pres. trump: a year of strategic patience. regime hasorean failed. they will be met with fire and fury. man is on a suicide mission for himself. sensely believe it makes for north korea to come to the table. we are going to make a great deal for the world, for north korea, for south korea, for japan, for china.

yvonne: history will be made in the next couple of hours. the summit few would dare to predict. welcome to "daybreak asia." i am yvonne man in singapore. ramy: i am ramy inocencio in new york. remember, no sitting american president has met the north rean leader. yvonne: you know what? it is showtime. all the preparations are done. we have all that up to this, which starts in a few hours with a handshake between president trump and kim jong-un. it will be interesting to add to the suspense. this will be a one-on-one meeting between trump and kim. who knows how this will play out once the leaders are put in a room alone together. 9:15, local time, they

are supposed to speak one-on-one just with their translators. a few hours later, if they can get to it, donald trump says he will size up kim jong-un in the first minute or so. they will have a working lunch at 11:30 local time to hash out the details. possibly denuclearization. before all that, let's get a quick check of where the markets close in the united states because we have to check that as well. taking a look at that, the dow was flat. s&p 500 up by .1%. the nasdaq up by .2%. really pushing a little bit higher as we look to an abatement of the tensions of the trade drama as well. but take a look at what is happening in terms of asia-pacificutures. for the most part, those are looking positive. nearly .5 percent. the nikkei flat right now. kospi futures up a fraction. the new zealand and that 50 down

nzx 50 down. the bloomberg dollar spot a fraction of a heather heyer. it has an higher than that in the past hour or so, paring some gains. the japanese yen weakening a tad because of the euro hitting nearly a four-week high after italy's foreign minister said they would not leave the shared currency. you can see that gaining a tad. it had been up for the past seven days. interesting haven play. we can see the aussie dollar against the u.s. dollar slipping into unchanged territory, on. -- yvonne. yvonne: let's get more on that with our chief north asia correspondent, stephen engle. he is where donald trump and kim jong-un will shake hands for the first time. tell us what to expect here today. we learned yesterday that the

north koreans want this done early. >> that's right. the itinerary has been pushed up a bit. it's 9:00 a.m. behind me. the handshake will happen as outlined. the face-to-face meeting, the first time a u.s. president has met face-to-face with the north korean leader. it's quite historic, but then it gets into the detail, whether they hit it off and they go into that working lunch with a constructive attitude to get some sort of statement. we are a long ways away from what we are saying possibly this will begin the groundwork for a peace deal. they cannot even seem to agree on what the definition of denuclearization is, but they have pushed up the timetable. koreang-un and the north entourage will leave in the afternoon. that's a pretty tight timeframe from 9:00 a.m. to 2:00 p.m.

donald trump will be wheels up on air force one by 7:00 p.m. today, so that kills any possibility of a day two summit. various invitations have been handed to each other. donald trump said he's open to having him come at the white house or even to mar-a-lago. we are hearing kim jong-un in that letter he gave to donald trump through his envoy and the white house invited donald trump to pyongyang. perhaps they are ratcheting down expectations, but setting the stage for further summits down the road. we heard from the press briefing with mike pompeo. he has mentioned president trump can offer unique options when it comes to security guarantees. we have not heard the secretary of state mentioned it before. what does that all mean? is interesting,

because mike pompeo said he believes, in his meetings with the north koreans, that the north koreans are committed to denuclearization, but when reporters yesterday repeatedly asked him about have the two sides agreed on what the definition of denuclearization is, he would not necessarily answer that other than to say outcome thehe only united states will accept, and that is complete, verifiable, .rreversible denuclearization they are sticking steadfast to that. it's up to donald trump how much give and take he will give in those face-to-face meetings. u.s. officials also have been saying repeatedly that they are not pursuing regime change, and that is very much at the top of the list of the north koreans in addition to sanctions relief. a bit easier would be assurances from donald trump that they are not going to seek regime change. this is what mike pompeo had to say. i am not sure if we have the actual sound on it, but i can

read out the quote. sorry? yvonne? all right, we do not have the sound for it. let's talk about what happened yesterday. kim exploring the lion city a bit. he got some cheers by onlookers. today, kim said he learned a lot from the experience of singapore, so it seems like he was in good spirits. stephen: not a bad model to emulate if you want to change the economy. glimpse of a glimmering, shining economy here in singapore as he walked in and out along the central they business district.

he also took in the port. i'm not sure he went on the way over to the port. looking at the economy and successes that singapore has made since its independence in an absolute long way. north korea would want similar ambitions. i want to get back to that mike pompeo quote he had that i was about to read out. he says the united states -- they are reported to take actions that will -- we will take actions that will provide north koreans sufficient certainty that they can be comfortable that denuclearization is not something that ends badly for them. it looks as though donald trump offer what mike pompeo said was a unique option as far as assurances that they are not pursuing regime change in north korea. bloomberg's chief north asia correspondent, at stephen engle, in singapore. you momentarily.

meantime, you can follow developments right on your own number. tliv to get commentary and analysis from bloomberg's editors as events happen. trump and kim to meet, market highlights from wall street. the trade drama out of g7 and focus has shifted to singapore as well as global central banks. has the details. it looks like you had a second straight jump for the s&p, but there were hurdles. su: especially in the last 30 minutes. we saw a lot of the gains given back. to heart trump's statement that we will know in the first 30 seconds how it goes. the dollar did not move much here. the big focus, the market coming out with a bit of green despite the selloff toward the end.

the s&p had been up earlier. seven of 11 groups did close higher. mostly telecom. let's go into the big movers. the big decision on whether the time warner/att merger will be out on tuesday. up, with a big outsized move. very positive analyst comments. boston scientific, possible merger with another medical device maker. that has been reported. not stop on the move. the big focus is the various trade concerns. let's take a look at how the canada dollar iseacting. president trump putting a very negative to eat, accusing the canadian prime minister of being weak and dishonest. you can go to the mexican peso, leading losses.

mexico has concern. it cannot go well for nafta. let's take a look at the italian bonds. confirming the commitment to the euro. we have seen some rejoicing in the bond, but thot of reassurance. that is the story on the latest reaction to the various trade issues. yvonne. thank you. first word news with jessica summers in new york. jessica: thanks. attitude after's the g7 summit has raised questions about his commitment to america's closest allies. he is expected to attend the nato meeting in brussels next month. however, that was before he rejected the g7 closing insulted justin trudeau and accused of germany of freeloading on u.s. military

spending. imf managing director christine to the says threats global economy are rising amid signs of a trade war. getting clouds are darker each day, particularly following the acrimonious g7 in quebec. that's where president trump accused host justin trudeau of being dishonest and weak. he threatened to stop trading with the other six nations entirely. parent, daimler, has been ordered to recall more than three quarters of a million vehicles in europe after a meeting with a german regulator failed to allay concerns about diesel emissions. the glc sport-utility vehicle and the veto van. daimler has consistently deniedy measures such as fines. the cryptocurrency selloff is deepening. it's wiping away more than $40 billion worth of market value in the last couple days.

2018 also extending the slumped to more than 50%. in the retreat to a hack in south korea. others point to a clampdown on trading platforms in china. are under scrutiny following theft, money manipulation, and money laundering. global news, 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts. i am jessica summers. this is bloomberg. still ahead, as we count down to the meeting between ,resident trump and kim jong-un how could fall denuclearization work? we will ask former secretary-general alexander, later on this hour. ramy: how a softer stance from president trump is setting up a summit for success. us, straight joins

ahead. th is bloomberg. ♪

ramy: a live shot of singapore, where it is just after -- 60 minutes after the hour as we count down to the historic meeting between president trump and kim jong-un. all right, let's cross to washington and speak to eurasia group asian m.d., evan medeiros. good to speak with you. donald trump wants basically complete verifiable and irreversible denuclearization. that is a mouthful. is he going to get it? evan: no, not a chance. probably not even close. i mean, this summit is going to be very long in symbolism. a lo very broad statements.

the gap between the u.s. and north korea on denuclearization is likely to narrow little bit because the trump administration will come closer ultimately to this made formulation that the north koreans talk about, which is denuclearization on the and then therea, is the question as to what happens to chemical weapons, biological weapons, and missiles . no one is really talking about that, and that is important especially to american allies like south korea and japan. interesting thing that our cause him came out with is that the best thing donald trump can do is to actually do no harm. it seems like this is a low bar here. what do younk? evan: i think the of ministration has been trying to tamp down expectations, but it is hard to do because so much of the world, 2500 journalists, are

focused on the summit that will begin in about one hour, so i think it will be very hard to lower expectations. the key issues to watch our number one, wt do both sides agree on regarding denuclearization? what does the language look like? number two, what is the administration going tregarding? made a cryptic statement suggesting the administration was going to go further than either the clinton administration or the bush 43 administration on securityassur. what does that look like? are they going to agree to stop annual military exercises? are they about the third rail and alliance politics, which is pulling u.s. forces off the korean peninsula? that will be a critical issue to watch. what does the process look like? this summ, who are the teams going to be that are going to negotiate this? how are they going to do it? will it be a bilateral negotiation?

is south korea going to be involved? what about china, japan, russia? big questions. yvonne: i was going to talk about what that statement from the secretary of state meant, bringing these unique options for security guarantees. you know, is there a risk south korea, japan, are going to lose out and be traded out of the negotiations? are they likely to seek their own nuclear deterrent? evan: it's unlikely that is going to happen in the short-term, but certainly, in the immediate term, south korea will look at what assurances are given to the north because that raises questions about what the security assurances the u.s. has and south korea currently looks like. will the u.s. pullback from south korea to reassure north more?

and japan has real concerns about whether or not chemical weapons, biological weapons, short range and medium-range missiles are on the table. are they part of cbid? the administration has claimed all of those issues are included in the id -- in cbid. it's going to be an important question to ask coming out of the summit later on tonight. if all this accumulates to what we are talking about, does more time mean better outcomes? who stands to benefit more? evan: north korea. the more time there is, the more diplomatic and economic base north korea gets. even though the un's sanctions will likely remain in place, because that is a big source of leverage for the united states, and trump and bolton and pompeo almost that. but outside of those u.n. sanctions, south korea and especially china can engage in

more economic activity. you are already the economic links between china and north korea expand even more since kim jong-un met with xi jinping first in beijing and then dolly ian. ramy: you have four scenarios outlined, and it looks like you are very, very skeptical on anything really happening aside from failure. 5%, as you say, heading towards the finish line together. talk to me about these scenarios and what is most important in less than two hours to go. evan: what is important to focus on right now is understanding what the scope of the ultimate commitments are in the end. what it is the administration going to get on denuclearization? what security assurances are provided to north korea? what does the process look like? is that a fast or slow process?

at eurasia group, our assessment is north korea wants to become a de facto nuclear weapons state. the more time it has to basically socialize the international community to being comfortable with kim and north korea possessing nuclear weapons , it plays to his advantage. my concern is he's going to create a process that during the long these issues over time that makes the international community after being exhausted with negotiations sort of throw up their hands. as long as north korea cap its nuclear and missile programs, i ess we will be willing to accept them as a nuclear weapons state and export the issue of the ultimate disposition of the future. i think that is what tim johnson wants. --- kim jong-un wants. ramy: what is your assessment of the man kim jong-un? this is his first time to singapore. caseinate, he by

said he was interested in learning more from singapore. do you think trump knows what he is doing? evan: i think kim jong-un clearly has demonstrated that he can learn rapidly. i worked in the white house during the transition from can jong-il to kim jong-un. it was ad out with -- pretty rocky road at first. he was very focused on domestic political consolidation. a few pretty tough things like eliminating his uncle and cronies in a very brutal way. played a aly limited hand of cards. he was able to rebuild relations with south korea very rapidly, reconcile us china, demonstrates this is someone who understands how to manipulate international politics and play a limited hand

very, very well. yvonne: we have 30 seconds left. given what we have seen with the u.s. and allies, will that affect singapore? evan: the north koreans really are not focused on what happened with the g7. the north koreans have already made up their mind what kind of person trump is. the friction with european allies at the g7, i don't think, has much of an effect. trump sought to look tough by criticizing, you know, many of his counterparts. i don't think that really affects this very much. a think what's really critical is to sort of see what the personal chemistry is going to be like between the two leaders. my guess is it's going to probably be pretty good. in part because both leaders have a very strong stake in this being a success. the question is really where do we go from here? and i am skeptical. ramy: thank you so much for your

analysis. evan medeiros in washington. you a roundup of the stories you need to know to get your day going in today's edition of "daybreak." bloomberg subscribers go to dayb on their terminals. this is also available on mobile in the bloomberg anywhere ap p. this is bloomberg. ♪

ramy: you are watching "daybreak asia." i am ramy inocencio in new york. let's get a quick check of the yen because it's moving. days, it's uptwo by .8%. definitely weakening against the u.s. dollar as well. this is the highest since may 23. it is weaker versus all of the

g10 peers. all right, up next, a look at thcost of dismantling north korea's nuclear weapons and how president trump and kim jong-un disagree on what dbt limitation means. this is the -- denuclearization means. this is bloomberg. ♪ retail.

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yvonne: 7:30 a.m. here in the lion city. we are counting you down to the historic meeting between president trump and kim jong-un. less than 90 minutes away. the president will be leaving the shangri-la at 8:00 and head towards the island. will be aarnedhis one-on-one between president trump and kim was their interpreters. to add to suspense, really just how much we can expect, anything can happen. ramy: anything can happen. looking at those scenes of the singaporean skyline, i am imagining kim jong-un walking

around last night, wondering what could transpire with president trump. looking at the clock, one point five hours until they actually meet, yvonne. was a: it certainly circus yesterday. a lot of hype about what was he doing when he made that walk. he was met with cheers. 20 of smiles and waves. it certainly was a sight to see. jessica summers. jessica: president trump has been forced to set an earlier than expected departure time. trump indicated he would stay on if the talks made progress. off at 4:00 singapore time, seven hours after the summit against. president trump will leave a couple of hours later. provided a shot

of the summit so far. he posed for a selfie near his hotel. the gardens by the bay. trump was met with cheers. he's been trying to spruce up his image recently in a bid to ease sanctions imposed after he tested nuclear bombs and long-range ballistic missiles. secretary of defense james mattis suggested u.s. troop levels will not be on the negotiating table on singapore. any discussion about reducing the 28,000 american soldiers in south korea would typically be between washington and seoul. russians about troop levels arose after officials repeatedly said the trump administration is willing to offer security guarantees to pyongyang. the u.k. prime minister, theresa may, is in advanced talks to head off a rebellion by pro-european members. we are td brexit secretary david davis is back to compromise on customs

arrangements with the e.u. her landmark brexit legislation goes to parliament on tuesday. pro-e.u. rebels on one side and pre-brexit campaigners on the other. malaysia says it has uncovered many -- as the government moves to expose state corruption. mohammed said he found indications of multiple criminal breaches of trust in companies like the authorities. $7 billion went missing at 1mdb, and the government expects widespread losses elsewhere. global news, 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 100 20 countries. i am jessica summers. this is bloomberg. ramy: thank very much. china is not officially represented at the historic talks between president trump and kim jong-un, but that has not stopped beijing from making its presence felt. tom mackenzie joins us for more.

trying tos beijing make sure everyone knows it is still around ? tom: this ch about symbolism, isn't it? china is very good about symbolism. they provided the aircraft that kim jong-un used to fly in. that three years ago, was used by the politburo standing committee. play thatodel of president xi uses. the message to north korea was one of support, of course, significant support to the other participants at this meeting, which is we have north korea's back. involvednot officially in these talks, but there is a huge amount at stake for beijing. we are likely to see further sanctions imposed on north korea.

at least pressure to ramp up sanctions. they are very concerned about the north korean regime crumbling. succeed, there are other risks for china. pyongyang moves closer to washington, and the forming of an alliance that freezes china out. they want to be able to shake the events on the ground. they don't have the kind of aircraft that makes that predictably, safely, and reliably. it was a quicker, safer way of getting kim and to singapore. what do you hope to get from the stocks? everyone wants one piece, but they want things to be a little more status quo. i think you point to an important fact, which is that

china is anxious about any major changes in north korea in terms of the regime. they are fairly comfortable knowing the king family is in charge, as they are very concerned about the missile tests and proliferation of nuclear weapons on the korean peninsula, something china has long said it oes. what i would dearly like to see out of these talks is an agreement by the u.s. to reduce its 38,000 troops in south korea , weakening of the south korea and u.s. relationship. and using would benefit china as well. we want to make sure plug-in does not flip into washington's camp. there is the prospect of china being involved that any economic rehabilitation in north korea and in wanting to ensure they shake the peace process. we have seen of course the relationship between beijing and pyongyang in the last few years has turned very frosty indeed.

it was only until this year that met in quicknally succession, twice, in china. a signal that beijing is very determined to get back into play with the north koreans. as ahave not seen this result to implement the sanctions signed off by the united nations. he wants to make sure he can have the year of the north koreans and steer the outcome at least as beijing sees it. yvonne: i appreciate your insight. tom mackenzie joining us from beijing. willord denuclearization likely be the most loaded word of the day when the historic u.s.-north korea summit begins. donald trump and kim jong-un have very different ideas to what it means. that raises fears that it will not be a meeting of minds. pres. trump: it would be easy for me to make a simple deal and

claim victory. i don't want that. >> complete, verifiable, and irreversible. that is the president's ultimate aim to take to the negotiation table. kim will be what is being termed rejection ofach, a the so-called libyan model, and a demand that the u.s. removes its own nuclear weapons from the region. while trump has indicated flexibility, he will still want to see pyongyang agree to some sort of guideline. ramy: as we know, washington says nothing less than complete denuclearization will do. aside from geopolitics, there is the issue of economics. how much would that cost? our editor has been looking at this. kathleen, how do we tally this bill? kathleen: let's start by looking at the cost to kim jong-un and north korea if there is not a deal, because we know that president trump has been holding out the possibility of increased trade and investments to

economic benefits, but also holding out the threat of increased sanctions if a deal is not made. let's listen to how mike pompeo put it earlier today. >> the complete, verifiable, and irreversible denuclearization of the korean peninsula is the only outcome that the united rates will accept. sanctions will remain until north korea completely and verifiably eliminate its weapons of mass destruction programs. if diplomacy does not move in the right direction, and we are hopeful it will continue to do so, those measures will increase. kathleen: increase those measures. that is at the heart of trump's bet on getting a deal out of north korea that kim wants to end economics regulation relation of north korea that has been going on for decades, have a wealthy, prosperous country to increase investment. he fears giving up nuclear weapons. will they come to a common definition of what the nuclearization means? --

denuclearization means? if you take a look at trump's yvonne: definition, how much would that cost? kathleen: the closer we get to a deal, which may take a while to implement -- the korean herald running a story based on a study from cookman university in south korea, which estimates the total cost at $20 billion. let's look at how they tallied this up. the author of the study is looking first of all at how much to denuclearize ukraine in the 1990's. $460 million. they had 1800 warheads. north korea estimated to have anywhere from 20 to 80. that cost is at about $5 billion. there is a lot of inflation. another cost was linked to a 1994 agreement between the u.s. and north korea. two light water reactors for

electricity. economic aid. there is 3000 and 10,000 workers estimated in korea's nuclear industry. they will need training and jobs. kind of costs there. president trump and his team want a quick denuclearization. going to be ably 10 year period. another way to think about cost is who is going to pay for the $20 billion tab? president trump says north korea should look to the governments of south korea and china. ramy: we will leave it there. thank you very much, kathleen hays. the summit.head on weill be speaking to the former u.s. ambassador to south korea about whether he believes complete denuclearization is actually achievable. before that, here is a look at the numbers behind north korea and south korea's military

might. this is bloomberg. ♪

yvonne: this is "daybreak asia." i am yvonne man in singapore. ramy: i am ramy inocencio in new york. we are counting down to some of the major market opens in the asia-pacific. for more, here is david ingles. we are looking at gains

at the open. if nothing changes over the next 15 minutes, have a look at our futures. .6%are looking mainly at gain, closer to 23,000 on the nikkei 225. australia is reopening. we are below 6000. also watching the south korean markets which we will talk about at the open. have a look at majors. want to note,e the story in italy was positive overnight. yields dropped on the two-year. the other thing i want to point out on this board is sterling. they drop following the contraction in manufacturing. a good day for the dollar, and we are continuing to .ee that filter through this is your wrist monitor for today. dollar-yen pushing back towards this. sentiment is quite positive ahead of that summit.

the key cross you want to watch is this one. if this starts to head up, things are in trouble. at the moment, that's pointing lower. quickly before i go, this is one of the charts. the cost of hedging on korean assets. you have seen a divergence of sorts. a sort of one-stop shop. three major things, at least. korea. risk on south the other thing we want to mention is if we are looking at orloyed -- implied vol, on the currency, those have recently started to pick up, and as you can see, we are back above multiyear averages at this point in time. summit,d closer to that

just over one hour from now. thank you. david ingles on the markets, let's get back to the summit in singapore. the distinguished fellow at the atlantic council was the u.s. ambassador to south korea and and nato that beauty. -- deputy. thank you for joining us. momentous day. i want to bring up a quick tweak eet thesident -- tw president sent out. we have our lawsuit is -- hostages testing missiles. we will be fine. this coming off of a very awkward g7 meeting to read a lot of questions here of how this could actually affect these negotiations in singapore. is the u.s. coming here was a

show of confidence or the opposite? the president exudes a lot of confidence, but i think he comes in with very uncertain ending in the international community after trashing our allies during the g7 meeting. it may convince the north koreans that he needs an agreement more than they do. that's the problem all along. agreeing to the summit was a risk worth taking. full confidence that they are really ready to denuclearize means we may have a real break down when this summit takes place in a few hours. yvonne: why do you think the u.s. is so keen on making enemies with its traditional allies like canada and making friends with enemies like kim jong-un? is there a method to the madness? >> i am not sure i can see a

real method here. the president clearly has had a chip on his shoulder about allies, or as he would say, our so-called allies, which goes out to well before he was president. he has this notion that they are taking advantage of us. there are some elements of his criticisms that are valid. the burden sharing within the nato alliance could be better. at the same time, we gain a lot through the trade relationships we have with our allies. more european investment in the united dates than there is american investment in europe. it's puzzling why he would want to build these bridges by behaving as he did in canada. ahead to the next few hours, it is clear that mike not equipped to handle those questions, talking about the definition of denuclearization. when you heard there was silence or avoidance, was that cause for concern for you that we would not be getting anywhere today?

david: very much. that has and my concern for weeks. we have experts face-to-face with the north koreans over the but it's been slow going in getting the north koreans to agree to anything that would meet our defion real denuclearization, and whether they were ready to do it in a rapid fashion is even more uncertain. i think there is a danger here that we may have some every declaration that doesn't mean anything. kim jong-un walks away with the status in hand and de facto, we himbe seen as recognizing as a nuclear weapons state, which is precisely what we want to avoid. ramy: what is the minimum level of success for the united states walking away here and for that matter for kim jong-nam? -- kim jong-un? alexander: for kim jong-un, i think he already has achieved his minimum level of success, which is having this meeting.

need toed states, we get some kind of clear commitment to denuclearization that could be the basis for follow-on negotiations. no one expected to solve all of our problems in one meeting. the president scaled down his expectations wisely. we don't have anything even close to a commitment to denuclearization and some kind of commitment that there will be verification and full cooperation with the international community. worried, because follow-on negotiations will have toset rule and will be back square one. ramy: with regards to kim been veryhis has all structured. each man comes with their own contingent. last night, we saw that selfie he took with the singaporean foreign minister, walking around littering, dazzling metropolis. do you think his exposure to the realm,tional sphere,

might change his mind in some way that might have been unexpected before saying, you know what, maybe we can move the needle on this and there is positivity on the other side? alexander: i think it was very shrewd that he did this walk around the town. and he showed he is not the recluse that people have portrayed him. but he has been doing pretty well in pr ever since the inter-korean summit when he really did put on the charm. he is a different kind of leader than his father, no question about it. he went to swiss boarding school. he has a little bit better feel for the west than his predecessors, but at the same time, this does not mean that he have seen the light about opening up his economy, getting ukes in return for economic aid. we don't have evidence that he's given up on the basic playbook of his father and grandfather, to boost north korea's status by andiring nuclear weapons

hanging onto those as the best guarantee of the survival of the regime. ambassador, i want to bring up live pictures. our viewers are looking at the saint regis hotel, where we are waiting to see the motorcade, waiting for kim jong-un, north korean leader, to head to the island where he will be meeting with the president at the capello hotel. fashion, we should be seeing live pictures when it comes to shangri-la, where president trump will be heading that 9:00a.m. meeting, where tl shake cans for the first time. let's bring it back with the ambassador real quick. i want to talk more about what mike pompeo mentioned during his press briefing about bringing in unique and different options when it came to security guarantees to the region and north korea. is the withdrawal of u.s. troops a reduction of the u.s. nuclear umbrella over the allies like south korea really a possibility now? it is not i hope

already being presented as a trade-off for denuclearization because we have lots of reasons to protect south korea to deter chinese aggression in the region. we better be careful on that score. i think in the positive scenario, and i hope my pessimism is misplaced, if the two koreas begin to draw down their forces and reduce the danger of a confrontation on the korean peninsula, there may be justification for looking at the troop presence and redeploying our troops for the south. but these should be decisions we take in close consultation with our south korean allies and also with the japanese who are protected as well by u.s. forces in the region. i was puzzled by what pompeo had to say. hopefully he can stall not out a little bit more after these meetings have taken place.

ramy: i want to get your assessment of kim jong-un in terms of his acumen to negotiate and his exposure to singapore. and for the world writ large. what do you make of his skills, first time out. probably the furthest traveled of his predecessors as well, right? alexander: this is a set forward in terms of joining the world, and we can only pray him for doing that much. as to whether we can praise him for the different approach to the future of his country remains to be seen. a lot of people in south korea are very hopeful that he is seeing himself more and more as the north korean version of deng he's ready to trade in this very expensive nuclear weapons program in return for making his country as prosperous and stable as china.

that would be a nice scenario. we have yet to see real proof that has happened. he is talking a much smoother game. he has reduced tensions on the korean peninsula. a genuine success. it's given momentum to this summit. so maybe president trump can persuade him that economic development really is what his focus should be on and that it's worth giving up the nukes for that. nukes, get the assistance, get the legitimation , but not absolutely give up those nuclear weapons. yvonne: ambassador, we have 40 seconds left. will the president be keeping japan and south korea's interest in mind? is there risk for disappointment, especially for moon jae-in, who exerted a lot

of political capital on these negotiations? alexander: i certainly hope so. there has been very good consultation. he has been in very close contact with moon jae-in, who visited. i think the main concern that the japanese have is a deal seems to reduce the threat to the united states. it leaves them just as vulnerable to the medium range missiles that can target them. i hope we continue to talk about comprehensive denuclearization and not make it appear that we are looking out for number one and taking care of our allies. ramy: thank you very much. former u.s. ambassador to south korea. we are counting down to the market opened in japan, south korea. nikkei futures up .6%. green across the board.

next, a doctorup negotiated during the clinton administration and served as barack obama's arms control coordinator. we have the market open, coming up. this is bloomberg. ♪ mberg. ♪

♪ >> you are watching daybreak asia. live from singapore. look at live pictures out of this hotel. the motorcades are. kim jong-un is stepping in. we are seeing some movement here as we count down to this historic meeting. we are expecting to hear from president trump as well, leaving the shangri-la at this hour and heading about three miles away or so to the resort ivan. of course, a historic meeting underway here. >> pens and needles, clearly with so many people watching.

one or two months ago we were talking about how this meeting could be happening and today is finally the day. we are one hour a men, donald trump and kim jong-un meet for the first meeting. the first time a sitting president has met a north korean leader. we are now seeing what appears to be a part of the motorcade, possibly leaving the hotel. looking ahead on our of schedule, he is expected to in less than 20 minutes. of course, we will follow the action as we witnessed this all unfold under the next hour. the first sitting u.s. president and a north korean leader. levon: here we go, showtime. security is going to be very tight. of the main throw is

here in the city. others are a bit more contained. certainly as we get closer to that summit, traffic especially during the early morning hours will be ready busy, we can see more of these cars drive through. we talked about how this could really go into different extremes here. we can actually see world peace and the making or we could go to the other scenario where we could save -- military conflict reemerge once again. we will wait for those live pictures to come out from the shangri-la as well. we are getting lines dropping on the bloomberg terminal. donald trump has departed the shanghai hotel. these are live pictures you are watching of u.s. president donald trump leaving the shangri-la for that historic meeting. is expected to get there in about 18 minutes time.

a: 20 a.m.. then at 9:00 is expected to meet kim jong-un for the very first time. >> we were told that this will kick off with a one-on-one between president trump and kim jong-un alongside their interpreters. that will be quite interesting. the chemisy between the two, historics of that handshake we will be witnessing in an hours time. will they be able to get out of the issues? that is the definition of denuclearization. we he mike pompeo during a press meeting yesterday. very stern words senator masto committed to the complete -- rsible -- irreversible we will see how kim jong-un does. how he will react as well. he talks about having doesn't like to have the summit go

beyond just day one. there is a scheduled flight later on this afternoon for the north korean to leave. that caught the u.s. offguard. they said they were expecting this to go on for 48 hours or so. they had to say that press briefing with president trump was happening later on. >> donald trump was trying to keep open the possibility of maybe something beyond one day. they definitely put the kibosh on that. bloombergo direct our subscribers heresomething that was also put in just about a week or so ago. we are going to be looking to see if they actually sign an agreement. donald trump said we could absolutely sign an agreement at the white house, we are talking about it with them. that is probably the easy part. as we talked about in the past hour, it seems like no one is

expecting anything even though hopes are high. >> perhaps they could kick the can down the road. is on the island for this historic summit. the two men headed your way, tell us what we can expect to that. -- today. stephen: all of the action will happen behind me. the outcome really does hang in the balance. will the two gentlemen hit it off? all indications are that they will have a cordial meeting, a handshake and then the first one-on-one or face-toe between u.s. president and the north korean leader for a few minutes. donald trump has said that he will gauge his intent -- kim jong-un's intent. pursueis sincerity to

denuclearization. that is the ultimate goal of the united states. mike pompeo says it is the only outcome that the united states will accept. mike pompeo, giving a frankly words meant. -- worded statement. also touching on the biggest concerns that the north koreans have. that is regime security. kim jong-un want to sciences -- wants assurances. assurances that they are not pursuing regime change. donald trump said they are not rsuing that. this is what mike pompeo had to one unit unique -- proposal they might give to them. mike pompeo: we are prepared to make security assurances. we are prepared to take actions

that will provide them sufficient certainty that they could become to go that denuclearization isn't something that ends badly for them. >> one of the things that people , thebandied about potential to reduce trip numbers in asia. it is not something the united states has agreed to said they would do. they have 2800 shirts on the korean peninsula. james mattis, the defense secretary alluded to that by saying that trip levels in asia will not be on the table. we note we want than a death the north koreans want complete denuclearization. their definition includes reducing the nuclear threat by the americans in asia. the united states removed their nuclear warheads from the korean peninsula in the early 1990's. there is a nuclear protection umbrella of its allies in south korea and japan in various sites

around asia. not necessarily the korean peninsula. we have to see how far donald trump will go in offering those sorts of concessions. let's not hold our breath on any promises to that. -- today. what we also learn from secretary of state pompeo is that they are still waiting for north korea to see if they are sick -- serious about denuclearization. i would think these things are ironed out before a summit could happen. how big of a risk is that? is there a chance of the present giving up too much? >> that is the fear of our ally, japan. they don't want the united states to give up the hardline approach with north korea as far as giving up its nuclear ambitions. japan is in the crosshairs.

these are the threats coming from pyongyang. the japanese would clearly want to united states to stay hardline on that. said,, as mike pompeo that was the ultimate outcome that the united states wants. it is not going to be likely decided today. both sidesct that have decided to end the summit a little earlier than we had anticipated. the united states had kept the option open for having a second day of talks tomorrow. kim jong-un says he will be leaving at about 2:00 this afternoon. back to pyongyang and then back to the united states as donald trump has his press conference. the wheels up on air force one will be at about 7:00. to furtherrelude talks down the road. if they don't hit it off, worst-case outcomes. it was a wild precursor last

night with kim going on that nighttime stroll. even before some onlookers were cheering him. interesting stuff there. can we get anything from his mood as we move into the summit? she seems quite jubilant and interested in the economic auto of singapore. independenthey were in 1965. i did some digging on the gdp. today, it is 71,000. similar numbers if you compare north korea gdp per capita or gross national income per capita as opposed to south korea today. there are parallels therebetween the north korean economy and south korea and what singapore was in 1965 compared to what it is today. he tore the singapore port. he tore the marina based gambling.

he toured one of the big gardens here. he seemed quite jubilant on his evening stroll with the sirean foreign minister. this is one of the first foreign dignitaries to ever take a south they with kim jong-un. i don't know, i don't have that on record. hang on, we are looking at live pictures of donald trump's motorcade. it is now living for santos a and the capello hotel. live pictures are what you are seeing on your screen right now. this is the north correspondent. let's get a check on the markets right now to see if anything is moving with david and less. -- ignles. david: have a look at equity markets. equities are a. this is 23,000. keep in mind, this was closed yesterday.

that being said, we are still getting some positivity more or less across these markets. let me point you to the costs 200 index. level, 317,at the the price of december puts on this one. we will get that on the bottom of your screen. long story short, you look at how the prices are on the way down. i think it is june, 2018. these calls have been pushing up. in other words, the best at the moment are tilted in favor of this summit helping sentiment push through. that is one indication. just keep an eye on that. here is our risk screen for you. what you want to watch is the dollar yen, dollar swiss. it is this key cross right here. if they look at this, start to head up, that means we

are in trouble. you point to the direction currently, 974. it does indicate that the sentiment is robust. there is a fair amount of risk appetite out there right now, these are key developments over the 3 -- next few hours or so. >> let's get you back on the life pictures and singapore. has been here the past couple of days or so. we haven't seen part of the delegation go over to that bridge. they're heading to santos ivan. we are seeing a little bit of movement here. the bodyguards seem to be running. ofy will be quite a lot fanfare leading up to this historic handshake. you can see the motorcade there. we are not sure if kim jong-un is in one of those vehicles. we are seeing his delegation heading that way.

remy: it appears he is in one of those vehicles. as we move ahead toward that planned meetidonald trump is supposed to be arriving there in several minutes time. according to our sources, he is running a tad behind schedule. if kim jong-un is in one of these vehicles, he is as well. we are looking ahead to that 9:00 hour when they meet. we could see photographs being taken by some people up in front of that motorcade to document what is happening for this historic occasion. be theat we believe to reports here, kim is leaving the hotel for the summit right now on his way to meet donald trump. >> he was in good spirits walking around this. perhaps he needed to take a breather after all this preparation leading up to what could be one of the biggest

moments since she has taken power. meeting with a sitting u.s. president. he has gone from this pariah status to this more of a statesman here. leaderswith multiple from south korea, xi jinping twice in the past couple of months or so. is this a statesman in the making? what is the big question here? .e likes the fanfare he likes the crowds that were cheering him on. he was waving and smiling. we will see how that plays out with negotiations. when we were talking with our analyst, i did pose a question about whether kim jong-un cause exposure to singapore and the international community with the city -- with its glitz and money, with the skyscrapers -- could it change his mind about

?pening up to the world steve,we send it back to just crossing the u.s. motorcade. we can confirm that the u.s. motorcade is now on santos island. let's bring in steve. north asianchief correspondent. trump is talking about how he has a lot of confidence. he is not giving up too much in these negotiations. is this coming from a position of strength for the president? : i think donaldrump thinks he is coming from a position of strength. they got the hostages out of north korea.

he has been quite vocal in tweets this morning as well, really dissing his detractors in the united states. let's bring up one of these tweets. he was of the earlier near the shangri-la. he said the fact that i am having a meeting is a major loss states -- they are wrong. we have our hostages. these pundits have nothing else they can say. we will be fine says donald trump. if you ask donald trump, he is coming from a position of strength. he also went on to give a bit of foreshadowing on how that meeting with kim jong-un is going to go. he said the meeting between the two sides have been going well. in the end, that doesn't matter. we will all know whether a real deal can happen.

we have to see in those opening they happen. we'll see what kind of concessions the united states is willing to offer. we have that hint from mike pompeo that they're willing to offer some sortf unique solution to ensure the kim regime can have security. even if we get some sort of joint declaration, we are going to continue these talks. does that eliminate the short-term threat? do you think the u.s. is at risk of sing kim jong-un's language? stephen: if they walk out on each other, maybe that will be a bad thing. the fact that kim jong-un has

indicated theyarly in the afternoon, right after lunch to get out to the airplane and living by two, they may not stay for lunch. that indicates that not a lot of going to be accomplished today. what it alludes to is that they are going to be setting up further meetings. we know they have each offered invitations. hearing through sources , the envoy from washington dc to donald trump -- invitationtion to come to pyeongchang. we heard from the white house spokeswoman saying that this is a process that could be 2, 3, 4, even five summits.

your guess is as good as mine. today is an opening for both gentleman. ramy: the fact that they are looking to leave at 2:00 p.m., is that a sign of concern? especially with donald trump saying that he might be open to a second day? stephen: they may have read the art of the deal. many have said let's leave at 2:00, let's get something done. i would not be surprised if the summit goes much further. it isn't like this is a scheduled flight. they can stay if they want to.l.

>> that is our chief north asian correspondent. we are waiting for president trump and kim jong-un to arrive. of course, this comes with a lot of applications. perhaps this is more of a distraction. we had a big week of federal bank meetings. cio. look at the original what does this mean for markets? we have seen these currying etf's and outflows here. as a long-term investor, can you make any investment decision? >> on the long-term basis, you one.t make anything out of this we have a direct impact when the markets are concerned. in the last couple of months when trump actually pulled out of the summit itself, there was how the any reaction on the markets itself. on a longer-term basis, if north if people start

to move, it could be very positive for asians. this is the last standpoint. there is still open conflict in the nation. >> what is the possible positive outcome for the investor? are they looking for further talks? i think it is more than enough. for the whole of last year, the thing that could happen was the north korean conflict. that, there was no real other conflict there. this was the only one. north korea is taking its first gradual step toward opening up. yvonne: what are your views on korea right now? we had this chart on earnings.

this is the only asian benchmark where we have seen analyst/their earnings estimate. earnings haven't been very good. how are you doing the market? >> i am neutral on korea. we are looking at about 2%. -- from anea economic standpoint, korea is clearly not attractive from that perspective. the korean market is dominated by a couple of big tables. if they don't do well, korea doesn't do well. ramy: sticking to south korea, i was looking at the south korean won. a safe haven play over the last six or seven days. in relationain that to the board of north korea?

can you tell us about a possible project three -- trajectory? >> they will be pretty well supported over the next couple of sessions. this is the first time the u.s. is meeting a north korean leader. the sentiment is really positive. from an economic perspective, there is nothing to move the currency. after the dust settles, again, fundamentals on the economy, it doesn't look very promising. other asianthe currencies. in terms of other asian stocks, one thing i always remembered is that when north korea fires a missile, south korean defense stocks rise. in terms of moving ahead, if there is some kind of agreement, some kind of deal made, can we

say that maybe if we delve into those stocks that it might be something that would have a negative outlook? perhaps on a short-term basis. basis, sentiment will not be positive. from previous conflict, these conflicts have never had a long-term embellishment on the market. they tend to get away with it pretty quickly. after that, life goes on. affect think this will the markets. there were a lot of optimistic analysts at the same that there was blood of opportunity when it came to infrastructure, natural resources. these two koreas and businesses operating here back-and-forth. is that still a long-term play? >> i'm skeptical about that.

the germans are still paying for that reunification bill. ths after the reunification itself. north korea is in far worse shape than germany was back in the 1990's. getting aople are little carried away about that. >> the one possible outcome out of this could be better u.s. china relationships. >> absolutely. if you ask me what region will i would saymost, the chinese along the border of north korea. there has been a lot of immigration out of those provinces. people were worried about a war breaking out. standpoint,onomic

that region will benefit to medically. i e direct affect there is a lot more clear. if you're trying to play the reunification story, you will be there for a long time. yvonne: that may be a long-term play. after g7, we see president trump last out on traditional allies and made friends of enemies like kim jong-un. changing the international order, i was still at risk of a trade work russian mark -- trade war? becausee at risk president trump was quite volatile and unpredictable. it is hard to see any sort of certainty. will prevail sense at the end of the day. all will come to an agreement. they will be successful at the end of the day.

edition not be any reconstruction to the global economy. i think the global central banks are placed. i think this is something we'll have to keep in mind. the central bank did not officiate the currency. they took it up by 0.5%. i think the possibility of a trade war -- ink global central banks are clearly intend with the risks that could come from the trade war. we will know if a trade war erupts. yvonne: is that what you're are going a little malala comes to these mid-caps? >> absolutely. the global economy is not midcycle. in that sense, you have to avoid

getting too much exposure into the stocks. >> stick around a little bit more. you can take a look at those live pictures coming up. we will reach the goal posts that of the motorcade. it is going to be heading to santos a. that is the entryway into the resort island. is where we will see the capello hotel and that hand-check between president trump and kim jong-un. we are 30 minutes away. ramy: countdown to history. we are waiting for live pictures of the two men finally meeting in just about 30 minutes time. looking at singapore through the lens of history, this is the switzerland of asia. major events and major's attempt have happened. i'm thinking back to 2015 when the country played host to the persistent between the leaders

of china and taiwan. they were very well-positioned. we do know they are doing this at cost, 15 or $20 million according to the prime minister. they said this is our little support to make history happen, to host these two world leaders. thousands of world journalists and security have come here to witness this event and make sure it happens smoothly. we are waiting over the next 30 minutes to see that happen for ourselves. in stephen's bring engle. joining us from santa rosa. sentosa. are getting a life you like everyone else is getting on the other side. when we do know is that kim

bodyguards,urt of they are very fit soldiers in the black suits and they're already for his arrival. they presumably will run alongside the car as kim jong-un arrives at the capello hotel. -- inw donald trump anticipation of the continued charm offensive of kim jong-un, he did put on the charm at the dmz when he met with moon jae-in. we have even seen public opinion in south korea spike upwards of 30 or 40% approval of kim jong-un. that was about half of that before that for some it. kim jong-un will likely come out all smiles. that is my prediction. trump i don't see donald

as the hugging type. will they embrace? there's a lot of questions that need to be answered. joining us from cambridge. that was the executive director for research. you previously negotiated with north korea during the clinton administration. also joining us now, we want to bring in kevin cirilli. good morning. i will start with gary. let's talk a bit more about the chemistry between these two. we have been talking about this charm offensive that kim jong-un display with moon jae-in. are we likely to see a report like that russian mark -- like that? gary: i expect the meeting to be very friendly. i think both meters -- of them will announce that it will be a

successful meeting. >> kevin, you have been here for 48 hours? thinking president trump is thinking at the moment? kevin: this whole summit has been so trumpian. he gets here, he meets prime minister lee and then hunkers down. he was really preparing for this meeting with a senior administration officials. there is going to have a translator. then he will be joined by his chief of staff, general john kelly as well as his national security adviser, john bolton. those individuals are not always on the same side of foreign policy. it is interesting that he is surrounding himself with such a diverse type of foreign policy.

he will also be touring the region of the conclusion of the summit. what i thought was interesting, beyond the policy, when we were reporting on this, we had kim jong-un trying to forecast something. sister, his top foreign-policy administrators, taking a tour of singapore. i'm wrong, this is an individual of thirtysomething dictators who has traveled made it four times out of the country that we know of and greeted with tear gas cheers. i am standing there outside of the marina basin, my first time in singapore andll of a sudden a celebrity paparazzi. it was very surreal to see that. that is the effect of trump. from a policy standpoint, the sources back in washington dc are very much concerned about the president not agreeing to a

long-term deal. that is what they want, the long-term deal. are talking about policy here, a lot of people have said tot trump has gone too far get kim jong-un to come to the table. if there was something going down that route, if there was something that donald trump should not have done, what was works at an mark president trump is interested in starting a process of negotiation. the summit will have a very big agreement on objectives. north korea giving up weapons, normalizing relations between pyongyang and washington. will have anymmit details on timetables or reciprocity, all of these tough issues will have to be negotiated after the summit.

that is likely to take months or even years to negotiate. what i will be looking for is any indication of a timeframe. the north koreans will be very happy to stretch out these negotiations as much as possible. the u.s. will like to have them concluded within six months or a year. the sanctions are still in place. koreansor not the north will agree to that will be the key questions. afraid president trump's enthusiasm for having this meeting without any conditions may have weakened our bargaining leverage. the real test will be after the to set up a series negotiation. >> one other thing, we'll be looking ahead in the next 45 or 45 minutes is how gregarious that initial handshake is going to be.

to kevin, in terms of what is that mindset of donald trump over the past 48 hours, you mentioned him coming out of g7. he was irate when we saw his reactions to trudeau. i was understand where he sits in his head right now, going into this. for i get him to answer that question, we have this coming out from the president. he is talking about larry kudlow -- he suffered a heart attack. this is breaking. we don't know a whole lot of details. >> this is remarkable. larry kudlow has been a surrogate for president trump dating back to the campaign trail. he just recently officially joined the administration. negotiated allho the president trump's recent economic policy.

this is a very startling development. of course it comes just minutes before the president is set to meet the highest of negotiation we have seen with kim jong-un. >> he was not someone who accompanies the president on this portion of the trip. he did not follow the president and singapore. he is someone from his previous economic experience. he served in modern reagan's administration. we are just getting this word via twitter. we will bring everyone the latest developments as we get them. larry kudlow did have that heart attack. he is in the hospital right now. we are short of anything more than that. gary, i want your reaction to this news.

does this have on the application for u.s. policy? gary: i don't think it has any applications at all on the singapore summit. i think that outcome has already been predetermined. it will be a successful summit. both leaders will be very friendly. they will announce that they had a very successful meeting, a breakthrough and all of that is flawed. the question will be whether the subsequent negotiations can have concrete results. i think the test of that is very much up in the air. yvonne: we are seeing a market move when it comes to this latest news that larry kudlow has suffered a heart attack. we are seeing significantly lower futures here on this news. you can look at what we are seeing it. many teachers are not unchanged.

we have seen a reversal here. there was a lot of optimism leading up t this summit and singapore. take a look at what we are seeing with the dollar-yen. we are seeing the yen paring back some of those gains. a little bit more of a risk on and off the field. i want to bring back stephen engle. we can really know what happened with larry call-up. we have to bring it back to what is at play here. this is president trump and singapore right now. just minutes away from eating kim jong-un. >> i want to pose a question to dr. say more. he was also involved in nuclear talks around the world under the obama administration. basically,that coercive diplomacy, the combination of sanctions and negotiations has not worked.

why hasn't worked this time? is it the style of president trump? >> the north koreans often make promises about denuclearization theyid nee to limit their missile nuclear activities. whether they will do so this time, we will have to see. i believe kim jong-un is interested in sanctions relief and economic assistance and cooperation. i think he may be willing to agree to further limits on his nuclear missile program beyond the current moratorium on testing. for the u.s. side, that will ofrt with the declaration north korea's missile stockpile. then, steps to actually freeze those facilities. ast will be very important early concrete steps that will indicate north korea's

seriousness about taking measures to limit their program. on the west side, we'll have to decide what we are prepared to do for north korea in return for those initial steps. the has not indicated any willingness for sanctions relief for economic assistance bowl of -- short of full denuclearization. realistically, that is not a realistic position. washington will have to come up with a strategy that can at least achieve some initial steps. >> you and i talked in seoul ahead of the big meeting between moon jae-in and kim jong-un. you told me you met north korean negotiators. you have a pretty good read on how they do negotiate. i know you are not involved in the negotiations now but do you see the change in the tax coming

from north korea? we talked about kim jong-un's charm offensive. we heard that he removed three of his hard-line generals. perhaps he wants new counsel on how to move the economy and the path for north korea forward. d.c. changes or is it the same old north korea russian mark -- north korea? in terms of style, kim jong-un is much more effective than his father. in particular, we saw that charm in the meeting with moon jae-in. that is why i am quite confident that kim jong-un will be all smiles and handshakes and hugs with president trump. he knows how to do that very effectively. in terms of substance, i hav noen any fundamental change in the north korean strategy. that is to promise a lot and do a little bit. -- get somesome economic rewards in exchange for small steps.

>> this may be low hanging fruit. doesn't matter much to get a peace deal? does it matter for the optics to end the war officially from 1953? how important is that? >> the u.s. has always taken a position that a formal end of the weace treatd be contingent on north korea giving up its nuclear weapons. of course, presidentrump can change that conditionality. to some extent, it would be giving up bargaining leverage. yvonne: we have seen this kind

of diplomatic back-and-forth from kim jong-un. he displays quite a bit of showmanship and statesmanship. does that give the trump white house a bit more of a challenge >> the maximum pressure campaign has already eroded very significantly. because of kim jong-un's overtures to xi jinping and moon jae-in, i think we have already seen their significant relaxation on sanctions and enforcement, especially in china. both seoul and beijing are very interested in giving this process alive. that weakens our bargaining leverage. it, --n't weaken

eliminate it, we still have some. i don't think we are in a position to demand an course north korea into meeting our maximum ramy: i'm glad you toucn beijing. i want to bring in tom mackenzie to get the side of beijing in terms of their encouragement or pressure to get north korea to come to the negotiating table while also recognizing the fact that they are our closest allies. aside from china, north korea doesn't really have anyone else. tom: that is right. the largest trading partner for north korea. as gary was saying, the chinese authorities are reluctant to implement any further sanctions. that is what the usn would happen if these talks failed.

china is very concerned about beijing and north korea crumbling. they want to ensure that they see north korea come out of this having agreed to stop its nuclear weapons program advancing. they don't want to see pyongyang getting too close to the u.s.. they would like to see the chinese on the back of an agreement we see a drawdown. jim matheson this will not be part of the discussions. -- chinese would also there's a lot at play here for china. they will be watching this very closely. to knowbe from gary when the chinese will

be brought in on the back of the summit. whether they will push their way into these discussions and what role he would expect the chinese to play. why don't we bring gary back into this conversation to ask about those thoughts. do you think china will weigh in anytime soon? this brought kim jong-un and his delegation to singapore. i agree that china is obviously very pleased but we are now on a diplomatic track as opposed to economic sanctions. i also agree that the chinese are a little nervous. particular once any ultimate solution to include an

end to the u.s. rok security relationship. perhaps, even more than north korea does. china has some leverage. they are in a position to provide economic cooperation and trade and investment in north korea. to some extent, pyongyang will beijing's goals into these negotiations. think they would prefer to give this a bilateral negotiation. it is possible that once an agreement is reached, china and the ot russia and japan and south korea might all be brought together in order to have a grand signing ceremony of some kind. >> dr. seymour, i know you were the arms control or get a for president obama.

we heard a warning that the north koreans don't necessarily trust donald trump's word on any kind of agreement on denuclearization. is there some credence to that warning as well or is there another model? thenow how disastrous suggestion of a living model for denuclearization. are there other models out there? whether it is kazakhstan were others that the united states would be offering a more palatable solution to the north koreans russian mark -- north koreans? they developed nuclear weapons under the apartheid regime. after the change to majority rule, the south african government made a decision to give up those nuclear weapons and cooperated with the international atomic energy agency to verify that the weapons were destroyed.

presumes a fundamental political decision on the part of the north korean government to give up their nuclear weapons. i don't believe kim jong-un has made such a decision. i think he is willing to accept limits in exchange for economic and security benefits. i don't believe he's going to that.p yvonne: we were talking to dan tenenbaum about sanctions and the fact that mike pompeo still irreversibleplete, and verifiable denuclearization. do you think a more practical approach could be more targeted lifting of sanctions that can be reversible? would that give pyongyang and sent it to denuclearize? gary: i think the u.s. position is a good opening.

we want north korea to completely give up its nuclear weapons to our satisfaction before they get any sanctions believe. i think that is a good starting point. i don't think it is practical in terms of what could be realistically achieved through negotiation. at some point, if we want the north koreans to take limited measures like an end to additional production of nuclear weapons or long-range missiles, we will have to slice and dice sanctions relief. we have to offer partial sanctions believe in exchange for concrete and verifiable steps than north korea takes. the challenge of verification will be extremely difficult. up till now, north korea has not been willing to declare all of nuclear missile facilities and it hasn't been want to allow any international inspectors to go any place outside of the declared facilities at the nuclear center. that will be a very early test whether north korea is serious,

if there was to make a declaration and allow the bylaration to be verified inspectors. yvonne: we are looking at live pictures of what we believe to be kim jong-un arriving at the hotel. donald trump is already at the --el on santos island sentosa iland. -- island. this is kim jong-un arriving for this historic meeting of minds. let's see what happens there. you just saw that kim jong-un was finally arriving. the pictures we were waiting for, see what he has with donald yvonne: we are waiting for that money shot.

if anything, it will be that handshake, the first we have seen between the u.s. sitting president and a north korean leader. we see life pictures outside. we will see if we can see anything inside. of course, we have been following how important optics will be. how important the body language will be between these two. we have been talking about face-saving as well. this could be pretty key. let's talk about the face-saving as well. kevin: the president is trying to have some kind of win here. he is trying to get north korean leader kim jong-il and to commit to a long-term denuclearization deal. met with kimas jong-un and has said publicly as recently as yesterday that kim jong-un has committed to denuclearization bf you read a communique or the state

propaganda coming from north korea, they have been very careful in how they were to the issue of denuclearization. if we wot sure from kim jong-un after the summit. we are hearing that they are scheduled to meet one-on-one with the translators for 45 minutes before they get the delegation. president trump is going to size up kim jong-un in the first couple of minutes of the meeting. yvonne: we talked about the journey to get here. pompeo,ioned about mike the summit have happened without him? no, secretary pompeo is a former congressman and then became a director of the cia. i am told that he brought over his team from the cia to personally negotiate with this.

secretary tillerson was not in lockstep with him by any stretch of imagination. president trump and secretary pompeo are really working one-on-one. reason that he was going to be part of this very small delegation. he will be the most senior ranking official it president trump. president trump actually met with -- trusted him to meet with kim jong-un before he was confirmed. mike pompeo traveled from the u.s. to north korea to meet with kim jong-un before he was officially confirmed by the senate. the president placing a lot of trust in him and believe that he would be able to do this. there's a lot riding on that from that perspective. mentioned, we you watched these negotiations in real-time. at just howook

quickly this has evolved in terms of a political cultural moment. you have the president of the united states: the north korean dictator leader little rocket men. man. kim jong-un called donald trump a political dummy. you have this back and forth, the meeting is off, the meeting is back on. i was going over the official chronicles of the departures in the movement from president trump last motorcade. 's motorcade.trump kim jong-un just arrived. we are only about two minutes left before the summit.

what you think is the best case scenario for you? that there are two leaders will issue communique or a joint statement that commits both ,ides to long-term objectives denuclearization, peas, normalization of relations and then sets up a diplomatic process to try to flesh that out in terms of timetables, reciprocity. this is much better than where we were months ago when both sides were trading insults and talking about threats of war. i don't think it will end in denuclearization. if it produces concrete limits on north korea's missile program, that is very positive. >> no one things that denuclearization will happen here. as president obama's , gary, looking at the icbm aspect of things --

japan could be had. is the middle ground in giving some kind of concession with icbm's? from north korea's standpoint, this is the most recent demonstrated capability. i would not be surprised if kim jong-un was willing to agree to dismantle whatever limited force they have or not develop any further long-range missiles as part of sanctions. that is something that japan is very worried about. missilesmediate major that north korea has had for many years can reach tokyo. i think the japanese are concerned that president trump will make concessions and giveaway bargaining leverage that doesn't really deal with japan's security concerns. ramy: donald trump has now arrived at the hotel.

>> donald ump is adjusting his jacket, arranging his tight as he walks into the hotel. now both men ar at the hotel. it is a few seconds until 9:00. both of them are going to be money shothat handshake that will be plastered across your television screens and newspapers around the world once that happens. trump -- they will get down to the nitty-gritty is tired -- donald trump tries to iron out denuclearization. all eyes are watching singapore. the next hours are going to determine where the strategy, if it will happen in history, in the asia-pacific