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

THE EXPANDING U.S.-KOREA ALLIANCE

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

HEARING

BEFORE THE

SUBCOMMITTEE ON ASIA AND THE PACIFIC

OF THE

COMMITTEE ON FOREIGN AFFAIRS
HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS

FIRST SESSION

__________

OCTOBER 26, 2011

__________

Serial No. 112-71

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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

ILEANA ROS-LEHTINEN, Florida, Chairman
CHRISTOPHER H. SMITH, New Jersey HOWARD L. BERMAN, California
DAN BURTON, Indiana GARY L. ACKERMAN, New York
ELTON GALLEGLY, California ENI F.H. FALEOMAVAEGA, American
DANA ROHRABACHER, California Samoa
DONALD A. MANZULLO, Illinois DONALD M. PAYNE, New Jersey
EDWARD R. ROYCE, California BRAD SHERMAN, California
STEVE CHABOT, Ohio ELIOT L. ENGEL, New York
RON PAUL, Texas GREGORY W. MEEKS, New York
MIKE PENCE, Indiana RUSS CARNAHAN, Missouri
JOE WILSON, South Carolina ALBIO SIRES, New Jersey
CONNIE MACK, Florida GERALD E. CONNOLLY, Virginia
JEFF FORTENBERRY, Nebraska THEODORE E. DEUTCH, Florida
MICHAEL T. McCAUL, Texas DENNIS CARDOZA, California
TED POE, Texas BEN CHANDLER, Kentucky
GUS M. BILIRAKIS, Florida BRIAN HIGGINS, New York
JEAN SCHMIDT, Ohio ALLYSON SCHWARTZ, Pennsylvania
BILL JOHNSON, Ohio CHRISTOPHER S. MURPHY, Connecticut
DAVID RIVERA, Florida FREDERICA WILSON, Florida
MIKE KELLY, Pennsylvania KAREN BASS, California
TIM GRIFFIN, Arkansas WILLIAM KEATING, Massachusetts
TOM MARINO, Pennsylvania DAVID CICILLINE, Rhode Island
JEFF DUNCAN, South Carolina
ANN MARIE BUERKLE, New York
RENEE ELLMERS, North Carolina
ROBERT TURNER, New YorkAs
of October 5, 2011 deg.
Yleem D.S. Poblete, Staff Director
Richard J. Kessler, Democratic Staff Director
------

Subcommittee on Asia and the Pacific

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

C O N T E N T S

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Page

WITNESSES

Ambassador Chris Hill, dean, Josef Korbel School of International
Studies, University of Denver.................................. 9
Mr. Bruce Klingner, senior research fellow for Northeast Asia,
The Heritage Foundation........................................ 16
Ms. Tami Overby, president, U.S.-Korea Business Council.......... 30
Abraham Kim, Ph.D., vice president, Korea Economic Institute..... 37

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

The Honorable Donald A. Manzullo, a Representative in Congress
from the State of Illinois, and chairman, Subcommittee on Asia
and the Pacific: Prepared statement............................ 3
The Honorable Eni F.H. Faleomavaega, a Representative in Congress
from American Samoa: Prepared statement........................ 8
Ambassador Chris Hill: Prepared statement........................ 12
Mr. Bruce Klingner: Prepared statement........................... 18
Ms. Tami Overby: Prepared statement.............................. 32
Abraham Kim, Ph.D.: Prepared statement........................... 39

APPENDIX

Hearing notice................................................... 66
Hearing minutes.................................................. 67
Question submitted for the record by the Honorable Edward R.
Royce, a Representative in Congress from the State of
California, and written response from Ms. Tami Overby.......... 68

THE EXPANDING U.S.-KOREA ALLIANCE

----------

WEDNESDAY, OCTOBER 26, 2011

House of Representatives,
Subcommittee on Asia and the Pacific,
Committee on Foreign Affairs,
Washington, DC.
The committee met, pursuant to notice, at 11 o'clock a.m.,
in room 2172 Rayburn House Office Building, Hon. Donald A.
Manzullo (chairman of the subcommittee) presiding.
Mr. Manzullo. The Subcommittee on Asia and the Pacific will
now come to order.
On October 12th of 2011, Congress passed the U.S.-Korea
Free Trade Agreement, marking the dawn of a new era in U.S.-
South Korea relations. As America's largest free trade
agreement in Asia, the KORUS Free Trade Agreement promises more
export opportunities for U.S. businesses and manufacturers than
ever before. In a relationship that has ebbed and flowed over
the past few decades, President Lee's visit to the U.S. is
testament that this relationship is the strongest it has ever
been.
Today's hearing is both timely and important in addressing
the impact of expanded U.S.-South Korea relations in terms of
peace, prosperity, and security in the Asia-Pacific region. The
16th Congressional District of Illinois, which I have the honor
of representing, depends heavily on manufacturing for its
livelihood. Many of the products produced in the district are
exported around the world. The KORUS Free Trade Agreement
promises to boost existing exports, with economists estimating
as much as $11 billion in export growth. The Agreement will
also provide American companies important access to South
Korea's $1 trillion market and boost the overall level of two-
way trade beyond the $87 billion value recorded in 2010.
Here in the United States, we are blessed with the fact
that 1.5 million Americans of Korean descent call this nation
``home.'' They are an integral part of the fabric of American
society. Many Korean-Americans are small business owners, and
their pursuit of the American dream contributes greatly to the
U.S. economy.
In November 2008, South Korea qualified to join the group
of countries eligible to participate in our visa waiver
program. Long overdue, South Korean citizens, along with our
Japanese and Singaporean friends, now enjoy visa-free travel to
the U.S. for tourism and business for up to 90 days. The
ability to easily travel back and forth is a key to welcoming
Korean investment and businesses into the United States.
The U.S.-Korea relationship has grown over time, beyond a
security alliance to one of incredible depth and
sophistication. I'll never forget the day when former
Ambassador Lee Tae-Sik made a special visit to the 16th
Congressional District in Illinois to personally thank American
Veterans of the Korean War for the efforts to defend his
country and protect his people. As I stood watching this take
place, I could not but be overcome with great respect and
gratitude for the friendship our two nations share. Several
veterans told me that this was the first time anybody had ever
said ``thank you'' for helping them achieve freedom in their
country.
While South Korea embraces freedom, democracy, and respect
for human rights, her neighbor to the north continues to shock
the world with threats of weapons of mass destruction and
violent provocations. In March 2010, North Korea sent tremors
when it sunk a South Korean naval vessel, the Cheonan, killing
46 sailors. It followed this attack by shelling Yeonpyeong
Island in November of the same year. The international
community was outraged further when China not only remained
silent, but also rewarded North Korea with further food and
fuel assistance.
Just this past week, the Chinese Ambassador to North Korea
announced that China and North Korea are entering a new era of
vigorous development and will make unremitted efforts to
consolidate and develop their friendship further. North Korea
is one of the most repressive and hostile regimes on the
planet. North Korea is in a league of its own when it comes to
the level of weapons proliferation, human rights violations,
and illicit activities carried out by the regime.
The Kim Jong Il regime is starving its own people and at
the same time it remains a sponsor of international terrorism.
Its close relationship with Syria, Iran, and Burma add to this
concern. It's important that we continue to work with South
Korea on a joint strategic plan and do not offer concessions.
Our collective security is being threatened and we cannot
tolerate this continued behavior.
In his address to Congress, President Lee expressed the
sentiments of the South Korean people best when he stated
``America is our friend and neighbor.'' Indeed, those words
ring true now more than ever in a 60-year partnership that saw
South Korea transform from poverty and dictatorship to the
prosperous and thriving democracy we see today. America played
a direct role in Korea's epic success. I concur with President
Lee that our countries have one of the closest, most important
economic relationships in the world. I also agree that when we
work together, we win together.
The future of our alliance is bright. I thank my Korean
friends for their steadfast friendship and hope our
relationship continues to evolve to benefit generations of
Americans and Koreans alike.
[The prepeared statement of Mr. Manzullo follows:]

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Mr. Manzullo. I now recognize Ranking Member Faleomavaega
for his opening statement. You just got back from home, 50
hours in the air or something like that?
Mr. Faleomavaega. You don't want to know, Mr. Chairman.
Mr. Manzullo. Okay, but I'm glad you're here. If you doze,
we'll understand why.
Mr. Faleomavaega. Thank you, Mr. Chairman, and I want to
commend you and your leadership in calling this very important
hearing this afternoon. But first of all, I do want to
recognize a dear friend who is here with us and is one of our
star witnesses, my good friend, the former Assistant Secretary
of East Asian and Pacific Affairs, Chris Hill, and also one of
our standard bearers in negotiating and trying to negotiate
with North Korea for all these years until he was transferred
to another important job on behalf of our Government. So I do
want to personally welcome Chris for his presence here in our
subcommittee.
Also, Mr. Chairman, I think it's only fair that I say how
wonderful it's been in welcoming His Excellency, the President
of South Korea, not only by the White House and President
Obama, but also the fact that he was given the opportunity to
address the joint session of Congress to tell the world how
much we feel and our close relationship with the good people
and the leaders of South Korea. I think it's very indicative of
President Obama's initiative and his leadership in telling our
friends in the Asian region that South Korea means a lot to us,
not only militarily, but in so many other ways.
I also want to commend personally the outstanding services
and certainly his friendship, the former Prime Minister of
South Korea who now is South Korea's Ambassador in the United
States, Ambassador Han Duk-soo, who did an outstanding job in
also helping and not only educating, but giving our members a
better understanding of how important it is to pass the KORUS
Free Trade Agreement. And I'm so happy that we finally have
been able to pass that very important legislation and to
establish an excellent trade relationship with our friends in
South Korea.
Also to note personally, my good friend the chairman of the
Hanwha Group, Chairman Kim Seung Yeon, who also was very much
involved and personally lending his support for the importance
of passage of this legislation.
Again, Mr. Chairman, I thank you for holding this hearing
about expanding the U.S.-Korea alliance. Again, I commend the
administration for the successful passage, as well as the
colleagues in the Congress, in passing this free trade
agreement that will create about 70,000 new jobs for our
American workers. The U.S.-Korea Free Trade Agreement also
promises to increase the U.S. Gross Domestic Product by $11
billion, generate about $10 billion in new U.S. export annually
which I think, I hope, will also create a positive development
in your District, since your District is very famous for
manufacturing.
Now, the U.S. continues to be South Korea's third largest
trading partner. South Korea is the United States' seventh
largest trading partner. Last year, trade between the U.S. and
South Korea totalled over $86 billion. Given the historic
nature of the passage of the U.S.-Korea Free Trade Agreement
this month, I want to publicly acknowledge the grass roots
efforts of Mr. Dongsuk Kim, the founder and former president of
the Korean-American Voters' Council. Mr. Kim gathered Korean-
American business leaders from all over the country to urge the
Congress to pass the U.S.-Korea Free Trade Agreement. And I
certainly applaud him for all that he has done for increasing
not only an understanding, but also promoting our Korean-
American community which numbers well over 3 million of our
fellow Americans living here in this great country, giving us a
better sense of understanding and appreciation about tremendous
contributions that our Korean-American community makes to our
country.
Mr. Thomas Kim, my dear friend, whose tireless efforts in
representing the interests of the Korean Embassy here in the
United States, all of us know him. I want to personally thank
Tom for his efforts as well.
On a personal note, I also want to say that I am sorry that
I'm not acquainted with our other expert witnesses, but I look
forward to hearing from their testimonies and again, Chris,
good to see you. I don't know what you're doing out there in
Denver, but I think this is where all the action is. But again,
thank you for coming.
And Mr. Chairman, thank you for your calling this hearing
this afternoon. I yield back.
[The prepared statement of Mr. Faleomavaega follows:]

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Mr. Manzullo. I would like to introduce the witnesses. It's
with great pleasure that we welcome Ambassador Chris Hill, a
good friend of ours back to the Foreign Affairs Committee. Eni,
Chris Hill and I are survivors of the New Zealand earthquake.
You got caught in it and our delegation left Christchurch 2
hours and 21 minutes before it hit. It really is good to see
you.
Ambassador Hill's long and distinguished career includes
service as U.S. Ambassador to not one, but four countries:
Macedonia, Poland, Korea, and Iraq. In between those tours as
Ambassador, he managed to squeeze in tours as Assistant
Secretary of State for East Asian and Pacific Affairs and as
Senior Director of the National Security Council. Chris Hill's
resume is well known. It's good to see you back here. He is
presently dean of the Joseph Korbel School of International
Studies at the University of Denver.
Bruce Klingner is the senior research fellow for Northeast
Asia at the Heritage Foundation's Asia Study Center. He joined
Heritage in 2007 after 20 years in the intelligence community
working for the Central Intelligence Agency and the Defense
Intelligence Agency. In 1993, Bruce was selected as Chief of
the CIA's Korea Branch focusing on North Korea. He later served
as Deputy Division Chief for Korea of the CIA's Directorate of
Intelligence where he was responsible for analyzing Korean
political, military, and economic issues for the President and
other senior policy makers.
Tami Overby serves as vice president for Asia at the U.S.
Chamber of Commerce. She's responsible for developing,
promoting, and executing programs and policies related to U.S.
trade and investment in Asia. Tami lived and worked in South
Korea for 21 years prior to her present role. She received the
Korean Order of Industrial Service Merit Award, two letters of
citation, and is an honorary citizen of Seoul.
Abraham Kim is vice president of the Korea Economic
Institute and oversees the organization's research programs and
publications. He's an expert on U.S.-Korea relations, trade and
investment, North Korea, and regional security issues. Dr. Kim
also directs KEI's Academy of Korean Policy Outreach, a KEI-
sponsored nonprofit organization focused on promoting Korea and
its policy studies toward the United States. Prior to joining
KEI, Dr. Kim was principal Korea analyst and research manager
of government services at the Eurasia Group. Dr. Kim has also
worked at the Science Application International Corporation and
the Center for Strategic and International Studies.
I recognize the distinguished witnesses for their opening
statements. We try to keep it at 5 minutes. The light will go
on there. The yellow light goes on when you have 1 minute to
go.
Let's start first with Ambassador Hill. It's good to see
you here.

STATEMENT OF AMBASSADOR CHRIS HILL, DEAN, JOSEF KORBEL SCHOOL
OF INTERNATIONAL STUDIES, UNIVERSITY OF DENVER

Ambassador Hill. Thank you very much, Mr. Chairman, Mr.
Faleomavaega. It's also a great pleasure to see you. It's a
great pleasure to be back here in this committee where I have
spent many hours of my life, my past life, in these
discussions.
I have a prepared text which with your permission I would
like to read into the record or have entered into the record.
Mr. Manzullo. Without objection, all the prepared
statements of the witnesses will be made part of the record.
Ambassador Hill. Mr. Chairman, for me, it's quite unusual
because I wrote it myself and cleared it with nobody except my
wife, so it's quite a change in my lifestyle here.
But let me summarize from this and then of course, I will
be happy to join with the others in taking questions. For a
generation, Korea was known as a long and difficult war
tempered by a long and as difficult peace. That has changed.
Korea is now considered one of the world's great success
stories with an economy that has become the envy of the world,
a democracy that is one of the world's most successful, and a
vibrant culture whose wave has reached the four corners of the
globe. It is truly one of the great inspirations of our era.
Against this enormous success, however, remains one of the
world's great tragedies, the continued impoverishment and
virtual enslavement of a third of the Korean people on the
northern half of the peninsula. The tragedy of this division on
the Korean peninsula is one of the saddest and most brutal of
the great legacies of the 20th century.
The United States is fortunate that out of these tragic
historical circumstances, we've had the leadership in Congress,
both among Democrats and Republicans and succeeding
administrations now, spanning one dozen Presidents to
understand the importance to our interest and the wisdom to
stay close to the Republic of Korea, to be committed to its
freedoms and its people and to count Korea among our most
important alliances in the world.
It is altogether fitting that in the last month that great
alliance has now been strengthened by a free trade agreement
that, as with other elements of our relationship, enjoy broad
support between both our major parties and also among all of
the Republic of Korea's major political formations. That free
trade agreement rests on a broad and deep foundation that will
endure. It's a foundation that will not only act to strengthen
both of our economies, but also to be the basis for global,
strategic partnership between the two countries stretching into
the future.
Mr. Chairman, I live in Colorado now and like many states
it has not been immune to the problems facing our economy and
ordinary people. Seeing the problems of unemployment firsthand,
I'm very aware of the need for our trade agreements with other
countries to be ones that work for both countries. I believe
the Korea-U.S. Free Trade Agreement does just that, as
President Lee and President Obama both made clear during
President Lee's recent state visit to Washington. This trade
agreement will create economic activity, not diminish it.
President Lee's pledge to our auto workers in Michigan was
particularly poignant. For an economist, the logic of free
trade is fairly obvious. For workers, it can be more of an
illusive concept, showing these workers in both Korea and the
United States a benefit of the agreement in the coming years
and months will be our challenge.
Mr. Chairman, I would like to shift gears somewhat to the
threat that continues to be posed by North Korea. The challenge
from North Korea, both in conventional and in weapons of mass
destruction remains one of the world's most difficult. North
Korea remains committed to developing nuclear weapons, not to
protect itself, but rather to threaten its neighbors. It was
altogether appropriate that President Bush and then Korean
President, the late Roh Moo-hyun, worked hard to create and
support a regional approach to this threat known as the Six-
Party Process. The concept behind this approach was as sound
then as it is today. The problem posed by North Korean
aspirations for nuclear weapons is not just a peninsula issue
involving the ROK and the United States. It is a broader issue
that the international community needs to address with broader
measures. Russia needs to be part of the solution. So does
Japan and so especially does China.
China, in particular, remains the country with the greatest
leverage for dealing with this issue. There are many theories
why China has not done more. The first, and this argument is
obviously one favored by the Chinese, is that it is proof that
China does not have leverage. Another theory is that China
fears potential refugees from North Korea. Still another is
that there is enough old think in China that those who somehow
worry that a North Korean collapse would amount to a victory
for the United States and a loss for China. There are almost as
many theories for why China has not done more than there are
North Korean weapons.
What is clear is that the U.S. and ROK need to press
diplomatically with others in the Six-Party Talks, especially
with China to address the issue before the time comes that the
North Koreans have succeeded in putting one of their crude
devices, crude nuclear devices, on to a crude missile system.
In particular, China needs to be convinced by the U.S. and the
ROK that in the event of a North Korean collapse our alliance
will not seek advantage against the Chinese. We have our
interests securing the nuclear materials, protecting the
population against hunger, but we will not look to disadvantage
China's interest.
China has nothing to fear from the U.S. or ROK
relationship, nor does it have anything to fear from the basic
proposition that further arrangements on the peninsula are for
the Korean people to work out. China's relations with the ROK
are of enormous significance to China and to the ROK. In turn,
the U.S. has nothing to fear or oppose in the strong ROK
relationship.
Mr. Chairman, some day this issue will come to an end and
North Korea will either become a respectable member of the
international community or it will collapse. We need to be
prepared for however events take this. And when it does and
when the historians sift through its wreckage to find out what
happened, they will see that the unshakable U.S.-ROK alliance,
self confident, able to engage other key players, including
China, will be the reason why this terrible legacy of the 20th
century finally comes to an end. I look forward to answering
your questions.
[The prepared statement of Mr. Hill follows:]

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Mr. Manzullo. Thank you, Ambassador.
Mr. Klingner.

STATEMENT OF MR. BRUCE KLINGNER, SENIOR RESEARCH FELLOW FOR
NORTHEAST ASIA, THE HERITAGE FOUNDATION

Mr. Klingner. Thank you, Mr. Chairman and distinguished
members of the committee. It is indeed an honor to appear
before you.
The tragic 3 years of conflict that began on June 25, 1950
have been referred to as ``The Forgotten War.'' It is an
unfitting label since neither North Korea's invasion or the
American sacrifices will ever be forgotten by the Republic of
Korea, nor should that shared ordeal ever be forgotten by those
Americans who treasure freedom and the willingness to defend
it.
This alliance forged in blood is not merely historic
legacy. As tragically demonstrated by North Korea's two
unprovoked acts of war last year against our South Korean ally,
those attacks made all too clear that the need for vigilance
has not diminished. Alliance managers in both countries
describe the current military, political, and economic ties as
the best they've ever seen. With the recent approval of the
KORUS FTA, there are no major substantive areas of disagreement
between Washington and Seoul. Indeed, much of the recent summit
between Presidents Obama and Lee was to discuss additional
areas of bilateral cooperation beyond the Korean Peninsula.
The U.S.-South Korean security alliance has been
indispensable in maintaining peace and stability in northeast
Asia. The U.S. security guarantee has long deterred a North
Korean attack while providing the shield behind which South
Korea developed its economic strength and institutionalized
democratic rule.
South Korea has devoted considerable resources to
protecting itself against a daunting spectrum of North Korean
military threats. Seoul has recently initiated extensive
defense reforms to enable its military to better protect the
country while concurrently expanding its security reach beyond
the Korean Peninsula.
In March of this year, Seoul announced 73 defense reform
objectives of a new defense reform plan called DR 307. These
objectives will better prepare South Korea to assume more time
operational command in 2015, as well as address deficiencies
identified in the South Korean military response to last year's
attacks. Seoul should be commended for creating an
organizational structure capable of assuming independent
military command with the U.S. to serve in a supporting role.
That said, there are still challenges ahead.
South Korean forces still have insufficient agility to
respond effectively to Yeonpyeong's tactical provocations.
South Korean forces are not currently organized for joint
operations, particularly at the tactical level. However, the
U.S. and South Korea are currently engaged in bilateral efforts
to improve Korean and alliance provocation response
capabilities.
Another area for improvement is South Korean missile
defense. During the two previous South Korean Presidents, Seoul
downplayed the growing North Korean missile threat for
political reasons. The result is that South Korea currently has
insufficient missile defenses against North Korea's missile
threat. Under President Lee Myung-bak, South Korea has been
more receptive to augmenting missile defenses. It has not
followed through with requisite actions such as purchasing
land-based PAC-3 missiles and seaborne SM-3 missiles.
Of course, South Korea does not bear its security burden
alone. Despite its security reform initiatives, South Korea
will remain heavily reliant on U.S. military capabilities. And
even after wartime OPCOM transfer, Seoul's alliance with the
United States will continue to play an irreplaceable role in
maintaining peace and stability.
In order to remain an effective deterrent, defense, and
response capability, the U.S. must maintain a robust forward-
deployed military presence in South Korea at promised levels
and affirm our unequivocal extended deterrence commitment. We
must also fully fund on-going U.S. military realignment plans
in South Korea and Japan including the Yongsan Base Relocation,
the Land Partnership Plan, and accompanied tours.
Also, constructing the Futenma Replacement Facility in
Okinawa for U.S. Marine Corps Air Units is crucial for
maintaining U.S. military capabilities including for Korean
contingencies. Proposed cuts by the U.S. Senate Armed Services
Committee would undermine years of carefully crafted diplomacy
that achieve U.S. strategic objectives. And potential
additional draconian cuts of $500 billion to the defense budget
could have a devastating impact on U.S. ability to deter
security threats in Asia, protect American national interests,
and fulfill our defense treaty obligations.
In conclusion, the U.S.-South Korea alliance has been under
valued in recent years. The U.S.-Japan alliance is critical to
American interests, but South Korea has capabilities that are
not available to Japan. Tokyo is constrained in its security
contributions by its historic legacies, constitutional limits,
restrictive rules of engagement, and low defense spending. U.S.
policy statements that imply secondary status for American
military relations with South Korea are a disservice to the
stalwart military bonds forged during 60 years of the bilateral
alliance with Seoul.
Thank you again for the opportunity to appear before you.
And I look forward to your questions.
[The prepared statement of Mr. Klingner follows:]

----------

Mr. Manzullo. Thank you.
Ms. Overby, we look forward to your testimony.

STATEMENT OF MS. TAMI OVERBY, PRESIDENT, U.S.-KOREA BUSINESS
COUNCIL

Ms. Overby. Thank you, Mr. Chairman, distinguished members.
On behalf of the U.S.-Korea Business Council and the U.S.
Chamber of Commerce and its members, thank you for the
opportunity to speak with you today.
The U.S.-Korea Business Council is the premiere business
advocacy organization representing America's top companies
investing in Korea. The Council is made up of senior executives
of U.S. companies from every business sector that are major
investors in Korea and are firmly committed to the Korean
market. The Council has led efforts in support of the U.S.-
Korea Free Trade Agreement since the start of negotiations in
February 2006.
As signed into law by President Obama last week, this
agreement successfully addresses many of the market access and
regulatory barriers that have long presented challenges to the
expansion of trade and investment between our two countries.
KORUS further strengthens our shared commitment to open trade
and commerce and holds extremely positive implications for both
large and small American business.
We salute the work of Congress and the Subcommittee on Asia
and the Pacific in ratifying the FTA and we await passage of
the agreement in the Korean National Assembly. The U.S.-Korea
FTA is the most commercially significant trade agreement
America has entered into since NAFTA. Korea is America's
seventh largest trade partner with $88 billion in two-way trade
last year; the fifth largest market for U.S. agriculture goods.
And last year, our ag. exports totaled nearly $5 billion.
South Korea is also the second largest market for U.S.
services in Asia and U.S. cross border export of services in
Korea total $12 billion in 2010. Conservative estimates hold
that KORUS has the potential to create as many as 70,000
American jobs, a conservative figure that does not capture the
full potential for growth. The U.S.-Korea FTA is vital not only
for creating new jobs and growth, but also to halt the erosion
of U.S. market share and competitiveness as South Korea enters
into preferential trade agreements with other major economies.
This new partnership addresses Korea's complex regulatory
system and other non-tariff barriers with strong provisions and
protections that open the market, protect U.S. interests and
set the bar higher for future trade pacts. This is an important
opportunity for the United States to shape the future trade
agenda in Asia.
Uniquely positioned in the region, Korea will now serve as
a launching pad for U.S. goods and services. With strong rule
of law, enhanced intellectual property protection, a high
education rate, and a passionate workforce, Korea will enhance
U.S. ties to all of northeast Asia in addition to its own
trillion-dollar marketplace.
KORUS affirms Korea as the only country in northeast Asia
with a U.S. free trade agreement, thus providing American
workers, farmers and companies with an important edge over our
global competitors. Successful implementation of this landmark
agreement now stands as our primary concern. Before the FTA can
formally enter into force, both countries must demonstrate
their compliance with all obligations that will take effect on
Day 1. This includes specific tariff revisions and product-
specific rules as well as administrative and regulatory changes
covering issues such as Customs and procurement.
Immediately following President Lee's signature, officials
from both nations will schedule comprehension discussions to
review bilateral law adjustments and following this, the
exchange of formal diplomatic notes will empower the agreement.
While these steps must be expeditiously carried out in order to
meet the first of the year deadline, this is only the beginning
of a much larger plan that must be executed. Understanding the
many challenges that will arise during this implementation
process, the U.S.-Korea Business Council is poised to
collaborate with government officials as well as our Korean
colleagues to discuss and resolve issues that have impeded past
agreements.
U.S. businesses, small and large, must have a clear and
navigable route to this fertile market and the Chamber is proud
to play a leading role in these efforts. Following the
implementation, a working level dialogue will be established to
discuss economic policies that affect both countries and give
U.S. companies a voice in the Korean marketplace. Korea wishes
to become a regional financial hub and in order to do this,
transparency within the market must be increased. Under this
new spirit of openness, U.S. business will thrive.
Mr. Chairman, Mr. Ranking Member, members of the
subcommittee, I greatly appreciate the opportunity to testify
on this expanding alliance. By demonstrating that we are
willing and able to embrace new opportunities in an
increasingly competitive market, we are reinforcing America's
economic leadership in the region. The U.S. Chamber and the
U.S.-Korea Business Council are firmly committed to working
with Congress and the administration to ensure successful
implementation of the U.S.-Korea FTA and to advance U.S.
interests in Asia and around the world.
Thank you very much.
[The prepared statement of Ms. Overby follows:]

----------

Mr. Manzullo. Thank you for your testimony.
Mr. Kim?

STATEMENT OF ABRAHAM KIM, PH.D., VICE PRESIDENT, KOREA ECONOMIC
INSTITUTE

Mr. Kim. Thank you, Mr. Chairman and Congressman
Faleomavaega and honorable members of the subcommittee for this
privilege to speak before you today about the future of the
U.S.-Korea alliance after the successful state visit of
President Lee and the ratification of the U.S.-Korea free trade
agreement by the U.S. Congress. This is an important occasion
for me on two respects. From a professional standpoint, my
organization, the Korea Economic Institute, for the last 30
years has served as an education and policy research institute,
has tirelessly worked to promote dialogue and understanding
between the U.S. and Korea.
From a personal standpoint, as one of the 1.7 million
Korean Americans that live in the United States, it was deeply
satisfying to see the ties between Korea and the United States
growing stronger and more vibrant. Building up this critical
relationship is a win-win situation for both countries and
peoples.
As requested by the subcommittee, I would like to focus my
statement on three basic issues: What are the political
dynamics that are shaping the efforts to ratify KORUS FTA in
South Korea. Number two, looking ahead to 2012 in South Korea,
how will next year's national assembly elections in April and
Presidential elections in December impact U.S.-Korea relations.
And finally, what is South Korean political sentiment on North-
South Korea relations?
First of all, what is going on in South Korea? Since the
U.S. Congress voted on the KORUS FTA, the South Korean National
Assembly has geared up to pass it as well. However, the ruling
Grand National Party and the liberal opposition have been
locked in a political struggle over its passage, causing delay
in the ratification process. The Democratic Party, the main
liberal opposition party, is obviously concerned about how
South Korean workers, farmers, and the small and medium
enterprise will be negatively impacted. And also they are
unhappy about the renegotiations that took place in December
2010.
Technically, the ruling of the Grand National Party could
unilaterally pass the KORUS FTA with their majority. The ruling
party leadership, however, faces popular pressure to build a
consensus rather than simply ramming through legislation.
Furthermore, threats by liberal opposition to use physical
force have delayed voting on the agreement.
Although the elections are not until next year, the
election politic season has already begun in South Korea and
politicians are increasingly sensitized to voters' perception
and attitudes. That said, the Grand National Party leadership
has announced that it intends to bring the free trade agreement
to a vote by October 31st and the general sentiment is that the
KORUS FTA will pass despite liberal opposition. For one, the
political sentiment in South Korea about the KORUS FTA is
majorly positive. According to a South Korean newspaper poll,
55.2 percent are in support, while 28.5 percent are against.
Clearly, there's a majority to support this.
Once Seoul ratifies the agreement, the hope is to have this
agreement enforced by January 1, 2010.
So how will the KORUS FTA position the U.S. vis-a-vis
Europe and China? Well, as Tami already explained, it will
level the playing field and already as we know the European
Union has already passed a KORUS FTA with South Korea. With the
passage of the KORUS FTA and its implementation it will put
U.S. companies and European companies on the same foothold.
KORUS FTA will also make U.S. companies more competitive,
increasingly competitive, excuse me, with Chinese companies,
but to have the U.S. regain its top position in South Korea
market will be unlikely. China is too far ahead in the South
Korean market.
But the greater ramification of this is political. It
reinforces the long strategic value and reinforces the strong
relationship that our two countries have. KORUS FTA also sets
the standard of openness, transparency, and rule of law as the
basis of other future U.S. engagement with the region. Finally,
and third, it reestablishes U.S. credibility as a regional
leader.
Next I turn to how will next year's election impact U.S.-
Korea relations? In 2012, the Republic of Korea will have two
major elections, the National Assembly election and the
Presidential election. Political pundits in South Korea
anticipate a major political shift. In the National Assembly
they assume that the Democratic Party, the opposition party,
will take a majority. In the Presidential election it is yet
unclear because it's so far ahead. But despite these changes,
the general understanding among most South Koreans is that
whoever comes into power a strong relationship with the United
States is important for three important reasons. One, South
Korea needs the U.S. as a balance against a growing and more
diplomatically aggressive China. Number two, North Korea
continues to be a grave threat to South Korea and regional
security. And North Korea's future with its leadership
transition is unclear. And number three, South Korea shares
common political and cultural values and have deep people-to-
people connections and have common global interests with the
United States.
Now I turn to what is the public sentiment in South Korea
regarding North-South Korea relations? Well, the general public
view about North Korea is very mixed. But in general, they
appear to be supportive of a policy based on no unilateral
economic assistance unless Pyongyang takes substantive move
toward inter-Korean talks and denuclearization. Last year's
North Korean attack on the Cheonan and Yeonpyeong Island was a
defining moment for many South Koreans. Some have called it
South Korea's 9/11. Up to that point South Koreans were aware
that North Korea's military threat existed, but never believed
the North Koreans would actually attack, and yet last year they
did.
Polls illustrate that after the Yeonpyeong Island, almost
70 percent of the respondents supported some kind of limited
response. Another poll indicated that up to 80 percent of poll
respondents supported that more military action should have
taken place. All this said, South Koreans also do not support
war on the peninsular. Plus, most South Korean citizens are
distrustful of Pyongyang and many anticipate North Korea will
cause more provocation as we move into 2012.
Thank you very much for this opportunity. And I'm open for
any questions, Chairman.
[The prepared statement of Mr. Kim follows:]

----------

Mr. Manzullo. Thank you. We're going to start with Mr.
Kelly.
Mr. Kelly. Thank you, Mr. Chairman. And I'd like to thank
the panel for being here today. I've been accused of having
some type of a personal interest in the KORUS moving forward
and I have no problem with that. I'm a Hyundai Kia dealer in
addition to serving in Congress. So I would gladly say that I
have a personal interest not only me, but the 60,000 Americans
that are directly involved with the production in Alabama and
Georgia of those two products.
My real concern though, I think, and we face the same
challenges together when we look at our two countries, we're
much closer than most people realize, both strategically,
geopolitically, and especially when it comes to elections or
reelections. So it seems to me the discourse is more driven
toward be careful what you say and what you do because it may
have a bad reflection.
I am very concerned, Mr. Kim. In the Republic, what would
be the problems for getting the agreement ratified? And I know
that you spoke--right now, there's even threats of violence and
some aspects of the agreement. I know that geopolitically it
did have and I know in the last elections it had tremendous
effects on the outcome of the elections because I think in the
Republic they felt, look, we made concessions. President Obama
came over. We agreed to do certain things and then went back to
the United States and it sat for a long time before it was
voted on and we did, just a couple of weeks ago in a bipartisan
effort, passed KORUS and President Lee was here and gave one of
the best addresses that I have heard from a person coming in
from the outside and talking to the Congress.
But for the American people to understand, what would be
now the holdup and what are some of the challenges that
President Lee faces from the opposition and knowing even that
the agreement really was crafted by his predecessor to start
off that way. So I'm trying to understand okay, we have an
agreement, we've come together. It's gone through the Republic.
It's come over to the United States. We've approved it. Now
it's going back to Korea. Now what are the challenges that we
face right now and if you could just maybe articulate those a
little.
Mr. Kim. Sure. Congressman Kelly, the challenge is
basically election season has started in South Korea and right
now the ruling party is in a very vulnerable position of losing
its majority because of low support. And so in order to
consolidate the Democratic Party, the opposition, in order to
consolidate their base as well as win the support of those who
may negatively impact the KORUS FTA in South Korea, the
politicians in the opposition parties are making a political
stand right before the vote of this, the ratification of this
agreement.
And so in many ways this is domestic politics, but in terms
of getting the votes to get this ratified, the Grand National
Party has the votes to get this through and passed. And so I
don't think from our understanding, the general understanding
is that the Grand National Party will be able to get this
through and they will be able to hopefully get this implemented
by the January 1st time line. But it's, as you know, the old
saying goes all politics is local and so a lot of folks are
concerned about how this will impact next year.
And so a lot of--even Grand National Party members are a
little bit skittish or assessing to make sure that this
agreement--that they can make a good push and good value effort
and sell to the Korean people that this is good for everybody.
And so I think this is much more domestic politics than the
substance of the agreement. Everyone understands what this is
about.
Mr. Kelly. And I understand that. I mean we really share a
lot. We have a lot more in common, especially when it comes to
politics than most people understand. It really would be nice
and I think that both sides all agree on this, if we could quit
worrying about reelections and start worrying about getting
things fixed it would really help both our countries
dramatically. So thanks so much for being here and I apologize.
Thank you so much for being here.
I know the effort was a grand effort to get this done. I'm
not sure I understand why, but now after being here 9 months
it's starting to become a little more clear to me. But thanks
so much for your efforts. I think we're moving in the right
direction. It's great for both our countries to move forward.
So thanks so much.
I yield back, Mr. Chairman.
Mr. Manzullo. Thank you. Congressman Faleomavaega has
deferred to Mr. Chabot so he can ask his questions and then run
off to another meeting at noon.
Mr. Chabot?
Mr. Chabot. I thank the chair and I also thank Mr.
Faleomavaega for giving me the time. Ambassador Hill, I've got
five questions and I'd like to get five answers. If you could
keep them relatively brief, we'll try to get them all in in the
5 minutes I've got.
Number one, in 2008, according to The Washington Post,
fresh traces of highly enriched uranium were discovered among
the 18,000 pages of documents submitted by North Korea to the
United States. Yet, at that time you chose as the U.S. chief
negotiator to ignore this evidence on North Korean HEU program
and to focus solely on plutonium processing.
In addition, in November last year, visiting American
scientist Siegfried Hecker was shown an HEU facility in North
Korea that reportedly left him stunned. In retrospect, wasn't
your decision not to pursue the HEU topic in negotiations with
the North a huge mistake?
Ambassador Hill. Actually, we were concerned about HEU for
a number of years when the evidence first started coming in.
The question was we didn't know how far they had gotten. The
fact was that we know they were producing plutonium and that
was a clear and present danger. So the policy became to do
something to stop the plutonium, but keep the door open to
discuss the uranium enrichment in particular. And the reason
all the negotiations broke down in '08 was over the issue of
highly enriched uranium because we did get these indications,
as you said, trace amounts on documents.
We also got trace amounts on some actual samples that we
were able to get back from the North Koreans. So we insisted
that we could not accept only access to known facilities. We
insisted that we needed access to unknown facilities. The North
Koreans wouldn't give us that access and therefore we actually
ended the talks.
Mr. Chabot. Thank you. I'm going to go ahead and give you
all four questions now and you can take whatever time to answer
all four because I'll never get through these in 5 minutes.
Last February, in retirement, you published an article
stating that ``North Korea had lied repeatedly to not only the
United States, but also to China, Russian, Japan, and South
Korea and that North Korea has no genuine interest whatsoever
in fulfilling its nuclear disarmament responsibilities.''
That's all your quote. Doesn't repeated North Korean duplicity
raise questions about the whole negotiating process including
the Six-Party Talks? That's the second.
Next question, number three. In a February 2011 article,
you stated that North Korea was ``a state whose treatment of
its own citizens is among the most abysmal in the world.''
Given you acknowledge that Pyongyang is one of the leading
human rights abusers in the world, do you still believe it was
the right decision to minimize human rights and religious
freedom concerns in your negotiations with the North Koreans?
Next question. According to his memoirs, Vice President
Cheney considered the North Korea built reactor in Syria to be
such a threat to peace that he urged President Bush to take it
out in a military strike. Now we know the Israelis, of course,
took that action. The Vice President viewed the engagement
policy with North Korea advocated by Secretary of State Rice
and yourself as naive and a major foreign policy mistake. How
would you respond to Mr. Cheney's concern.
And finally, in October 2008, you succeeded in your
advocacy that North Korea be removed from the State Sponsors of
Terrorism list, despite the major distress this caused our
Japanese ally due to the abduction issue. In exchange, you
reportedly received North Korean assurances that they would
accept a transparent verification process for denuclearization.
You did not, however, according to press reports, receive North
Korean assurances in writing to the reported dismay of then
Secretary of State Rice. The North Koreans reneged on their
assurances to you. By the end of 2008, the Six-Party Talks had
fallen apart and they have not reconvened for the past 3 years.
Given the results, would you now admit that removing North
Korea from the list of State Sponsored Terrorism was both
premature and a mistake. And you have 26 seconds to answer all
four questions.
Ambassador Hill. Let me do my best.
Mr. Manzullo. Ambassador, you have as much time as you
need.
Ambassador Hill. Thank you very much. First of all, with
regard to the issue of North Korean duplicity, you bet, there
was North Korean duplicity. But often when you're conducting
negotiations, you're doing it for a number of reasons. One of
the reasons the United States tried vigorously to conduct these
negotiations was to demonstrate to other partners, especially
in South Korea that we were prepared to do all we could on a
peaceful track through diplomatic track to see if we could make
progress. If you looked at polling data in South Korea in 2003,
2004, you could see that the United States was considered,
along with North Korea, considered one of the reasons for the
North Korea nuclear problem.
So to see the United States as being held to blame by a
substantial percentage of South Korean citizens suggested that
we needed a policy that had a stronger diplomatic track. It
does not mean that we were naive about the possibilities of
getting the North Koreans to give up their nuclear weapons, but
we did hope that through a step-by-step process we could make
some progress. I believe we did make some progress in terms of
shutting down the clear and present danger of plutonium
production because they were producing plutonium and then using
it in nuclear devices. So I think that was important to
continue and I do not believe that was a mistake. And I think
it was very important to show the South Koreans our commitment.
Today, we have a situation where the North Koreans are
still duplicitous, but the United States is not being held to
blame by any substantial number of people in South Korea. We
are together with South Korea. We're working together and I
think it's a much better environment as a result of our
attempting to pursue this.
Secondly, with respect to human rights, I stand by my
statement North Korea is one of the most abysmal human rights
abusers in the world. And there's no question about that. And
any country that has that kind of record is going to have
difficulty in achieving normalization with us, for example. And
I made very clear to people at the time, in fact, I gave
assurances that if we ever got to the point where we were going
to go beyond the nuclear negotiations and try to somehow
normalize bilateral ties with North Korea that we would address
the human rights forthwith with a separate track to deal with
human rights. That is, we were not prepared to go ahead and
just normalize with North Korea given its human rights track.
Now arguments can be made well, why didn't you make human
rights, why didn't you tie it to the nuclear issue. The nuclear
issue was a very tough issue to make any progress as some of
your questions suggest. You're absolutely right. We didn't feel
that adding human rights in the context of the nuclear
negotiations would make progress either on human rights or on
nuclear and besides, our other partners were opposed to that.
So we made very clear to the North Koreans, we raised human
rights on a number of occasions with them, on many occasions,
and we made very clear that if we got to the point where we
were prepared to improve bilateral ties with North Korea that
we would have to deal with the human rights issue.
I understand that former Vice President Cheney did not
support the issue of the negotiations with North Korea. I was
an Assistant Secretary taking instructions from the Secretary
of State and the Secretary of State was taking instructions
from the President. So Vice President Cheney's views on this,
he really should take them up with the President or with the
Secretary of State and not with the person who was implementing
them which was me.
With respect to the issue of the Syrian nuclear facility,
you're quite right. There was apparently a reference in Vice
President Cheney's book to him suggesting that he felt we
should take out the facility on our own and as I understand
from his book, other people in the situation room, including
the President didn't support him. Again, I think this is a
matter between former Vice President and the former President
to sort out what that argument was about.
Is there something else I haven't addressed? I just want to
make sure--oh yes, I'm sorry, the terrorism list. The issue of
the terrorism list, the issue of state sponsors of terrorism,
it's essentially a list that says if a country is a state
sponsor of terrorism, for example, if a country is giving
material aid to terrorist groups, that country is ineligible
for U.S. assistance, also ineligible for the U.S. to vote
affirmatively on World Bank loans and other issues like that.
So the first question was from the point of view of the
statute, was North Korea eligible to come off of the statute?
According to the committee which had nothing to do with me,
nothing to do really--it was an inter-agency committee. The
assessment was that North Korea was not assisting terrorist
groups. There were various reports that North Korea might be
helping groups in the Middle East. These assessments were
tracked down and it was determined that they were not assisting
them.
So then becomes the political question are you prepared to
take them off the list if you could feel you could make some
political gains elsewhere. And the decision was made over my
pay grade. The decision was made that if we could get North
Korea to first of all end the plutonium production, blow up the
cooling tower, these actions, that we would at least be able to
end the plutonium threat. We never accepted verbal assurances
or even written assurances on the issue of access to undeclared
sites. We needed real assurances on access and we never got
them and that's why the negotiations fell apart.
When the negotiations did fall apart, I think everyone
understood, the South Korean public, everyone understood it was
not for our lack of trying, it was not for our lack of good
faith negotiation, the blame was squarely put on the North
Koreans and as a consequence, no one has blamed the U.S. and
the U.S.-ROK, Republic of Korea alliance is as strong as it has
ever been.
Mr. Manzullo. Thank you, Mr. Ambassador.
Mr. Chabot. Mr. Chairman, thank you again for your time. If
I could just say one final thing, at least this one member's
opinion is that U.S. policy toward North Korea, particularly
with respect to their nuclear program has been flawed and
wanting, not just in this administration, but previous
administrations as well, if you look at the results. And I'll
yield back. And thank you and the ranking member for your
generosity.
Mr. Manzullo. Before we go to Mr. Faleomavaega, Mr. Kim,
you've got your family here?
Mr. Kim. Yes, I do.
Mr. Manzullo. Do you want to introduce them to us?
Mr. Kim. My wife and my son and my daughter and their two
friends are over there in the left corner.
Mr. Manzullo. Welcome. It's good to have you here. Are your
children taking notes? Yes, of course, you bet, you bet.
Mr. Faleomavaega.
Mr. Faleomavaega. Thank you, Mr. Chairman, and I do want to
again thank the distinguished chairman of the Subcommittee on
the Middle East, a very, very important and dear friend,
Chairman Chabot, for raising the questions concerning our
hearing this afternoon.
Mr. Chairman, I have so many questions I don't know where
to start. I think we sometimes compartmentalize issues and to
think that everything is all laid out in a real neat package,
Korea is not one of those packages. It is very, very
complicated. The times that I've had the privilege of visiting
with the leaders and the good people of Korea for all these
years, Mr. Chairman, I must say that it's such a difficult
situation, the fact that Korea being divided as it is, it
wasn't because of the Koreans doing. It was something that
because of two more powerful forces caused the division that we
now have in North and South Korea. It is very, very
unfortunate.
I'd like to raise this question first. You know, several
weeks ago we had a hearing here and I'd like to invite our
witnesses to think outside the box on this situation, this
observation that I've made. We talked about the dangerous
situation in North Korea. We talked about the involvement of
China, the involvement of Japan, the involvement of the United
States.
And when all this dialogue was going on, Mr. Chairman, not
one expert witness mentioned anything about South Korea, as if
the people, the leaders of South Korea had no say in the
process, no input, no sense of appreciation and understanding
that by thinking outside the box we need to have South Korea to
be just as involved and not just as dependent on so much of
what China thinks or what Japan thinks, or what Russia thinks.
What about the people of South Korea?
When I raised the issue, it was a little of a surprise from
our expert witnesses, oh yeah, yeah, South Korea is important,
too. We need to talk about their involvement in the
negotiations process.
Chris, you know more than anybody, the years that you've
spent in negotiations with North Korea--again, thinking outside
the box, North Korea is already a nuclear country. It's a
member of the nuclear club, along with the permanent members of
the U.N. Security Council, along with Pakistan, India, and
Israel. And here, we're telling North Korea, oh, put your
nuclear bombs back in the box and pretend like as if they
already do not possess eight nuclear weapons, have the
capability only 30 miles away with 12 million people living in
Seoul, that if there ever is to be a conflict in the Korean
Peninsula, it's a lose-lose proposition.
I don't care how you do it, I don't care how much military
assistance we give South Korea. The bottom line in my humble
opinion, Mr. Chairman, the Korean people will suffer. The
Korean people will die and all these negotiations that we talk
about and I would like to say to my friend, Chris, I have very
serious questions about the relevancy of the Six-Party Talks.
I can understand why China should be involved because China
borders North Korea. I understand why we should be involved. I
can understand why South Korea should be involved, but I don't
understand why Russia and Japan should be involved. It's a
beautiful understanding of oh, we have to have a multi-lateral
approach to the situation of the Korean Peninsula, but in my
humble opinion, I don't understand why the relevancy of having
Six-Party Talks for all these years. And where have we ended up
after negotiations? Zero.
Chris, could you care to comment on this?
Ambassador Hill. Well, first of all, I think it was
important and it remains important to have all the countries in
the region taking ownership of the problem. I do not accept the
notion, first of all, that somehow this is just the U.S.
problem. I think for that reason it was very important to bring
in other countries, especially the Republic of Korea because
the peninsula belongs to the Korean people.
And we have a real role there. We have a security
commitment. We have troops on the ground there. We have to be
involved in that. But I think it was very important to bring
other actors, including the South Koreans to the table.
Secondly, I think if you look at Japanese security
concerns, clearly some of them emanate from threat in North
Korea, so Japan, I think clearly needs to be at the table. I
have concerns about whether we have been able to work out
precisely the same approaches, but I think generally speaking,
the U.S. and Japan have worked well on the issue of North
Korea. It's true, there were some differences over the
abduction issue as was previously discussed, but I think
overall, our relationship with Japan has not suffered from the
Six-Party process.
And finally, I think the Russians have some potential
leverage with the North Koreans. I think that's also important.
And finally, I'd like to say, Mr. Faleomavaega, that I really
cannot accept the notion that we need to simply sit back and
accept that North Korea is quote deg.``a nuclear
power.'' I think North Korea's nuclear ambitions are inherently
unstable, unstable within North Korea, unstable in the Korean
Peninsula, unstable to the neighborhood, and ultimately to the
world. I think we have to continue to work on it.
I grant the point you made which is that we haven't solved
it. I do believe getting rid of the plutonium capability which
is not totally gotten rid of, but that threat is diminished.
They have not been in the kind of breakout scenario that we
worried about earlier, that some 30 kilos would become 60 or
become 160 kilos. So I think we made some progress there, but I
accept your point that this has been a really tough one and not
enough progress has been made. But I think in diplomacy, as in
other endeavors in life, you have to answer the question
compared to what? And what else--what other track exists that
would get us further on the way?
So I think we have done our best to work with other
countries. I think that's a key track and as I suggested in my
testimony, I think we really need to press the Chinese to take
far more ownership of this problem.
Mr. Faleomavaega. I guess my time is up, Mr. Chairman. I'll
wait for the second round. I have so many other things I wanted
to ask, but my time is up. I'll wait. Thank you, Mr. Chairman.
Mr. Manzullo. Thank you. I have a question for Ms. Overby.
Actually, it's a question to Ms. Overby and Mr. Kim.
Ms. Overby, you say in your written testimony that
opposition to the free trade agreement in Korea is mild.
Mr. Kim, you say opposition is intense. I realize there's a
lot of politics going on here and obviously the ruling party
has enough votes to ratify the agreement, trying to build a
consensus, but give me some political scenarios. Is it possible
this free trade agreement may not pass in Korea?
Ms. Overby. I'll start and then pass it to Abraham. I said
mild because I lived in Korea for 21 years and watched Korean
politics up close and personal. I was also very actively
engaged with the current opposition party, the Democratic Party
when they were in power with Roh Moo-hyun and they actually
negotiated this agreement. In fact, one of the DP leaders,
Chung Won-Kyung was Commerce Minister under President Roh and
he and I lobbied in this house, holding hands talking about how
good this potential free trade agreement would be for both
countries.
So I do find it a bit ironic that he and his party are now
staking out the opposite ground. But I do believe as Dr. Kim
said, it is very much politics. In fact, when I meet privately
with my DP friends, they pat my arm and say, ``Oh, Tami, you
know it's just Korean politics. At the end of the day, KORUS
will pass, don't worry. But we must play our role. We must have
our theater.'' And I believe what they're having and what
they're going to have the next few days with the Mayor election
and then with the ratification of KORUS is going to be very
good theater. But I do believe it will pass. I see no scenario
where it does not pass.
Dr. Kim?
Mr. Kim. Sure. When I meant intense, I meant emotionally
intense. And you will probably, as Tami mentioned, see this
kind of political theatrics appear, because it's very much
election politics. People are looking ahead to 2012.
I think as Tami pointed out, the fact that the Democratic
Party President actually negotiated the free trade agreement in
'07 is one factor that would suggest that the Democratic Party
will eventually vote, will allow a vote to occur. And also, the
fact that EU-Korea FTA passed. There was some opposition, but
it was allowed to be voted on and passed relatively quietly.
And if you look at the structure of the two agreements, they're
not exactly the same, but they're pretty same. And so the fact
that that was passed and implemented suggests that I think the
substance of the agreement is probably--there's some opposition
by the most extreme politicians, but in general, I think
they're willing to swallow, of course, FTA. But I think it's
more electoral politics than anything else that we'll be
seeing.
Mr. Klingner. Yes, sir. And this also gets to Mr. Kelly's
question, which is, why is there the opposition? I think three
main reasons. One is that many of the members believe it's not
in the best interest of their country. And that's fine. And
that's why there's a democracy. They should allow a vote on the
KORUS FTA instead of occupying the chairman's chair or seizing
his gavel in order to prevent an actual vote.
But other reasons, I think, are political. One is that the
DP and the DLP want to maintain a left-of-center alliance to
lead into next year's elections, so they see that they can
garner more votes from the left-of-center voters by being
opposed to this agreement. Another factor is that they want to
force the GNP to railroad the KORUS through ratification. The
GNP has the majority of the votes as given to them by the
populace of South Korea. They can vote and they can use their
majority.
And yet, the majority party is afraid of doing that because
then they will be accused of acting like the authoritarian
regimes of the past. And that actually has resonance with a
large part of the populace. So they are very nervous about
acting like a majority party.
Also, I think the DP wants to do that, and then they can
look like the aggrieved party, that they were the victims of an
authoritarian regime. It's very similar to World Cup soccer
players who feign injury and with much theatrics fall to the
ground, trying to induce a penalty. And one, I think, can't
help but wonder if on the left-of-center resistance there's not
some strain of anti-Americanism because the KOREU, Korea-EU
FTA, was very, very similar, and there were very few protests
against it within the National Assembly and out on the streets.
And one thinks also back on 2008 and the massive anti-U.S. beef
demonstrations and yet, at the time, there were far more
serious dangers from Chinese products. There were carcinogenic
chemicals in their kimchi, parasitic eggs and other products,
Chilean pork had carcinogenic chemicals and yet we didn't see a
single protest against them. So I think there was also a strain
of anti-Americanism in that resistance. Thank you.
Mr. Manzullo. Did you say they imported kimchi? Koreans
imported Kimchi?
Mr. Klingner. Yes, sir. From China. And there have been
parasitic eggs in that. There were carcinogenic chemicals in
Chinese seafood and some of the Chinese exporters were putting
lead in the fish in order to weigh it down so that it would
cost more. And also Chinese melamine was also seen as a danger,
particularly to infants.
Mr. Manzullo. Right before lunch. Mr. Kelly.
Mr. Kelly. Thanks, Mr. Chairman. I appreciate that. I think
you've answered most of the questions. Dr. Kim, you were
talking about these legislation would have to be taken care of
before the KORUS could go forward, but the more I listen to the
testimony, this is the third time I've said this, we are more
alike than we are different and I think sometimes in the world
the shape of your eye or the color of your skin makes you think
you're different, absolutely not true. We're all the same.
When I look at the political process and what you're going
through and the idea that we can somehow paint the other side
as the problem and not really address the problems together to
get them solved is the key to it. But I've got to tell you, I
have a great affection for the Korean people because I know
since 1949, 1950, we really have been very close allies and
brothers in arms in almost every conflict and in every conflict
and we do rely on each other quite a bit for support. So you
all being here today and you're expressing it.
I think the message that we need to get across, not only to
the Republic, but also to those in the United States that don't
understand where it is we're trying to go is that at the end of
the day, this is so good for both of us and the upside is such
a dramatic upside that we need to get beyond these political
battles that we have and as we do face the same problems.
My friend, Tom Kim, is here today. It's so good to see you,
Tom. Tom has been so influential and has been so supportive in
our backing of this agreement.
So Mr. Chairman, I appreciate the opportunity to be here
and also our colleagues on the other side. I think we see the
upside of this and we understand it, and the ability to come
together and talk about it in an open forum like this is
critical. Not only to the United States, but also to the world
because we do work better when we work together. Thanks so
much. We appreciate you being here and I yield back my time,
sir.
Mr. Manzullo. Mr. Sherman from Sherman Oaks, California.
Mr. Sherman. Thank you. I want to thank you for having this
hearing in the wake of the U.S.-Korea Free Trade Agreement, or
so-called free trade agreement. Needless to say, we would focus
on that and it is a shame that we don't we have a single
representative of American workers here, but of course, that
agreement was never about American workers. It was only about
profits for giant corporations on both sides of the Pacific.
I'm sure it will achieve that purpose.
Mr. Hill or Ambassador Hill, one of the issues, now that
we've signed this agreement, both sides are supposed to enter
into discussions as to whether Kaesong and similar facilities
in North Korea will be considered part of South Korea for the
purposes of the agreement.
Now that would allow goods to come into our country duty
free produced some would say by slave labor, in any case
certainly not by those who are free to bargain over their own
working conditions. Now Appendix 22B, I believe it is, it had a
different number, says that before the executive branch can
agree to that, there is supposed to be some involvement of the
United States Congress. The current administration has issued a
statement stating that it would not finalize such agreements
without getting an affirmative vote by both Houses of Congress.
Is that statement binding on the next administration, legally
binding?
Ambassador Hill. Well, first of all, Mr. Sherman, it's
great to see you again. You may have missed the fact that I'm
no longer in the U.S. Government.
Mr. Sherman. I'm asking you as an expert. You were invited
because you are an expert.
Ambassador Hill. I would like to defer my answer on this
particular issue to some of my colleagues who are closer to it
than I am. I think----
Mr. Sherman. They're even further from being parts of the
administration than you are, but if one of them claims to have
expertise on the matter, happy to hear from them.
Mr. Klingner. Congressman Sherman, the KORUS does not allow
South Korea to declare Kaesong to be part of----
Mr. Sherman. No, it calls for serious negotiations between
the executive branches of both governments which may--designed
in the view of some to lead to that conclusion. The question is
whether Congress will have--congressional approval would be
necessary.
Mr. Klingner. Right. The witnesses, administration
officials from this administration and previous administration
have testified including before this committee that it would
require the approval, including legislative action by the----
Mr. Sherman. Legislative action. Did they ever say in
anything legally binding, that it would require the affirmative
vote of the majority of both Houses of Congress?
Mr. Klingner. I will look for the quote.
Mr. Sherman. The answer is no. They deliberately prevented
making that statement in anything legally binding. The
proponents of the agreement fought tooth and nail and with
great success to keep that out of the implementing legislation
and you can be sure that within this decade goods from Kaesong
will be coming into the United States as the current Ambassador
of South Korea to the United States told a rally years before
he became Ambassador to the United States. This is an agreement
that will put American workers up against North Korean workers
in fighting for jobs in the United States market. And I'm sure
that if we had had a representative of the American worker here
today that point would have been made before I came into the
room.
With that, I yield back.
Mr. Klingner. Sir, if I could comment? Deputy U.S. Trade
Representative Marantis testified in April 2011 that any change
to how Kaesong is treated under the agreement would require
Congress to pass and the President to sign legislation.
Mr. Sherman. Is that legally binding or is that--Mr.
Klingner, the point I'm making is that we got a press release
instead of binding legislation. The point I'm making is that
that statement is not binding on any administration, least of
all the next one. And the cleverness of the proponents in
giving us a press release instead of a provision in the
implementing legislation demonstrates how successful they've
been at achieving profits from major corporations and a loss of
jobs for the middle class. I yield back all my time.
Mr. Manzullo. Mr. Klingner, did you want to further answer
his question?
Mr. Klingner. There's also been questions about the rules
of origin in the KORUS FTA and the idea that the rules of
origin would allow North Korean products into the United
States. That would be in conflict with existing U.S. laws and
Executive Orders. For example, Executive Order 13570 declares
that the importation into the United States directly or
indirectly--indirectly, of course, covering components of any
goods, services, or technology from North Korea is prohibited.
And that any kind of import of North Korean products or
components would require the specific approval by a U.S.
Government agency.
Mr. Sherman. Mr. Chairman, if I could have some time after
the witness speaks?
Mr. Klingner. The existing regulations would not be
superseded by the KORUS FTA and there's text in the KORUS which
specifically identifies that it would not be in conflict with
existing rules and regulations.
As for the effectiveness of these rules and regulations,
during the past 5 years, the total imports into the United
States from North Korea is $8,000 of stamps and during the past
4 years, the imports are virtually zero. So I think the
regulations show that they have been quite effective.
Mr. Sherman. Mr. Chairman, can I address that?
Mr. Manzullo. Sure.
Mr. Sherman. First of all, the known imports from North
Korea are $8,000. We have no idea how many North Korean
components are contained in goods that come here from China,
South Korea, Britain, or anywhere else. To stand here and say,
sit here and say that we have been 100 percent effective on
every item other than postage stamps is to misconstrue the
practical world.
Second, this committee and its chairwoman and I have
introduced legislation to make those sanctions against North
Korea statutory. Those efforts have been thwarted by the
proponents of this agreement so that all of the Executive
Orders you talk about can be waived by this or some other
administration and the executive branch has been far less
interested in sanctions than has this Congress and far more
willing to accommodate multi-national corporations.
But then finally, you claim that we will not be in
violation of this agreement when goods partially made in North
Korea and partially made in South Korea come into the United
States. Yes, our current Executive Order, subject to change by
a decision of just one individual, without any congressional
input, but our current Executive Orders would block that at the
border. That would put us in violation of the agreement and
allow South Korea to take back some of the concessions they
made, putting enormous economic pressure on the United States
to relent. We've been through this already----
Mr. Manzullo. I'm going to be unrelenting here and go on to
Mr. Faleomavaega.
Mr. Sherman. I want to thank you for the extra time, Mr.
Chairman.
Mr. Faleomavaega. Thank you, Mr. Chairman. I think Mr.
Sherman has made his point and his concerns concerning some of
the provisions there in the free trade agreement and I'd like
to follow up just for my own better understanding of the
specifics. And his concerns, and correct me if I'm wrong, Mr.
Klingner, Executive Orders have to have some guidance from the
statutory provision that allows or authorizes the President to
issue that Executive Order.
My point is that isn't there a provision in the agreement
or by law, as you have read earlier, that the Congress has to
pass any conditions on anything or products coming out of North
Korea. I think we've put it pretty clear that it's not to be
allowed to be imported, to come to the United States.
Can you, for the record, can you clarify that a little
better?
Mr. Klingner. Yes, Annex 22-B points out that for any
additional, any outward processing zone to be included, whether
it's Kaesong or some other area outside of the borders of South
Korea, there would first have to be an agreement by a bilateral
committee, U.S.-South Korea committee that couldn't even meet
until 1 year after entering the force. If the U.S. team agreed
that Kaesong or others should be included, that would require
the U.S. team to agree that North Korea's environmental
standards, working standards had it made progress on human
rights, had it made progress on denuclearization, all of those
are requirements. Even if the U.S. team agreed to that, then it
has to be--the executive branch has to receive approval by
Congress.
Mr. Faleomavaega. It still has to come back to Congress for
final approval.
Mr. Klingner. Yes. And as for Mr. Sherman's point that the
U.S. rules, regulations, etcetera could be in conflict, that's
not the case because the KORUS FTA cannot override or even be
in conflict with current U.S. laws prohibiting the import of
North Korean products or components because the KORUS contains
text specifically allowing the U.S. to do that.
Article 23.2(b) says nothing in this agreement shall be
construed to preclude a party from applying measures that it
considers, which is a very low standard, necessary for the
protection of its own essential security or the protection of
its own essential security.
Article 22.8.4 says no provision of this agreement shall
prevent the party from limiting or prohibiting the importation
of the good of the nonparty from the territory of the other
party. So there's a lot of various----
Mr. Faleomavaega. Would be correct, while I can appreciate
my colleague's concerns about the importation of products that
are manufactured from North Korea, there are provisions in the
agreement to be absolutely certain that if there are to be
changes, it has to come back to the Congress for approval or
disapproval?
Mr. Klingner. Yes, sir.
Mr. Faleomavaega. And I just wanted to make sure for the
record that we're clear on that. I was listening and trying to
sense what his concerns are about as if we're allowing this to
be an exception, but from what you've just shared with us, we
appreciate your sharing with us that provision of the free
trade agreement very clear in my opinion.
I have another question I wanted to raise with our
witnesses, Mr. Chairman. As I've said, thinking outside the
box, is our number one concern about the nuclear issues in the
Korean Peninsula? That always seems to be the number one
concern that we have, our Government as well as the governments
in the region about North Korea having the capability of
possessing or creating nuclear weapons.
Two weeks ago, the President of Kazakhstan invited me to
attend a world conference on getting rid of nuclear weapons
altogether. Now I'm very concerned simply because I'm probably
one of the few Members of Congress who has ever been to Ground
Zero where we conducted nuclear tests in our history. I've been
to the Marshall Islands where we literally blew up those
islands to pieces, leaving several hundred Marshallese people
for the rest of their lives subjected to nuclear radiation,
where we exploded the first hydrogen bomb. That was 1,300 times
more powerful than the bombs that we dropped in Nagasaki and
Hiroshima; where we detonated 67 nuclear bombs in the Marshall
Islands. That bomb was so devastating which was called the
Bravo Shot, the nuclear cloud floated and it ended up with
strontium 90 in milk products in Minnesota and Wisconsin.
And so what do we do? We immediately put a stop on our
nuclear testing program in the Marshall Islands, and we decided
to send it to Nevada where we conducted an additional 1,000
nuclear detonations, but this time underground thinking that
maybe it's safe and well, when in actuality the downwinders
until to this day, there's very serious questions about the
higher rate of cancer among those people living in southern
Utah as well as in other parts of the State of Nevada as a
result of our nuclear testing program.
The French, after detonating 17 nuclear bombs in Algeria,
they got kicked out of Algeria where the Algerian people were
fighting for their independence and where 1 million Algerians
lost their lives to fighting against French Colonialism. So
President de Gaulle decided to say well, we don't want to test
in Paris, can't do that in France, so they come to the South
Pacific where they exploded 220 nuclear bombs in the
atmosphere, on the surface, under the ocean in French
Polynesia. I personally went to Moruroa Atoll where the French
conducted these nuclear tests and it was not a very pretty
sight in my humble opinion, Mr. Chairman. To this day that
island is still contaminated. Thousands of Tahitians were also
subjected to nuclear radiation.
The President of Kazakhstan years ago invited me to come to
Kazakhstan. This is where the Russians exploded their first
nuclear bomb in 1949 and afterwards detonated 450 nuclear bombs
in Kazakhstan, subjecting some 1.5 million Kazakhs to nuclear
radiation. I say that nuclear proliferation, it comes to this
bearing, Mr. Chairman, that I think it has serious implications
on the very issue that we're talking about in the Korean
Peninsula.
Are we really serious about getting rid of nuclear weapons?
I commend the Obama administration for its efforts to lessen
the number of nuclear weapons that we now possess, between us
and the Russians. It is a fact that the President of
Kazakhstan, by his leadership and initiative, decided he didn't
want to be a nuclear nation where he could have had the fourth
largest number of nuclear bombs in his possession. It could
have been a nuclear country overnight if he wanted to, but no,
he wanted to dismantle it, thanks to the likes of Senator
Lugar, Senator Sam Nunn, and Chris Hill is very familiar with
this, where we assisted in getting rid of all the nuclear bombs
that the Russians left to the Kazakhs.
The bottom line that I wanted to raise on this issue of
nonproliferation, there's a double standard that we have here
in telling the rest of the world that you can't have nuclear
weapons, but it's okay for certain countries to continue
possessing nuclear weapons. Oh yes, we are making every effort
to get rid of nuclear weapons altogether, but boy, we're sure
doing it pretty slow. And of course, we go back to President
Reagan's famous axiom, ``trust, but verify.'' Well, how long
are we going to continue doing this with the fact that those
who possess nuclear weapons aren't exactly the best examples of
how we can really get rid of nuclear weapons altogether.
And I suppose this is also the implications why North Korea
wants to have nuclear weapons because of fear that we might
have nuclear weapons at its borders in South Korea. Of course,
we will never admit or deny or allow to think such is the case,
but those are the implications.
And coming out to my point, Mr. Chairman, and I want to ask
the witnesses, I think if there's ever a resolution to the
situation of the Korean Peninsula, 30 seconds, Mr. Chairman, I
really believe that the people and the leaders of North and
South Korea have got to be the ones to find that solution. I
don't think it's up to the United States and China and all the
other countries to think that they can do it for them. I really
believe if they're responsible for President Kim Dae-jung's
personal visit to North Korea and trying his sunshine policy.
Some say it failed, but the principle was there. And
unfortunately, the situation is still under negotiation, I
suppose, in that act.
And all I want to say, Mr. Chairman, is that, and I'm sorry
that I've gone way beyond my time, the peaceful resolution in
the Korean Peninsula has got to be on the minds and in the
hearts of the people of both North and South Korea. With that,
Mr. Chairman, I yield.
Mr. Manzullo. We want to thank the witnesses for coming. It
has been a very enlightening and wonderful discussion.
Ambassador, did you want to say something, because you had
pressed your button there?
Ambassador Hill. Let me just say in response to Mr.
Faleomavaega, I think every one in the world, most people in
the world share this aspiration for a nuclear-free world.
Certainly, we understand the point that those nuclear weapon
states also have an obligation and an obligation, NPT, to look
for ways that they also build down.
But I just want to make it very clear that the North
Koreans have not embarked on this path for some sort of defense
purposes. No country in the region, South Korea, Japan, to name
the two main countries there, have nuclear arsenals. And for
North Korea to develop one is very dangerous and destabilizing
in the region and we need to keep focused on the task of
getting them to get rid of these weapons. And the way to do
that is to work with other countries in the region.
I completely take the point, however, that there is a role
in the overall process of negotiating with North Korea between
the--in the inter-Korean dialogue. There's a role for South
Korea to be working or negotiating with North Korea on a
variety of issues. but South Korea is also a very--member in
good standing of the Six-Party process, consults very closely
with us, consults very closely with the other parties and I
think what we all need to do is not allow a situation where the
North Koreans can somehow divide and conquer or go shopping for
various different configurations of countries that we all need
to stand united in the fact that we cannot allow this country
that cannot even feed its people to be building nuclear
weapons.
Mr. Manzullo. Mr. Klingner, go ahead.
Mr. Klingner. Mr. Faleomavaega, thank you very much for
your very expansive and heartfelt thoughts. I'm a Northeast
Asia analyst so I tend to remain in my own little box rather
than having such an expansive view, but perhaps just to point
out, I think, a difference between North Korea's nuclear
programs and all of the others you mentioned, is that North
Korea vowed it would never pursue nuclear weapons programs, and
actually signed four or five documents vowing it would never
pursue nuclear weapons programs. And then under the Six-Party
Talks, they signed three agreements that they promised to give
up the programs that they had vowed never to pursue in the
first place.
So the requests of the United States and its allies are
simply to ask Pyongyang to live up to its agreements, to
abandon its nuclear arsenal, and that's, I think, a very direct
request and that's what we're hoping North Korea will do,
although as Ambassador Hill said before, there's not a great
deal of optimism that that will be successful, but I think it
is still a pursuit that we need to try to achieve with all the
efforts that the United States Government can use as well as
those of our allies.
Mr. Manzullo. Thank you very much for the testimony and
this subcommittee is adjourned.
[Whereupon, at 12:36 p.m., the subcommittee was adjourned.]

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