CITING PROGRESS in addressing U.S. non-proliferation concerns, the Clinton administration announced on November 6 its intention to use new waiver authority to lift many of the sanctions imposed on India and Pakistan following their nuclear tests in May. Noting both states' moratoriums on nuclear testing, pledges to sign the Comprehensive Test Ban (CTB) Treaty, commitments to strengthen export controls, and support for negotiations on a fissile material cutoff treaty, a senior administration official said that President Clinton had decided to use the one-time, one-year waiver authority to create a better environment for negotiations to reduce the nuclear danger in South Asia.
The waiver, which took effect on December 1, will allow the resumption of trade support by U.S. government entities such as the Export-Import Bank and the Overseas Private Investment Corporation and will lift restrictions on lending by private U.S. banks. Additionally, the United States will renew military-to-military contacts through the Defense Department's International Military Education and Training program. To prevent Islamabad from slipping into default, the administration will also support a one-time, $5.5 billion International Monetary Fund (IMF) bailout package for Pakistan.
The administration did not, however, lift the general ban on support for lending to India and Pakistan by international financial institutions like the IMF and the World Bank. Nor did it agree to resume the sale of military or munitions list items, which were not included in the waiver authority.
U.S. diplomatic efforts have been led by Deputy Secretary of State Strobe Talbott, who in November conducted his seventh round of talks with Pakistani Foreign Secretary Shamshad Ahmed and separately with Indian special envoy (and now Minister of External Affairs) Jaswant Singh. In a November 12 speech at the Brookings Institution in Washington, Talbott listed five "practical steps" to prevent a nuclear arms race and reduce tensions in South Asia. In addition to signing the CTB Treaty, Talbott also called on both governments to stop producing fissile material for weapons purposes, limit development of ballistic missiles and deployment of nuclear-capable aircraft, begin a "high-level, frequent and, above all, productive dialogue" on bilateral security issues and tighten export controls on nuclear and missile technology.
While both countries announced in September their willingness to sign the CTB Treaty before September 1999, neither has embraced U.S. suggestions regarding a fissile material production moratorium or limits on ballistic missile development.
India and Pakistan have held several rounds of bilateral talks on security issues, most recently in Islamabad from October 15 to 18. Despite adopting a substantive agenda that included the divisive issue of Kashmir, the talks failed to make much progress, as both sides reiterated familiar positions. The next round of bilateral talks is scheduled for February 1999.
An interagency group of U.S. officials held meetings in India and Pakistan on November 9–10 and 11–12, respectively, on ways to improve each country's system of export controls. Washington is urging both countries to adhere to the Nuclear Suppliers Group and Missile Technology Control Regime standards. Pakistani Foreign Minister Sataj Aziz announced on December 13 that nuclear export control legislation was being prepared for cabinet consideration. Speaking to both houses of Parliament on December 15, Indian Prime Minister Atal Bihari Vajpayee said, "we are taking steps to make more stringent our laws" regarding sensitive technology sales.