This is a partial transcript from On the Record with Greta Van Susteren, August 25, 2003. Watch On the Record weeknights at 10 p.m. ET.

GRETA VAN SUSTEREN, HOST: Joining us from San Francisco is former presidential policy adviser on North Korea, Philip Yun. And in Washington is Joby Warrick of The Washington Post. Welcome to both of you.

Philip, the thought that South Korea has fired on North Korea patrol boats -- does that ratchet it up for the talks?

PHILIP YUN, FORMER NORTH KOREA ADVISER: Well, obviously, it's not a good development, but I think everyone is going to take it in context. I mean, this kind of thing happens on a regular basis. A couple of years ago, there were, in fact, a number of casualties that were taken by the North Koreans and then subsequently by South Koreans. It's something that's not helpful, but I think it's the way that North Koreans are trying to let them know, let us know that they're still around, and the key is not to let it escalate into a worse situation.

VAN SUSTEREN: But what, Philip, is the purpose of this boat straying into the territory of South Korea, or at least where South Korea's going to fire on it? I mean, the talks are just two days away, and it's certainly going the draw fire from South Korea.

YUN: Well, you're assuming that there is a real control in that the North Korean central government is directing what the navy on the ground is doing. That may not necessarily be the case and it could be someone just trying to test what the responses are going to be. This is something that happens all the time. It's sort of a cat-and- mouse game that happens between North Korea and South Korea all along the DMZ and in territorial waters.

VAN SUSTEREN: Joby, what weapons does the United States believe North Korea has?

JOBY WARRICK, THE WASHINGTON POST: Well, there's a consensus that North Korea possesses at least a couple of nuclear weapons, at this point. There has been concern for years about a very large chemical stockpile, probably a biological stockpile, as well. No question at all that North Korea possesses the means to deliver all of the above on any number of missiles that it's developed, using its own technology and stuff that it got from the Soviet Union and from the Chinese.

VAN SUSTEREN: Joby, are the missiles and the technology being exported from North Korea? Are they using the high seas? I mean, what do we know about any effort to sell weapons?

WARRICK: We know that North Korea has been quite busy at selling weapons, especially missiles, over the last decade and longer. In fact, it relies on these sales for a great part of its cash revenue. Something like half a billion dollars a year are derived from sales of these kinds of weapons to states such as Iran, such as Syria, and as we recently learned, to Libya, as well.

VAN SUSTEREN: Philip, the United States, at least as I understand it, is going to go into the talks and say they've got to stop their nuclear program. They're not going to offer anything in exchange. They're simply going to lay out, “You must stop.” Is that what you understand the United States intends to do? And do you think that's a good way to approach these talks?

YUN: That's my understanding, essentially, what they're going to do. I don't have a lot of hope, a lot of expectations out of these talks. I think the best that can happen is that they agree to speak again. The worst that can happen is that the North Koreans, like last time, can storm out.

I think you've hit the nail on the head. The issue, to a large extent, that people have been focusing on has been procedural issues. And it really is a matter of who goes first. I think those can be sort of taken care of, but I think there's a larger issue of a huge amount of mistrust between North Korea and the United States. North Korea thinks that the United States is out to destroy it, and the U.S. has had some serious questions about whether it should even deal with a regime as repugnant as North Korea.

VAN SUSTEREN: Joby, are you able to assess, or at least from your sources, the level of intelligence gathering that we have for North Korea? I mean, everyone always says Kim Jong Il is paranoid, the country is hermetically sealed. I mean, how much information can we really get about North Korea?

WARRICK: Some of it's quite good. We've been fairly successful in tracking the movements of ships that may or may not be carrying various kinds of munitions or precursors for munitions. In the last few months, there have been several ships full of stuff bound for North Korea for nuclear parts, all kinds of switches for nuclear weapons, and we've been able to get good intelligence on those ships and stop them before they actually arrive at their destination. But the thing is, we don't really know how many we're missing. The times that we do catch these things, sometimes it seems the to be kind of a lucky break. Other times, we're pretty sure things are getting to North Korea without anybody catching on.

VAN SUSTEREN: Philip, our strategy is quite plain. The president's been quite blunt about what he wants. What do you think is the North Korean strategy going into these talks?

YUN: North Korea is they're worried about getting economic benefits, security assurances and diplomatic relations. Their strategy is going to try to use as their leverage with the nuclear weapons and other weapons as much as they can, to try to extract as many benefits as they possibly can. And that's what's going to happen, and they'll ratchet up the pressure and continue to do so.

I think what's got to happen is that the administration has to really start thinking about what its interests are and how we can stop North Korea from producing nuclear weapons and not necessarily focus on teaching North Korea a lesson.

VAN SUSTEREN: One quick question. We got to go. I need a yes or answer. Can we trust North Korea?

YUN: Absolutely not, but that's not the point. You can create a situation where there's a step-by-step, verifiable process in which you can verify what they do, and then they verify what we do, to get where we want to go.

VAN SUSTEREN: All right, gentlemen, thank you both very much.

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