued by South Korea. Indeed, we concluded that the success in our new policy formulation required a concerted action by all three allies. So our team set about to structure the policy review with the full participation of the Republic of Korea and Japan. As a result, this review was done jointly with our allies, beginning the very first week. And most importantly, six of our meetings were held at the tight level, which I believe made a very significant contribution to the success of the process. Indeed, the essence of what has come to be called the PERI process was this close consultation, which in turn led to a consensus among the allies before any action was taken. Now, I'm assuming that you are aware of the findings of the policy review, so I will not repeat them here. But let me highlight several important points about the findings. The findings were built on the South Korean engagement strategy, but added to that a specific course of action if engagement failed. That is, we recommended that the allies should establish two alternative strategies. If, and this was a big if, if North Korea would forego its long-range missile program as well as its nuclear weapons program, the allies agreed to move on a step by step to a comprehensive normalization of relations, including the establishment of a permanent peace. Alternatively, if North Korea did not demonstrate by their actions that they were willing to remove the threat, the allies agreed on what actions they must take to contain the threat. Both the positive and the negative alternatives were approved by President Kim Dae-jung and the late Prime Minister, Buche, as well as President Clinton, which meant that we could represent a united front to North Korea, which previously had successfully used a divide and conquer approach with the three governments. First in many meetings with the North Koreans to pursue this new strategy was held May of 99 in Pyongyang. During the talks, it was clear that the North Koreans were interested in exploring the positive alternative, but it was also clear that they feared the communication with the outside world would put at risk the closed society that has kept their regime in undisputed control in North Korea. About a year ago, it became clear that North Korea had decided to take that risk and has been moving forward on three parallel paths with the United States, Japan, and the Republic of Korea. After numerous meetings with the North Koreans that required all of the considerable diplomatic skills of Ambassador Cartman, the United States and North Korea agreed on a first step. North Korea agreed to suspend the testing of long-range missiles, and the U.S. agreed to lift sanctions on consumer products. This was, I must say, a modest but a useful step. And these bilateral talks continue, factor this very month, with both sides trying to build on that first step. I believe that an agreement could be reached with the North that would result in the cessation of long-range missile testing, deploying, and exporting. However, it's quite clear that time has run out on the President's administration, so that opportunity will have to be pursued by the new administration. Meanwhile, the Japanese government and the South Korean government have been pursuing parallel but closely coordinated paths to achieve our joint objectives. Japanese have already had three separate meetings with the North, in Pyongyang and in Tokyo. And while these meetings are a welcome change in the past, I must say they have not yet made substantive progress. Most significantly, the South Koreans have had a real breakthrough in their approach to the North. Early this year, they held a series of secret talks with the North Koreans in Beijing, which resulted in an agreement for a first-ever summit meeting between the two countries. President Kim Dae-jung summed up his reaction of the summit meeting with a dramatic statement. Koreans no longer need, he said, to live under the constant threat of an imminent war. Well, considering where we were two years ago, this is a stunning judgment. So is this the baton we are passing on? A peaceful peninsula with reunification just around the corner. I am afraid not. Before we get completely carried away by enthusiasm for the remarkable turn of events that has happened, let us examine the problems in the way of realizing President Kim's judgment, as well as the opportunities to increase the likelihood of realizing it. Now, we have moved the Korean ball forward these past few months, these past few years. But the question now facing the new administration is what can they do push it the rest of the way? I have a prescription for them, which I would like to pass on now. First, first and most importantly, they should sustain the robust consultation with their allies. In particular, they should move immediately to appoint an experienced high-level American representative to the tripartite coordinating group. Easy prescription to make. I must caution that this advice will not be easy to carry out. Why? It's because our three countries have, in fact, quite different interests concerning North Korea. The Republic of Korea has a very strong emotional commitment to success and family visits, and pragmatic as well as emotional reasons for greatly increasing cross-border traffic and establishing joint business ventures in North Korea. Japan has a very strong emotional commitment to recovering Japanese citizens kidnapped by North Korea more than a decade ago, and a quite pragmatic reason for wanting a nuclear-free peninsula. The United States, as a guarantor of security on a peninsula, has its primary interest in a peninsula that is free of nuclear weapons and long-range missiles, and wants to see the establishment of confidence building measures that would allow for reduction in conventional military forces along the DMZ. Thus, it will be a continuing challenge for the three allies to sustain their cooperation in the years ahead, given their inherently different interests. But I am persuaded that such cooperation is a key to our goal of achieving long-term peace and stability, not just in Korea, but in the region. Secondly, the new administration should work closely with the government of the Republic of Korea to support their initiatives in economic exchange with the North. Many actions can be taken between the North and the South that reduce tension and build trust, a trust that has been almost totally lacking. Family exchanges, marching together in the Olympics, and defense ministers' meetings, all are examples of trust building, which have great symbolic significance. But the real payoff of North-South meetings would be the establishment of meaningful economic cooperation in which the major role will be played by South Korean companies with the encouragement of the two governments. But for this to happen, fundamental changes are needed. The North must back off regulations that effectively harass foreign businessmen, and the North and South must cooperate in rebuilding desperately needed infrastructure in North Korea. Most critical is the transportation network, the energy grid, and the telecommunications network, all of which are essential for modern businesses to function. If such economic cooperation could be established, it would not only be of immense help to the North Korean people, it could very well exert a strong liberalizing influence in North Korea. Third goal for the new administration is to establish a priority for dealing with the security problems posed by North Korean military forces. Nuclear, missiles, other weapons of mass destruction, and conventional forces in that order. I emphasize in that order. We're not going to deal with them all at once. Now, in line with that approach, then the first task is to sustain the agreed framework. Since if we allow North Korea to go into serial production of nuclear weapons, the whole security issue changes dramatically for the worse. If we can keep that from happening, everything else can be arranged. Also in line with that, they should try to drive home an agreement by which North Korea complies with the missile technology control regime, an agreement which will stop the deployment, the export production of medium to long range missiles. I believe, as I said before, that such an agreement is within reach, but it is not yet in our pocket. Now, if progress is made in all of these areas, it is time then to consider the confidence-building measures that would allow a major reduction of the dangerous and expensive level of ground troops surrounding the DMZ today. And if that can happen, this reduction could create the environment, which would make possible, finally, a real and permanent peace agreement on the peninsula. Now, if and when this happens, many changes politically are possible. But until it happens, the United States should not make any reductions in its military forces in the region. Indeed, even after we have political progress of the kind I've described, any reductions we make should take full account of our responsibilities in regional security. Now, I started off with a metaphor of passing the baton. I want to end with a different metaphor, which is a football metaphor. I think in the last two years, we have moved the North Korean ball to about the 10 to 20 yard line, but not over the goal. The task of the new administration is to push it over the goal line. I say that with a full understanding that the last 10 to 20 yards is often the hardest. Thank you. Thank you, Dr. Perry. Ambassador Armacost is next. You may stay right here. Maybe I should start with a baseball metaphor. I think we feel like we're in the eighth inning and a lot of batters yet to come to the place. So I'm going to talk real fast. I was asked to address the Japan component of our Northeast Asia strategy. I'm happy to do that because I think it remains the pivot of our geopolitical and economic position in that part of the world. Let me begin with a proposition I expect is unexceptionable. 10 years or more after the Cold War ended, our alliance with Japan remains critical and dispensable indeed to the pursuit of a variety of pretty critical American interests. I would mention three. It's a lot easier to maintain peace in Asia if the two most powerful countries in the region remain friends and security partners. And I would remind you that Japan, for all the talk of China, still accounts for two-thirds the output of Asia and still has the most technologically sophisticated military capability. The second, we both gain a lot more security at lower cost through defense cooperation. For the US, it's a very efficient means of projecting our power into the Western Pacific and thereby playing our own role in the regional balance of forces. For Japan, it permits them to maintain security with forces that are a lot more comfortable to their own people and to their neighbors than those they would find adequate without the alliance. And I dare say it's a source of reassurance that we maintain this connection to not only the Japanese people but to all their neighbors.