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TO RUEHC/SECSTATE WASHDC IMMEDIATE 6884
INFO RUEHBJ/AMEMBASSY BEIJING 3232
RUEHKO/AMEMBASSY TOKYO 3372
RUEHMO/AMEMBASSY MOSCOW 8299
RUEHIN/AIT TAIPEI 2244
RHMFISS/COMUSKOREA J5 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 003043 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 07/16/2017 
TAGS: PREL PROG KS KN
SUBJECT: MOU MINISTER DOWNPLAYS SUMMIT TENSIONS, HIGHLIGHTS 
PEACE REGIME AND ECONOMIC PROJECTS 
 
Classified By: Amb. Alexander Vershbow.  Reasons 1.4 (b/d) 
 
------- 
Summary 
------- 
 
¶1. (C) In an October 8 meeting with the Ambassador, 
Unification Minister Lee Jae-jung went into detail about the 
personal dynamics between President Roh Moo-hyun and Kim 
Jong-il at the October 2-4 Summit, and downplayed the awkward 
moments between the two.  Lee's overall impression of the 
summit as "systematic," however, tracked with incidents 
suggesting a lack of warmth and personal connection between 
the two leaders.  This stood in contrast to the obvious 
rapport between Kim Dae-jung and Kim Jong-il during the 2000 
summit.  Lee also highlighted Kim Jong-il's interest in U.S. 
statements on a potential end-of-war declaration, and 
discussed the implementation of the various joint economic 
projects.  The Ambassador pressed for and received assurances 
that the ROK was not seeking an end-of-war declaration before 
full DPRK denuclearization.  END SUMMARY. 
 
------------ 
Peace Regime 
------------ 
 
¶2. (C) Kim Jong-il evinced great interest during Roh's 
detailed explanation of President Bush's Sydney statement 
concerning the possibility of a declaration to end the Korean 
War, according to Lee.  Kim agreed with Roh's view that the 
Korean War needed to come to an official end.  Kim reportedly 
emphasized that U.S. suggestions on a peace regime would be 
very important.  Kim agreed that peace process discussions 
should be held, and requested that the U.S. and ROK consult 
with each other on the matter of the "three or four directly 
related parties" issue.  Lee declined to specify whether the 
"three or four directly related parties" language was aimed 
at excluding China.  Lee claimed that the two sides had not 
discussed who the three or four parties should be, though he 
noted that the DPRK had accepted the ROK as one of the 
directly related parties, calling this a significant change 
from its prior position. 
 
¶3. (C) The Ambassador said that the media had been 
circulating unhelpful speculation that a summit including the 
U.S. President could take place before complete DPRK 
denuclearization.  He emphasized that an end-of-war 
declaration and a peace regime were one and the same and 
depended on a successful conclusion to denuclearization 
efforts.  Lee assured the Ambassador that the Six-Party Talks 
(6PT) and peace regime discussions had to run in parallel to 
each other, and that the ROKG would continue consultations 
with the U.S. on these issues.  Kim Jong-il had spoken at 
length about the importance of the 6PT, and had summoned Vice 
Foreign Minister Kim Gye-gwan to explain the status of the 
talks when Roh raised the subject.  As both denuclearization 
and peace regime discussions would require significant time 
to implement, Lee requested that the U.S. increase its pace 
with respect to these issues.  The Ambassador conveyed that 
the U.S. also desired a more rapid implementation of all 
aspects of the September 2005 Joint Statement, but also 
reiterated President Bush's statement in Sydney that a peace 
declaration could come only after Kim Jong-il had verifiably 
given up his nuclear weapons and programs. 
 
----------------- 
Economic Projects 
----------------- 
 
¶4. (C) Lee said that President Roh had made it a priority to 
press for the DPRK military's attention to and acceptance of 
the West Sea Peace Zone and other economic projects, since 
the military had not previously acknowledged the link between 
peace and economic measures.  The West Sea Peace Zone 
proposal was rejected by Kim Jong-il when first raised by Roh 
during the morning session between the two summit leaders. 
Kim had said that there were naval bases at Haeju, the port 
city involved, making it inappropriate to designate that area 
as a special economic zone (SEZ).  (NOTE: Kim recalled that a 
former Hyundai CEO had suggested Haeju as a joint economic 
site in the past, but that Hyundai had ultimately accepted 
Kaesong instead. END NOTE.)  However, in the afternoon 
session, and following discussions with his military 
advisors, Kim accepted all parts of the West Sea Peace Zone 
 
proposal, including the Haeju SEZ. 
 
¶5. (C) The Ambassador noted that the October 4 Summit 
Declaration included many potential economic projects, and 
asked which ones could plausibly get under way by February 
2008, when the Roh Administration would leave office.  Lee 
replied that the expansion of the Kaesong Industrial Complex 
(KIC), the freight railway link from the KIC to the ROK, and 
the Mt. Baekdu tour operations could all be implemented by as 
early as next year.  As over 100,000 South Koreans had 
already traveled to Mt. Baekdu via China, Lee believed that a 
direct route to Mt. Baekdu, which would be less expensive, 
would be an even bigger draw.  Kim Jong-il's official 
endorsement of the freight link between the KIC and the ROK 
was a significant achievement, which could lead to rail 
traffic soon.  On the other hand, Lee said that the ROK 
viewed the West Sea joint fishing area and Peace Zone as a 
long-term project.  He stated that all of the economic 
projects would require cooperation and support from the U.S., 
and that this was why the ROK had sent Deputy NSA Yun 
Byung-se to the U.S. to brief on the results of the summit. 
 
¶6. (C) Asked about the estimated price tag for the proposed 
joint economic projects, Lee replied that MOU's budget 
proposal to the National Assembly for the next fiscal year 
would include 1.3 trillion won (approx 1.5 billion USD) for 
North-South projects.  Haeju and the West Sea proposal would 
not be included, as the scope of the project had yet to be 
determined.  Lee acknowledged that a large share of the cost 
for many of the projects would be borne by the private 
sector, in the form of investments. 
 
------------ 
Summit Blips 
------------ 
 
¶7. (C) According to Lee, Kim's offer to Roh to extend the 
summit by another day was not an official invitation, but 
rather a polite gesture of hospitality.  In Korean culture, 
according to Lee, such offers were made whenever guests 
visited but were not expected to be acted upon.  The media 
had blown the incident out of proportion, and Roh had not 
taken any offense at this unexpected invitation. 
 
¶8. (C) There was no misunderstanding of the terms "opening" 
and "reform," as reported in the South Korean press.  Roh 
explained to Kim Jong-il that projects such as those being 
pursued at the KIC could help promote reform while 
maintaining the DPRK regime, citing the PRC as a model.  Roh 
emphasized to Kim that the KIC was not a political vehicle to 
open and reform the DPRK.  The Ambassador stressed that, even 
though we might want to use diplomatic language, he hoped the 
ROK's policy was still aimed at encouraging the DPRK to 
reform and open its society. 
 
¶9. (C) Lee portrayed the absence of Kim Jong-il at both the 
Arirang performance and the Roh dinners as no surprise: the 
DPRK had merely followed the agreed-upon schedule and 
protocol.  The summit as a whole had been carried out 
according to schedule, and in a very "systematic" manner that 
resulted in a substantive summit declaration, said Lee. 
 
--------------- 
Summit Dynamics 
--------------- 
 
¶10. (C) Kim Jong-il and Kim Yong-nam, the official DPRK head 
of state, spoke on different topics and with different 
attitudes during their meetings with Roh.  Kim Yong-nam spoke 
with Roh for an hour about the more controversial North-South 
issues in a "very conventional way," and Lee noted that Kim 
Yong-nam's demeanor was formal to the point of being cold. 
On the other hand, Kim Jong-il presented a more flexible 
attitude and had clearly prepared for the summit.  In 
particular, Kim Jong-il did not mention the NLL.  "It's the 
21st century now, so it would not be appropriate to discuss 
20th-century issues," Kim reportedly said.  The Ambassador 
remarked that this seemed to be a "good cop/bad cop" 
situation, with Kim Jong-il playing the role of the good cop. 
 Lee agreed with this assessment. 
 
¶11. (C) Lee characterized the summit as "more systematic" 
than the 2000 summit, particularly in protocol matters.  The 
DPRK accepted almost all of the ROK's protocol and 
 
preparation suggestions, indicating a "very flexible 
attitude" going into the summit.  The DPRK allowed the ROK to 
hang the ROK flag and national flower at a temporary ROK 
Presidential Office at the Paekhwawon Guesthouse, and allowed 
President Roh's car to fly the ROK flag alongside the 
unification flag while in the DPRK. 
 
------- 
Comment 
------- 
 
¶12. (C) Minister Lee's attempt to downplay awkward moments 
between the summit heads was not convincing.  In particular, 
his attempt to spin the awkward invitation to extend the 
summit by a day as a "cultural misunderstanding" did not make 
sense, as Kim's and Roh's positions made the invitation 
inherently official.  Lee's characterization of the summit as 
"systematic" suggested that the two leaders did not make a 
personal connection during their time together.  Overall, 
Lee's favorable characterization of the summit seemed to be 
aimed at putting the best possible face on the meeting, with 
particular pride in the Declaration that resulted.  END 
COMMENT. 
VERSHBOW