This is a partial transcript of "Special Report With Brit Hume," Oct. 1, 2004, that has been edited for clarity.

Watch "Special Report With Brit Hume" weeknights at 6 p.m. ET!

(BEGIN VIDEO CLIP)

SEN. JOHN KERRY, D-MASS., PRESIDENTIAL CANDIDATE: I want bilateral talks, which put all of the issues from the Armistice of 1952: the economic issues, the human rights issues, the artillery disposal issues, the DMZ issues and the nuclear issues on the table.

JIM LEHRER, DEBATE MODERATOR: And you're opposed to that, sir. Right?

PRESIDENT GEORGE W. BUSH: The minute we have bilateral talks the six-party talks will unwind. It's exactly what Kim Jong Il wants.

(END VIDEO CLIP)

BRIAN WILSON, GUEST HOST: Well, that exchange last night hasn't gotten a great deal of attention, but it was a substantive issue on which the president and Senator Kerry strongly disagreed. But to understand their positions, perhaps we need to spend a little time getting background on where things now stand between the United States and North Korea.

For that, we turn to professor David Kang of Dartmouth College, an expert on Asia and co-author of the book "Nuclear North Korea, a Debate on Engagement Strategies."

Thanks for coming in. We greatly appreciate it.

DAVID KANG, AUTHOR, "NUCLEAR NORTH KOREA": My pleasure.

WILSON: Now, where are we right now? We're involved in what are called six-party talks.

KANG: Six-party talks that involve: Japan, Russia, South and North Korea (search), the United States. And the goal is to get some kind of deal over this nuclear accord. There is a quasi proposal on the table put forth by the U.S. and South Korea. North Korea hasn't responded to it really. We haven't pushed it very much. So, they're sort of treading water at this point.

WILSON: And the president was very adamant last night that the six- party approach is the way to go. To get these other countries, which he believes have influence over North Korea to weigh in, and try to bring them into the world community, and to bring them into line. How's that going so far?

KANG: That's one of problems with the way the six-party talks are going right now. Particularly, China and South Korea (search) don't view the threat as great as the United States does. And so, the six-party talks have a number of different voices going on. And there isn't that sort of consensus where everyone is saying the same message to North Korea.

WILSON: Well, Kerry wants bilateral talks. And the president says if you have bilateral talks, well, it's all over. That's basically the message he left last night. Why do you think he feels so strongly about that?

KANG: Well, I think what the Kerry position is that the concern with the United States over the weapons of mass destruction is basically a U.S.- North Korea issue. And so that without resolving it bilaterally, it doesn't matter how many other countries are involved.

WILSON: Well, let me ask you this question. I'm asking you isn't a nuclear-free North Korean Peninsula in the best interest of China and all those other countries?

KANG: Yes. Here's where actually the talks sort of begin to break down. The countries of northeast Asia are actually principally concerned about North Korean weakness. That is economic collapse, the political and economic fallout that would happen from a North Korean collapse. So they're more concerned about a weak North Korea. The United States is more concerned about North Korean strength, which is their nuclear weapons.

Therefore, when we talk about the nuclear weapons, the other countries don't want to see these North Korea collapse. So at this point, they have differing goals as to what they're principally concerned about in North Korea.

WILSON: So, the concern over nuclear weapons only goes so far in your estimation, because they're also concerned about the economic side of the equation?

KANG: The refugees, if there's a collapse. If we push too hard on the nuclear weapons and North Korea collapses, the United States is not going to feel that fallout as much as South Korea, and particularly China would feel.

WILSON: One of the things that I had a hard time getting my arms around, and may be you can help me out with that, was that on the issue of Iraq, it seemed that Senator Kerry was saying what we need is more world engagement. We need to get our allies on board. We need to have people involved. And yet, on the issue of North Korea, he seemed to be saying that's not what we need.

KANG: Yes. I'm not working for the Kerry campaign.

WILSON: I understand that.

(LAUGHTER)

KANG: So I'm not going to — but I think in this case, and again I won't talk about Iraq, but with North Korea, the main — the main conflict is between the U.S. and North Korea. We're the ones that are most concerned about the nuclear weapons issue.

WILSON: Look, can I just challenge you on that?

KANG: Sure.

WILSON: I mean again, because it seems to me if I'm in Japan and I see a North Korea that's acting as they sometimes act very bold, very aggressive. And they're out there making nuclear weapons; this would be a paramount concern to me. If I'm China, the instability that that brings to the equation would scare me to death.

KANG: I think that if North Korea was dumb enough to actually test a nuclear weapon or something like that, you might see a real shift in the way these countries viewed the issue. As long as North Korea sort of tows that red line, threatens, talks a lot, but doesn't really test a nuclear weapon of some type or a missile, these countries are then more concerned about the economic fallout. And I think absolutely it could shift very quickly, which might then bring China and South Korea to add more pressure.

WILSON: Where do we believe they are; the North Koreans are in their nuclear weapons program at the moment?

KANG: Most people think they have between six to eight nuclear devices of some type. They haven't tested any. So we don't have the proof of that. But they claim that they've reprocessed a lot of uranium. Most people think that they must have a couple.

WILSON: A couple?

KANG: Two, six to eight.

WILSON: But we really don't know if they are viable weapons or not.

KANG: No. They have not tested yet the Taepo Dong 2 missile (search) that can actually hit the United States.

WILSON: And again, that is the other thing. It's the nuclear technology on one side of the equation and the fact that they are developing some pretty effective missiles.

KANG: Yes.

WILSON: If you're able to marry the two, then you've got a huge problem.

KANG: Yes. In which case you might see these other countries then take that much more seriously. For now, most of the other countries in the region tend to see that North Korea responds to American threats with threats of its own. But that neither really wants to go down the path towards a nuclear-armed North Korea and what the U.S. might have to do. And they all talk and stay below that line.

WILSON: In the grand scheme of things, one of the things that was discussed last night, was what the bigger threat, Iran or North Korea? Where do you see that?

KANG: I think that North Korea is not going to engage in unprovoked action.

WILSON: You believe that they're more reasonable than we've given them credit for.

KANG: Yes. They've been deterred for 50 years. They haven't started a war since the first one.

WILSON: They didn't have nuclear weapons either.

KANG: And nuclear weapons are a response to the extreme changing of the balance of power in the region. They are a very small, poor country. Now, the concern about North Korea is actually less that they would use them, than they would actually sell them. And they have been known to sell weapons technology and missile technology, and some kind of nuclear devices.

WILSON: And that is not in anybody's interest.

KANG: Yes. And that's actually the real concern, is that they're an opener player on the world market.

WILSON: Dave Kang, thanks a lot. We appreciate it.

KANG: My pleasure.

Content and Programming Copyright 2004 Fox News Network, L.L.C. ALL RIGHTS RESERVED. Transcription Copyright 2004 eMediaMillWorks, Inc. (f/k/a Federal Document Clearing House, Inc.), which takes sole responsibility for the accuracy of the transcription. ALL RIGHTS RESERVED. No license is granted to the user of this material except for the user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon Fox News Network, L.L.C.'s and eMediaMillWorks, Inc.'s copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.