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Good evening and welcome to today's program of the Commonwealth Club of California. I am Lillian Nakagawa, member of the Club's Asia Pacific Affairs Forum and your coordinator for today's program. North Korea's nuclear gamble, will it pay off, by co author Gordon G. Chang. We also welcome our listeners on the radio. We invite our audience to visit us at our website www.commonwealthclub.org. Now it is my pleasure to introduce tonight's speaker Gordon G. Chang. Gordon G. Chang's 2006 book Nuclear Showdown: North Korea Takes On the World has been called a superb and frightening history of the US-North Korea nuclear confrontation and was selected by The New York Times as an Editor's Choice. Nuclear Showdown focuses on nuclear proliferation in general and the North Korean crisis in particular. Gordon's first book called The Coming Collapse of China was published in 2001. His writings on China and North Korea have appeared in The New York Times, The Wall Street Journal, the Far Eastern Economic Review, the International Herald Tribune and many other publications. Gordon is a frequent lecturer at Universities Government Agencies and other institutions in United States and abroad including the State Department, the CIA and the Pentagon. I think that sounds very interesting. He has also made numerous television appearances including on CNN, the Fox News Channel, CNBC, the BBC, Bloomberg Television as well as The Daily Show with Jon Stewart. He has served two terms as a trustee of Cornell University. Gordon has lived and worked in China, in Hong Kong for almost two decades, most recently in Shanghai, as Counsel to an American law firm and earlier in Hong Kong as a Partner in an international law firm. This evening we have asked Gordon to share with us his views of North Korea's future and what it means for the world. North Korea and its leader Kim Jong-il agreed in February to dismantle its nuclear weapons program in steps. And the first step of shutting down the nuclear reactor in return for fuel has run into difficulties. Why would Kim Jong il agree to give up his nuclear weapons program? Is peace coming to this volatile region or not? With that introduction would you please join me in welcoming Gordon G. Chang. Thank you Lillian. We are the strongest nation in history. North Korea is on of the most destitute states today. Yet, for more than five decades the regime run by the Kim family has out maneuvered us at almost every turn. This situation is even more clear than that. Because North Korea is not only our maneuvering us, it's outsmarting the rest of the world. Today the international community is committed to Six Party Talks in Beijing. On one side of those talks is a quintet of nations that wants North Korea to disarm. In addition to us there are also two other nuclear armed states. One of them the world's most populous nation, the other is largest as measured by geographic area. Also on the same team is the planets second largest economy and another nation that is Asia's fourth biggest. Together these five countries account for 31 percent of global population and 47 percent of the world's economic output. On the other side is the destitute and reviled regime that accounts for one-third of one percent of humanity and an even smaller portion of its economy. Destitute and reviled North Korea is not proving that neither size nor strength matters that much in a nuclear weapons world because it is in fact prevailing over the United States, China, Russia, Japan and South Korea. It has tested missiles last July. It detonated an atomic device in October and it is paying almost no cost for behavior that is destabilizing the international community. On the contrary it has been receiving aid from its neighbors. For example, you may have heard that last Thursday, for the first time since 1951 two trains traveled between North and South Korea each crossing the demilitarized zone. South Korea shelled out $600 million to de-mine the demilitarized zone for this purpose. To construct the rails and also to build stations. And yet on top of this North Korea has also received an additional $86.5 million from the South for the purpose of conducting the one day test. So how do we account for this strange state of affairs and why is North Korea's nuclear gamble actually paying off? I think that there are four primary reasons. First, North Korea is riding an historical wave. Up to now the dispersal of nuclear technology around the world has not been as fast as one's fear. The nuclear taboo, the importance of the bomb has helped slow proliferation. And so has the world's arm controlled regime. At the heart of that structure is the nuclear Non Proliferation Treaty which at last count had 188 signatories, all but four of the recognized states in the world. The NPT as this global pact is called contains two classes of countries. There are five nations that are permitted to have nuclear weapons and all the rest that are not. The two tier structure is inherently unstable but is especially so in a globalizing world where economic development is spreading wealth from nation to nation. And as nations go rich they naturally desire security and even power. A nuclear weapon is the ultimate badge of power. Today we are approaching a tipping point for the world's arm control regime. Today there are about 40 nations that are capable of building the bomb. So rapid nuclearization is possible. Now these and other nations are talking less about the nuclear taboo and more about nuclear apartheid. In other words they are less concerned about the horror of these weapons than they are bothered by the discriminatory nature of the NPT. This is a sign of momentous change. In fact one of the more recent tactics of North Korean leader Kim Jong-il is to say, "yes I will disarm, just as long as everybody else disarms as well." He is undoubtedly being insincere but he is nonetheless tapping into an argument that resonates around the world. The second reason why North Korea is prevailing is that China is supporting the Kim regime. For decades the Chinese used proliferation to further their Foreign Policy goals. Maoist China initially promised to spread nuclear weapons technology far and wide. But it became much more conservative after detonating its first atomic device in 1964. Then Beijing adopted a policy of selective proliferation. For example China, beginning in 1974 helped Pakistan develop the bomb to keep India, their common adversary, at bay. The father of Pakistan's bomb, Dr. A. Q. Khan then turned around and sold China's technology to other nations. Pakistan, for instance transferred its nuclear technology to North Korea and in exchange North Korea gave Pakistan missiles and missile technology. In 2002 Pakistani Air Force Plane, originally acquired from the United States by the way, re-fuelled in the Chinese city of Guangzhou to and from North Korea on its mission to ferry North Korean missile cargo. In other words China's two closest allies were dealing in China's most sensitive technologies and using Chinese facilities to implement the exchange. The fact suggests that China, despite passionate and repeated denials, has not stopped playing the proliferation card, its most powerful tool for accomplishing its most important strategic objectives. As much as we would like to think otherwise the Chinese are willing to risk Nuclear Winter to get their way in the world. From Mao Tse to the present Chinese leaders have been much less concerned about the danger of these weapons and they have been much more confident about controlling the consequences of proliferation. Beijing could disarm North Korea if it wanted to. It supplies approximately 90 percent of North Korea's oil, 80 percent of its consumer goods, about 45 percent of its food. China is the only nation that has pledged to defend Kim Jong-il's State with military force. And of course no country other than China provides more diplomatic support to the North Koreans. Some North Korean Leaders are believed to be more loyal to the Chinese leadership than they are to Kim, the troublesome little Dictator in Pyongyang could neither bark nor bite without China's assistance. Beijing however has chosen not to exercise its influence over Kim to shut down the nuclear program. China's failure to act leads many analysts to believe that Beijing keeps the Kim regime alive because it wants to preserve peace in North Asia. Avoid a tide of refugees, maintain a buffer, destabilize Japan and obtain leverage against Washington. Now I am sure that China seeks all of these advantages but they barely explain Chinese Policy. After all if we take a look at all of these, we can see that Kim is on balance a destabilizing force in North Asia. Korean refugees would move south in a crisis and not north. A unified Korea in Beijing's orbit would be a much superior buffer. Kim is pushing Japan to rearm itself and to build missile defenses and of course Korean issues are starting to complicate the relations between Beijing and Washington. So therefore when you look at all of these at least on balance, North Korea is a growing liability for Beijing. The world's oddest bilateral relationship really no longer serves China's interest. So why haven't the Chinese solved the Korean crisis? Most because I believe that the Chinese are in the middle of a once in a lifetime transition. Many people in Beijing realize that the further nuclearization of Asia only will result a reduction of China's relative strength. It's not just the potential rearmament of Japan, South Korea and Taiwan. But it's also of course India and the United States. The Nuclear agreement between the world's largest democracy and it's most powerful one if it's implemented for shadows a setback of immense proportions for China. Despite Beijing's recognition that proliferation no longer serves its needs there is now no accepted long term strategic vision in the Chinese capital. Instead they are just competing views that results in directionless policy. What many people say and mistakenly say is nuanced diplomacy. Now there may be academics and professionals in the foreign ministry who want to take constructive steps in the North Korean crisis. But there are also generals who enjoy bedeviling the United States and who maintain close ties with their counterparts in Pyongyang. The most recent evidence of this indecisiveness in China is the flip flop on the inspection of goods building in and out of North Korea. First on October 14th of last year Wang Guangya, Chinese UN Ambassador voted in favor of UN Security Council Resolution 1718 which called on nations to inspect North Korean cargos. Immediately after the vote Ambassador Wang said that the inspection provision, which China voted in favor of, was unacceptable to Beijing. Then two days later he said that China would indeed inspect North Korean cargos but China would not intercept or interdict them. This erratic performance in front of the international community is a sign of a government that still today does not know what to think or do. Even on a matter of some importance not only to the international system but to China itself. On Korea I think, Beijing mostly reacts to pressure applied to them by one nation or another. And the leaders in Beijing hope to keep, at the same time some harmony in Foreign Policy circles. The failure to develop a consensus in the Chinese capital to use its leverage over North Korea has permitted Kim Jong-il to repeatedly defy Beijing and to embarrass it. Now no country changes its Foreign Policy quickly. But changes in China are particularly slow due to the cumbersome nature of its collective decision making process. The Chinese must do more than just begin a fundamental reevaluation of its Foreign Policy. They must complete the processes of both shedding their traditional images of themselves as outsiders and also bending their role as adversaries of the existing global order. Such a change inevitably occurs when a rising power matures but it only happens after internal perceptions have shifted over time. At this part of time the problem is that China has not yet made a decision to be a responsible power. Well so while China thinks about what it wants to do, North Korea has been building nuclear weapons and the missiles to deliver them. The third reason why North Korea is prevailing is because it also has the support of not only China but also South Korea. Virtually everybody says that the key to North Korea China, but the key to China is South Korea. Chinese Supremo Hu Jintao has been able to Hyun has been doing the same thing. In other words South Korea has been giving cover to China to act irresponsibly. Why is South Korea doing that? Both President Roh and his predecessor Kim Dae-Jung believe that North Korea can eventually be bought of with large amounts of Seoul's cash. Therefore the South Koreans are continually making concessions to North Korea not expecting reciprocity, at least in the short term, because South Korean leaders no longer tell the truth about North Korea, many South Koreans no longer see Pyongyang as an enemy. As a result South Korea is gone on a nationalist bender. Now many of them no longer think of North Korean leader Kim Jong-il as abominable, he is just another Korean. As a matter of fact many of them just see him to be a victim. There is a case to be made that South Korea and North Korea really were the biggest victims of the 20th century. During the last 110 years the South the Korean State has been defeated, it has been absorbed into Japan, it has been cut into two at the end of the war and it's now grown into two very different ways under two very different ideologies. Now the prosperous and democratic half of the Korea has new found strength and because of that it's indulging in long repressed passions. Those passions which are entirely understandable within the context of Korean history nonetheless make it difficult for the United States to try to maintain some semblance of order in North Asia. The fourth reason that North Korea is prevailing is that our Korean policies are terrible, even counter-productive. One could devote a lifetime to studying the feelings of American diplomacy as it regards the Peninsula. But let me boil it down to just a couple of points. For one thing we never pay enough attention to Korea. There is always some crisis that absorbs us that is more important, more urgent Vietnam, Iraq whatever. So we have let problems on the Korean Peninsula fester. But when we have paid attention to the Korean Peninsular we have changed our policies all the time. We could prevail employing hard tactics; we could win with soft ones. But the one thing that we cannot do is we cannot prevail by alternating between these two approaches all the time. While we have ignored the Korean Peninsular and switched our tactics North Korea has become a real threat. "Kim is now one click away from torching the skyscrapers of New York". That's from Kim Myong Chol who is often described as North Korea's unofficial spokesman and he wrote that at the beginning of the year. Now this is surely an exaggeration because the worst that the North Korean leader can do at this moment is to incinerate Anchorage or Honolulu. However in five to seven years he will be able to destroy any spot in North America should he so choose. Just at the end of last month, by the way, North Korea unveiled they knew long range missile capable of hitting American territory. So what are we doing to stop North Korea? This February the Bush administration reversed six years of policy and accepted a two step interim deal that provides North Korea with aid, a million tones of heavy fuel oil without requiring it to give up a single bomb or ounce of plutonium. So far North Korea has not honored even the first part of this agreement. It was supposed to do so by April 14th by shutting down its reactor in Yongbyon which is a little bit North of the capital of Pyongyang. Pyongyang basically said that it was not going to do so until the United States released $25 million currently held by Banco Delta Asia to Macau bank that the North Koreans use to hide Kim Jong-il's personal funds, to distribute counterfeit American currency and the launder the proceeds of other state criminal activity. Pyongyang had earlier refused to participate in the disarmament talks unless the United States had given up the funds, Beijing sided with North Korea on this critical issue and Washington as I mentioned reversed course. The funds have now been available to the North Koreans since April 11th but so far they have not taken them from the Macau bank. So why is North Korea dragging its feet? My guess is that as we speak at this very moment North Korean technicians are scrubbing down the Yongbyon facility so that international inspectors from the International Atomic Energy Agency, the UN's nuclear watchdog will not be able to know what is going on since they were ejected in late 2002. If the North Korean technicians do a stellar clean up job we will not know much about North Korea's recent isotopes. If we don't know about the isotopes then we will not know about North Korea's plutonium whether before or after a detonation if the North Korean leaders sells them to terrorists or to rogue states. So essentially I think that what's going on is that the North Korean leader is trying to preserve for himself the maximum flexibility so that he can merchandise the most deadly substance ever produced. Whether I am right or wrong about plutonium cells, there are indeed a few things that we know. Kim's nuclear arms program makes him geopolitically relevant. It insures aid from his neighbors and it destabilizes arch enemies South Korea and Japan. It provides him an aura of invulnerability and therefore insures the survivability of his one man regime. His nuclear weapons program is the only success that he can point to in more than a decade of misrule. Without it he is just another ignorant leader of one more failing state. But with them he is a fearsome autocrat and a center of the world's attention. In short Washington needs the plan just in case Kim decides to break the February agreement, just like he and his father have breached every other nuclear pact that they have signed. Unfortunately no one and especially no one in the Bush administration knows what to do, well almost no one. Because unlike your elected representatives in Washington I have a plan to disarm Kim Jong-il and there are three related components. First, we need to strip Seoul away from the Beijing Pyongyang access. This should be our most immediate tactical goal. The key to winning over Seoul is influencing South Korea's almost evenly divided public. The election to pick President Roh Moo-hyun successor will be held in December of this year. President now has an approval rating of about 10 percent, he makes our President look popular in comparison. And his ruling Uri Party has barely won an election in the last two years. After the missile tests in July and especially after the atomic detonation on October, the ruling Uri party has lost even more support and now looks adrift. There is a growing new right movement in South Korea, that means that the Conservative Grand National Party can win the Presidency in December. Between now and then the White House can help the Conservatives take over the Blue House by making Kim Jong Il look bad and thereby discrediting the so-called progressive forces in South Korea. And the best way for us to do that is to attend to a few items on Seoul's wish list. For instance, we should not be trying to renegotiate the recently concluded free-trade agreement with South Korea as we are now attempting to do. And of course we should listen more closely to Seoul on our North Asia policy. If Washington can help South Korea reverse course, the Chinese will be alone in their support of Pyongyang and therefore they'll have to take a clear stand. They'll either have to side with their future which is cooperation with us. Or they'll have to side with their past which is their military alliance with North Korea. So here is the second component of the strategy; and that's China. Beijing's leaders know that the stability of the modern Chinese state depends upon prosperity. And that prosperity depends in large measure on access to American markets, capital and technology. They are not about to cross Washington; if they thought we were serious about North Korea. If we can strip away South Korea from China, then China will fall into line but only if we convince Beijing that we are resolute. Historically the Chinese have almost always been accommodating when they've been alone. So it is up to Washington to create the conditions under which Beijing has no choice but to be responsible. With China, we must be prepared to make nuclear proliferation the litmus test of our relations and to use all the leverage that we have. The West has been patiently engaging the Chinese for decades. And now its time for them to act responsibly. After all, what's the point of trying to integrate Beijing into an international community that it is working to destabilize through the proliferation of nuclear technologies. This thus brings us to the last and third point of the strategy. It would be nice to believe that all of these dangers of proliferation will disappear on their own. But we now know that they won't. Our current global order is not going to survive if every tyrant, terrorist and thug gets his hands on the bomb and is able to trigger Armageddon. Over time, every nation that wants the bomb will get the bomb. Eventually terrorists will get their hands on a nuclear device. Straight line extrapolations are often wrong, but these are so compelling. As Henry Kissinger said, about proliferation at the end of 2004, "Now, we are in a world in which there is no end-game." It is comforting to think that we will be able to meet tomorrow's purchase with yesterday's solutions. But too much has changed since the end of the Super Power rivalry. Almost every pundit, commentator and analyst says that there is not much that we can do to disarm North Korea. And they are right. If we stick with conventional diplomatic techniques, conventional diplomacy got us into this tight spot. So conventional thinking won't save us. There are times in history when the middle way doesn't work any more. So is there anything that we can do short of military force. Well if Kim Jong Il saw that every nation wanted North Korea to disarm, he would have no choice but to comply. So as former Senator Sam Nunn has said, "We have to achieve cooperation on a scale we've never seen or attempted before." To create cooperation of that magnitude, we may have to employ transformational diplomacy, to borrow Condoleezza Rice's buzz phrase. In a contest that will be decided by the legitimacy and credibility as much as by power we may have to take a giant first step to further de-legitimize the use of nuclear weapons. Specifically, we should look at our own strategic doctrine and substantially reduce our arsenal to create this global wave against North Korea. The counter intuitive aspect of this tactic is that it carries virtually no cost for the United States. American planners want to reduce the size of our strategic nuclear force anyway that is, it is far larger than needed. The Pentagon stockpile is so big and so well protected that even the elimination of most of our nukes would have no discernible effect either on our own security or our ability to protect our allies. This arsenal even after a substantial reduction could still survive a first strike from any other nation. More than half of our warheads are carried on ballistic missile submarines which are undetectable when submerged. Each Boomer is permitted under existing Arms Control Rules to carry the destructive power of 1536 Hiroshimas. Just one of a subs 24 missiles could make Central America uninhabitable for 150 years. Each Boomer has more explosive power than detonated in all of the human history and is by itself the third most powerful country in the world. The United States Navy has 14 of these submarines. Today President Bush could give the order to eliminate all human life on this planet several times over. We are not going to be any less safe if we reduce our arsenal so that he can kill everybody just once. In any event we have already committed ourselves to reducing our stockpile of nuclear weapons. We did that when we signed the nuclear Non Proliferation Treaty more than three decades ago and agreed to engage in good faith efforts to disarm. So arms reduction is our treaty obligation. As mentioned, countries are already complaining about nuclear apartheid. So whether we like it or not this issue is not going to go away and we cannot ignore it. Washington should start a global conversation about nuclear weapons while we still have great leverage in shaping the emerging international system. For example we could enhance our security by negotiating staged reduction of nukes with the four other recognized powers; Russia, Britain, France and China, and three of the nuclear power outside of the Non Proliferation Treaty; India, Pakistan, and Israel. We would have more and more authority to deal with the North Koreas of the world if we were reducing our arsenal. This tactic of reducing our arsenal strangely enough is starting to catch on. George Shultz and Henry Kissinger have come out in favor of complete disarmament in early January of this year in their now famous Wall Street Journal op-ed. And of course there is America's most famous disarmament advocate, Ronald Reagan. Reagan almost clinched a complete a 100 percent disarmament deal with Gorbachev at their famous summit in Reykjavik in 1986. No country would benefit more from world wide disarmament than the American colossus. America may be the strongest nation in history but neither size nor strength matters that much in a nuclear weapons world. Any county with just one bomb can indefinitely stalemate the super power. And terrorists with Uranium, well they could obliterate American cities, destroy our economy, paralyze our society, kill millions and of course bend out role atop the geo-political order for generations. Why wouldn't American do every thing we possibly could to eliminate the only threat to our existence. Today there is no conceivable combination of conventional forces in the world that can match the Pentagons. So we would essentially be invulnerable and unchallengeable in a no nuke world. Paradoxically we would become even more powerful if we gave up our most destructive weapon. Many say that this whole idea of arms reduction is not feasible. I am not going to disagree. After all there are times in history when what is necessary is not considered practical. Those times are usually followed by uncertainty, turbulence and death in great numbers. Because the risks are so extraordinary we shouldn't automatically reject solutions because they would be difficult to implement. I wrote Nuclear Showdown because the most important challenge of our time is to avoid the worst possible effects. We may not be successful in this regard but at least we have an obligation to our children to try. One final point. In April 2003, in Beijing, a North Korean diplomat told one of ours that his country reserved the right to sell nuclear weapons. We have to think about this. Many people say that North Korea can be deterred but unfortunately North Korea does not resemble the Soviet Union. Despite top talk, Moscow, especially after the initial stages of the cold war, generally acted like a status quo power. North Korea on the other hand is not. Kim Il Sung and Kim Jong Il, the only two leaders that North Korea has ever known have repeatedly used violence to upset status quos that they found to be unacceptable. They accomplished something that no other communist leaders have ever managed. The institutionalized brinkmanship. Continual crisis permits the current Kim to maintain his grip over an increasingly unstable society. Moreover we have to remember that the Soviets did not launch against us because they knew that we could launch against them. In other words, there were deterred by the prospect of horrendous casualties. Last decade, Kim Jong Il adopted policies that could only have resulted in deaths of hundreds of thousands and perhaps millions of his fellow Koreans. And that is exactly what happened in the great famine of the mid 1990s. Therefore, we cannot assume that Kim is going to be deterred by the prospect of massive death. In any event, a policy of containment assumes that we can control events for decades. Unfortunately, that's not likely in volatile North Asia, where the rivalries are intense. Moreover, containment assumes that we can keep our focus and maintain consistent foreign policies. Democracies are not very good at doing that, but consistency is the one quality that we will need. On an average day, people successfully smuggle 21000 pounds of cocaine and marijuana into the United States. On an average day, 31,000 trucks, 6500 rail cars, 1200 buses, 50,000 cargo containers and 334,000 cars cross into America. On an average day, a 134000 pedestrians enter our country legally and another 14,500 do so illegally. If we are to adopt a policy of containment, we have to be confident that in the midst of all of this traffic, and over the course of decades, we will be able to find disassembled nukes, softballs of uranium and oranges of plutonium. We may catch shipments now and then, but all it takes is just one failure to change the course of history. With just one such failure, the best moment in history could be followed by the worst. So therefore the stakes couldn't be higher. An international system that cannot defend its most vital interest against one of its weakest members cannot last. So there must be a solution. It need not be American, unilateral or military but it does need to be near at hand. We can avoid the horror of a nuclear detonation but only if we show determination. And we have to confront reality, the old diplomatic strategians no longer work. We cannot continue to repeat them and expect better results. Now, more than at any other time we have to take great risks for peace if we are to avoid the great toll of war. North Korea is taking on the world and its nuclear gamble is paying off. If we are to prevail, we will have to take a big gamble of our own. Thank you.