NSA KIM ON NORTH KOREA, SUMMIT AND ALLIANCE ISSUES

C O N F I D E N T I A L SEOUL 000707

SIPDIS

SIPDIS

STATE PLEASE PASS USTR FOR SCHWAB AND CUTLER

E.O. 12958: DECL: AFTER KOREAN REUNIFICATION
TAGS: PGOV PREL ETRD PINR KN KS
SUBJECT: NSA KIM ON NORTH KOREA, SUMMIT AND ALLIANCE ISSUES

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


1. (C) SUMMARY: Over an April 8, 2008 luncheon meeting with
the Ambassador, ROK National Security Advisor Kim Byung-kook
said that President Lee's position on North Korea had not
changed despite the heated rhetoric from Pyongyang. Lee
wanted "sincere and substantive" dialogue with the North,
discussing frankly the problems and aspirations of both
sides. Still, the deterioration in the North-South relations
was not good; Seoul might consider making an overture after
the April 9 legislative elections and LMB's visit to
Washington. Regarding the visit, NSA Kim said he was
"certain" that the beef issue would be resolved before the
summit meeting, allowing LMB to promote the KORUS FTA to
American legislators and businessmen. Kim also expressed his
desire to work toward strengthening the U.S.-ROK alliance by
resolving small and large problems encountered by USFK, but
cautioned that many "bureaucrats" remained set in their old
ways; it would take some time to get the message out.
Regarding the reported 10 percent cut proposed for the
defense budget, Kim said that this was an across-the-board
request to all ministries, not just the Ministry of National
Defense. No actual cuts have been identified, however; the
purpose of the request was to make MND (and other ministries)
justify why cuts less than 10 percent should be made. In
this regard, Kim said that the ROK's Defense Reform 2020
would need to be revised to reintroduce the notion of a "main
enemy" (North Korea) that had been omitted under Roh
Moo-Hyun. END SUMMARY.

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NORTH KOREA: WHAT IS TO BE DONE?
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2. (C) Blue House Senior Secretary for Foreign and Security
Policy, Kim Byung-kook, opened the April 8 luncheon meeting
with the Ambassador by expressing his own frustrations at the
angry and insulting statements from Pyongyang criticizing
President Lee Myung-bak. The LMB administration would not be
intimidated by such rhetoric. President Lee had made it
clear that he wanted genuine dialogue with the North that was
"sincere and substantive." This was LMB's language for frank
discussions between Seoul and Pyongyang that were not
formulaic, but focused on what each wanted from the other
party. LMB wanted a business-style dialogue with the North,
Kim said.


3. (C) Still, Kim was concerned about the turn of events,
making it clear that ROK JCS Chief Kim's comments that
provoked the heated reaction from the North was a mistake.
Two weeks ago, the Blue House wanted to launch an initiative
to upgrade transportation and communication facilities in the
Kaesong Industrial Complex (KIC); this was now in limbo. Kim
was also worried by the lack of a request for humanitarian
assistance from the North, because it was clear that North
Korea was facing substantial food shortages. But how could
South Korea provide rice and fertilizer assistance in the
absence of a request? Kim speculated that "quite soon,"
perhaps after the April 9 National Assembly elections and
LMB's visit to Washington and Tokyo later this month, the
ROKG would try contacting the DPRK. For now, he said, there
was no contact between Seoul and Pyongyang.

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SUMMIT ISSUES
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4. (C) Kim said he thought that summit planning was
proceeding well. Blue House staff were preparing extensive
briefing papers, which Lee would read, but, in the end, Lee
would rely on his instincts and core beliefs -- like
President Bush, he was not interested in a pre-scripted
conversation at Camp David. Among the issues most important
to LMB was North Korean human rights; LMB believed in
straight talk. At the same time, LMB also felt strongly
about extending humanitarian assistance to the North Korean
people


5. (C) Turning to trade issues, Kim said the Blue House was
committed to resolving the beef issue before the summit.
"There will be an agreement" on beef, Kim assured the

Ambassador. Moreover, LMB would use his meetings with
Congressional and business leaders in New York and Washington
to show that he was business friendly, very much in favor of
open markets for goods and services. When the Ambassador
suggested that Lee make a personal commitment to U.S.
business leaders to resolve any trade problems that might
arise, Kim said that "it's already in his speeches" to
corporate audiences.

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ALLIANCE ISSUES AND DEFENSE BUDGET
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6. (C) The Ambassador said that he hoped the summit would
also include a broad discussion on the direction of the
U.S.-ROK Alliance. Although the Presidents should defer to
their ministers on detailed topics, such as the SMA and troop
realignment, they should exchange views on Korea's regional
and global role and the longer-term vision of the Alliance.
Although it may be too early for concrete decisions on
additional contributions in Afghanistan or full participation
in PSI, the Ambassador suggested that it would be helpful if
LMB could signal -- to the President and publicly -- that
such steps are under active consideration. The summit should
also provide some momentum to resolve a number of outstanding
issues involving USFK, such as base returns and the
appropriate level of U.S. troops in Korea. Some of these
issues were ripe for quick resolution, the Ambassador said,
and were opportunities to show that it would be easier to do
business on defense matters with the LMB Administration.


7. (C) Kim expressed genuine frustration that these problems
involving USFK had festered so long. One real difficulty
was that the bureaucrats throughout the government had not
gotten the message of the new leadership. Kim promised that
the Blue House would be helpful in finding solutions, but
cautioned that these were early days for the new
administration. After ten years of "leftist" government, it
would take some time to change course, Kim said.


8. (C) Responding to the Ambassador's concern that the
government's policy of cutting the defense budget by 10
percent could damage the ROK's defense capabilities and also
threaten the "Defense Reform Plan 2020," Kim said that all
ministries had been instructed to identify budget cuts of 10
percent. The saving would be spent on new productive
projects. Still, Kim emphasized, no decisions had been made
on what to cut and by how much. The instruction was
essentially a request from President Lee that all government
spending must be justified. On Defense Reform 2020, Kim said
that the whole plan had to be revisited because its central
assumption that South Korea had "no main enemy" was not
correct. North Korea was the primary enemy and the defense
plan had to reflect this new "security doctrine." This
change in security doctrine would have implications
throughout the plan, including the amount of spending needed.

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COMMENT
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9. (C) NSA Kim is on a steep learning curve, trying to put
together LMB's various pronouncements into consistent foreign
policy while putting out fires on several fronts. Over the
past two months, Kim has made some progress in framing the
ROK's policy toward the North. Now he must do likewise on
the ROK's relations with the United States. A strong
supporter of the Alliance, Kim, we believe, will be
instrumental in forwarding helpful ideas and resolving many
problems facing USFK inherited from the previous government.
He seems determined to develop collegial working relations
with his colleagues in the Cabinet, and expressed an interest
in more frequent interaction with Americans in both Seoul and
Washington, including members of Congress. END COMMENT.


VERSHBOW