March 8 (Bloomberg) -- Representative Ed Royce, chairman of the House Foreign Affairs Committee, said in an interview on Bloomberg Television’s “Political Capital with Al Hunt,” airing this weekend, that the U.S. should increase the economic pressure on North Korea to force its leaders to abandon their nuclear weapons program, and sees a chance China might support such efforts.
(This is not a legal transcript. Bloomberg LP cannot guarantee its accuracy.)
AL HUNT: We begin the show with Congressman Ed Royce of California, the chairman of the House Foreign Affairs Committee. Mr. Chairman, thank you for being with us.
ED ROYCE: Thank you, Al.
HUNT: Let’s start with Venezuela. Hugo Chavez is dead. Vice President Maduro already has kicked out U.S. embassy officials, accused us of poisoning Chavez. He’s favored to win elections and says he’s going to continue those policies. What should the Obama administration policy be towards Venezuela?
ROYCE: Well, in their constitution in Venezuela, there is an election in 30 days. And as a consequence, there was a very - a quite close election with a very popular governor in - in Venezuela who is going to run again. And if we can do anything to broadcast in - the problem in Venezuela is when you run against the president, he has seized all the means of communication. So if other - if other countries or broadcasting stations can broadcast in the message of the opposition to sort of balance this, this time that popular governor who just won re-election might win the election.
HUNT: So is that - is that the USIA? Should the U.S. be more active in doing that?
ROYCE: We definitely should be.
HUNT: More active?
ROYCE: And I hope the administration will do that. Also, the international community should try to put fair election observers in play here to get a fair and free election. Because the prior regime has so collapsed the economy, hyper-inflation, devaluation of the currency, just absolutely tanked the standard of living, that there is now an opportunity if they can hear another viewpoint, especially with the last election being so close.
HUNT: If Maduro wins in a sympathy vote and he continues these kind of policies, how far should the U.S. go? Should we cut off oil from Venezuela?
ROYCE: Well, I think the reality is that it’s going to be far harder for him - for the vice president than for Hugo Chavez. Chavez was one of these charismatic strongmen down there that had a much - it’s hard to replace that.
And second, you already have the estrangement between Iran and Venezuela. If you noticed that speech that Ahmadinejad, who’s at the funeral today, that speech that he gave was very unpopular inside Iran where he said when the - when the imam is resurrected, Hugo Chavez will be resurrected with him. And of course this was taken as blasphemy by - and so I think you already see the distancing. You’re not going to see that close a relationship where Venezuela is going to be able to help skirt sanctions for Iran.
So I think you’re going to see more isolation. Besides, Colombia, the standard of living is so robust. The economic changes that are occurring under the neo-liberal order - economic order is such a contrast for Latin Americans that I do think this is a situation where it’s increasingly looking more like East Germany versus West Germany when you look at those two countries.
HUNT: Let me turn to Asia. You just got back from a trip to China. North Korea has threatened a preemptive nuclear strike against the US. I don’t think we take that seriously, but they are a real rogue state. What would - you say let’s treat them like the Mafia. What would you do? What would you do that we’re not doing now?
ROYCE: What’s interesting is how much of their hard currency comes from dealing in contraband. So if you look at how the state receives money, it - it manufactures meth and then it sells it. It - it sells rogue missiles that are manufactured there. It counterfeits currency.
HUNT: So what can we do?
ROYCE: And so what we can do is - is the Proliferation Security Initiative. There is now renewed interest on the part of all the neighboring states in simply stopping and checking all the ships that come in and out of North Korea, and perhaps again sanctions on Banco Delta Asia or those financial institutions that are used for transactions with the regime - regime. If that is done - as you noticed in 2005, it was done for a year and the result was the regime could not get its hands on the hard currency, and as a result it impacted their ability for their missile program and some of their other R&D.
HUNT: Are you confident that China would go along with ratcheting up any sanctions? And is there any indication they may be evading some of the sanctions now?
ROYCE: I had the opportunity to speak to the new premier in China a few - three weeks ago when we had a delegation there. And the - the inclination - China in my view is becoming increasingly irritated at this young leader’s reluctance to take any counsel and to behave in - like a rogue regime threatening everyone in the vicinity. As the Chinese have observed and as we’ve observed, we do not want to see an arms race, with South Korea, Taiwan, Japan all going nuclear. But nothing will drive that more surely than this type of bellicose, threatening behavior.
HUNT: So you think China’s going to be with us now?
ROYCE: I think there’s a chance that we can get China, especially - you’ll notice when we put the sanctions on in 2005, when we caught them counterfeiting our currency, those sanctions were applied on those banks in Macao. And the consequence was that they could not in the regime in North Korea obtain the hard currency they needed. I think we do that again, and I think China will sort of be forced to comply and in some ways will want to comply.
HUNT: The dreaded sequester everybody likes - or dislikes. Everyone dislikes. Your senator, Dianne Feinstein, says California is going to get hit the hardest, lose $9 billion. Do you think it proportionally is worse for California, and when do you think there might be an alternative or will there not be?
ROYCE: Well, obviously this is a bad way to make law. If we think back to the original proposal, we know why it was made. The concept was out of the White House if - they promoted this. They proposed this. They thought if this is part of the deal the Republicans will back off because they won’t want to make the defense cuts, right? But now the deal wasn’t made in the interim and so this goes into effect. I think the grand bargain, as it’s called, is the way to go because -
HUNT: You think it’s a realistic possibility?
ROYCE: - I think it’s possible, but we still have to move the administration in terms of real changes in entitlements.
HUNT: If you get real changes in entitlements, they give on that, Republicans give a little on revenues, that’s the grand bargain?
ROYCE: Well, I think at that point we could probably look at closing loopholes. But let’s think for a minute. Republicans already got hit in the minds of Republicans because on Jan. 1 you already had the taxes go up.
HUNT: Let me make sure I got this right.
ROYCE: But if it’s a part of a grand bargain and out of that you get enough - enough in the way of real deficit reduction, here’s our concern on the Republican side. We have not seen that in terms of entitlements.
HUNT: But if you do get enough. That’s the key.
ROYCE: And I think everything’s on the table.
HUNT: Let me - final question. Is Rand Paul right in the vehement objections he has to the administration’s use of drones?
ROYCE: Well, I think - I think you have a decision out of the administration to release out of the attorney general’s office a statement that drones will not be used on U.S. soil against US citizens. And I think that perhaps takes it off the table.
HUNT: So should we be using drones the way we are now extensively around the world?
ROYCE: Overseas, absolutely. And so I think the question was simply one of defining whether that was going to be used domestically to target an attack on a U.S. citizen. And I think that categorically was - a decision was made by the administration to take the position in order to take that off the table.
HUNT: Chairman Royce, thank you so much for being with us today.
ROYCE: Thank you, Al. Good to be with you.
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