MR. HADLEY: Good morning. I think you probably all heard the President's statement this morning about developments in the six-party talks involving the denuclearization of the Korean Peninsula. I wanted to provide a little more detail on some of the things that the President talked about, and then I'd be delighted to answer questions.

First, let me talk a little bit about what the North Korea -- North Korea has done, and this really involves implementing a series of agreements that began in September of '05, a follow-on and more refinement in February of '07, then again in October of '07, and in the first and second phase of the process outlined in those documents.

North Korea was to disable its nuclear facilities, beginning with the plutonium facilities at Yongbyon. And that process is coming along pretty well and pretty far along. That process has been overseen by representatives of the six-party talks. The United States has been very much involved with support as we go forward with the IAEA. And that process continues.

The second thing that North Korea was to do in the so-called second phase was to declare its nuclear activity. And what provoked, of course, the President's statement this morning was that the North Koreans did provide to the Chinese, who have been the convener, if you will, of this six-party effort, their declaration. This will describe their nuclear activity. It is a good first step in getting the kind of disclosure and transparency into North Korea's nuclear activities as part of and a step towards their disablement, dismantlement and termination of those activities.

The North Koreans, as part of that process, have indicated that the six-party representatives will have access to their facilities, including the reactor core, including waste sites. They will make available documents, records, operating manuals and the like -- they've already made available over 19,000 pages of documents -- and that the six parties will have access to personnel involved in their nuclear programs.

This is important because it is part of this process to be able to verify the declaration that the North Koreans have filed. And I want to emphasize, this is not something that's being imposed on the North Koreans. They have agreed to this process, and they have agreed to make available the things that I've described. And we are looking for, in the next days ahead, to the six parties agreeing on verification principles, a verification protocol, and to the monitoring mechanism that will oversee this process. And we expect these things to be in place in the next 45 days.

Now, the premise of these documents I described in this six-party process has been, as the President said, action for action. And in these prior agreements, the six parties committed that if North Korea would take these steps in Phase Two, then the United States would take two actions: One, there would -- and these are the actions that the President announced this morning -- one is a proclamation that lifts the Trading with the Enemy Act as it applies to North Korea. And I want to come back to that and describe a little bit what that means. And secondly, the President was committed and did today notify the Congress of his intent to lift North Korea's status as a state sponsor of terror within the next 45 days.

In addition, part of this Phase Two has also been the delivery of fuel oil or the economic equivalent. That is something that was committed to -- fuel oil to North Korea -- and that obligation is being carried out.

In terms of the lifting of the status of North Korea under the Trading with the Enemies Act, it has the following consequences. There are certain -- really, three categories of sanctions that are in place in part because of this legislation that will be lifted. They involve some requirements of licensing for Americans who want to import goods from North Korea into the United States; there are some provisions that affect U.S. persons participating in shipments of third countries to North Korea; and finally there are some prohibitions with respect to certain financial transfers by the North Korean government.

These will expire so far as they look to the Trading with the Enemies Act as the statutory basis for their being imposed, and these will be lifted.

There are two other prohibitions that result from North Korea being on the Trading with the Enemies Act that are going to be kept in place by an executive order that the President also signed today, and these involve the interaction of U.S. persons with ships that are flagged under the North Korean flag, and secondly the freezing of certain kind of assets that were first frozen in 2000.

So these are symbolic acts -- that is to say, getting North Korea off the Trading with the Enemies Act, and also the prospect of lifting their status under the state support to terror. They have some consequences in terms of easing sanctions. I will tell you, and the North Koreans understand, that the degree of easing of sanctions is relatively minor. North Korea remains one of the most sanctioned regimes not only by U.S. bilateral sanctions, but also under the U.N. Security Council resolution 1718, and actions taken by other countries.

The prospect for North Korea, of course, is this is in response to the actions they are taking, and the prospect that as they take further actions to carry out the commitments they made in September of '05, then sanctions will lift, and some benefits will start coming to North Korea, such as the fuel oil that was part of Phase Two.

We appreciate the declaration, obviously, that North Korea has provided to China today, and that will be ultimately circulated to the six parties. That said, we have some concerns that will be addressed as part of this verification and monitoring process that we talked about today.

One of those, of course, is just exactly how much plutonium has North Korea produced, and the access to records and personnels and to sites that the North Koreans have said the six parties will have will help answer that question, because understanding how much plutonium North Korea has produced, of course, is the step to ultimately having that plutonium removed from North Korea as part of the denuclearization of the Peninsula to which North Korea has agreed.

Secondly, there's concerns about the uranium enrichment program. This was something that was really discovered in 2001-2002 time frame. The North Koreans initially affirmed the program; they subsequently denied it. They have basically said that they are not now engaged in any enrichment activities, and they will not be engaging in uranium enrichment activities in the future.

That said, our intelligence community has some concerns about their past activities and has some concerns about potentially ongoing activities. And we have been learning more about these potential activities, as part of this six-party process. That's one of the things that has been useful about it. And the second thing is that it provides a framework for us to be able to pursue these concerns with North Korea and to get to the bottom of this issue of the uranium enrichment program, because it would be one of the programs that North Korea has agreed to end as part of the six-party process -- because, remember, it is a denuclearization of the Korean Peninsula, and the ending of all nuclear programs and activities by North Korea. That's what North Korea has agreed to; that's what this process is about.

Obviously we're concerned about their proliferation activities. Everybody knows about the activity with respect to Syria and North Korea assistance in building a nuclear reactor in Syria. We want to get to the bottom of that so we understand what that activity was to make sure there is not continuing activity going on between North Korea and Syria, or activity with respect to other locations as well.

And that is why, of course, the verification and monitoring regime that we talked about -- the verification and monitoring protocol is so important, and we believe it will -- using the access that North Korea has agreed to give us, will allow us over time to get to the bottom of these questions. But I want to emphasize the "over time." This is a process. It is going to take time. This is an important step today. I think it marks some real progress in this process that we have had -- not had before, but as the President emphasized, it needs to be followed by a series of other steps. And this is going to take some time.

So a good day. More to do. And I'd be delighted to answer any questions. Terry. Read more Comment (0), Email this.

Q Could you clarify -- does North Korea come clean about its cooperation with Syria on its nuclear

MR. HADLEY: Right. Read more Comment (0), Email this.

MR. HADLEY: What they -- the accounting they have given is, we are not now engaged in any enrichment program or any proliferation activities and will -- we will not in the future. But, of course, part of being able to confirm that they're not now engaging in these activities is to be able to understand what they did in the past, because that is the only way we can be able to say we understand what was done in the past, we have seen that being wound down, and we therefore have confidence that they are not undergoing that activity.

So the declaration they've made, what the disclosure they made is, we're not engaged in this activity now, will not engage it in the future. We've made it very clear in this process and in the documents that constitute the declaration, that we have concerns about their past activities in Syria and in the enrichment area, and that raises questions about whether they have, in fact, are engaging in none of that activity today.

We've made those concerns clear. The North Koreans acknowledge those concerns. They know we are going to want to be pursuing them in this six-party process, and that's, of course, what is ahead of us.

You had a second part -- Read more Comment (0), Email this.

MR. HADLEY: They do. They don't say it in terms of number of bombs. That is something that is a so-called Phase Three issue that we will get to, the process by identifying and moving the plutonium out of the country, whether in bomb form or not. What they agreed to do, and what they do in the declaration, is say how many kilograms of plutonium their activities to date have produced. And one of the things, of course, we want to do is to be able to verify the accuracy of that number, and the North Koreans have, as I said, made very clear that they will give us the access to the facilities and documents, the persons that will hopefully allow us to do that. Read more Comment (0), Email this.

MR. HADLEY: Yes, it's pretty easy to do the math, because we generally know -- have some sense of the weapons that they tested, generally know what kind of plutonium -- how much plutonium is required to make a nuclear device. So it's a good starting point, but obviously we have more to do.

Bill. Read more Comment (0), Email this.

MR. HADLEY: Well, addressed in the sense, Bill, of they say they're not engaged in these activities now and won't in the future. They also have acknowledged in writing that we have raised concerns about their enrichment activities in the past and their actions with respect to Syria. And they have, as you've noticed, have not been out publicly denying that -- or discounting these concerns. So we're in a situation of not quite admitting, not denying, but opening the door for us to be able to try and get greater clarity. Read more Comment (0), Email this.

MR. HADLEY: Well, we will see. We've made it clear that in order for this process to go forward, which has further obligations by them, but also further benefits for them in terms of ultimately moving to normalization of relations and the like, we've made it very clear that for us to move forward, we are going to need to be able to get to the bottom of these issues with respect to plutonium enrichment and proliferation. Read more Comment (0), Email this.

MR. HADLEY: Well, we've -- they've set up a process; they've said we will have access. We've said we were going to be making the questions, and that we need to get answers and be satisfied or we aren't going to be able to move forward. It's pretty clear.

Sir. Read more Comment (0), Email this.

Q Secretary Rice said that the U.S. has the information to verify the dismantlement of the nuclear

MR. HADLEY: Yes. Yes. This is a very closed regime. And part of this process is to see if we can get this regime to open up with respect to the nuclear issues. And our hope, of course, is that -- and it's in the September '05 document -- that the opening up that we hope the regime will do on the nuclear issues in order for us to get satisfaction on these three issues will be part of a gradual process of opening this regime, because we think that is the way, ultimately, we're going to be able to do something which is something all of us would like to do, and that the President talked about today -- have this regime open up and provide a better life to their people. Read more Comment (0), Email this.

MR. HADLEY: Yes, there is a monitoring mechanism, and we have the commitments from the North Koreans for the kind of access that I described. One of the things, for example, that will be very important is to get a better understanding of their uranium ore and processing activities up front, how much uranium ore were they able to pull out of the ground, because that will tell you how much they might have had available for proliferation for a plutonium program, for an enrichment program, and potentially, proliferation overseas, which, of course, would be extremely troubling.

The thing that will be difficult to get our hands around is other arrangements like they had with Syria, other facilities either in Syria that we have suspicions about, perhaps, or other facilities and patterns of cooperation with other countries. That's why access to the people involved in the nuclear program is going to be very important, because in the end of the day, those are programs driven less by material and more by brains, and brains are in the hands of their people. And so that's why we think access to their personnel is going to be very important.

Sir. Read more Comment (0), Email this.

Q Once the Trading with the Enemy Act provisions are lifted and North Korea is removed from the terrorism

MR. HADLEY: Right. At this phase, very little, very little. There are all kinds of reasons why, for most companies, North Korea is not particularly attractive at this point in time. And secondly, there are a whole series of sanctions that are in place because of North Korean human rights activity, because of their 2006 nuclear tests, because of their proliferation activities of various sorts. So, this is not opening the door, at this point in time, for commercial relations.

Now, as we move forward in implementing the September '05 agreement, and as this process moves into later phases, that is one of the prospects that is open. But in terms of economic benefits now, substantial economic benefits, relaxation of trading, we're too early in this process at this point. Read more Comment (0), Email this.

MR. HADLEY: I think it is symbolic. I think, for the North Koreans, I think it is important to them not to be on a list that says "enemies," and not to be on a list as supporters of terror. And that's what they asked for, and we've said, again, in terms of this step-by-step process, action for action, if they took these actions, we would take the action that the President took today.

Steven Lee. Read more Comment (0), Email this.

Q How many kilograms did they declare in their thing? And do you believe that that's a complete

MR. HADLEY: One, I have not seen the declaration. It is going to be released by the Chinese today. It is, so far as I know, not yet back in Washington. I know what they have talked about, and it is a number that is in -- within the range of our intelligence community, but our intelligence community does have a range. And one of the things we will be trying to do is to be able, with this process, to narrow that range to get to the point where we think, yes, they've -- where we want to be is, yes, we think with pretty good confidence they've disclosed all the plutonium they produced.

I think one of the things we did in this process, to be honest, is I think we learned a bit. I think what we learned was the notion that they could, in December, provide a document which on its face would be so compelling that we could say it's complete and correct, no further work required, was probably unrealistic. And that is why we have emphasized, and have worked with our six parties and with the North Koreans -- I want to emphasize that -- this has been a cooperative process. This is not something we're imposing on the North Koreans, it is something that they have agreed to and will be part of in the six-party process.

What we really needed to have is a declaration that is verifiable, that will allow us in a process of verification and monitoring to gain confidence over time that what they've told us is true. And I think we signed on for a two-dimensional process, and I think we learned over time we need a three-dimensional process that's going to take place over time.

The second thing I would say on that is we also want to -- while that process goes forward, and assuming the North Koreans participated in good faith -- we also want to be able to move forward in the process of moving from disablement to dismantlement, and ultimately getting the plutonium, whether in weapons form or otherwise, corralled and given up in some form, because, again, that's what the North Koreans agreed to in September of '05.

Yes, ma'am. Read more Comment (0), Email this.

Q Two questions. The President this morning in his remarks said that if North Korea makes the wrong

MR. HADLEY: The six-party framework in which we have been operating has always had two heads to it, sort of a Janus face. One is, when the North Koreans are willing to cooperate and to negotiate, it is a forum for negotiation. But in those periods over this process where they have stepped away from the negotiations, it has also been a forum for coordinating pressure on North Korea. And it's really been from the very beginning this notion that North Korea has a strategic choice to make: If it cooperates, carries forth on its commitments, then it has the prospect for improving its relations with the international community, ultimately normalization of relations, economic benefits, trades, and all the rest. But if they make the other choice of confrontation and being unwilling to carry out their obligations, then there will be consequences.

To the extent applicable, and to the extent we can do it legally, we would reimpose past sanctions. We would also have the option to get additional sanctions. But it, again, would not be just the United States; it would be all the countries of the six-party talks, and both acting individually, but also with respect to U.N. Security Council sanctions, because, as you know, there is -- Resolution 1718 authorizes such sanctions. Read more Comment (0), Email this.

MR. HADLEY: We largely are.

Yes, ma'am. Read more Comment (0), Email this.

Q Steve, how does this compare to the deal the North Koreans made in the last months of the Clinton

MR. HADLEY: I don't think so. This has been a pretty ongoing process. Let me say a little bit about the -- this is the '94 framework agreement under the prior administration. I would say that was a good-faith effort to deal with this problem, and -- but it went awry. And unbeknownst to that administration, while they were moving forward under the framework agreement to deal with North Korea's plutonium program we discovered North Korea was pursuing a uranium enrichment program, which is one of two paths to get the nuclear material you need for a bomb, either through the plutonium path, uranium enrichment.

The '94 agreement assumed and thought it had agreement by North Koreans to give up both paths. The only one that was known at the time was the plutonium path. And unbeknownst to the administration, while they were moving on the -- to implement that agreement, North Korea was pursuing an enrichment program.

We confronted them with it in 2002. They, as I mentioned earlier, initially acknowledged and then subsequently denied. In any event, they walked out of the six-party framework.

So what we tried to do was learn the lessons from that effort to try and do it better this time. That's what we would -- you would expect us to do. And there are really three or four things we learned. One is that the bilateral relationship was not going to have enough weight to get this job done; that if you were going to get North Korea to make the decision to give up its nuclear programs, you were going to need to have coordinated effort, both diplomacy and potentially sanctions, from all those countries on which North Korea depends. And that's why we went into the multilateral framework involving China, Russia, Japan and South Korea.

Secondly, we learned a little bit about how to structure the negotiations. There were considerable benefits that North Korea was going to get up front, in terms of the financing and construction of a light water reactor, really before they moved into dismantling their nuclear infrastructure. And we thought that, in the end of the day, did not work out. And that's why we have this action for action, as -- rather than give them benefits on the expectation they will carry out their commitments, we got the commitments up front, and asked them as they carried out their commitments, then they would get some benefits -- initially lifting of sanctions over time and increasing benefits over time.

Third, that agreement was premised on a freeze during the period that the light water reactor was going to be constructed. The problem with a freeze, of course, is that it's just a freeze. And when the North Koreans walked out of the framework agreement in 2002-2003, it was a few months before they were back in the business of producing plutonium.

So that's why we called, in the first and second phases, for a disablement, which is ongoing, which we -- our objective has been that if the process breaks down, it would take at least a year for them to get back into the business. But it was also disablement on the road to and in contemplation of dismantlement, and that's what we want to get to, not have a long phase -- certainly not a freeze, but even a long phase of disablement before you get into the dismantlement process.

So this is not a criticism. The '94 agreement was a good-faith effort. Unfortunately, the North Koreans did not want it to succeed. We have tried to learn from that. We think we have constructed a better framework that has been more effective, and that is what we will hand over to the next administration, and hopefully they will be in a position to continue this.

Yes, sir. Read more Comment (0), Email this.

Q What is your response to criticism that, in effect, a term paper is being accepted that isn't complete

MR. HADLEY: Well, I think the most serious issues are front and center. Because, remember, as best we can understand, it is the plutonium program that produced plutonium that was in the weapons that North Korea tested in 2006. And it is the plutonium infrastructure that can, if it is not dismantled, churn out additional nuclear materials for nuclear weapons. So we think getting our hands around that program, knowing exactly how much plutonium was produced, getting that at some point given up, or as we say, abandoned by the North Koreans, and getting that infrastructure disabled and dismantled is the most immediate source of nuclear material for North Korea and the most threatening source.

So we think that's a priority. But at the same time, we have recognized that we do have a declaration by the North Koreans on these other items -- that is to say their assertions that they're not engaged in either proliferation or uranium activity and will not in the future. But we also have a mechanism that will allow us to get satisfaction, we hope, over time, of the concerns we have.

So this is not accepting a passing grade. In some sense it is we're passing the paper back and asking the student to come in and work with us cooperatively to resolve the questions we have about their draft. That's what we're trying to do.

Sir. Read more Comment (0), Email this.

MR. HADLEY: No, the statutory requirement is that in the prior six months the country engaged in support to terrorist activity, defined as activities by individuals or groups that is a terrorist incident. And we do not have any evidence, and it is the -- and this is -- we've taken a look at this question in terms of our own intelligence -- we do not have any evidence that North Korea has engaged in that kind of support.

So, by the book, in terms of the statutory language, they are entitled to get off that list. It is not a concession that we've made, or a determination we made for other political reasons. This was done by the book. Read more Comment (0), Email this.

MR. HADLEY: Well, one of the things he said in his statement this afternoon is we have a lot of problems with North Korea. We have problems about how they treat their own people. This is a country that is -- where the people are in difficult straits. And as you know, we've entered into arrangement to provide food assistance, and we think it's a good thing that North Korea has worked with us so we can provide that assistance. We've been very concerned about human rights in North Korea, the lack of freedoms by the people in North Korea. We're obviously concerned about their nuclear activities. We're concerned about their ballistic missile activities. We're concerned about the threat they potentially pose to their neighbors because of their ballistic missiles and because the large conventional forces they make.

So we have a long agenda with North Korea. And as the President made clear today, we are in the process of addressing the nuclear issue, but before we can have the kind of relationships we would like with North Korea, and like with the North Korean people, these other issues are going to have to be addressed. Read more Comment (0), Email this.

Q Can you just shed a little more light on the level of plutonium production? And you mentioned

MR. HADLEY: I don't -- I'm not sure we've declassified that, so I can't give it to you. And let me be clear this way: We think you can get a sense of the number of weapons, but the big point is we want to understand the amount of plutonium and have a process by which that plutonium is taken out of circulation.

If you know you got all of the plutonium and you have a process by which it's all going to be brought forward and taken out of circulation, in a way, how much of that was actually in bombs and how much of it was still on the staff -- shelf, in a way, is less important so long as you know you're getting all of it. And that's the point. Read more Comment (0), Email this.

MR. HADLEY: Yes, sir. Read more Comment (0), Email this.

Q Two questions. One, what happens if, over the next, say, 45 days, you are dissatisfied with what

MR. HADLEY: Well, part of it is that we're not resting on hope or faith. We're asking for disclosures and a process of monitoring and a verification protocol which will allow us to be able to judge the truth and completeness of those answers. So we're not depending on faith. Second of all, this -- and that is, of course, what we hope will be the vehicle for truth.

And secondly, you have to ask yourself, what are the alternatives to this process? If your goal is to denuclearize the nuclear -- the Korean Peninsula and to try to do it in a framework that over time gives you opportunities to address the other threats that North Korea poses to its neighbors, you know, what's the alternative to this Korean program? And we took a look at whether there were alternatives that offered the prospect of getting progress on these accounts.

As the President said today, we concluded -- he concluded -- that multilateral diplomacy that is tough-minded, that is action for action, that is not based on faith but has a process available for monitoring and verification, offers the best prospect of dealing with this problem. Read more Comment (0), Email this.

MR. HADLEY: Well, what the President said clearly is that we obviously have -- we'll be watching what North Korea does in the next 45 days. We'll be monitoring their activity. One of the -- our real priority is to get the verification principles and the verification protocol in place in this 45 days, and actually get some steps underway. We are hopeful that that can happen in that 45-day period.

And as the President said to you, we'll sort of look and see where we are in 45 days. Our expectation is that we will move forward, we will make the progress, and that he will be able to, in 45 days, go ahead and -- the process for finally lifting the status as a state sponsor of terror will go forward.

But again, he has this 45-day period and he's made very clear that we will be watching and we will be working very hard with our others in six-party talks to get this verification protocol and framework in place.

Sir. Read more Comment (0), Email this.

Q Steve, inevitably this process, this announcement, along with the Middle East peace talks, will

MR. HADLEY: I don't think we see it in that framework, partly because we see, and the President sees, what he did in Iraq in very much as a -- in a multilateral context. It was actually action taken to enforce 16 U.N. Security Council resolutions, one of which said there will be serious consequences if Saddam Hussein did not disclose the truth about his nuclear and other activities. It did not address terrorism, did not address the treatment of his own people, did not address the threat he posed to his neighbors. So we went through, I think, 16 U.N. Security Council resolutions, and we had the support of most of the European countries, but not all, and had a coalition of well over 30 nations, many of whom are still with us in Iraq.

So I think the point is we have tried to use the multilateral instrument, but it's also been clear that if multilateral diplomacy works -- is going to work -- there has to be consequences if countries do not go along with the will of the international community. That was something we saw in Iraq, and that is something we see in the six-party talks in terms of the willingness of the six to move to a sanctions mode if North Korea decides to elect for confrontation rather than cooperation with the international community. MS. PERINO: I think we should just take one or two more. MR. HADLEY: One or two more.

Terry, did you have a follow-up? Read more Comment (0), Email this.