Trump and Brexit give momentum to EU defense push

European Commissioner Elzbieta Bienkowska arrives to a meeting of European Union defence ministers at the EU Council in Brussels, Belgium May 18, 2017. REUTERS/Eric Vidal

By Gabriela Baczynska and Robin Emmott

BRUSSELS (Reuters) – The European Union’s executive is ready to increase support for the bloc’s first ever defense research program, offering more funds to develop new military hardware in its earliest stages after years of government cuts, a top EU official said.

Following a 90-million-euro pilot investment from the EU’s common budget in 2017-2019, the European Commission is proposing 500 million euros ($563 million) for the 2019-2020 period that could rise to 1.5 billion euros a year from 2021, Industry Commissioner Elzbieta Bienkowska told Reuters.

“European citizens see security as the number one thing that Europe should provide to them, so it’s time to propose this,” Bienkowska said in an interview.

With Britain, one of EU’s leading military powers, leaving the bloc, ideas for common EU defense are gathering pace in the wake of Islamic attacks in Western Europe. Europeans are also worried about U.S. commitment to NATO under President Donald Trump.

Under the proposal unveiled on Wednesday, at least three firms and two member states would have to submit a joint project to be eligible for financing from the EU budget.

If agreed by governments and the European Parliament, the EU budget would put up 20 percent of the costs of developing prototypes, Bienkowska said.

“The prototype phase is the riskiest one and it is very important to have incentives from the European budget to prepare common projects,” she added.

A European drone is often cited as an example of how EU funding can help get projects underway. Bienkowska said she also hoped to see cyber projects from smaller firms and innovative startups.

She said she wants negotiations and legislative work between the Commission, member states and the European Parliament to finalize by the end of 2018.

BREXIT FACTOR

The EU’s political capital Brussels hopes it can turn the tables on Brexit – an unprecedented setback in 60 years of European integration – by moving ahead with closer defense and security cooperation, which London had long blocked.

The EU, where most governments are also NATO allies, have also come under increased pressure from Trump, who last month scolded the Europeans for failing to spend enough on their own defense.

Though Bienkowska said work on promoting more security and defense cooperation in the EU has started two years ago, she admitted Europe’s unease about Trump gives it additional momentum: “All developments in the United States will make our cooperation (in Europe) stronger.”

“We will work more closely in the European Union, what we want to achieve is to have a stronger European defense and a stronger NATO.”

Russia’s 2014 annexation of Crimea from Ukraine and its subsequent backing for militias fighting Kiev troops in the industrial east of the former Soviet republic also add to the bloc’s security concerns.

The EU estimates it loses up to a 100 billion euros a year on duplication, leaving it with far fewer capabilities than the United States. Years of defense cuts have worsened the issue as national governments jealously protect their own firms.

Europe has 37 types of armored personal carriers and 12 types of tanker aircraft compared to nine and four respectively in the United States, according to EU analysis.

“Up until now, member states were doing things completely separately, without any cooperation. I want to appeal to the member states to think about common projects, because the money will be there,” Bienkowska said.

For the future, Bienkowska is mulling a common European defense bond for joint purchases from 2021, though she said no decisions had yet been taken.

Italy is a proponent of issuing joint EU debt, as well as exempting various types of spending from budget deficit limits. Germany, on the other hand, which is the bloc’s largest economy and key power, is opposed to both these approaches. ($1 = 0.8887 euros)

(Editing by Pritha Sarkar)

Exclusive: U.S., Japanese firms collaborating on new missile defense radars – sources

FILE PHOTO: Logos of Mitsubishi Electric Corp are seen at a news conference at the company's headquarters in Tokyo, Japan, May 23, 2016. REUTERS/Toru Hanai/File Photo

By Tim Kelly and Nobuhiro Kubo

TOKYO (Reuters) – Raytheon Co and Lockheed Martin Corp are working with Japanese partners on rival projects to develop new radars that will enhance Japan’s shield against any North Korean missile strike, government and defense industry sources in Tokyo told Reuters.

As nuclear-armed Pyongyang builds ever more advanced missiles with the ability to strike anywhere in Japan, Tokyo is likely to fund a ground version of the ship-based Aegis defense system deployed on warships in the Sea of Japan, other sources had said earlier.

Raytheon is allied with Mitsubishi Electric Corp on the project while Lockheed is working with Fujitsu Ltd. The intent is to extend the range of Japan’s detection and targeting radars multiple times beyond range of models currently deployed at sea, the five government and industry sources said.

“Japan’s government is very interested in acquiring this capability,” said one of the sources with knowledge of the radar plans. The sources asked not to be identified because they were not authorized to speak to the media.

“Japan wants to have Aegis Ashore operational by 2023 at the latest,” said another of the sources.

Lockheed Martin, Raytheon and Mitsubishi Electric declined comment, while Fujitsu did not respond to requests for comment.

A spokesman for Japan’s Ministry of Defense said Tokyo did not currently have any concrete plans to collaborate with the United States on Aegis radars. “It is not our place to discuss the activities of corporations,” the spokesman added.

The proposed Aegis Ashore radars would be variants of models already developed by Raytheon and Lockheed, the sources said. They would include components using gallium nitride, an advanced material fabricated separately by Mitsubishi Electric and Fujitsu that can amplify power far more efficiently than conventional silicon-based semiconductors.

Nuclear-capable North Korea has a fast accelerating missile development program and Japanese officials have been worried that its ballistic missile defenses (BMD) could be overwhelmed by swarm attacks or be circumvented by warheads launched on lofted trajectories.

In the latest snub to demands it end its weapons program, North Korea on Sunday fired what it described as a intermediate-range ballistic missile that flew about 500 km (311 miles), falling into waters off its east coast.

It had tested another missile the previous Sunday. North Korea said that launch tested the capability to carry a “large-size heavy nuclear warhead” and put the U.S. mainland within “sighting range.”

Japan would likely need three Aegis Ashore batteries to cover the whole country, each of which would cost around $700 million without missiles, one of the sources said.

EXPORT

The idea is that such systems could eventually be sold to the U.S. or other militaries, representing a second chance for Japan to break into global arms markets after a failed bid last year to sell Australia a fleet of submarines in what Tokyo had hoped would spur military exports.

Prime Minister Shinzo Abe ended a decades-old ban on arms exports in 2014 to help beef up the nation’s military and lower the unit cost of home-built military equipment but Japan’s long-isolated defense companies have so far had scant success winning business overseas.

“Rather than a fully engineered submarine or other platform, the best way Japan can win export deals is to get Japanese components and technology integrated into U.S. equipment,” another of the sources said.

Japan is expected to make a final decision to acquire a ground-based Aegis system this year. It has also looked at buying THAAD (Terminal High Altitude Area Defense), which would add a third layer of defense between Aegis and Japan’s last line of defense PAC-3 Patriot missiles, to counter the North Korean threat.

Each THAAD battery, which come with missiles already loaded, costs around $1 billion.

Using either THAAD or beefed up Aegis radars could, however, anger China, which is already upset that THAAD batteries recently deployed in South Korea can peer deep beyond its border.

(Editing by Raju Gopalakrishnan)

Trump states Saudis not paying fair share for U.S. defense

U.S. President Donald Trump and Saudi Deputy Crown Prince and Minister of Defense Mohammed bin Salman enter the State Dining Room of the White House in Washington, U.S., March 14, 2017. REUTERS/Kevin Lamarque

By Stephen J. Adler, Jeff Mason and Steve Holland

WASHINGTON (Reuters) – President Donald Trump complained on Thursday that U.S. ally Saudi Arabia was not treating the United States fairly and Washington was losing a “tremendous amount of money” defending the kingdom.

In an interview with Reuters, Trump confirmed his administration was in talks about possible visits to Saudi Arabia and Israel in the second half of May. He is due to make his first trip abroad as president for a May 25 NATO summit in Brussels and could add other stops.

“Frankly, Saudi Arabia has not treated us fairly, because we are losing a tremendous amount of money in defending Saudi Arabia,” he said.

Trump’s criticism of Riyadh was a return to his 2016 election campaign rhetoric when he accused the kingdom of not pulling its weight in paying for the U.S. security umbrella.

“Nobody’s going to mess with Saudi Arabia because we’re watching them,” Trump told a campaign rally in Wisconsin a year ago. “They’re not paying us a fair price. We’re losing our shirt.”

The United States is the main supplier for most Saudi military needs, from F-15 fighters to control and command systems worth tens of billions of dollars in recent years, while American contractors win major energy deals.

The world’s top oil exporter and its biggest consumer have enjoyed close economic ties for decades, with U.S. firms building much of the infrastructure of the modern Saudi state after its oil boom in the 1970s.

Saudi officials could not immediately be reached for comment on Trump’s latest comments.

But Foreign Minister Adel al-Jubeir rejected similar comments from Trump during his election campaign, telling CNN during a visit to Washington last July that the Islamic kingdom “carries its own weight” as an ally.

Saudi Arabia’s powerful deputy crown prince Mohammed bin Salman met with Trump last month in a meeting that was hailed by a senior Saudi adviser as a “historical turning point” in relations. The talks appeared to signal a meeting of minds on many issues, including their shared view that Iran posed a regional security threat.

Riyadh and other Gulf allies see in Trump a strong president who will shore up Washington’s role as their main strategic partner and help contain Riyadh’s adversary Iran in a region central to U.S. security and energy interests, regional analysts said.

ISLAMIC STATE “HUMILIATION”

Asked about the fight against Islamic State, which Saudi Arabia and other U.S. allies are confronting as a coalition, Trump said the militant group had to be defeated.

“I have to say, there is an end. And it has to be humiliation,” Trump said, when asked about what the endgame was for defeating Islamist violent extremism.

“There is an end. Otherwise it’s really tough. But there is an end,” without detailing a strategy.

A visit to Israel would reciprocate a White House visit in February by Israeli Prime Minister Benjamin Netanyahu. Palestinian President Mahmoud Abbas is due to meet Trump next Wednesday in Washington.

Trump has set a more positive tone with Israel than his Democratic predecessor, Barack Obama, who often clashed with the right-wing Israeli leader, and has raised concerns among Palestinians that their leaders may not get equal treatment.

Trump has also asked Israel to put unspecified limits on its building of Jewish settlements on land the Palestinians want for a state, and has promised to seek a Middle East peace deal that eluded his predecessors. However, he has offered no new diplomatic prescriptions.

“I want to see peace with Israel and the Palestinians,” he said. “There is no reason there’s not peace between Israel and the Palestinians – none whatsoever.”

Trump brushed aside a question of whether he might use a possible trip to Israel to declare U.S. recognition of the entire city of Jerusalem as Israel’s capital, a reversal of longstanding U.S. foreign policy likely to draw international condemnation.

“Ask me in a month on that,” he said, without elaborating.

If Trump ties an Israel visit to next month’s Brussels trip, it would be around the time Israelis are celebrating the 50th anniversary of the reunification of Jerusalem, when Israel captured Arab East Jerusalem in the 1967 Middle East war.

Successive U.S. administrations as well as the international community have not recognized Israel’s annexation of the eastern part of the city, and the future status of Jerusalem remains one of the thorniest issues in the Israeli-Palestinian dispute.

Israel claims all of Jerusalem, which contains sites sacred to the Jewish, Muslim and Christian faiths, as its capital. Palestinians want East Jerusalem as the capital of a future state of their own.

(Additional reporting by David Brunnstrom; Writing by Yara Bayoumy and Matt Spetalnick; Editing by Howard Goller)

U.S. should expand missile defense due to North Korea, Iran: lawmaker

U.S. Rep Mac Thornberry discussing missile defense against Iran and North Korea

By Patricia Zengerle

WASHINGTON (Reuters) – The United States should invest more in missile defense given missile testing by North Korea and Iran, the chairman of the House of Representatives Armed Services Committee said on Monday.

The comments by Republican Representative Mac Thornberry followed new U.S. sanctions against Iran after Tehran’s recent ballistic missile tests. Washington is also concerned North Korea may be preparing to test a new ballistic missile.

Thornberry’s position was a sign of support in Congress for military spending to counter North Korea after President Donald Trump during the 2016 election campaign raised doubts about future U.S. funding to defend allies like South Korea and Japan.

“If you look at what’s happening around the world, I would mention Iran and North Korea, the importance of missile defense is increasing,” Thornberry said at a roundtable discussion with reporters.

He said there was a need both to provide more systems and to improve missile defense technology. “Actors around the world are building missiles that are harder to stop,” he added.

Jim Mattis, Trump’s defense secretary, told South Korea last week that Washington and Seoul would stand “shoulder-to-shoulder” to face the threat from North Korea.

Both South Korea and the United States have recommitted to plans to deploy an $800 million advanced missile defense system in South Korea later this year.

More broadly, Thornberry also said he expected an end to strict limits on defense spending now that Republicans control both Congress and the White House.

The 2011 Budget Control Act imposed across-the-board cuts on government spending, and under former President Barack Obama, a Democrat, congressional Democrats were able to ward off Republican pushes to increase the defense budget without also raising spending on non-defense items such as education and medical research.

“I think we have a tremendous opportunity to do the right thing,” Thornberry said. “There’s more of the federal budget being looked at, in play, if you will, than has been the case for many years.”

The Trump administration is expected within weeks to send Congress a request for a supplemental bill to increase defense spending this year.

(Reporting by Patricia Zengerle; Editing by Andrew Hay)

U.S. warns North Korea of ‘overwhelming’ response if nuclear arms used

US Defense Scretary shakes hands with South Korean government official

By Phil Stewart

SEOUL (Reuters) – U.S. President Donald Trump’s defense secretary warned North Korea on Friday of an “effective and overwhelming” response if it chose to use nuclear weapons, as he reassured South Korea of steadfast U.S. support.

“Any attack on the United States, or our allies, will be defeated, and any use of nuclear weapons would be met with a response that would be effective and overwhelming,” Defense Secretary Jim Mattis said at South Korea’s defense ministry, at the end of a two-day visit.

Mattis’ remarks come amid concern that North Korea could be readying to test a new ballistic missile, in what could be an early challenge for Trump’s administration.

North Korea, which regularly threatens to destroy South Korea and its main ally, the United States, conducted more than 20 missile tests last year, as well as two nuclear tests, in defiance of U.N. resolutions and sanctions.

The North also appears to have also restarted operation of a reactor at its main Yongbyon nuclear facility that produces plutonium that can be used for its nuclear weapons program, according to the U.S. think-tank 38 North.

“North Korea continues to launch missiles, develop its nuclear weapons program and engage in threatening rhetoric and behavior,” Mattis said.

North Korea’s actions have prompted the United States and South Korea to respond by bolstering defenses, including the expected deployment of a U.S. missile defense system, known as Terminal High Altitude Area Defense (THAAD), in South Korea later this year.

The two sides reconfirmed that commitment on Friday.

China, however, has objected to THAAD, saying it is a direct threat to China’s own security and will do nothing to bring North Korea back to the negotiating table, leading to calls from some South Korean opposition leaders to delay or cancel it.

Chinese Foreign Ministry spokesman Lu Kang reiterated China’s opposition, which he said would never change.

“We do not believe this move will be conducive to resolving the Korean peninsula nuclear issue or to maintaining peace and stability on the peninsula,” Lu told a daily news briefing in Beijing.

South Korean Defense Minister Han Min-koo said Mattis’ visit to Seoul – his first trip abroad as defense secretary – sent a clear message of strong U.S. support.

“Faced with a current severe security situation, Secretary Mattis’ visit to Korea … also communicates the strongest warning to North Korea,” Han said.

Once fully developed, a North Korean intercontinental ballistic missile (ICBM) could threaten the continental United States, which is about 9,000 km (5,500 miles) from North Korea. ICBMs have a minimum range of about 5,500 km (3,400 miles), but some are designed to travel 10,000 km (6,200 miles) or more.

Former U.S. officials and other experts have said the United States essentially has two options when it comes to trying to curb North Korea’s fast-expanding nuclear and missile programs – negotiate or take military action.

Neither path offers certain success and the military option is fraught with huge dangers, especially for Japan and South Korea, U.S. allies in close proximity to North Korea.

Mattis is due in Japan later on Friday.

(Additional reporting by Ben Blanchard in Beijing; Editing by Nick Macfie, Robert Birsel)

U.S. deploys high-tech radar amid heightened North Korea rhetoric: official

radar to spy on North Korea

WASHINGTON (Reuters) – A high-tech sea-based U.S. military radar has left Hawaii to monitor for potential North Korean intercontinental ballistic missile test launches, a U.S. defense official said on Wednesday.

Earlier this month, North Korean leader Kim Jong Un said that the isolated, nuclear-capable country was close to test-launching an intercontinental ballistic missile (ICBM).

The official, speaking on condition of anonymity, said the radar, known as the Sea-based X-band radar (SBX), left on Monday and would reach its destination, about 2,000 miles (3,218 km) northwest of Hawaii, towards the end of January.

The radar is able to track ICBMs and differentiate between hostile missiles and those that are not a threat.

On Tuesday, U.S. Defense Secretary Ash Carter said the U.S. military might monitor a North Korean intercontinental ballistic missile test and gather intelligence rather than destroy it, as long as the launch did not pose a threat.

“If the missile is threatening, it will be intercepted. If it’s not threatening, we won’t necessarily do so,” Carter said,

“Because it may be more to our advantage to, first of all, save our interceptor inventory, and, second, to gather intelligence from the flight, rather than do that (intercept the ICBM) when it’s not threatening.”

Carter’s remarks came just over a week after U.S. President-elect Donald Trump vowed that North Korea would never fulfill its threat to test an ICBM. Trump said in a Jan. 2 tweet: “It won’t happen!”

“The SBX’s current deployment is not based on any credible threat; however, we cannot discuss specifics for this particular mission while it is underway,” Commander Gary Ross, a Pentagon spokesman, said.

(Reporting by Idrees Ali and Phil Stewart; Editing by James Dalgleish)

Despite failures, North Korea could field missile next year: U.S. expert

A test-fire of strategic submarine-launched ballistic missile is seen in this undated photo released by North Korea's Korean Central News Agency

By David Brunnstrom

WASHINGTON (Reuters) – In spite of the apparent failure of another North Korean missile test at the weekend, the country’s aggressive testing schedule could see its Musudan intermediate ballistic missile entering operational service sometime next year – much sooner than expected, a leading U.S. expert said on Monday.

The U.S. military said on Saturday it had detected a failed launch of a Musudan, the latest in a series in violation of United Nations resolutions.

The U.S. Strategic Command said the missile failed in a launch near North Korea’s northwestern city of Kusong. South Korea’s military said the missile failed immediately after launch, but neither it nor the Pentagon suggested reasons.

The Musudan has range of some 3,000 km (1,860 miles), posing a threat to South Korea and Japan, and possibly the U.S. territory of Guam. Pyongyang claims that it has succeeded in miniaturizing a nuclear warhead that can be mounted on a missile, but this have never been independently verified.

John Schilling, an aerospace engineer specializing in rocket propulsion, said it was noteworthy that North Korea had launched the missile from its west coast, rather than from its purpose-built test facility.

“Moving to a roadside near Kusong is like taking the training wheels off the bicycle, seeing if you really have mastered something new,” he wrote on the 38 North website that monitors North Korea.

Schilling said the move showed that in spite of only one successful launch to show for seven attempts this year, North Korea was not simply repeating old failures.

“They are continuing with an aggressive test schedule that involves, at least this time, demonstrating new operational capabilities. That increases the probability of individual tests failing, but it means they will learn more with each test,” he wrote.

“If they continue at this rate, the Musudan intermediate -range ballistic missile could enter operational service sometime next year – much sooner than had previously been expected,” Schilling said

The latest test comes ahead of a meeting on Wednesday in Washington of U.S., Japanese and South Korean defense and foreign ministers expected to focus on North Korea’s missile and nuclear programs.

The top U.S. diplomat for East Asia said last month Washington would speed up deployment of the U.S. Terminal High Altitude Area Defense (THAAD) anti-missile system to South Korea given the pace of North Korea’s missile tests.

Japanese government sources told Reuters Japan may accelerate around $1 billion of planned spending to upgrade its ballistic missile defenses.

(Reporting by David Brunnstrom; Editing by Alistair Bell)

Fore! South Korea golf course may get anti-missile battery

THAAD

By Ju-min Park and Hyunjoo Jin

SEOUL (Reuters) – South Korea’s military aims to deploy an advanced U.S. missile defense unit on a golf course, a defense ministry official said on Friday, after it had to scrap its initial site for the battery in the face of opposition from residents.

Tension on the Korean peninsula has been high this year, beginning with North Korea’s fourth nuclear test in January, which was followed by a satellite launch, a string of tests of various missiles, and its fifth and largest nuclear test this month.

In July, South Korea agreed with the United States that a U.S. Terminal High Altitude Area Defense (THAAD) anti-missile unit would be deployed in the Seongju region, southeast of the capital, Seoul, to defend the country.

But residents of the melon-farming area protested over worries about the safety of the system’s powerful radar and the likelihood it would be a target for North Korea, which warned of retaliation, if war broke out.

The plan to deploy the system has also angered China, which worries that the THAAD’s powerful radar would compromise its security.

The new site for the missile battery would be a golf course at the high-end Lotte Skyhill Seongju Country Club, the South Korean ministry official said told Reuters, confirming media reports.

The club is owned by the Lotte Group conglomerate and had been considered as an alternative due to its high altitude and accessibility for military vehicles, the defense official said.

It was not clear how the military would acquire the property, reportedly worth about 100 billion won ($90.54 million).

“We will positively consider the deployment of THAAD at the golf course considering the grave situation regarding national security,” Kim Byung-wook, an official at the club, told Reuters by phone.

He said the company had received a notice from the defense ministry about the plan on Thursday.

The United States said this week that it would speed up deployment of the system given the pace of North Korea’s missile tests, and it would be stationed in South Korea “as soon as possible”.

The United States and South Korea have said THAAD does not threaten China’s security or target any country other than North Korea.

In Beijing, Chinese Foreign Ministry spokesman Geng Shuang said deployment of the system should be stopped, and again promised unspecified countermeasures.

“The United States’ deployment of THAAD in South Korea cannot resolve the relevant parties’ security concerns,” he told a daily news briefing.

The military analyzed three possible locations for the system and found the golf course to be the most feasible, the defense official said, as the other two would require additional engineering which would delay the deployment.

The official declined to be identified as he was not authorized to speak to media.

(Additional reporting by Hyunjoo Jin, and Michael Martina in Beijing; Editing by Tony Munroe, Robert Birsel)

South Korea, U.S. to deploy THAAD missile defense, drawing China rebuke

Missile Defense System in South Korea

By Jack Kim

SEOUL (Reuters) – South Korea and the United States said on Friday they would deploy an advanced missile defense system in South Korea to counter a threat from North Korea, drawing a sharp and swift protest from neighboring China.

The Terminal High Altitude Area Defense, or THAAD, anti-missile system will be used only as protection against North Korea’s growing nuclear and ballistic missile capabilities, the South’s Defence Ministry and the U.S. Defence Department said in a joint statement.

“This is an important … decision,” General Vincent Brooks, commander of U.S. forces in South Korea, said in a statement. “North Korea’s continued development of ballistic missiles and weapons of mass destruction require the alliance to take this prudent, protective measure to bolster our … missile defense.”

Beijing said on Friday it lodged complaints with the U.S. and South Korean ambassadors over the THAAD decision.

China said the system would destabilize the security balance in the region without achieving anything to end the North’s nuclear program. China is North Korea’s main ally but opposes its pursuit of nuclear weapons and backed the latest United Nations sanctions against Pyongyang in March.

“China strongly urges the United States and South Korea to stop the deployment process of the THAAD anti-missile system, not take any steps to complicate the regional situation and do nothing to harm China’s strategic security interests,” the foreign ministry said in a statement.

Selection of a site for the system could come “within weeks,” and the allies were working to have it operational by the end of 2017, a South Korean Defence Ministry official said.

The THAAD will be deployed to U.S. Forces Korea “to protect alliance military forces from North Korea’s weapons of mass destruction and ballistic missile threats,” the joint statement said. The United States maintains 28,500 troops in South Korea, a legacy of the 1950-53 Korean war.

“When the THAAD system is deployed to the Korean Peninsula, it will be focused solely on North Korean nuclear and missile threats and would not be directed towards any third-party nations,” the statement said.

SEVEN SUMMITS

The decision to deploy THAAD is the latest move to squeeze the increasingly isolated North, which also includes a series of bilateral sanctions by Seoul and Washington as well as layers of U.N. sanctions.

South Korea has been reluctant to discuss THAAD openly, given the opposition of China, its main trading partner and an increasingly close diplomatic ally. South Korean President Park Geun-hye and her Chinese counterpart, Xi Jinping, have held seven summit meetings since both took office in 2013.

Russia is also opposed to basing a THAAD system in South Korea. Its foreign ministry will take the deployment into account in Moscow’s military planning, Interfax news agency quoted it as saying on Friday.

China worries the THAAD system’s radar will be able to track its own military capabilities.

China “knows full well that the THAAD being deployed to South Korea is not aimed at it at all,” said Yoo Dong-ryol, who heads the Korea Institute of Liberal Democracy in Seoul. “It just doesn’t like more American weapons system being brought in so close to it.”

Japanese Deputy Chief Cabinet Secretary Koichi Hagiuda said Tokyo “supports the deployment because it bolsters security in the region.”

Japan has said it is considering another layer of ballistic missile defense, such as THAAD, to complement ship-borne missiles aboard Aegis destroyers in the Sea of Japan and its ground-based Patriot missiles.

TRUMP’S ARGUMENT

Built by Lockheed Martin Corp <LMT.N>, THAAD is designed to defend against short and medium-range ballistic missiles by intercepting them high in the Earth’s atmosphere, or outside it. The United States already has a THAAD system in its territory of Guam.

Each system costs an estimated $800 million and is likely to add to the cost of maintaining the U.S. military presence in South Korea, an issue in the U.S. presidential campaign. Republican candidate Donald Trump has argued that U.S. allies South Korea and Japan should pay more towards their own defense.

A joint South Korea-U.S. working group is determining the best location for deploying THAAD. It has been discussing the feasibility of deployment and potential locations for the THAAD unit since February, after a North Korean rocket launch put an object into space orbit.

The launch was condemned by the U.N. Security Council as a test of a long-range missile in disguise, which North Korea is prohibited from doing under several Security Council resolutions.

North Korea rejects the ban, saying it is an infringement on its sovereignty and its right to space exploration.

North Korea in late June launched an intermediate range ballistic missile off its east coast in a test that was believed to show some advancement in the weapon’s engine system.

On Thursday, Pyongyang said it was planning its toughest response to what it called a “declaration of war” by the United States after the U.S. Treasury Department blacklisted leader Kim Jong Un for human rights abuses.

Also on Thursday, a U.S. official said the administration of President Barack Obama was asking other nations to cut the employment of North Korean workers as a way to reduce Pyongyang’s access to foreign currency.

(Additional reporting by David Brunnstrom in Washington and Ben Blanchard in Beijing; Editing by Bill Tarrant and Lisa Von Ahn)

Obama urges NATO to stand firm against Russia despite Brexit

European Council President Donald Tusk (L-R), U.S. President Barack Obama and European Commission President Jean-Claude Juncker deliver remarks to reporters after their meeting at the NATO Summit in Warsaw, Poland July 8, 2016. REUTERS/Jonathan Ernst

By Yeganeh Torbati and Wiktor Szary

WARSAW (Reuters) – U.S. President Barack Obama urged NATO leaders on Friday to stand firm against a resurgent Russia over its seizure of Crimea from Ukraine, saying Britain’s vote to leave the European Union should not weaken the Western defense alliance.

In an article published in the Financial Times newspaper as he arrived for his last summit of the North Atlantic Treaty Organisation before he leaves office in January, Obama said America’s “special relationship” with Britain would survive the referendum decision he had warned against.

“The special relationship between the U.S. and the UK will endure. I have no doubt that the UK will remain one of NATO’s most capable members,” he said, but noted that the vote raised significant questions about the future of EU integration.

The 28-nation EU will formally agree to deploy four battalions totaling 3,000 to 4,000 troops in the Baltic states and Poland on a rotating basis to reassure eastern members of its readiness to defend them against any Russian aggression.

Host nation Poland set the tone of mistrust of Russia. Its foreign minister, Witold Waszczykowski, told a pre-summit forum: “We have to reject any type of wishful thinking with regard to a pragmatic cooperation with Russia as long as it keeps on invading its neighbors.”

Obama was more diplomatic, urging dialogue with Russia, but he too urged allies to keep sanctions on Moscow until it fully complies with a ceasefire agreement in Ukraine, and to help Kiev defend its sovereignty. Ukraine is not itself a member of NATO.

“In Warsaw, we must reaffirm our determination — our duty under Article 5 of the North Atlantic Treaty — to defend every NATO ally,” Obama said.

“We need to bolster the defense of our allies in central and eastern Europe, strengthen deterrence and boost our resilience against new threats, including cyber attacks.”

Estonia, Latvia, Lithuania and Poland – all NATO members – have requested a permanent NATO presence. They fear Moscow will seek to destabilize their pro-Western governments through cyber attacks, stirring up Russian speakers, hostile broadcasting and even territorial incursions. Critics say the NATO plan is a minimal trip wire that might not deter Russian action.

The head of NATO’s military committee, Czech General Petr Pavel, said Russia was attempting to restore its status as a world power, an effort that includes using its military.

“We must accept that Russia can be a competitor, adversary, peer or partner and probably all four at the same time,” he said.

The Kremlin said it was absurd for NATO to talk of any threat coming from Russia and it hoped “common sense” would prevail at the Warsaw summit. Moscow was and remains open to dialogue with NATO and is ready to cooperate with it, Kremlin spokesman Dmitry Peskov said in a conference call with journalists.

Russia often depicts NATO as an aggressor, whose member states are moving troops and military hardware further into former Soviet territory, which it regards as its sphere of influence.

Russian President Vladimir Putin made several gestures aimed at showing a cooperative face before the summit. At the same time, Moscow highlighted its intention to deploy nuclear-capable missiles in Kaliningrad, a Russian enclave between Poland and Lithuania.

Putin agreed to a meeting of the NATO-Russia Council next week, the second meeting this year of a consultation body that was put on ice after Moscow’s seizure of Crimea in 2014. Russia allowed a U.N. resolution authorizing the EU to intercept arms shipments to Libya in the Mediterranean, and Putin talked by telephone with Obama in the run-up to the NATO meeting.

However, a White House spokesman said they reached no agreement on cooperation in fighting Islamic State militants in Syria during that call on Wednesday.

BRITAIN

Outgoing British Prime Minister David Cameron, who said he will resign after losing the referendum on EU membership last month, will seek to emphasize an active commitment to Western security at his final NATO summit, to offset any concern about Europe’s biggest military spender leaving the EU.

The first item on the summit agenda was the signing of an agreement between the EU and NATO on deeper military and security cooperation.

The U.S.-led alliance is also expected to announce its support for the EU’s Mediterranean interdiction operation. NATO already supports EU efforts to stem a flood of refugees and migrants from Turkey into Greece, in conjunction with an EU-Turkey deal to curb migration in return for benefits for Ankara.

Obama and the other NATO leaders will have a more unscripted discussion of how to deal with Russia over dinner in the same room of the Polish Presidential Palace where the Warsaw Pact was signed in 1955, creating the Soviet-dominated military alliance that was NATO’s adversary during the Cold War.

NATO Secretary-General Jens Stoltenberg sought to balance the new military deployments and air patrols close to Russia’s borders by stressing the alliance would continue to seek “meaningful and constructive dialogue” with Moscow.

“We don’t want a new Cold War,” he told reporters. “The Cold War is history and it should remain history.”

Turkish President Tayyip Erdogan told reporters before leaving Ankara to attend the summit that NATO also needed to adapt to do more to fight a threat from Islamic State militants, who were accused of last week’s deadly attack on Istanbul airport.

“As we have seen from the terrorist attacks first in Istanbul and then in Iraq and Saudi Arabia, international security is becoming more fragile,” Erdogan said.

“The concept of a security threat is undergoing a serious change. In this process, NATO needs to be more active and has to update itself against the new security threats,” he said.

(Additional reporting by Gabriela Baczynska and Robin Emmott in Warsaw, Humeyra Pamuk in Istanbul and Elizabeth Piper in Lodon; Writing by Paul Taylor; Editing by Toby Chopra, Larry King)