Northeast Asia Peace and Security Network DAILY REPORT For Wednesday, October 21, 1998, from Berkeley, California, USA

I. United States

1. Light-Water Reactor Project

The Associated Press ("JAPAN TO RESUME NUKE AID TO NKOREA," Tokyo, 10/21/98) reported that the Japanese Foreign Ministry said that Japan signed an agreement Wednesday to resume payments for the project to build light-water nuclear reactors in the DPRK. Chief government spokesman Hiromu Nonaka announced the decision to resume funding, saying that the project is the best way to keep the DPRK from developing its own nuclear weapons. An anonymous Foreign Ministry official said that Terusuke Terada, Japan's ambassador to the Korean Peninsula Energy Development Organization (KEDO), signed the resolution on funding in Tokyo.

2. Four-Party Peace Talks

The Associated Press ("KOREA PEACE PACT TALKS PRODUCE LITTLE PROGRESS ON FIRST DAY," Geneva, 10/21/98) and Reuters (Elif Kaban, "KOREA PEACE TALKS RESUME TO BREAK STALEMATE," Geneva, 10/21/98) reported that the four- party peace talks for the Korean peninsula resumed in Geneva on Wednesday with little sign of early progress. At the end of the first day's discussions, ROK officials said only that the talks were "business-like and constructive." At the end of the morning session, ROK delegation leader Park Kun-woo said that it had proceeded smoothly, although he did not elaborate. Before the session, Park, who is chairing this round of talks, stated, "The four-party talks have great importance for peace and stability in and around the Korean peninsula. I'll do my utmost to move forward the session." He added that an agenda had yet to be set. DPRK and US officials continued to hold bilateral discussions into the evening. Unnamed officials said that the DPRK delegation brought up the issue of US troop withdrawal again at Wednesday's talks. Opening the talks, Jakob Kellenberger, the Swiss secretary of state for foreign affairs, proposed opening a humanitarian corridor across the demilitarized zone to ease the flow of aid to the DPRK. He urged the parties to discuss the proposal "to facilitate direct distribution of humanitarian aid to North Korea by offering logistical support for and monitoring of relief goods transiting through the north-south border." The talks are expected to last until Sunday.

The British Broadcasting Company ("THIRD TIME LUCKY FOR KOREA PEACE TALKS," 10/21/98) reported that diplomats said that the prospects for any progress at the latest round of four-party talks in Geneva are slight. An unnamed ROK official based in Geneva stated, "It is still too early to say if we can expect success." He added, however, "the fact that we are continuing a dialogue is a good thing." PRC Foreign Ministry spokesman Tang Guoqiang stated, "The Chinese side has always maintained the establishment of a new peace mechanism in place of the old attitude is feasible."

3. Remains of US Soldiers from Korean War

PRNewswire carried a Press Release (Veterans of Foreign Wars of the U.S., "VFW TO VISIT NORTH KOREA FOR MIA JOINT RECOVERY OPERATION," Washington, 10/20/98) which said that Kenneth A. Steadman, the Executive Director of the Washington office of the Veterans of Foreign Wars (VFW), will join a small group representing family and veterans organizations on a four-day visit to the DPRK beginning Saturday, to observe operations to recover the remains of missing US servicemen from the Korean War. Representatives from the VFW, the American Legion, the Chosen Few, the Korean War Veterans Association, the American Veterans Committee, the Association of Korean War Families, and the Coalition of Korean War Families will depart the US on Wednesday, October 21. The group participated in a similar visit in October 1997. The operation will be the fifth and final joint recovery operation for 1998.

4. ROK Economic Crisis

Dow Jones Newswires (US ENVOY: S. KOREA DOESN'T NEED $8B IN BACKUP LOANS - REPORT," Seoul, 10/21/98) reported that the Korea Herald said Wednesday that US Ambassador to the ROK Stephen Bosworth said Tuesday that the ROK does not need the US$8 billion in back-up loans promised by the US and 12 other nations, in view of the country's growing foreign currency reserves. Bosworth stated, "The money is simply not needed...there is no reason to borrow the money and pay interest if it's not needed." He added, "Without an adequate social safety net to cushion the worst effects of recession and rising unemployment, it will be much more difficult for Korea to raise productivity and regain international competitiveness." Bosworth also stressed the importance of a strong US- ROK security alliance and coordinated bilateral efforts for greater engagement with the DPRK.

5. PRC-Taiwan Talks

The Associated Press (Christopher Bodeen, "TAIWAN'S LEADER PRAISES CHINA TALKS," Taipei, 10/20/98) reported that Taiwan President Lee Teng-hui called Tuesday for expanded dialogue with the PRC in wake of chief envoy Koo Chen-fu's recently completed visit. However, Lee added that relations with the PRC can improve only if the PRC recognizes Taiwan's political independence. According to a survey commissioned by a ruling Nationalist Party foundation, more than 85 percent of respondents said that they approved of the visit and more talks. More than 65 percent, however, said that if Lee visited the PRC, he should do so only in his capacity as Taiwan's president.

6. India-Pakistan Talks

Reuters ("INDIA, PAKISTAN SEEK TRUST OVER NUCLEAR ARMS," New Delhi, 10/20/98) reported that Indian officials said Tuesday that India and Pakistan have planned a set of confidence-building measures to reduce the prospects of conflict. An unnamed Indian foreign ministry official stated, "There was a general agreement on both sides that you need CBMs (confidence-building measures). This is necessary for building a new security architecture in the region." Another Indian official said that, late Tuesday, Indian Prime Minister Atal Behari Vajpayee spoke with his Pakistani counterpart Nawaz Sharif by telephone and expressed satisfaction over the latest round of talks. The official added that India proposed a full range of measures at the talks, including an agreement to avert accidental or unauthorized use of nuclear weapons and early exchange of information on flight-testing of ballistic missiles. He added that Pakistan presented its own set of proposals. He stated, "Basically, from now to February the effort will be to see what are the areas where there is overlap and work on these."

7. Comprehensive Test Ban Treaty

The Associated Press (Tom Raum, "ALBRIGHT SEEKS TEST-BAN HEARINGS," Washington, 10/21/98) reported that the US Senate recessed for the year on Wednesday without holding a hearing on the Comprehensive Test Ban Treaty (CTBT). Senator Bob Kerrey, D-Neb, stated, "Our failure to debate and ratify this Comprehensive Test Ban Treaty during this Congress has relinquished our historic role as leader in the effort to end the testing of nuclear weapons." Mark Thiessen, spokesman for Senate Foreign Relations Committee Chairman Jesse Helms (R-NC), said Tuesday that Helms will not consider bringing the treaty to the floor until the administration submits for Senate approval changes agreed to by US President Bill Clinton and Russian President Boris Yeltsin in the 1972 Anti-Ballistic Missile (ABM) Treaty. Thiessen added, "As far as we're concerned, the (ABM) treaty doesn't exist." John D. Steinbruner, a senior fellow for foreign policy studies at the Brookings Institution, said that the CTBT has "no prominent Republican support." He added, "There is no prospect of getting it through anytime soon. It will take a new political situation."

8. US Theater Missile Defense

US Defense Department Spokesman Ken Bacon ("PENTAGON SPOKESMAN'S REGULAR BRIEFING," USIA Transcript, 10/21/98) said that the additional US$1 billion voted by Congress for developing a missile defense system will be utilized. Bacon stated, "the real aim of Congress here, I believe, is to position the Department to be able to fund a deployment decision for national missile defense if one is made in the year 2000. I'm sure that given the technological complexities and the demanding financial needs of both theater and national missile defense programs, that we will be able to spend this additional $1 billion." He added, "It won't all go into THAAD (Theater High Altitude Anti-Missile Defense). That is one where we have sort of reached a technological barrier for the time being, and I'm not sure that more money there would help. But there are other areas in which we could spend that money and will."

II. Republic of Korea

1. PRC Aid to DPRK

JoongAng Ilbo ("PRC EXPANDS SUPPORT TO DPRK," Seoul, 10/21/98) reported that the PRC has recently expanded its support to the DPRK. A PRC source, who visited Pyongyang for the 50th anniversary of the DPRK's foundation, said on October 21, "The Chinese administration is considering offering the DPRK 1 billion dollars in loans. Since the PRC last year decided not to force the DPRK to initiate an open-door policy, the relationship between the two countries is getting closer." Moreover, since the PRC officially announced that they will offer 80,000 tons of additional oil to the DPRK, high-ranking DPRK officials invited the PRC ambassador to Mansudae, a palace used for official receptions, to offer their gratitude. Last year the PRC also lent US$1 billion to Thailand.

2. Four-Party Talks

Korea Times ("ROK CALLS FOR CREATION OF 2 SUBCOMMITTEES FOR 4-PARTY PEACE TALKS," Seoul, 10/21/98) reported that the ROK, the DPRK, the US, and the PRC on Wednesday resumed four-party talks aimed at establishing permanent peace on the Korean peninsula, after a seven-month break. Ahead of the full-fledged peace talks, the delegates held working-level talks on Tuesday, which an ROK delegate said were "constructive." He said the talks were held to make-last minute preparations for the third round of peace talks. The four parties also held separate bilateral meetings Tuesday, he said, including negotiations between the US and the DPRK. US chief delegate Charles Kartman came out of the talks with the DPRK saying they were "serious and good talks." The DPRK's ally, the PRC, has expressed optimism over prospects for the upcoming peace talks. "The Chinese side has always maintained the establishment of a new peace mechanism in place of the old attitude is feasible," said PRC foreign ministry spokesman Tang Guoqiang. "The PRC hopes a peace mechanism can be established on the Korean peninsula as soon as possible," he added. The European Union on Tuesday also urged negotiators in the talks to adopt a "constructive approach," saying it would be watching the DPRK's position closely. An Austrian EU presidency statement expressed hope that the talks "will bring substantial progress in easing the existing tension on the Korean peninsula."

3. DPRK Trade

Korea Herald ("DPRK'S TRADE TO CONTRACT BY 30 PERCENT THIS YEAR," Seoul, 10/21/98) reported that the Korea Trade-Investment Promotion Agency (KOTRA) said that the DPRK's trade with foreign countries is expected to amount to US$1.5 billion this year, down 30 percent from last year's estimated figure of US$2.18 billion. The DPRK's trade has diminished this year with its factory operation rate down to 20 percent due to energy shortages, KOTRA said in its report on first-half DPRK trade. The DPRK's exports are expected to shrink by 42.5 percent this year to US$520 million from last year's US$904 million, while imports will plummet 23 percent from US$1.27 billion to US$980 million, KOTRA forecast. Foreign trade by the DPRK is estimated at US$750 million in the first half of this year, down 13.3 percent from the same period last year, it said.

4. ROK-US Trade Talks

Chosun Ilbo ("ROK-US CONCLUDE SUCCESSFUL CAR TALKS," Seoul, 10/21/98) reported that officials from the ROK and the US successfully concluded negotiations on automobile taxes and customs Tuesday, ending a long confrontation between the two countries. An official of the ROK delegation said that US trade representatives accepted the market opening-up plan proposed by the ROK government. The agreement is scheduled to be initialed on Wednesday in Washington. As part of the agreement, cars with engines in excess of 2000cc will no longer be required to pay an additional tax but will instead be levied a charge of W220 per cc, netting a 12 to 40 percent decrease in fees paid. US requests to permanently enforce the 30 percent special tax levied up to the end of last July and the decrease of the customs tax on ROK car imports to the US from 8 percent to 6 percent will be discussed next. The US had been warning that the ROK market was not sufficiently accessible to foreign vehicle manufacturers and could face punitive sanctions under US "Super 301" trade legislation.

III. Russian Federation

1. DPRK Missile Launch

Nezavisimoye voyennoye obozreniye's Andrey Baranovsky ("IN BRIEF .... U.S.A. INVESTIGATES N.KOREAN MISSILE," Moscow, 2, 10/16-22/98 339(113)) reported that US analysts concluded that the "Taepodong-1" missile launched by the DPRK on August 31 was 25 meters long and consisted of 2 liquid fuel powered stages. The first stage used 4 engines taken from a "Nodong" missile; the second one had one engine from a "Scud" missile. To create the missile, the DPRK used "technologies obtained from the US, the RF, the PRC, Britain, France, Japan, Israel, India and the European Space Agency." As for alloys, engines, fuel and homing systems, those correspond to the "Scud" level. According to the US Administration, in 3 years a new "Taepodong-2" missile with a 4000-6200 kilometer range will be able to reach Alaska and Hawaii.

2. RF Military Sales to ROK

Nezavisimoye voyennoye obozreniye's A.B. ("IN BRIEF .... SU-35 FOR S.KOREA," Moscow, 3, 10/16-22/98 339(113)) reported that, according to Flight International magazine, the RF offered a new advanced version of its Su-35 fighter planes to the ROK. Due to the financial crisis, the ROK practically ceased to develop its own fighters under its F-X program. The RF proposal includes arrangements for Su-35s to be assembled in the ROK, 100 percent servicing, and also technology transfers. The deliveries are to partly cover RF debt to the ROK. The SU-35s are to be equipped with phased grid radar and multifunctional color displays, and AL-31FP variable jet direction engines, which have been undergoing tests since this March. Titanium used in some more important areas made the aircraft lighter and the engine life span was increased from 250 to 500 hours. Presently, the relevant engine plant in the city of Ufa is working on 88 such engines for 40 Su-30 MKI planes ordered by India.

3. PRC-Taiwan Talks

Izvestia's Yuriy Savenkov ("BEIJING SUGGEST A NEW REUNIFICATION MODEL TO TAIPEI," Moscow, 3, 10/21/98) reported that an hour-and-a-half-long meeting took place in Beijing between PRC Chairman Jiang Zemin and Kuomintang Central Committee Member Koo Chen-fu, who was on a visit to the PRC. There has been no precedent for such a high-level meeting since 1949. During the visit, Koo met some high-ranking officials, among them PRC State Council Deputy Premier Qian Qichen, who suggested a modification to the well-known reunification formula of the late Deng Xiaoping. So far the PRC has offered a "one country, two systems" formula, with Taiwan to retain a large degree of autonomy, including its social system, for 50 years. Qian suggested that the system could exist with no time limit. Koo, on his part, suggested that the PRC and Taiwan make an initiative for an East Asian forum to deal with the current financial crisis. The crisis is believed to have made the PRC and Taiwan closer, with Taiwanese businessmen insisting on more open bilateral relations.

4. Japanese Foreign Minister's Russia Trip

Nezavisimaia gazeta's Andrey Ilyashenko and Dmitriy Kosyrev ("MOSCOW- TOKYO RAPPROCHEMENT," Tokyo, 6, 10/16/98) interviewed Japanese Foreign Minister Masahiko Komura prior to his leaving for Moscow. Mr. Komura positively assessed the development of bilateral relations, calling the progress reached a "historical trend." In particular, he noted that the "strategic situation that Japan and Russia face in Northeast Asia and Asia Pacific region causes both states to further strengthen close and stable relations." He said that he intended to go to Moscow in order to do work designed to make the November visit there of Prime Minister Keizo Obuchi successful. Commenting on RF Foreign Minister Igor Ivanov's statements that in solving the territorial issue, one should proceed from the fact that the disputed territories belong to the RF, Komura said, "We would like to act on the basis of phrases and opinions expressed during direct meetings of state representatives and we do not think it necessary to comment on separate phrases circulated by the mass media."

Segodnya's Georgiy Bovt ("DO NOT MISTAKE KURILS FOR HONG KONG," Moscow, 2, 10/19/98) reported on Japanese Foreign Minister Masahiko Komura's visit to Moscow. On the eve of Komura's visit, Aleksandr Losyukov, Director, 2nd Asia Department, RF Foreign Ministry, said that the draft peace treaty is "quite a working draft document which can be negotiated further, discussing in fact only the wording issues and not the principal problems, if one were not to take into account its part concerning territorial problems." Japan's negative reaction to what it saw as an attempt to "forget" about the Krasnoyarsk summit decisions prompted RF Premier Yevgeniy Primakov to confirm during Komura's visit that "Russia will firmly stand on the positions worked out by RF President Boris Yeltsin and ex-Premier Ryutaro Hashimoto." According to diplomatic sources, RF officials had to change their negotiating positions in view of Japan's "rigidness" right on the eve of Komura's visit. Japanese Prime Minister Keizo Obuchi is scheduled to come to Moscow on November 10, but will hardly agree to sign a final declaration without the RF giving a clear answer on the territorial issue. Otherwise, Segodnya's author argued, "a sharp roll-back in bilateral relations will become inevitable." Meanwhile, upon Komura's departure, information was leaked from the RF Foreign Ministry that during the RF-Japanese summit in Kawana, Japan suggested a "Hong Kong option" with the Isles to be recognized as Japanese, but to stay temporarily under RF jurisdiction.

Izvestia's Yuriy Savenkov ("MOSCOW INSISTS ON ITS SOVEREIGNTY OVER THE SOUTH KURILS," Moscow, 1, 10/19/98) reported that during Japanese Foreign Minister Masahiko Komura's visit to Moscow, the parties agreed on a formula saying that "development of Russia-Japan relations and solution of the territorial issue is a pair of wheels which should spin simultaneously and possibly faster." Japanese Foreign Ministry Press Secretary Masaki Okada said that Japan intends to regularly deliver money within the US$1.5 billion credit extended by the Japanese Export-Import Bank to the RF. During Japanese Premier Keizo Obuchi's visit to Moscow this November, a bilateral investment protection agreement is to be completed with a joint investment company to be created. There are plans for further development of contacts, including those in the military field. For instance, RF Armed Forces General Staff Chief is to come to Japan this November.

5. Japanese Economic Assistance to RF

Izvestia's Vasiliy Golovnin ("TOKYO PROMISED US$2 BILLION TO MOSCOW," Moscow, 1, 10/16/98) reported on the forthcoming visit of Japanese Foreign Minister Masahiko Komura, pointing out that Japan is the only great power that again renders the RF assistance on a bilateral basis, not through the International Monetary Fund. This month, the Japanese Government agreed in principle to give the RF US$2 billion as an "economic credit" to transform 20 thermal power plants in the RF from coal-using into gas-using. The credit payback term is almost forty years.

6. RF Celebration of Victory over Japan

Izvestia's Aleksandr Privalov ("DAY OF VICTORY OVER JAPAN," Moscow, 1, 10/16/98) reported that on October 15, right on the eve of Japanese Foreign Minister Masahiko Komura's official visit to the RF and with a month left before the Japanese Premier's visit, the Council of Federation (the upper chamber of the RF parliament) approved a supplement to the Law on the Military Glory Days of Russia. The draft law was submitted by the Sakhalin Regional Duma prior to that. According to the law, September 3 is now to be celebrated as an official holiday as the Day of Victory over Militarist Japan, though it will not be a day off. Izvestia's author commented that it's hard to believe that in both chambers of the parliament not a single person knew about the current RF-Japanese contacts and that "much more probably this tactlessness is yet another manifestation of the strange form of patriotism many people's deputies are obsessed with."

Segodnya's Georgiy Bovt ("DO NOT MISTAKE KURILS FOR HONG KONG," Moscow, 2, 10/19/98) reported that Japanese Foreign Ministry Press Secretary Masaki Okada commented that he learned about the new law only in Moscow, but added that such acts were "an internal affair of any sovereign state." Last week Japan, though, sent its official protest against DPRK vessels fishing alongside with Japanese ones in the area near the South Kurils. Seemingly, the RF and Japan so far have decided not to emphasize the incident.

7. RF Nuclear Facilities

Nezavisimoye voyennoye obozreniye's Vladimir Georgiyev ("NOVAYA ZEMLYA IS PREPARED FOR EXPLOSIONS," Moscow, 3, 10/16-22/98 339(113)) reported on a press conference held last week by General Colonel Igor Valynkin, Chief, 12th Main Directorate, RF Defense Ministry, responsible for exploitation and protection of nuclear devices. Valynkin in particular rejected some recent allegations abroad about a low level of safety at RF nuclear technical facilities. Representatives of US strategic nuclear forces who visited the RF this June assessed highly the level of safety of "S" facilities. Valynkin also said that the US is assisting the RF in this field. He refused to give the exact number of nuclear warheads in RF possession, but said that the retirement of obsolete weapons is going well. He also did not deny that defense experiments on Novaya Zemlya archipelago are continuing and that the test site there is kept prepared for a resumption of nuclear explosions, but said that such tests would take place only if some nuclear power were to abandon the Comprehensive Test Ban Treaty. Valynkin confirmed that nuclear submarines written off by the RF Navy would be utilized from now on by the RF Atomic Energy Ministry, which will also pay wages to the relevant enlisted sailors.

8. RF Defense Minister's Asian Trip

Segodnya's Oleg Odnokolenko ("KAMRAHN ALMOST CANNOT BE SEEN," Moscow, 2, 10/21/98) reported that RF Defense Minister Igor Sergeyev is on an official visit to Vietnam, to be followed by trips to the PRC and India. In Hanoi he in particular is to negotiate terms for further use of Kamrahn naval base by the RF Navy. Ships of the former USSR first appeared at that former US base in 1979 during Vietnam's armed conflict with the PRC. The relevant agreement was signed in 1993 to be in force till 2004. In Segodnya's author's opinion, after the USSR collapse, the RF Navy has gradually been decaying and will hardly return to rule the ocean waves soon. Therefore frequent visits of RF top military to Vietnam (in January of 1998 Anatoliy Kvashnin, Chief of the General Staff, was there) "most probably serve as just a cover for discussion of some other, more serious problems."

Nezavisimaia gazeta's Igor Korotchenko ("RUSSIA COMES BACK TO INDOCHINA," Moscow, 2, 10/21/98) reported that RF Defense Minister Igor Sergeyev arrived yesterday in Hanoi on an official visit to Vietnam, primarily to sign a 5-year RF-Vietnamese intergovernmental agreement on military technical cooperation. Contacts in that field were practically frozen in 1991-1993, but in 1994-1997 the RF delivered 12 Su-27SK and Su-27UBK fighters, 4 radar stations and 2 missile speed boats to Vietnam and signed contracts on technical assistance to the building of 2 ships there. The RF offers to continue selling Su-27s, as well as to deliver MiG-AT training planes and MiG-29SMT fighters. There are good prospects for cooperation in the field of naval armaments. Besides, the RF suggests a complex modernization of the whole military equipment pool of the Vietnamese Armed Forces, 75 percent of which consist of Soviet-made items. While meeting with Le Kha Fieu, General Secretary of the Communist Party of Vietnam, and Fam Van Cha, Vietnamese Defense Minister, Igor Sergeyev voiced his concern about US attempts to engage some Asian countries in joint development of non-strategic air defenses. If implemented, that "might bring about a breach in the balance of forces in the region," he stressed. The role of the RF-Vietnam military technical cooperation, in the author's opinion, should be also seen in the context of Japan's growing aspirations for the status of a superpower and an equal global partner of the US.

IV. Correction

1. ROK Aid to the DPRK

A summary of a Korea Times article in the October 20 Daily Report said that ROK religious bodies had contributed approximately US$98 million in aid to the DPRK between January, 1997 and August, 1998. The figure should have read US$9.8 million.

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