Return to Transcripts main page
Your World Today
Pyongyang Test-Launches Seven Missiles, White House Briefs Press on Situation; U.N. Security Council Consultations; Former Enron CEO Ken Lay Has Died
Aired July 05, 2006 - 11:56 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(JOINED IN PROGRESS)
CHRISTOPHER HILL, U.S. ASST. SECY. OF STATE: ... a member of the six-party process, and maybe more importantly as the host of that process. As you know, all the meetings take place in China. We need China to be very, very firm with their neighbors, and, frankly, with their long-term allies, the North Koreans, on what is acceptable behavior and what is not acceptable behavior.
COLLEEN MCEDWARDS, CNN ANCHOR: Where do you think process is at, though? I want to get one more shot at this. I mean, I understand what you're saying. You need everyone to get on board. You are looking very specifically to China for support here. But there are calls for direct talks. There are calls for more diplomacy. Is there room and time for more diplomacy here?
HILL: Well, look, diplomacy is clearly the best instrument for solving this, but this notion of direct talks versus multilateral talks, we have a process, we have a six-party process. Everybody in the region is involved with this. And within that process, we talked to the DPRK, the North Koreans, as much as we want, indeed as much as they want. So this is not a problem of lacking bilateral channels. We're able to talk to them. The problem is they don't like what we're saying.
MCEDWARDS: Ambassador Hill, what do you think North Korea's motivation is here?
HILL: Well, you'll have to ask them, because, quite frankly, firing off six or seven missiles of this kind, essentially threatening the entire peace and tranquillity of the neighborhood is not in anyone's interest, and certainly not in their interest. So whether they think -- whether they have a misplaced notion that this will help in their bargaining position, whether they've got some internal disputes, it's really hard to say. What is clear is they shouldn't be doing this.
MCEDWARDS: You know, the Japanese ambassador to the United Nations, Kenzo Oshima, just said something quite interesting when he came out from their meeting. I don't know if you were able to hear it or not. But he talked about the missile launch back in 1998. As people know, there's been a successful moratorium in place since then. But he said that this time it's more serious than it was in 1998, because he talked about the combination of nuclear weapons capabilities and missile testing, essentially saying essentially this launch is really at a whole different level than he's seen before.
HILL: Well, I certainly understand what he's talking about, because since 1998 what we have is a self-declared nuclear weapons state. So on the one hand, we know that they have nuclear weapons materials, plutonium. On the other hand, we know they are apparently testing the means to deliver it. And so what we don't want to do is be standing around, waiting around until they get both of these parts together and put them together in a viable delivery system.
So I think the stakes are high, but I think what's very important is we've got to stick with a process that has us working together. And I think one result of this is that the North Koreans will have brought the international community together as never before on this issue.
MCEDWARDS: Well, you know, some people have even suggested that this might be some sort of a strange way for North Korea to revitalize the six-party talks, to get that attention back and get things going again. Care to comment on that?
HILL: Well, you know, I've heard this theory that they feel neglected or shunned by other issues going on in other parts of the world. But I can assure you, we are very much on target in trying to get this six-party process going.
So, it's not for lack of our attention. Rather, it's been for lack of their attention.
MCEDWARDS: Japan calls for swift, strong, and resolute action, how important do you think that is? And what would you like to see come from the United Nations Security Council at this point?
HILL: Well, again, I don't want to speak for my colleague, Ambassador Bolton, up in New York, but I think it's very important that they -- that they have met today, that they have had a full discussion about this. As I said earlier, I think it's really quite unprecedented the degree to which everybody has lined up on the side of opposing these launches, launches that took place despite words of warnings from world leaders.
So, I think we need to come out of U.N. in a very solid, very united position. And I think we're doing that.
MCEDWARDS: Ambassador Hill, some people are even suggesting that the United States really does need to rethink its policy on North Korea and has suggested that in a lot of ways, the policy has failed.
HILL: Well, the policy is to get North Korea to stop developing weapons of mass destruction, stop developing the delivery systems, and to get on the -- with the rest of the world in joining the international community. We have a procedure for doing this, we have six-party talks. I realize it's -- we've had a hiatus for nine months. I know nine months can be a long time, but I think we have to stick with what we know is the right approach.
So, I'll be going out to the region, I'll be dealing with our partners. We have a real unanimity of views, and let's see what we can do with this.
MCEDWARDS: All right. U.S. Assistant Secretary of State Christopher Hill, thank you very much for taking time to speak with us on this. Appreciate it.
HILL: Thank you.
MCEDWARDS: I'm Colleen McEdwards. You've been watching CNN International, YOUR WORLD TODAY, with me and Michael Holmes.
CNN's Jim Clancy and Hala Gorani will be back with more of YOUR WORLD TODAY in just a moment.
Stay with CNN.
(COMMERCIAL BREAK)
JIM CLANCY, CNN INTERNATIONAL ANCHOR: Hello. And welcome to YOUR WORLD TODAY.
I'm Jim Clancy.
HALA GORANI, CNN INTERNATIONAL ANCHOR: I'm Hala Gorani.
CLANCY: We continue to follow fast-breaking developments in North Korea's series of missile tests. They have ignited a flurry of international condemnation.
GORANI: Now, as the world urged the reclusive nation to return to multi-party talks, six-nation talks, North Korea said that it is prepared to cope with any provocation, as it calls it, by the United States.
CLANCY: At Japan's question, the United Nations is meeting to discuss this issue. North Korea test-fired seven missiles in all. They fell harmlessly into the Sea of Japan.
GORANI: Most were short-range missiles.
CLANCY: Now, one of them was a long-range missile. And this was an important test. Analysts say that's a missile that's capable of reaching some parts of the United States. The missile, though, failed 40 seconds into its test flight.
GORANI: Now, we expect this topic to be front and center, of course, at the White House press briefing coming up in a few minutes. We'll go live to that when it happens.
We begin, though, with reaction from the region.
Earlier, I spoke to CNN reporters fanned out across the region. CNN's Sohn Jie-Ae in Seoul, Jaime FlorCruz in Beijing. But I began by asking Atika Shubert in Tokyo for reaction from Japan.
(BEGIN VIDEOTAPE) ATIKA SHUBERT, CNN CORRESPONDENT: Well, here in Japan, a lot of anxiety in the last 24 hours. At least seven missiles have been launched, all of them heading towards Japan. In fact, landing in the Sea of Japan. As you can imagine, that's caused a lot of anxiety here, people angered by what they say is a provocative act.
In the meantime, the government has taken a very tough position, imposing economic sanctions. Here's what Japan's government spokesperson had to say.
UNIDENTIFIED MALE: There is a legislation that will allow the Japanese government to take measures on the flow of currency towards North Korea. This is being now considered, and announcements will be made in due course.
SHUBERT: So, clearly, Japan taking very specific measures on economic sanctions towards North Korea. In fact, it seems as though Japan is really leading the charge and taking a harder line against these missile tests -- Hala.
GORANI: All right. Atika Shubert from Tokyo.
We take you to Seoul, North Korea's neighbor to the south.
We saw a lot of reaction there from Japan, Jie-Ae, but not as much from South Korea.
SOHN JIE-AE, CNN CORRESPONDENT: Well, South Korea has added its voice to the international community in expressing grave concern. But South Korea is a bit more cautious. I would say the mood here is more of frustration.
South Korea has in recent years tried very hard to build a relationship, a civil relationship with North Korea, and in some ways it has succeeded. The South Korean official reaction today reflects South Korea's frustration at the possibility that -- that by firing these missiles, North Korea could jeopardizes this fact that it could push itself more into isolation. There was also a feeling that even the good sentiments from South Korea to North Korea might worsen.
GORANI: All right. We're going to take you now from South Korea to China.
Jaime FlorCruz, China is perhaps the closest thing North Korea has to an ally in the region. What is the reaction from Beijing?
JAIME FLORCRUZ, CNN CORRESPONDENT: Well, Beijing is just as frustrated as the U.S. and Japan over North Korea's launching of the missiles But when they finally reacted some 16 hours after the launches, the reaction was a carefully worded statement from the foreign ministry expressing serious concern over the incident, but also calling on all sides to express calm and restraint.
They hope that neither side would -- would do anything that you could escalate tension or complicate the situation. This carefully worded statement reflects China's delicate diplomatic dilemma -- Hala. GORANI: All right. Now we have reaction from all three main players in the region.
Let's go back to Atika Shubert in Tokyo.
Japan, Atika, is spearheading this effort to get the international community and regional powers to speak with one voice regarding the North Korean issue.
Will it succeed?
SHUBERT: Well, Japan is really in an unenviable position. It finds itself as a prime target, and yet, because it has such bad relations with North Korea, it has no leverage, no bargaining position in which to negotiate with North Korea. And for that reason, it's really relying on either China or South Korea, depending on their good relations with North Korea to try and get some leverage, or it has the other option of trying to gather and consolidate international supports, really trying to get the international community to speak in one voice to condemn North Korea, hoping that that will eventually pressure Pyongyang.
Whether or not they'll succeed in that, we'll just have to see.
GORANI: Right. And we can see that in Japan's efforts at the United Nations as well.
Let's go back to Sohn Jie-Ae in Seoul.
We heard there from Atika, Jie-Ae, that Tokyo might be counting on South Korea in terms of diplomatic relations and in terms of trying to get things done diplomatically.
Do you think that that is a scenario that might unfold realistically?
SOHN: Well, it might. South Korea does have a bit more leverage on North Korea than Tokyo does because of its budding relationship with North Korea. There is a lot of economic relationship between South and North Korea. And South Korea has been providing North Korea with a great amount of fertilizer and food aid.
So, South Korea could use that as leverage. South and North Korean officials are expected to talk next week. And so we'll have to see if South Korea actually does use that as leverage. But at this point we're not sure -- Hala.
GORANI: All right.
Jaime FlorCruz, a final word to you. This putting China in a very difficult position, isn't it?
FLORCRUZ: It does. China is caught in the bind between the North Koreans, which is China's traditional ally, China's also neighbor and a main supplier of food, oil and other economic aid. And on the other hand, the U.S., Japan and other countries are pressuring China to lean on North Korea. And this is making China very -- put in a very difficult situation. China still hopes that all the six parties will come back to the six-party talks and resolve this issue through dialogue and negotiation -- Hala.
GORANI: All right.
Covering this story across the region, Atika Shubert, in Tokyo; Sohn Jie-Ae, in Seoul, Jaime FlorCruz in Beijing.
Many thanks to you all.
(END VIDEOTAPE)
CLANCY: Now, as we continue to explore in greater detail the aspects of this international crisis, the United Nations Security Council has convened an emergency closed session on North Korea. And we've been hearing from the diplomats.
Senior U.N. Correspondent Richard Roth joins us now live -- Richard.
RICHARD ROTH, CNN SR. U.N. CORRESPONDENT: Jim, the meeting has ended. And afterwards, the United States, Japan and Britain stood tall, stood together outside the Security Council. Japan explained that his country wants a firm resolution launched at North Korea.
(BEGIN VIDEO CLIP)
KENZO OSHIMA, JAPANESE AMBASSADOR TO U.N.: So, this afternoon, discussion on the draft will start at expert level, and hopefully it will reach an early agreement of the text (ph). We are working very, very closely with the United States, the countries in the region, and members of the six-party talks, the United Kingdom, other countries in the region, and beyond, who are all very deeply concerned about this unacceptable situation.
(END VIDEO CLIP)
ROTH: Diplomats tell us that Japan, Britain and the United States are pushing a resolution which would include a cut-off of funding and materials that could go towards any production of missiles and use in North Korea. Plus, condemning North Korea, calling on them to get back to a moratorium on missiles and return to the six-party talks.
The U.S. said afterwards that at the private consultations, nobody was opposed to tough action against North Korea.
(BEGIN VIDEO CLIP)
JOHN BOLTON, U.S. AMBASSADOR TO U.N.: ... because no member defended what the North Koreans have done. And I think that the tenor of that discussion shows how little support there is in the international community as a whole for these North Korean missile launches. We will now begin discussion, as Ambassador Oshima said, of their draft resolution, and proceed in a deliberate fashion, hoping to reach agreement on it at an early...
(END VIDEO CLIP)
ROTH: But not every country puts their cards on the table at some of these early meetings. So, what we were hearing afterwards, Russia seemed to be opposed to a resolution that would hint against sanctions, even saying there really should be a statement from the council, which would certainly not have as much clout as a resolution.
China is also being cautious at this time.
The North Korean ambassador made a rare appearance outside the Security Council and in the waiting room near the Security Council, and was followed on the streets of New York for any information about the missile launches and North Korea's intentions.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: OK. I am now busy. All of you, I invite to come to the United Nations immediately now. I'll be there.
UNIDENTIFIED MALE: You broke the treaty? Why you broke the treaty? You broke the treaty.
UNIDENTIFIED FEMALE: Was there a message...
UNIDENTIFIED MALE: Really, you don't have umbrella. I hold it for you.
(END VIDEO CLIP)
ROTH: That's Ambassador Pak Gillian (ph), who used his umbrella for diplomatic means and to fend off the rain and questions. His country still has no formal end of the Korean War treaty with the United States. That's what he's referring to, in part.
Jim, little action here at the United Nations Security Council in the morning, but now it will be a little bit private, as the so-called legal experts meet later in the afternoon in New York to try to draft a framework resolution that they can all tussle about -- Jim.
CLANCY: All right. Richard Roth reporting there live from the United Nations.
GORANI: All right. We've heard from the diplomats. Now we want to hear from you.
CLANCY: We're asking you this: What are the implications of North Korea's missile tests. What do you think?
GORANI: All right. E-mail us your thoughts, YWT@CNN.com. We'll read some of your messages a bit later on the show.
We turn now to a stunning development, though, in the Enron corporate scandal in the United States. The man at the end of the company which came to symbolize an era of corporate greed and fraud, Kenneth Lay, has died this day of a heart attack.
You may recall Ken Lay was convicted of fraud and conspiracy related to the collapse of Enron. During the trial, Lay was accused of lying to investors and Wall Street about the health of his company, the company he founded, even as he profited by selling millions of dollars in stock.
While Enron's collapse was one of the greatest corporate bankruptcies in U.S. history, Ken Lay's rise and fall has been described as equally spectacular.
Let's get more on the man behind the scandal.
Mallika Kapur joins us now live from New York.
Ken Lay, what a surprise today, his death. And this really writing the final chapter of the Enron fraud scandal, it seems like.
MALLIKA KAPUR, CNN CORRESPONDENT: It definitely does, Hala. Nobody was really expecting that chapter to close today, but that's exactly what happened this morning, about two months before he was sentenced.
And the former Enron CEO will be remembered as a man who presided over one of the most spectacular rises and falls in U.S. business history. The end came months before his sentencing. Lay's attorney says he died of natural causes. News reports say it was a heart attack.
In a statement, spokeswoman Kelly Kimberly says, "The Lays have a very large family with whom they need to communicate. And out of respect for the family, we will release further details at a later time."
Lay was convicted in May of 10 counts of fraud and conspiracy related to the collapse of Enron. And he seemed in disbelief. He maintained his innocence until the very end.
He was found guilty of repeatedly lying to investors and employees about the state of Enron's financial health during the months before the company collapsed back in late 2001. Lay was facing a maximum prison term of 45 years. He would have learned his fate in October, along with co-defendant Jeff Skilling.
Now, Kay Lay was once the toast of Houston, one of the city's richest men and great success stories of the late '90s. Remember, Houston went through some tough times after the oil bust, but the city turned on him after Enron's collapse.
Early in the trial, a survey of potential jurors found 80 percent of them were predisposed to convict. And Hala, legal experts we spoke with said that historians will debate whether Lay was actually speaking the truth when he said he didn't know about any crimes committed at Enron. Remember, the prosecution presented no smoking guns, no direct evidence, just several witnesses who pointed the finger at Lay and Skilling and say they were part of the massive fraud -- Hala.
GORANI: All right. A quick follow-up question on this.
Ken Lay clearly is most known right now in connection with that fraud scandal, in connection with the company he founded, Enron. Is there any else that people say, investors say he might be remembered for?
Well, of course, Hala, because Ken Lay was really the man who triggered a massive change in the U.S. legal system.
Remember, just about a year after Enron collapsed, we saw the U.S. government introduce the Sarbanes-Oxley Act. That was introduced back in 2002, and this was new legislation which asks for all U.S. public companies to have much stricter controls within the companies, much stricter controls of accounting and auditing. And that was really a response to Enron's collapse.
So, yes, Ken Lay will definitely be remembered as a man who set the ball rolling for this big change in the U.S. legal system with the introduction of Sarbanes-Oxley back in 2002 -- Hala.
GORANI: Mallika Kapur, live in New York.
Thank you -- Jim.
CLANCY: We continue to follow the story of the North Korean missiles and looking at what all of this means. We're expecting to have a White House briefing coming up soon. We're going to be waiting to hear how they weigh in.
Now, there's been a lot of analysis of what it all means, certainly not the least of which has focused on the fact that all of these missiles were send to fly on July the 4th, the U.S. Independence Day. Also, a day when the U.S. launched the space shuttle once again into orbit.
Also, some key questions being asked, whether or not Kim Jong-Il is trying to tout his missiles on the international market. Virtually the only product that North Korea has to sell is its arms. And chief among them, its missile technology.
Here is Tony Snow. We -- he's going to be doing some housekeeping here for the next couple of minutes, but we're going to go back into this, bring you this live as soon as they get into the matters of substance. And you can bet that the North Korea missile discussion is going to be right at the top of the agenda.
As I was saying a moment ago, there's a lot of belief that North Korea is trying to show that its missiles are reliable in large numbers. After all, there were seven missiles in total fired, particularly its short-range missiles are on the international market. This is the one of the few ways that North Korea can raise hard currency through these missile sales. The entire military program in North Korea is designed for export. That's just one more reason why the United States and so many others in the region are vitally concerned about what's happening here, what we are watching.
GORANI: And the question, Jim, is, what will be the strategy going forward for the United States? And we heard from the U.S. secretary of state, Condoleezza Rice, that she is saying this day that six-party talks are still the way to go, even though we know North Korea wants direct one-on-one communication with America.
CLANCY: There hasn't been any progress on six-party talks in years. It is a way, however, to regionalize the negotiations. And the United States thinks that's to an advantage.
It doesn't want to go into face-to-face talks, unless there's a key agreement for North Korea to stand down on its nuclear program. North Korea isn't willing to do that. So six-party talks will remain the framework. The question -- the result, though, is that nothing has been going on in these talks.
GORANI: Will it, though? Or, Jim, will the U.N. step in and condemn the tests in a forceful way?
We're told we can now go to the White House with Tony Snow, the press secretary.
CLANCY: Let's listen in.
TONY SNOW, WHITE HOUSE PRESS SECRETARY: ... of yesterday and today.
And that, sort of, closes up.
QUESTION: Could I ask you about China's reaction? They say that North Korea's launch was regrettable, but they indicate that they favor something weaker than a condemnation -- the condemnation that Japan is offering.
SNOW: Well, a number of people have been talking about different options. And as Ambassador Bolton just said, at this point, nobody's going to announce anything.
What they're doing is working together, both within the United Nations Security Council and also the parties of the six-party talks -- which reminds me: Chris Hill. Once again, there's been another schedule change. Chris Hill will be leaving this evening.
We do know that he will be meeting with his counterparts from Russia, China, Japan and South Korea. I do not know for certain exactly what the itinerary is. That will be announced a little bit later. But I had promised you that. So we do know that.
QUESTION: Well, does it appear that there is a lack of consensus? SNOW: I don't think so. If you take a look at all the statements, everybody regards it as a clear provocation.
The end state is pretty clear. What you want is a North Korea that renounces nuclear development, that returns to the table, that no longer engages in this kind of activity -- this kind of provocative activity. And you've also got to keep in mind that the Chinese specifically asked the North Koreans not to do this. The Japanese specifically asked the North Koreans not to do this. The South Koreans specifically asked them not to do this.
The Russians, the international community -- you had continuing efforts to try to reason with the government of Pyongyang. And there will continue to be those efforts.
And the one thing that Ambassador Bolton said, and it's been our policy all along, is that we do not act unilaterally; parties do not act unilaterally. They will act in concert. And that's how we will continue.
QUESTION: Tony, all of this brings up the question of how you reach North Korea. If you have their lone trading partners asking them not to do something and they do it, what can you sketch out as, sort of, a general range of options to...
(CROSSTALK)
SNOW: I don't want to get into general ranges of options.
As you know, the Japanese have already taken a couple of preliminary steps, and they have announced those earlier today. No North Korean ships are going to be able to come into Japanese ports. They're not going to permit transit into Japan from North Korea for diplomats and others.
I honestly don't know. I think that they're discussing a whole range of things.
I mean, you point out -- one of the most important things to remember is the situation in North Korea. We don't want to punish the North Korean people. They've been punished enough by their government.
Here you have a nation where as many as 2 million people starved in the last decade. You have a nation, the infrastructure of what was largely built in the period of 1910 to 1945. You have a government that commits regular human rights abuses, that rather than having an economy, draws its income from arm sales and also trafficking in counterfeit currencies and drugs.
Meanwhile, you have at least a third of the budget is spent on military expenditures. You have the dear leader living in splendor while many of his people live in squalor.
The question of how you get through and how you influence that behavior is something that everybody in these talks is taking very seriously. I don't have an answer for you right now.
I'm sure that they are trying in very practical terms to figure out the best way to have influence on that government or to have influence with people who are going to have influence with the government.
QUESTION: Last week, in the East Room, the Japanese prime minister said that he had been in consultation with president in talking about what they would do should the North Koreans launch hoping they wouldn't.
Now that they have, can we get a little more detail on what that conversation was all about?
SNOW: No. The president's had a number of general conversations. I was not in. There was one small restricted meeting. I have a feeling that some of those details were discussed in that restricted meeting of which I was not a party and I have not gotten a readout on anything specific.
But I know that what has been discussed -- and there was extensive diplomatic activity before this. As I said this morning, it was anticipated that something like this might happen. So there were ongoing efforts by the United States and its allies, A, to try to avert this and, B, to start gaming out some things that would happen, as I said earlier today.
Given what happened, I don't think anybody had a specific scenario for seven missile launches on the 4th and 5th of July. But I am wary of trying to get into, sort of, specific things that the leaders may have discussed.
I think right now, as Secretary Rice has said, and also Ambassador Bolton, all parties now are trying to figure out realistically how to make a positive difference through diplomatic needs.
QUESTION: Tony, can I just -- it's probably similar to your question as well -- but you've been talking about this for a month.
SNOW: Yes.
QUESTION: You anticipated this launch for a month, whether it was one missile or whether it was 10 missiles.
SNOW: Right.
QUESTION: And yet you still don't have a clear idea of what options there are.
SNOW: Well, I think people have a lot of options.
(CROSSTALK)
QUESTION: Or you just don't want to discuss it. SNOW: Well, again, I don't want to discuss anything that's going on behind the scenes, because part of what's going on is that the parties to the six-party talks are now working to come up with something in unison.
As you know, it's an enormously -- you've got a society that is anything but transparent. You have a society that already runs the kind of economy that I've described and subjects its people to human rights abuses. And so you do have the practical issue that has been discussed much, but now it has been joined, for people to figure out how to move together.
It is not like have you a simple off-the-shelf, "Let's go to Option C; surely this will make a difference." If we had had something that simple, it probably could have been deployed effectively to have prevented the launches.
QUESTION: Did you at any time think they were backing off? Or this entire month were you quite certain they were going to launch?
(CROSSTALK)
SNOW: I cannot speak. I know that there was always the hope that they would not launch. But when you do this, when you're looking at a situation like this, you always have to anticipate that something may happen. And that is what's going on.
And I must say: Even now there is continuing analysis of the launches and the telemetry from the launches to try to figure out what one may be able to determine about the aims and intents of those launches themselves.
SNOW: And the experts over at DOD and at NORCOM and other places are still trying to go through that.
QUESTION: Can I just get one definitive in? North Korea launched seven or possibly more missiles in the last 24 hours.
SNOW: So far we only know of seven, yes.
QUESTION: What's the U.S. response?
SNOW: The U.S. response is we're working with our allies to figure out how to try to get North Korea back to the table, back to the six-party talks, and to figure out some way to establish their credibility, so we can move forward.
QUESTION: Each government involved in this has issued a statement calling it a provocative act or whatever. How important is it to have a united statement condemning what has happened here?
SNOW: Well, inasmuch as you're operating as five parties in six- party talks, it's something that we very much expect to have. You expect to be speaking with one voice, not five, not 10, not 15.
It's also one of the reasons why, within the confines of the Security Council, there's also a very strong effort to reach consensus on how to proceed.
QUESTION: It was four years ago that President Bush labeled North Korea a member of the axis of evil. But under the president's watch, you have North Korea has increased its nuclear arsenal, you've got it abandoning the six-party talks and now these missile tests are going on.
What would you say to Americans -- how do you convince them that this is not a policy that is basically a failure? What can (inaudible) point to that actually shows that any of the U.S. objectives have been met?
SNOW: It's an interesting question. Let me put it this way; let me quibble with your assumption beforehand.
North Korea also had talked to the previous administration, which had put together an agreed framework that was designed to ensure that there would be no nuclear development.
It was this administration that discovered that nuclear development and brought it directly to the attention of the North Koreans. It was this administration that also, working with our allies, brought the North Koreans to the table for the six-party talks.
Is it going to be possible for a policy or a president to try to make a leader who seems determined not to care about his own people and also to defy the will of his neighbors and the people in his neighborhood -- is there a simply policy option that will change that? I don't know.
But to say that somehow the policy of this administration has made a tangible difference for the worse in North Korea I think is not accurate.
Furthermore, this is a North Korean government that's been behaving in much the same way for a very long period of time.
What the United States has done is created within the neighborhood a kind of diplomatic a diplomatic consensus that did not previously exist, and also now has a unity of purpose among the members of that community to try to make sure that North Korea's ambitions, whatever they may be, if they are hostile, get bottled up so that it is possible for that region to enjoy security and peace.
QUESTION: Just a follow-up here. I mean, while the behavior of those involved in the six-party talks has changed, they've gotten more aggressive toward North Korea, how has the six-party talks, that process, changed Pyongyang's behavior?
SNOW: Let me back up.
I would hesitate -- you've just described the behavior of people who've been offering diplomacy as aggressive. Wrong.
The people who are practicing aggression are the people who are firing missiles into the sea.
Now, in this particular case, again, when you build the international consensus of this sort and you have the chief trading partners and those who do a great deal of they commerce with the North Koreans involved, that's an important step. At some point things are going to change in North Korea -- we don't know how -- but we know that it is absolutely imperative on the peninsula to build the basis and the prospects for peace.
And if you have a man...
(CROSSTALK)
SNOW: Look, what do you want me to say? Do you think that there is some special way to sort of send a secret message and Kim Jong Il suddenly is going to practice rationality? If so, we'd love to hear it, and we'll accept all suggestions.
QUESTION: Do you have any plans to have the president reach out to his counterparts in an effort to forge this united...
SNOW: The president has spoken in recent weeks with these counterparts.
What we're doing right now is conducting negotiations at the appropriate -- and that is the diplomatic level. Secretary Rice now has spoken with the other four parties, her counterparts in Japan, Russia, South Korea and China, within the last two days.
We also have Chris Hill, who is going to be going directly to speak with his counterparts there and to make an appearance in the region.
So I think you've got very aggressive diplomacy before and now after the fact and we'll continue to do that. Let me say "assertive," since I quibbled with "aggressive" a moment ago: assertive diplomacy.
QUESTION: On that line of questioning, you have gone out of your way to point out that the president has not called world leaders today and, in fact, his NSC briefing was on Cuban.
QUESTION: Do you think that the North Koreans were trying to get this to a presidential level?
SNOW: I don't know, but if that was their desire, they failed.
If it was the desire of Kim Jong Il to turn this into a two-party negotiation or standoff between the United States and North Korea, he blew it.
Instead, what has happened is that the United States continues to work with its allies in the region, including those in the neighborhood who have profound and vested interest in their own safety and security, to work with the United States to try to come to a happy resolution to this. QUESTION: Have you heard concern from allies, including China, that if there are harsh sanctions that perhaps this regime would crumble, and that would not be a good thing for the region?
SNOW: I have not been privy to any of those discussions, so it would be presumptuous of me to say.
I am sure that people are discussing any and all scenarios, trying to figure out the proper way forward. But I honestly don't have an answer to your question.
QUESTION: Do you have an expectation that there would be any additional launches that might be imminent?
SNOW: I don't know. I'll go back to what Steve Hadley was saying yesterday, which is that there appear to be, at least potentially launchable, a small number also of No Dongs or Scuds, the short- or medium-range missiles that may or may not be launched; we don't know. But there is no immediate expectation.
Again, we're watching this with interest and keeping on top of it. But there certainly is the potential there. We don't know if they're going to act on it or not.
QUESTION: And what's the minimum threshold that you want to see come out of the U.N. Security Council?
SNOW: I don't think you talk about minimum thresholds because I don't even know how you measure it. I don't quite know what the question means. I think what you are going to see -- it's not even a minimum threshold; it's a necessity, which is the kind of diplomatic consensus that is going to make it possible to put whatever appropriate pressure on the government of Pyongyang to try to make sure that it steps back from these acts of provocation; that it steps back from being an arms supplier to terrorist regimes, including Iran and Syria; that steps back from the use of drugs and counterfeiting and arms proliferation as a way of making money; and it steps back from making life miserable for its own people while the small elites live in relative luxury.
QUESTION: My question is on Cuba. Why did the NSC meeting this morning focus on Cuba?
Is there anything new about Castro's health? Or is the administration adopting a new policy toward Cuba?
SNOW: None of the above. It was a regularly scheduled meeting.
As you know, the State Department has been producing a report. It produced one a couple of years ago. And it was for the purposes of reviewing that. And they were going through it.
I suspect -- and I apologize. I told you that I was going to seek some guidance on what, if anything, they discussed about Iraq at that meeting. I did not get it. So I will attach it to the transcript -- any additional information that I may get. QUESTION: May I ask another question? Congressman Brad Sherman of California says...
CLANCY: All right, we've been listening to a press conference there. Tony Snow, White House spokesman, talking about the North Korea test firings of seven missiles, and saying, really, that the U.S. is analyzing what is the next step. They are looking at the different measures that Japan is pushing right now, measures like barring any North Korean ships from their ports, measures like forbidding the transfer direct travel to Japan.
There's a lot of measures that could be taken. This is going to come up at the G-8 Summit, at the -- going to be held later this month in Russia. But the U.S. pointing out, what do you do when you have an entire country whose citizens lack almost everything? They're already deprived. What kind of penalties can you impose there?
GORANI: Well, and at the negotiation level, Tony Snow there, the White House press secretary, saying that the U.S. will continue in its efforts to try to, quote, "reason with Pyongyang and expect to be speaking with one voice, the international community."
The U.S. really, Jim, wants this to be a one voice issue. They don't want to be seen as engaging directly with North Korea. And that's where the U.N. also comes in.
CLANCY: And you've seen -- they have that. They have a universal condemnation. You've got Russia and China, Japan and South Korea, all involved here, all talking about the critical nature of all this, trying to reason with North Korea. But as Tony Snow points out, nothing seems to be working.
GORANI: All right, we're going to change gears now. And we're getting news from Gaza. This is a developing story from the Middle East. Let's join our Paula Hancocks live. She's in Gaza City. We're getting -- we do not have Paula, but we are trying to connect with her. She is a reporter on the ground this hour. For the latest, we are getting word of more ground movement into northern Gaza by the Israeli military. We do not have direct confirmation of this from the Israeli defense force. We are getting these reports from Reuters for now.
The question is, is this the massive military operation that the Israeli prime minister, Ehud Olmert, had threatened in order to try to gain the release of an Israeli soldier who was kidnapped more than a week ago now, Gilad Shalit? That is the question. And we don't have more details. And we will be going to Gaza City live once more information comes into us here at CNN.
We're covering the world for you on YOUR WORLD TODAY. This is CNN. Don't go away. Short break. We'll be right back.
(COMMERCIAL BREAK)
CLANCY: Welcome back. This is YOUR WORLD TODAY, the most important international news stories broadcast around the world. (NEWSBREAK)
CLANCY: Europe is on the edge of its seat, Germany is in despair -- well, really beyond despair -- and here's some advice, don't even try to phone Italy anytime Sunday. That's when the Italian national team will be playing in the World Cup final. The Italian flags out in force here.
GORANI: All right, there you see scenes of celebration. And we want to bring home really the level of intensity and passion across the world as the World Cup gets under way.
Our Becky Anderson is live in Berlin, the host nation for this World Cup 2006.
Becky Anderson, in Germany of course, give us a sense of the atmosphere today. We're waiting as well in a few hours for another crucial semifinal match, and that's Portugal versus France -- Becky.
BECKY ANDERSON, CNN CORRESPONDENT: That's right, you're absolutely right. The Italians winning last night, a brutal, brutal exit for the Germans, Hala, it really was. You saw grown men were crying here. No real malevolence around, just this sheer sort of desperation, and we've been suggesting this sense of resignation here. The team not expected to do particularly well at the beginning of this tournament. Once they got to the semifinals, there really was this sense they might go all the way.
Anyway, that was the first semifinals, so the Italians are now through, and we switch to France/Portugal. And the fans are arriving in Munich. The 66,000-capacity Alion (ph) Stadium hosts the second semifinal tonight. An outbreak really of peace and civility in Munich. More swimsuits and sunbathing than the swinging of fists, (INAUDIBLE) sound of sirens, which we might have had had if we had fans from other countries. There had always been these concerns that perhaps the British fans would cause trouble and fans from other places. But with France and Portugal in this match tonight, as I say, it is sort of peace and serenity, in the Marion Platz (ph) here, as you're seeing, in Munich today.
So the match kicking off at 1900 GMT tonight. As I say, 66,000 will be in the Alion Stadium. That smashing brand-new stadium. It looks like a UFO in Munich.
The Olympic Park hosting the fans there, and there'll be some 20,000 fans expected there tonight, nothing like, of course the numbers that we saw behind me here at the Brandenberg Gates in Berlin last night, watching that German game. There were some 900,000 people watching that game, and the game was being held in Dorfin (ph), a very, very long away from here, so a certain sense, though, because the German team isn't in this tournament anymore, that you won't see quite the sort of scenes that we've seen over the three weeks, but certainly some anticipation ahead of tonight's game.
Italy then facing the winners of France versus Portugal. After a sluggish start, will start as favorites, odds-on favorites. The Italians have something like 11-4. Le Blur (ph) haven't lost to Portugal in 31 years. Zimdy Zadan (ph), the playmaker has suddenly piqued just as he prepares to bring down the curtain on his illustrious career of course. Although the two countries have never met before at a World Cup, France's coach, Raymond Domenech, is not underestimating his opponents.
(BEGIN VIDEO CLIP)
RAYMOND DOMENECH, FRANCE COACH (through translator): The goal for all of us is the 9th of July. We've been talking about it a long time. But to get there we need to perform in that match, and there will be even more need to perform than in the other matches. Because our opponents are solid, they have also reached the semifinals, and it's not by chance; it is because they are talented. We are ready. We are not pretentious. We have a match to play, and that's the most important thing. The moment of truth will be in this match.
(END VIDEO CLIP)
ANDERSON: And one thing is for certain, and that is the fact that either Zadan or Luis Figo (ph), of Portugal of course, will be playing their last games for their countries today if, that is, Figo plays, and there has been some concerns about whether he will be match-fit or not.
For Portugal's coach, it's set to be an emotional farewell to at least one of the game's great players.
(BEGIN VIDEO CLIP)
LUIS FELIPE SCOLARI, PORTUGAL COACH: We like to see Figo playing as much as Zadan because I say the ball does not cry when it gets to his feet, but when I used to play, the ball would cry. So it is beautiful to see them play. Even an opponent feels ecstasy when he sees Zadan in action. We are going to try to mark (ph) him, but not only him, the whole team, because he's part of a group. That's what France is at the moment.
(END VIDEO CLIP)
ANDERSON: We are just hours away from the second of the semifinals. Whoever wins tonight plays Italy in the finals on Sunday -- Hala.
GORANI: All right, thanks for that extensive wrap-up. Becky Anderson live in Berlin.
A lot more on that North Korea missile crisis after the break. You're with YOUR WORLD TODAY. Don't go away.
(COMMERCIAL BREAK)
GORANI: All right. Let's return now to North Korea's missile tests, and the White House and the State Department today were quick to note that this episode is not a U.S./North Korea confrontation, but there are calls for direct talks between Washington and Pyongyang. Bill Richardson is a former U.S. ambassador to the U.N. and has held talks in Pyongyang.
(BEGIN VIDEO CLIP)
BILL RICHARDSON, FORMER U.S. AMBASSADOR TO U.N.: What you need is consistent engagement with the North Koreans, because if you provoke them, they get very, very, very upset at even the slightest little provocation.
Then what happens is they go haywire like they just did. They act irrationally, they act without any kind of common sense. They don't negotiate like any other nation, because they're so isolated and they have a cult of personality in Kim Jong-Il.
(END VIDEO CLIP)
GORANI: Well, influential members of the president's own Republican Party are also urging direct talks with North Korea -- Jim.
CLANCY: Direct talks the best way forward?
Well, Michael Green is U.S. President George W. Bush's former senior adviser on Asia. He joins us now live from Washington. Thanks so much for being with us. When you look at the situation now, a test of seven missiles. Some have said that Kim Jong-Il is really -- he put up a sales event to show the effectiveness of at least his medium- range missiles. Do you agree?
MICHAEL GREEN, FMR. SR. ASIA ADVISER TO BUSH: At one point, North Korea was offering to sell its exported missile inventory for a billion dollars a year to the U.S. That was about eight years ago. Those sales are way down.
It's possible North Korea is doing a kind of Fourth of July sale demonstration, but I think this is more about propaganda internally and about trying to create a sense of panic and shock to see if they -- the North Koreans -- can get the U.S. into a bilateral negotiating process that would allow them to isolate the U.S. and remove pressure that they now feel from the region as a whole.
CLANCY: Is it going to work?
GREEN: Oh, absolutely not. I mean, there are some, I think, a few critics saying that the right thing to do after North Korea, you know, provokes us with missile launches is to send a delegation to Pyongyang, but I seriously doubt that's where the administration is going to be.
I think the focus of the administration will rightly be on getting the other parties in the talks to take advantage of a blunder by Kim Jong-Il, a strategic blunder and a propaganda blunder.
The main missile flew off course and blew up after 30 seconds, take advantage of that to put pressure on the north to get them back into the six-party talks and to get them about the business of dismantling their nuclear weapons, which they said in September they would do, but since then, they've done nothing but, you know, provoke and delay and demand conditions.
CLANCY: Now, we have just heard from Bill Richardson saying that you have to consistently engage. Isn't the U.S., isn't the Bush administration trying to consistently engage? What is the problem?
GREEN: I think so. When I was in the administration I went to a number of these three-party and six-party talks, and clocked many, many hours talking to North Koreans about their concerns and about the way forward.
But the principle that we always maintained and that the administration still maintains is that this is a regional problem, that North Korea's missiles were a threat to Japan, to Korea, to China, and that those are also the countries that have the ability to help North Korea out of their problems.
So it makes sense that we come up with a regional agreement, and I think that's what the six-party talks are intended to do. And we had the outline of an agreement in September. Now, North Korea is, you know, regretting it, they don't want to implement it.
They're trying to raise the ante, and I think the right response is not to give them, you know, a bilateral agreement with the U.S., but rather to get the other parties together to get them back into the talks and dismantling the nuclear programs. And that's just what Ambassador Chris Hill I think will be doing on behalf of the president next week -- this week. Excuse me.
CLANCY: Now, this is going to come up at the G8 summit in Russia. Do you see this event as bringing together all of the parties that have an interest, including Russia?
GREEN: Yes. The reality, of course, is that China, South Korea have somewhat different takes on North Korea. They worry more, in the case of South Korea, about how to reconcile. They worry more, in the case of China, about how to maintain stability. So we've had a common objective of denuclearizing North Korea, but we've had some tactical disagreements. I think North Korea has now ...
CLANCY: Michael, did you press China -- the administration was pressing China, take a bigger role.
GREEN: Sure.
CLANCY: Use some of the pressure that you have. Is this likely to turn around any of the minds in China?
GREEN: I think it has to. Now, the Chinese are not going to come out and start sounding like the Japanese, and calling for sanctions and tough measures, but this has to have an effect in Beijing.
The Chinese are looking now at a North Korea that's going down a path of provocation, and it is absolutely in China's interest to start drawing the line now with some stern measures so that they don't keep going down that path.
And I think as this goes to the Security Council, China will not want to veto and stand alone. And I think they'll try to water down the resolution, but at the end of the day, they'll probably find it in their interesting to at least abstain to let North Korea know that they're on the wrong path, because where North Korea is heading is going to destabilize the region and hurt China's interests.
CLANCY: Michael Green, former adviser to the U.S. president on Asia, thank you very much for being with us on YOUR WORLD TODAY.
GREEN: Thank you.
GORANI: Well, as we've heard, world leaders have reacted swiftly to North Korea's missile tests, and now we want to know what you think.
CLANCY: Today in our "Inbox," we've been asking you this: What are the implications of North Korea's missile test?
GORANI: Gregor in Beijing thinks, "It's finally time for genuine negotiations with North Korea. Otherwise, things will just predictably repeat themselves over and over again."
CLANCY: But Bryan in Seoul disagrees, telling us, "North Korea is just trying to get attention from the rest of the world. They've done it before and each time things die down again."
GORANI: Steve in the United States believe, "It's all about isolation, isolation, isolation. North Korea will never learn, period."
CLANCY: Well, from Derek in Poland, this: "North Korea is merely diverting attention from the situation with Iran."
As always, thanks to all of you for writing us. Keep the e-mails coming. Our address, YWT@CNN.com
GORANI: All right. That's it for this hour of YOUR WORLD TODAY.
CLANCY: "LIVE FROM" is coming up next for our viewers in the U.S.
GORANI: For viewers elsewhere around the world, another hour of YOUR WORLD TODAY. I'm Hala Gorani.
CLANCY: I'm Jim Clancy, and this is CNN.
(COMMERCIAL BREAK)
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
