Identifier
Created
Classification
Origin
07SEOUL1405
2007-05-10 09:32:00
CONFIDENTIAL
Embassy Seoul
Cable title:  

NATIONAL SECURITY ADVISOR BAEK ON FTA, ALLIANCE,

Tags:  PREL PGOV MNUC KS KN 
pdf how-to read a cable
VZCZCXYZ0008
OO RUEHWEB

DE RUEHUL #1405/01 1300932
ZNY CCCCC ZZH
O 100932Z MAY 07
FM AMEMBASSY SEOUL
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4477
INFO RUEHBJ/AMEMBASSY BEIJING 2503
RUEHKO/AMEMBASSY TOKYO 2617
RUEHMO/AMEMBASSY MOSCOW 8042
RHMFISS/COMUSKOREA J5 SEOUL KOR
RHMFISS/COMUSKOREA J2 SEOUL KOR
RHMFISS/COMUSKOREA SCJS SEOUL KOR
RHHMUNA/CDR USPACOM HONOLULU HI
RUEKJCS/SECDEF WASHINGTON DC//OSD/ISA/EAP//
C O N F I D E N T I A L SEOUL 001405 

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SIPDIS

E.O. 12958: DECL: 05/10/2017
TAGS: PREL PGOV MNUC KS KN
SUBJECT: NATIONAL SECURITY ADVISOR BAEK ON FTA, ALLIANCE,
6PT AND INTER-KOREAN DIALOGUE

Classified By: Amb. Alexander Vershbow. Reasons 1.4 (b/d)

C O N F I D E N T I A L SEOUL 001405

SIPDIS

SIPDIS

E.O. 12958: DECL: 05/10/2017
TAGS: PREL PGOV MNUC KS KN
SUBJECT: NATIONAL SECURITY ADVISOR BAEK ON FTA, ALLIANCE,
6PT AND INTER-KOREAN DIALOGUE

Classified By: Amb. Alexander Vershbow. Reasons 1.4 (b/d)


1. (C) SUMMARY: In a May 10 lunch meeting with the
Ambassador, National Security Advisor Baek Jong-chun said his
responsibilities were defined: work closely to support the
KORUS FTA, USFK relocation agreements, and progress in the
Six-Party Talks (6PT). Baek expressed optimism that the
Banco Delta Asia (BDA) issue would be resolved soon and might
serve in educating North Korea how little it can accomplish
without international cooperation. Over the longer term,
Seoul hoped to leverage inter-Korean talks and the Kaesong
Industrial Complex to encourage the DPRK to make economic and
political changes. Asked about a possible inter-Korean
summit, Baek responded that the ROKG was not actively
considering anything. However, if a summit could contribute
to a resolution of the DPRK nuclear issue and provide a
breakthrough in inter-Korean reconciliation, Seoul would
think about it in consultation with the United States. END
SUMMARY.


2. (C) The Ambassador on May 10 hosted a luncheon at the
residence for Baek Jong-chun, Chief Secretary for
Unification, Foreign Affairs, and Security Policy (National
Security Advisor). Baek was joined by Park Sun-won,
Secretary to the President for National Security Strategy,

SIPDIS
and Kim Hong-kyun, Assistant Secretary to the President for
National Security Strategy. NSA Baek offered little color
commentary on views in the Blue House, but, in his proficient
English, reinforced the need for U.S.-ROK coordination to
resolve key economic, security and North Korean issues.

--------------
FTA, BEEF
--------------


3. (C) NSA Baek said that Seoul was tentatively planning on
submitting the KORUS FTA agreement for National Assembly
ratification in the September/October timeframe, even though
he was aware that the U.S. Congress might not take
corresponding action by that time. Seoul had "no reason to
delay," he said, adding that President Roh would like to get
the FTA ratified by the end of his term. Park explained that

the Blue House was considering an "endgame" debate in
mid-June with relevant ROKG ministers, political leaders and
NGO activists that President Roh would chair to argue for FTA
ratification. Seoul might even televise the session to
enable the President to make a stronger, broader push for its
passage.


4. (C) The Ambassador stated that the sooner the ROK could
ratify the KORUS FTA, the better. Not only would it provide
President Roh with a legacy deliverable, but it might
encourage KORUS supporters in the United States as well. If
ROK ratification were to slip past October, it might become
entangled in the ROK general election in December or National
Assembly elections in April, causing unnecessary
complications. The Ambassador expressed appreciation for
President Roh's commitment to be guided by science in
reopening the beef market. Baek acknowledged President Roh's
commitment to President Bush to open the market after the OIE
ruling later this month; he noted that the ROKG would welcome
U.S. beef, as it already imported beef from Australia and
others nations.

--------------
BASE RETURNS
--------------


5. (C) The Ambassador noted that the understanding reached
between Secretary of Defense Gates and Minister of National
Defense Kang Jang-soo was a positive way to resolve both
OPCON and USFK base return issues. Baek agreed and stated
that Seoul was working hard to bring the Ministry of the
Environment along. However, "NGOs are NGOs," and it would be
difficult to assuage all NGO concerns. Seoul's objective now
was to manage their protests, he said.

--------------
BDA AND 6PT
--------------


6. (C) Turning to the Six-Party Talks (6PT),the Ambassador
said it appeared that banks were concerned about receiving
funds from Banco Delta Asia (BDA) and were looking for some

kind of assurances that they would not be penalized by U.S.
financial measures. The USG had promised to resolve the BDA
issue, and we had done so in the U.S. Treasury's March 14
announcement. On April 10, one month ago today, the U.S.
Treasury Department issued another release expressing support
for the Macao Monetary Authorities' decision to unblock the
BDA accounts. Now, however, the DPRK seemed to be trying to
make a point about its access to the international banking
system.


7. (C) Baek conveyed appreciation for USG patience with
North Korea. He hoped that the DPRK would learn how the
international financial system worked and how it needed
international cooperation to resolve its problems. Still,
peace and denuclearization were more important than BDA.
This was why the ROKG sought continued USG flexibility,
perhaps in the form of a one-time exemption (from Section 311
provisions) for a bank to receive BDA funds. Park opined
that the difficulties in transferring money from BDA
confirmed to everyone the importance of the U.S. to the
international financial system; banks would not risk running
afoul of the U.S. Treasury. The USG's ability to monitor and
control DPRK's access to the financial system was strong
enough to allow for this one-time exemption, especially if it
would allow the 6PT to regain momentum, he insisted.


8. (C) The Ambassador responded that the USG wanted to
resolve the BDA issue. Unfortunately, we had lost a lot of
time. It was Qsible to get things back on track, if the
DPRK really wanted it to happen. It remained to be seen if
the DPRK had made the strategic decision to denuclearize or
if it was trying to present itself as a country like India
that should be allowed the right to posses nuclear programs.
If the later were the DPRK's decision, it was mistaken,
because, the Ambassador said, Washington could not normalize
relations with a North Korea that still had nuclear weapons.

--------------
INTER-KOREAN DIALOGUE
--------------


9. (C) Baek noted the on-going (May 8-10) inter-Korean
General officer-level officers talks and said that it
appeared that the DPRK would agree to a one-time trial run of
trains along the west and east coast rail corridorsQThe
DPRK was also pressing for concessions on the Northern
Limitation Line. The ROK delegation had pushed back, saying
that maritime borders should be addressed at Defense
Ministerial talks. The ROK was also trying to convince the
DPRK that a one-time trial run was helpful, but not as much
as regularized inter-Korean rail travel, which could provide
greater economic benefits to the DPRK.


10. (C) Baek sought to blur the link between the trial run
of trains and a ROK decision to provide USD 80 million in
light industrial material aid. He said that the real linkage
was between industrial aid and cooperation on ROK development
of DPRK natural resources. Seoul wanted to counter greater
PRC investment in DPRK mines and natural resources; the ROK
did not want to "lose" the DPRK to China. Greater rail and
resource access to the DPRK would also help the ROK transfer
or teach market-economic principles to the DPRK. If the two
Koreas connected their railways, this would help the future
of the peninsula, which would help USG interests as well.
Similarly, the Kaesong Industrial Complex (KIC) could be both
a starting point for economic reforms and a contact point
that would allow greater inter-Korean exchanges.


11. (C) The Ambassador said he understood the logic behind
puQing economic changes in the DPRK, but if North Korea
failed to live up to its February 13 "Initial Actions"
obligations, what would happen to ROK plans for rice
assistance at the end of May? While the USG does not want
greater hunger in the DPRK and does not see food as a weapon,
some might view rice aid as a sign of wavering ROK resolve on
the DPRK nuclear issue. The Ambassador noted that
credibility was hard to gain and easy to lose. The ROK
should consider what message the DPRK would hear if it
received rice aid without fulfilling its 6PT obligations.
The DPRK must already know that the KIC's future would be
brighter with denuclearization.


12. (C) Baek reiterated that it was for these reasons that
Seoul wanted a resolution of the BDQssue as soon as

possible. Park added that the ROK was doing its part to look
for solutions. It had considered whether its Export-Import
(EXIM) Bank might be able to contribute. However, the ROKG
decided that, without USG assurances, the risk of receiving
BDA funds would be too high. Park said that BDA was
currently being run by Macao Monetary Authorities, not its
owner Stanley Au, which should make it easier for USG
officials to grant a one-time waiver for American Banks to
deal with BDA.

--------------
NORTH-SOUTH SUMMIT
--------------


13. (C) Asked about politicians' comments and media
speculation about a possible inter-Korean summit, Baek said
Seoul at this time was not actively working on a summit
because of the current BDA situation. He had seen stories
that A/S Hill was considering visiting Pyongyang and articles
that former ROK Prime Minister Lee Hae-chan was proposing a
four-way summit between the U.S., ROK, DPRK and China. The
problem was too many reporters were speculating in the hopes
of finding a story. Of course, if the ROKG saw the
possibility that a summit would help to resolve the DPRK
nuclear issue and provide a breakthrough in inter-Korean
reconciliation, then the ROKG could consider an inter-Korean
summit. If the ROKG saw that opportunity, it would
coordinate with the USG because bilateral cooperation would
be important.


14. (C) The Ambassador said that if an inter-Korean summit
could truly help progress in the 6PT and North-South
relations, then the USG would see the logic behind it. He
agreed that USG-ROKG coordination and cooperation would be
important, so too would be avoiding unexpected surprises. At
this point, the USG was interested in seeing whether, after
shutdown of Yongbyon, the North was ready to take the more
serious step of disabling its nuclear facilities. This would
be a qualitative step beyond the 1994 Agreed Framework and
could open many more possibilities for advancing relations
with the DPRK.
VERSHBOW