The Commission on the Theft of American Intellectual
Property said U.S. responses so far, using the World Trade
Organization and government talks, have not kept up with the
fast growth of trade secret theft by cyber and traditional
methods.

“The scope of the problem requires stronger action,
involving swifter and more stringent penalties for IP theft,”
said the non-partisan commission’s report, compiled by former
senior government, military and industry leaders.

The panel recommends making the president’s national
security advisor the chief policy coordinator of an all-out U.S.
drive to protect intellectual property and punish theft.

Intellectual property thieves should be hit with a mix of
banking sanctions, bans on imports and blacklisting in financial
markets, said the commission, which has shared its 89-page
report with Congress and the Obama administration.

“The banking system has a very well-developed system of
denying the ability to change money for companies and other
organizations that either support terrorism or are involved in
drug activities,” said former U.S. Director of National
Intelligence Dennis Blair, a co-chairman of the commission.

“It’s a killer sanction for a company that’s attempting to
go international,” he told reporters in Washington.

CHINA STANDS OUT

China accounts for between 50 and 80 percent of intellectual
property theft, said the report, which also cites India and
Russia as other problem countries, based on data from customs
seizures and other trade figures.

“National industrial policy goals in China encourage IP
theft, and an extraordinary number of Chinese in business and
government entities are engaged in this practice,” it said.

President Barack Obama could help the issue “get traction”
by raising it in his meeting with his Chinese counterpart, Xi
Jinping, in California in early June, said former U.S.
Ambassador to China Jon Huntsman, also a commission co-chairman.

“The president sets the priorities for the U.S.-China
relationship, and this clearly would have to be at the top of
our economic agenda,” he said.

Leaving it to bilateral economic talks like July’s Strategic
and Economic Dialogue would continue unproductive “jaw boning”
while the problem gets worse, Huntsman added.

MOST THEFT HAPPENS INSIDE U.S.

Other recommended responses include immediate confiscation
of goods containing stolen intellectual property and making
respect for IP rights a condition for investing or listing
shares in the United States.

The commission recommends beefed-up protections to make U.S.
data less vulnerable to hackers, as well as enhanced measures
such as “water marking” or “beaconing” that allow companies to
identify stolen files and make them inoperable.

But it stops short of calling for what panel member Craig
Barrett, former chairman and chief executive of Intel
Corporation, described as “the nuclear option” of authorizing
counter attacks against hackers, citing legal questions and fear
of collateral damage.

The report recommends committing more resources to
investigating and prosecuting cyber-theft of trade secrets, but
says intellectual property stolen via the Internet is only a
portion of theft.

“Much of it occurs the old-fashioned way,” through copied or
stolen hard drives, bribing or planting of employees, tapping of
phones, pirating of software and the reverse engineering of
products, it said.

While credible reports have emerged of Chinese army hackers
raiding U.S. government and industry computers, the report said,
“In reality, most IP theft is committed within American offices,
factories, and even neighborhoods and homes.”

Beyond the $300 billion in economic losses, equal to the
annual value of U.S. exports to Asia, the United States loses
some 2.1 million jobs each year to IP theft, Huntsman said.

Intellectual property theft through actions ranging from
software piracy to patent or trademark infringement to
cyber-espionage also depresses research and development spending
and stymies future innovation, the commission said.

The report is posted here

(Editing by Philip Barbara)

During the first visit to the White House in 47 years by a leader of the Southeast Asian nation, Obama called for an end to the killings of Rohingya Muslims in western Myanmar’s Rakhine state.

Reformist Myanmar President Thein Sein vowed to resolve ethnic conflicts and bring perpetrators to justice.

“I also shared with President Sein our deep concern about communal violence that has been directed at Muslim communities inside Myanmar. The displacement of people, the violence directed towards them needs to stop,” Obama said.

At least 192 people died last year in violence between Buddhists in Rakhine and Rohingya Muslims, who are denied citizenship by Myanmar. Most of the victims, and the 140,000 people made homeless in the attacks, were Muslims.

As the Myanmar government eases repression, long-simmering ethnic tensions are on the boil – a dynamic that resembles what happened when multi-ethnic Yugoslavia fractured in the 1990s after communism fell.

Thein Sein appealed for U.S. “assistance and understanding” as Myanmar attempts difficult reforms.

Obama said the Myanmar leader had assured him that he intends to release more political prisoners and institutionalize political reforms that have already begun transforming the country and ending its estrangement from the West.

Rights groups and some U.S. lawmakers fear Obama has moved too quickly since forging a dramatic breakthrough in relations in 2011 after a half century of military rule in Myanmar.

U.S. officials argue that reforms by Myanmar – freeing democracy activist Aung San Suu Kyi and hundreds of political prisoners, scrapping censorship, legalizing trade unions and protests – are transformative and deserve support from Obama, who confirmed the end of Myanmar’s pariah status with the West with a landmark visit last November.

“What has allowed this shift in relations is the leadership that President Sein has shown in moving Myanmar down a path of both political and economic reform,” Obama said in the Oval Office.

Even critics in Congress of Obama’s Myanmar policy support the U.S. strategic goal of bringing Myanmar, tucked between China and India, out of its isolation from the West.

The long U.S.-Myanmar estrangement was a drag on America’s relations with ASEAN, the 10-nation Southeast Asian regional grouping that looks to Washington as a counterbalance to the more assertive China of recent years.

‘MAXIMUM INTERNATIONAL SUPPORT’

In a speech after the White House meeting, Thein Sein described efforts to develop Southeast Asia’s poorest economy, overhaul decrepit institutions, undo the habits of decades of authoritarian rule and build a new, inclusive national identity from dozens of ethnic groups, some of which have been at war for decades.

“To achieve all this we need maximum international support, including from the United States, to train and educate, share knowledge, trade and invest, and encourage others to do the same,” he told an audience at a Washington university.

He referred to the Muslim killings and said his government “must ensure not only that inter-communal violence is brought to a halt, but that all the perpetrators are brought to justice.”

Thein Sein, a retired general, was taken off the U.S. Treasury Department’s Specially Designated Nationals visa blacklist last year to facilitate engagement.

The slight, soft-spoken leader was a close confidante of former military ruler Than Shwe, who ran Myanmar for 19 years, a period that saw mass jailing of opponents, the gunning down of pro-democracy protesters and widespread abuses in ethnic minority areas.

Successive U.S. governments have refused to acknowledge the country’s change of name from Burma to Myanmar made in the late 1980s by the country’s military rulers.

The United States for years deliberately referred to the nation of 60 million people as Burma, so as not to give legitimacy to military governments.

But in a nod to political reforms, the White House acknowledged it is now employing the name Myanmar more often than before.

“We have responded by expanding our engagement with the government, easing a number of sanctions, and as a courtesy in appropriate settings, more frequently using the name Myanmar,” White House spokesman Jay Carney said.

In a new U.S. measure to support reform, the United States and Myanmar on Tuesday will sign a Trade and Investment Framework Agreement on boosting trade, labor standards and investment, the United States trade representative said.

U.S. business leaders support lifting sanctions more quickly to facilitate access to an undeveloped consumer market in a country rich in oil, natural gas, minerals and timber. Europe, Japan and other parts of Asia have few or no Myanmar sanctions.

“The immediate tasks at hand … are to remove the remaining U.S. economic sanctions on Myanmar, and to extend duty-free treatment in the United States for the imports of Myanmar,” said Bart Fisher, chairman of the new Myanmar-U.S. Trade Council.

(Reporting by Paul Eckert; Additional reporting by Steve Holland and Jeff Mason; Editing by Alistair Bell and Eric Beech)

Rights groups and some U.S. lawmakers fear Obama has moved too quickly since forging a dramatic breakthrough in relations in 2011 after half a century of military rule in Myanmar, also known as Burma.

U.S. officials argue that reforms by President Thein Sein’s quasi-military government – freeing democracy icon Aung San Suu Kyi and hundreds of political prisoners, scrapping censorship, legalizing trade unions and protests – are transformative and deserve support from Obama, who confirmed the end of Myanmar’s pariah status with the West with a landmark visit last November.

However, ethnic or sectarian violence, particularly in the western state of Rakhine, has worsened since Washington started easing sanctions, and a Reuters special report published last week found apartheid-like policies segregating minority Muslims in prison-like ghettos there.

At least 192 people died last year in violence between ethnic Buddhists in Rakhine and Rohingya Muslims, who are denied citizenship by Myanmar. Most of the victims, and the 140,000 people made homeless in the attacks, were Muslims.

The Myanmar government’s rights record has long been poor, especially in resource-rich areas inhabited by ethnic Shans, Karens and Kachins.

The Washington-based U.S. Campaign for Burma says 1,100 ethnic Rohingya and 200-250 Kachin have become political detainees in the past year, and the situation has led some to question how far Washington should go in its policy shift.

“When they abuse ethnic minorities, it really undercuts their credibility and undermines our ability to work with them,” said Republican Representative Trent Franks, one of a group of U.S. lawmakers arguing for lifting U.S. sanctions more slowly.

Obama administration officials believe that to deepen and sustain the reforms, Thein Sein has to be able to demonstrate tangible benefits to overcome opposition from powerful military leaders. To back that, Washington has narrowed the scope of its ban on business dealings with Myanmar officials and businessmen.

“Yes, there is still more work to do but … the progress they have made has been significant and they have put in place an ambitious reform agenda and we encourage them to keep doing more,” State Department spokeswoman Jen Psaki told reporters on Friday, after Myanmar freed 23 political prisoners.

On Monday, the two countries are expected to announce plans to work out a Trade and Investment Framework Agreement that would lead to regular talks on boosting trade, labor standards and investment, a business leader familiar with the issue said.

STRATEGIC IMPORTANCE

Even critics in Congress of Obama’s Myanmar policy support the U.S. strategic goal of bringing Myanmar, a nation of 60 million people tucked between China and India, out of its isolation from the West.

The long U.S.-Myanmar estrangement was a drag on America’s relations with ASEAN, the 10 nation Southeast Asian regional grouping that looks to Washington as a counterbalance to the more assertive China of recent years.

Ernest Bower, senior adviser for Southeast Asia at the Center for Strategic and International Studies, said improving relations with Myanmar fits into the wider U.S. policy of revitalizing its Asia-Pacific relationships.

“Myanmar is the keystone state that links China, Southeast Asia and India, and if we didn’t get it right, we wouldn’t be able to play the chess game that is required in order to deal with China,” he said.

But the concerns about rights abuses are holding back a fuller U.S. embrace of Thein Sein, a retired general, who was taken off the U.S. Treasury Department’s Specially Designated Nationals visa blacklist last year to facilitate engagement.

Thein Sein was a close confidante of former military ruler Than Shwe, who ran Myanmar for 19 years, a period that saw mass jailing of opponents, the gunning down of pro-democracy protesters and widespread abuses in ethnic minority areas.

Jennifer Quigley, head of the U.S. Campaign for Burma, said that even without the killings in Rakhine, the Myanmar military’s heavy hand in forced land seizures and corrupt trade in natural resources in Kachin and other states in multi-ethnic Myanmar should give Western countries pause.

Myanmar’s most coveted resources – natural gas, minerals, gems and timber – lie in ethnic areas that have been war zones for decades and remain largely untouched by reforms, she said.

“Our biggest concern about welcoming Thein Sein to the White House is that it reinforces this positive impression of him and of what is going on in Burma, while we have serious misgivings that he is not interested in pursuing critical reforms,” said Quigley.

The military has run Myanmar since a 1962 coup by Ne Win, whose 1966 visit to Washington at the invitation of President Lyndon Johnson was the last such visit by the country’s head of state.

The European Union has moved faster than the United States on Myanmar, lifting its last sanctions on trade, the economy and individuals last month, although it retains an arms embargo.

Earlier this month, Obama scrapped a ban on U.S. entry visas to Myanmar’s military rulers and their associates but kept sanctions on investing or doing business with figures involved in repression since the mid-1990s.

Franks and Democratic U.S. congressman Rush Holt are using budget legislation to press the Obama administration to hold back on expanding nascent U.S. military ties with Myanmar’s armed forces until the country stops abuses of ethnic groups and enacts reforms to reduce the military’s huge role in the economy.

“The Burmese military is the historic perpetrator of human rights abuses, and, one may presume, also the current perpetrator, so sanctions against them should be the last to go,” said Holt.

(Additional reporting by Arshad Mohammed, Editing by Alistair Bell)

ABC News reported emails between the White House, State Department and intelligence agencies about the Benghazi attack went through 12 extensive revisions and were scrubbed clean of warnings about a militant threat.

The ABC report came as Republicans in Congress have stepped up efforts to criticize the Obama administration’s response to the attack by suspected Islamist militants, with a growing focus on the role of then-Secretary of State Hillary Clinton, a potential Democratic presidential contender in 2016.

The so-called “talking point” memos were used to prepare U.S. Ambassador to the United Nations Susan Rice before she appeared on television talk shows to discuss the September 11, 2012, attack on the U.S. mission in which Ambassador Christopher Stevens and three other Americans were killed.

In one email exchange, the State Department’s top spokeswoman at the time, Victoria Nuland, objected to including the CIA’s reference to intelligence about the threat from al Qaeda in Benghazi and eastern Libya.

That “could be abused by members (of Congress) to beat up the State Department for not paying attention to warnings, so why would we want to feed that either? Concerned,” Nuland wrote in the email obtained by ABC News.

A source familiar with the Benghazi communications said Nuland was concerned the talking points went further than what she was allowed to say during her briefings and that “the CIA was attempting to exonerate itself at the State Department’s expense.”

But the source said the deletion of references to al Qaeda and the CIA’s warnings came after a White House meeting on the day before Susan Rice appeared on the Sunday talk shows and Nuland was not at the meeting.

The mistrust between government agencies revealed in the documents offered an unusual peek into the administration’s internal rivalries and displayed a rare crack in its usual discipline about messaging and public image.

‘PURE, PROLONGED POLITICAL PROCESS’

Democrats have dismissed the Republican attacks as politically motivated and they had not gained much public momentum until this week. The ABC report could draw fresh attention to the allegations, however, and give them new life.

“It’s a tragedy, but I hate to see it turned into a pure, prolonged, political process that really doesn’t tell us anything new about the facts,” Secretary of State John Kerry, who replaced Clinton, said in a Google+ Hangout chat.

A senior administration official said there was nothing in the new documents to contradict the administration’s claim the talking points were based on intelligence community assessments.

“The White House made stylistic edits to the talking points to emphasize that the investigation was ongoing as to who was responsible, to simplify certain phrasing, and to clarify that the Benghazi mission was not a consulate,” the official said.

At a high-profile congressional hearing two days ago and in public statements, Republicans have renewed months-old charges the email traffic shows the administration tried to play down the Benghazi assault because it came at the height of the U.S. presidential campaign and might have made President Barack Obama look weak on national security.

Republican House of Representatives Speaker John Boehner demanded on Thursday that the administration release emails on its handling of the attack. The emails reported by ABC had been shown to Congress, but lawmakers were not given copies, officials said.

The pro-Republican Super PAC American Crossroads released a web video on Friday focusing on questions about Clinton’s role in a possible “cover-up” over the evolving explanations for the incident.

“Why did she blame a video? And was she part of a cover-up?” the video asks. “Americans deserve the truth.”

The Republican National Committee sent out portions of the ABC report in an email headlined “Obama’s Bungled Benghazi Response.”

Congressman Elijah Cummings, a Maryland Democrat on the House of Representatives Oversight and Government Reform Committee, said the Republican accusations were an attempt to damage Clinton in case she decides to run for president in 2016.

“It is so much an effort … to harm her before she even makes a decision and then to make sure they’ve got some material after she decides to run for president, assuming she does,” he told MSNBC.

(Additional reporting by Susan Heavey and Mark Felsenthal; Writing by John Whitesides; Editing by Jackie Frank and Jim Loney)

ABC News reported emails between the White House, State Department and intelligence agencies about the Benghazi attack went through 12 extensive revisions and were scrubbed clean of warnings about a militant threat.

The ABC report came as Republicans in Congress have stepped up efforts to criticize the Obama administration’s response to the attack by suspected Islamist militants, with a growing focus on the role of then-Secretary of State Hillary Clinton, a potential Democratic presidential contender in 2016.

The so-called “talking point” memos were used to prepare U.S. Ambassador to the United Nations Susan Rice before she appeared on television talk shows to discuss the September 11, 2012, attack on the U.S. mission in which Ambassador Christopher Stevens and three other Americans were killed.

In one email exchange, the State Department’s top spokeswoman at the time, Victoria Nuland, objected to including the CIA’s reference to intelligence about the threat from al Qaeda in Benghazi and eastern Libya.

That “could be abused by members (of Congress) to beat up the State Department for not paying attention to warnings, so why would we want to feed that either? Concerned,” Nuland wrote in the email obtained by ABC News.

A source familiar with the Benghazi communications said Nuland was concerned the talking points went further than what she was allowed to say during her briefings and that “the CIA was attempting to exonerate itself at the State Department’s expense.”

But the source said the deletion of references to al Qaeda and the CIA’s warnings came after a White House meeting on the day before Susan Rice appeared on the Sunday talk shows and Nuland was not at the meeting.

The mistrust between government agencies revealed in the documents offered an unusual peek into the administration’s internal rivalries and displayed a rare crack in its usual discipline about messaging and public image.

‘PURE, PROLONGED POLITICAL PROCESS’

Democrats have dismissed the Republican attacks as politically motivated and they had not gained much public momentum until this week. The ABC report could draw fresh attention to the allegations, however, and give them new life.

“It’s a tragedy, but I hate to see it turned into a pure, prolonged, political process that really doesn’t tell us anything new about the facts,” Secretary of State John Kerry, who replaced Clinton, said in a Google+ Hangout chat.

A senior administration official said there was nothing in the new documents to contradict the administration’s claim the talking points were based on intelligence community assessments.

“The White House made stylistic edits to the talking points to emphasize that the investigation was ongoing as to who was responsible, to simplify certain phrasing, and to clarify that the Benghazi mission was not a consulate,” the official said.

At a high-profile congressional hearing two days ago and in public statements, Republicans have renewed months-old charges the email traffic shows the administration tried to play down the Benghazi assault because it came at the height of the U.S. presidential campaign and might have made President Barack Obama look weak on national security.

Republican House of Representatives Speaker John Boehner demanded on Thursday that the administration release emails on its handling of the attack. The emails reported by ABC had been shown to Congress, but lawmakers were not given copies, officials said.

The pro-Republican Super PAC American Crossroads released a web video on Friday focusing on questions about Clinton’s role in a possible “cover-up” over the evolving explanations for the incident.

“Why did she blame a video? And was she part of a cover-up?” the video asks. “Americans deserve the truth.”

The Republican National Committee sent out portions of the ABC report in an email headlined “Obama’s Bungled Benghazi Response.”

Congressman Elijah Cummings, a Maryland Democrat on the House of Representatives Oversight and Government Reform Committee, said the Republican accusations were an attempt to damage Clinton in case she decides to run for president in 2016.

“It is so much an effort … to harm her before she even makes a decision and then to make sure they’ve got some material after she decides to run for president, assuming she does,” he told MSNBC.

(Additional reporting by Susan Heavey and Mark Felsenthal; Writing by John Whitesides; Editing by Jackie Frank and Jim Loney)

In an address to a joint session of the U.S. Congress, Park said she wanted to break the pattern in which North Korea “provokes a crisis” that draws sanctions from the international community, which later tries concessions to calm things down.

“Meanwhile, Pyongyang uses that time to advance its nuclear capabilities, and uncertainty prevails,” she said.

“It is time to put an end to this vicious circle,” Park said in English to loud applause in a packed U.S. Capitol.

South Korea’s stable financial markets and strong economic fundamentals showed Seoul was unbowed by 10 weeks of nuclear war threats from North Korea, she told U.S. lawmakers in a special session presided over by Vice President Joe Biden and House of Representatives Speaker John Boehner.

“The Korean government is reacting resolutely but calmly. We are maintaining the highest level of readiness,” said Park.

“You may rest assured: No North Korean provocation will succeed,” Park said. She echoed lines from her show of solidarity with President Barack Obama at the White House a day earlier, when Obama said Pyongyang had failed to shake their alliance of 60 years and gained nothing from saber-rattling.

The 61-year-old daughter of a former Cold War military dictator presented a vision of the future in which South Korea and its U.S. ally would deal firmly with North Korea while working for a more stable long-term peace.

“That future, I know, feels distant today,” she said.

South Korea will never tolerate a nuclear-armed North Korea and would react “decisively” to provocations from the isolated, impoverished state that has conducted three nuclear tests since 2006, Park said.

“At the same time, I will not link humanitarian aid provided to the North Korean people, such as infants and young children, to the political situation,” she said, in a reference to persistent malnutrition in the country of 25 million people.

“IT TAKES TWO HANDS TO CLAP”

She held out the possibility of aid and economic cooperation to build up trust with Pyongyang, the core North Korea policy of her successful campaign last year to become the first female leader of South Korea.

“But as we say in Korea, ‘It takes two hands to clap,’” said Park.

To gain the economic benefits of re-engagement with South Korea, North Korea “must walk the path to become a responsible member of the community of nations,” she said.

After it conducted a nuclear test in mid-February that drew swift U.N. Security Council sanctions, North Korea ramped up tensions in its neighborhood with near-daily threats to attack South Korea, the United States and U.S. military bases in Japan.

Pyongyang caused further alarm last month when it closed a jointly run industrial zone in North Korea, expelling most South Korean workers from the zone and virtually stopping all operations at the last remaining symbol of North-South cooperation.

Early this week, however, U.S. officials said North Korea had taken two Musudan missiles off launch-ready status and moved them from the country’s east coast. This followed weeks of concern that Pyongyang had been poised for a test-launch.

There has also been a lull in bellicose rhetoric from North Korean state media, although Park said on Tuesday it was impossible to fathom Pyongyang’s intentions.

Park told a gathering of business leaders at the U.S. Chamber of Commerce later on Wednesday that her country would resist protectionism during this era of sluggish global economic growth.

“Let me be clear: Korea is firmly committed to free trade (and) to economic openness,” she told a luncheon, where executives marked the anniversary of a bilateral free trade agreement that has lowered barriers in South Korea, long a notoriously hard market for foreign firms to access.

“The overall picture is very positive for those sectors that were impacted, where there were tariff cuts,” said Myron Brilliant, executive vice-president of the U.S. Chamber of Commerce.

“There are still some issues to be worked through as you would expect a year into this deal,” he said, listing medical supplies, data storage and the auto sector as areas where the two countries disagree on implementation of the trade pact.

(Reporting by Paul Eckert; Editing by Cynthia Osterman and David Brunnstrom)

In her address to a joint session of the U.S. Congress, Park said South Korea’s stable financial markets and strong economic fundamentals showed Seoul was unbowed by 10 weeks of nuclear war threats from North Korea.

“The Korean government is reacting resolutely but calmly. We are maintaining the highest level of readiness,” she said in English to loud applause in a packed U.S. Capitol.

“You may rest assured: No North Korean provocation will succeed,” Park said. She echoed lines from her show of solidarity with President Barack Obama at the White House a day earlier, when Obama said Pyongyang had failed to rattle their alliance of 60 years and gained nothing from saber-rattling.

The 61-year-old daughter of a former Cold War military dictator presented a vision of the future in which South Korea and its U.S. ally would deal firmly with North Korea while working for a more stable long-term peace.

“That future, I know, feels distant today,” she said.

South Korea will never tolerate a nuclear-armed North Korea and would react “decisively” to provocations from the isolated, impoverished state that has conducted three nuclear tests since 2006, Park said.

“At the same time, I will not link humanitarian aid provided to the North Korean people, such as infants and young children, to the political situation,” she said, in a reference to persistent malnutrition in the country of 25 million people.

She held out the possibility of aid and economic cooperation to build up trust with Pyongyang, the core North Korea policy of her successful campaign last year to become the first female leader of South Korea.

“But as we say in Korea, ‘It takes two hands to clap,’” said Park.

To gain the economic benefits of re-engagement with South Korea, North Korea “must walk the path to become a responsible member of the community of nations,” she said.

After it conducted a nuclear test in mid-February that drew swift U.N. Security Council sanctions, North Korea ramped up tensions in its neighborhood with near-daily threats to attack South Korea, the United States and U.S. military bases in Japan.

Pyongyang caused further alarm last month when it closed a jointly run industrial zone in North Korea, sending most South Korean workers from the zone, virtually stopping all operations at the last remaining symbol of North-South cooperation.

Early this week, however, U.S. officials said North Korea has taken two Musudan missiles off launch-ready status and moved them from the country’s east coast, after weeks of concern that Pyongyang had been poised for a test-launch.

There has also been a lull in bellicose rhetoric from North Korean state media, although Park said on Tuesday it was impossible to fathom Pyongyang’s intentions.

(Reporting by Paul Eckert; Editing by Cynthia Osterman)

“If Pyongyang thought its recent threats would drive a wedge between South Korea and the United States or somehow garner the North international respect, today is further evidence that North Korea has failed again,” Obama said at a joint news conference with South Korean President Park Geun-hye.

“President Park and myself very much share the view that we are going to maintain a strong deterrent, we’re not going to reward provocative behaviour, but we remain open to the prospect of North Korea taking a peaceful path,” he said.

Obama’s meeting with Park, South Korea’s first female president, comes after signs of what a Pentagon spokesman called “provocation pause” by Pyongyang after nearly months of threats to attack the United States and South Korea.

U.S. officials told Reuters on Monday that North Korea had taken two medium-range Musudan missiles off launch-ready status and moved them from the country’s east coast.

The move, which followed a relative toning down of bellicose rhetoric from North Korean state media, could easily be reversed because the Musudan are mobile missiles, U.S. and South Korean officials cautioned.

Park, 61, said North Korea’s isolation made it difficult to figure out whether and why Pyongyang had changed tack.

“Why is North Korea appearing to de-escalate its threats and provocations? There is no knowing for sure,” she said through a translator.

Park, who took office in February just after North Korea conducted its third nuclear weapons test and began a 10-week campaign of near-daily treats to attack the South and U.S. territory with nuclear weapons.

Daniel Russel, the senior director for Asian affairs at the National Security Council, told reporters Washington and Seoul were serious about deterring North Korea provocations and on holding Pyongyang to a denuclearization agreement.

“We both support incremental engagement and are prepared to support the North if they make the right decision and take steps to abide by their international obligations,” he said on Monday.

TRADE PACT LAUDED

North Korea agreed under a 2005 pact signed with the United States, China, Japan, South Korea and Russia to abandon all of its nuclear weapons programs in exchange for economic aid, energy supplies and an end to diplomatic isolation.

That deal unravelled after Pyongyang staged a series of nuclear tests in 2006 and 2009 as well as last February.

Obama and Park said the door remained open to returning to diplomacy, but the onus was on North Korea.

“So far, at least, we haven’t seen actions on the part of the North Koreans that would indicate they’re prepared to move in a different direction,” said Obama.

While North Korea loomed over Park’s meeting with Obama, her visit also highlighted the 60th anniversary of a security alliance formed during the 1950-53 Korean War and South Korea’s rise from poverty to become a wealthy democracy.

“Korea is very proud that it’s the only example so far of a nation that used to receive U.S. Peace Corps volunteers and now sends Korean volunteers out to help other developing countries,” said a senior U.S. State Department official.

Obama also noted that a bilateral free trade agreement between the counties signed by his predecessor George W. Bush but implemented a year ago, had started to boost trade.

“On our side, we’re selling more exports to Korea, more manufactured goods, more services, more agricultural products,” said Obama. He added: “Even as we have a long way to go, our automobile exports are up nearly 50 percent.”

Critics, notably in the U.S. auto and steel sectors, however, say the trade deal has not removed South Korean barriers to manufactured goods and the increase in car sales is from a very low base.

Alan Tonelson of the U.S. Business and Industry Council, a critic of such trade pacts, says a U.S. merchandise trade deficit with South Korea that rose 135.75 percent in the year to March 2013 shows that the bilateral FTA “has slowed the already feeble U.S. recovery and undoubtedly reduced hiring.”

Park on Monday visited the Korean War Memorial honouring the 36,000 Americans killed in that conflict. On Wednesday, she will give a speech at a joint session of Congress and then have lunch with American executives from the U.S. Chamber of Commerce.

(Additional reporting by Mark Felsenthal and Steve Holland; Editing by Philip Barbara)

“If Pyongyang thought its recent threats would drive a wedge between South Korea and the United States or somehow garner the North international respect, today is further evidence that North Korea has failed again,” Obama said at a joint news conference with South Korean President Park Geun-hye.

“President Park and myself very much share the view that we are going to maintain a strong deterrent, we’re not going to reward provocative behavior, but we remain open to the prospect of North Korea taking a peaceful path,” he said.

Obama’s meeting with Park, South Korea’s first female president, comes after signs of what a Pentagon spokesman called “provocation pause” by Pyongyang after nearly months of threats to attack the United States and South Korea.

U.S. officials told Reuters on Monday that North Korea had taken two medium-range Musudan missiles off launch-ready status and moved them from the country’s east coast.

The move, which followed a relative toning down of bellicose rhetoric from North Korean state media, could easily be reversed because the Musudan are mobile missiles, U.S. and South Korean officials cautioned.

Park, 61, said North Korea’s isolation made it difficult to figure out whether and why Pyongyang had changed tack.

“Why is North Korea appearing to de-escalate its threats and provocations? There is no knowing for sure,” she said through a translator.

Park, who took office in February just after North Korea conducted its third nuclear weapons test and began a 10-week campaign of near-daily treats to attack the South and U.S. territory with nuclear weapons.

Daniel Russel, the senior director for Asian affairs at the National Security Council, told reporters Washington and Seoul were serious about deterring North Korea provocations and on holding Pyongyang to a denuclearization agreement.

“We both support incremental engagement and are prepared to support the North if they make the right decision and take steps to abide by their international obligations,” he said on Monday.

TRADE PACT LAUDED

North Korea agreed under a 2005 pact signed with the United States, China, Japan, South Korea and Russia to abandon all of its nuclear weapons programs in exchange for economic aid, energy supplies and an end to diplomatic isolation.

That deal unraveled after Pyongyang staged a series of nuclear tests in 2006 and 2009 as well as last February.

Obama and Park said the door remained open to returning to diplomacy, but the onus was on North Korea.

“So far, at least, we haven’t seen actions on the part of the North Koreans that would indicate they’re prepared to move in a different direction,” said Obama.

While North Korea loomed over Park’s meeting with Obama, her visit also highlighted the 60th anniversary of a security alliance formed during the 1950-53 Korean War and South Korea’s rise from poverty to become a wealthy democracy.

“Korea is very proud that it’s the only example so far of a nation that used to receive U.S. Peace Corps volunteers and now sends Korean volunteers out to help other developing countries,” said a senior U.S. State Department official.

Obama also noted that a bilateral free trade agreement between the counties signed by his predecessor George W. Bush but implemented a year ago, had started to boost trade.

“On our side, we’re selling more exports to Korea, more manufactured goods, more services, more agricultural products,” said Obama. He added: “Even as we have a long way to go, our automobile exports are up nearly 50 percent.”

Critics, notably in the U.S. auto and steel sectors, however, say the trade deal has not removed South Korean barriers to manufactured goods and the increase in car sales is from a very low base.

Alan Tonelson of the U.S. Business and Industry Council, a critic of such trade pacts, says a U.S. merchandise trade deficit with South Korea that rose 135.75 percent in the year to March 2013 shows that the bilateral FTA “has slowed the already feeble U.S. recovery and undoubtedly reduced hiring.”

Park on Monday visited the Korean War Memorial honoring the 36,000 Americans killed in that conflict. On Wednesday, she will give a speech at a joint session of Congress and then have lunch with American executives from the U.S. Chamber of Commerce.

(Additional reporting by Mark Felsenthal and Steve Holland; Editing by Philip Barbara)

Kenneth Bae, 44, was born in South Korea but is a naturalized citizen and attended the University of Oregon. His sentencing comes after two months of saber-rattling that saw North Korea threaten the United States and South Korea with nuclear war.

Pyongyang has previously tried to use American prisoners as bargaining chips in talks with Washington. A U.S. official, who spoke on condition of anonymity, said Washington was not currently looking for an envoy to try to secure Bae’s release as it sometimes has done.

The official said the United States has sought in recent years to break out of its pattern of lurching from one crisis to another with the North, only to resolve them with transactional deals with Pyongyang.

“We urge the DPRK (North Korea) to grant Mr. Bae amnesty and immediate release,” said State Department deputy spokesman Patrick Ventrell.

Bruce Klingner, a retired CIA North Korea analyst, dismissed the idea that Bae’s release would trigger the renewal of long-stalled diplomacy.

“Previous arrests of U.S. citizens didn’t lead to changes in North Korean policy, resumption of bilateral dialogue or breakthroughs in U.S.-North Korean relations,” said Klingner, a senior fellow at the Heritage Foundation think tank in Washington.

A North Korean defector said Bae will likely serve his sentence in a special facility for foreigners, not in one of the repressive state’s forced labor camps. More than 200,000 people are incarcerated in these camps, beaten and starved, sometimes to death, according to human rights groups.

Bae is believed to be a devout Christian, according to human rights activists in South Korea, who say he may have been arrested for taking pictures of starving children.

He was part of a group of five tourists who visited the northeastern North Korean city of Rajin in November and has been held since then. According to U.S. media, Bae most recently lived in the Seattle area.

AVOIDING ENTANGLEMENT

Former U.N. Ambassador Bill Richardson, who has made numerous trips to North Korea that included efforts to free detained Americans, said Bae’s case should not become entangled in the current U.S.-North Korea impasse.

“Now that the sentencing and the North Korean legal process has been completed, it is important that negotiations begin to secure Kenneth Bae’s release on humanitarian grounds or a general amnesty,” said Richardson, who visited North Korea in January with Google Inc CEO Eric Schmidt.

White House spokesman Jay Carney said any negotiations with North Korea are “dependent upon the North Koreans demonstrating a willingness to live up to their international obligations.”

North Korea is the subject of U.N. Security Council resolutions calling for an end to its nuclear and missile tests, as well as punitive U.N. sanctions.

“But thus far, as you know, they have flouted their obligations, engaged in provocative actions and rhetoric,” he told reporters aboard Air Force One.

Some media reports have identified Bae as the leader of the tour group. NK News, a specialist North Korea news website, said he was the owner of a company called Nation Tours that specialized in tours of northeastern North Korea.

The reports could not be verified and North Korean state news agency KCNA did not list any specific charge other than crimes against the state, and used a Korean rendering of Bae’s name, Pae Jun-ho, when it reported the Supreme Court ruling.

“North Korea has shown their intention to use him as a negotiating card as they have done in the past,” said Cheong Seong-chang, senior fellow at the Sejong Institute, a think-tank in Seoul.

Bae’s sentence was heftier than the 12 years handed down to two U.S. journalists, Laura Ling and Euna Lee, in 2009. It took a visit to Pyongyang by former President Bill Clinton to secure their release.

PERSONAL TRIBUTE?

North Korea appears to use the release of high-profile American prisoners to extract a form of personal tribute, rather than for economic or diplomatic gain, often portraying visiting dignitaries as paying homage.

Former U.S. President Jimmy Carter, who has traveled to North Korea before to try to free a detained American, has no plans to do so for Bae, Carter’s spokeswoman said.

“President Carter has not had an invitation to visit North Korea and has no plans to visit,” Carter’s press secretary, Deanna Congileo, said in an email.

According to North Korean law, the punishment for hostile acts against the state is between five and 10 years hard labor.

“I think his sentencing was hefty. North Korea seemed to consider his acts more severe,” said Jang Myung-bong, honorary professor at Kookmin University in Seoul and a North Korea law expert.

North Korea is one of the most isolated states on earth. Its official policy of “Juche,” or self-reliance, is a fusion of Marxism, extreme nationalism and self sufficiency centered on the cult of the ruling Kim family.

Bae likely will not be incarcerated in one of the North’s notorious slave labor camps, such as the one where defector Kwon Hyo-jin was locked up. There, Kwon said, prisoners were worked to death and often survived only by eating rats and snakes.

“If an American served jail together with North Korean inmates, which won’t happen, he could tell them about capitalism or economic developments. That would be the biggest mistake for North Korea,” said Kwon, a North Korean sentenced to one of its camps for seven years until 2007. He defected to South Korea in 2009.

“(Bae) would be sent to a correctional facility that only houses foreigners and was set up as a model for international human rights groups.”

It was not known if Bae had been taken immediately to jail.

Ling, the journalist, told U.S. television that she was placed in a 5-by-6 foot (1.5-by-1.8 meter) cell when captured and then kept in a regular room afterwards.

Bae was given counsel by the Swedish Embassy in Pyongyang, which has declined to comment on the case, as the United States does not have diplomatic relations with the North.

(Additional reporting by Christine Kim in Seoul and Arshad Mohammed in Washington; Editing by Xavier Briand)