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Former White House Coordinator for Arms Control and WMD Terrorism
U.S.-Indian Nuclear Deal Reaches NSG Brink

Wade Boese

After piloting a controversial nuclear trade initiative for more than three years through sometimes stormy domestic political processes that threatened to sink it, the United States and India in August brought the proposal before other governments for their approval. Several demurred, compelling New Delhi and Washington to work again to salvage it.

John Rood, acting U.S. undersecretary of state for arms control and international security, told reporters Aug. 22 that he was "optimistic" about the pact's prospects despite the failed initial attempt to move it through the 45-member Nuclear Suppliers Group (NSG). Rood led the U.S. delegation to the Aug. 21-22 Vienna meeting of the voluntary group, which was convened specifically to review the U.S.-Indian measure. The group operates by consensus to try and coordinate all members' nuclear trade policies, and it tentatively plans to meet again Sept. 4-5 to attempt to reach a common position on the U.S.-Indian initiative.

India has called for the group to allow it to trade with NSG members without any conditions. That now appears unlikely, raising questions about whether India ultimately might abandon the effort. Pranab Mukherjee, India's external affairs minister, was quoted in the Aug. 23 Hindustan Times as declaring, "[W]e cannot accept prescriptive conditionalities." Indian officials have most vehemently argued against measures that would end nuclear trade if India conducts another nuclear test. India last tested nuclear weapons in May 1998, leading rival Pakistan to carry out its first nuclear blasts. Neither state has forsworn additional tests although they have declared voluntary moratoriums.

Two days before the NSG meeting, Phil Goff, New Zealand's disarmament and arms control minister, told The Times of India that his country was exploring conditions that would terminate trade in the event of a future Indian test. Similarly, Rep. Howard Berman (D-Calif.) wrote an Aug. 5 letter to Secretary of State Condoleezza Rice urging that an NSG decision link trade and testing, as Congress did in its December 2006 legislation stipulating the circumstances under which the United States can engage in nuclear trade with India. (See ACT, January/February 2007. )

In general, Berman, chairman of the House Committee on Foreign Affairs, has pressed the administration to ensure that an NSG outcome be consistent with the U.S. law, known as the Hyde Act in honor of a former panel chairman. Berman warned in his letter that discrepancies between the NSG result and the Hyde Act would "jeopardize congressional support for nuclear cooperation with India." If the NSG clears India for nuclear trade, Congress would still need to approve a July 2007 bilateral U.S.-Indian nuclear cooperation agreement before any U.S. nuclear items could legally flow to India. (See ACT, September 2007. )

Some U.S. lawmakers have expressed concern that, under such a scenario, entities in other states such as France and Russia might get a jump start on cutting deals with India. Because of the abbreviated congressional schedule due to the November general elections, Congress is only expected to be in session Sept. 8-26 before ending this year's work. However, the Hyde Act calls for the bilateral agreement to sit for 30 continuous days before Congress can take a vote.

Consequently, if the NSG cleared India for nuclear trade this September or later this fall, foreign firms would most likely be free to pursue sales while U.S. companies would lack the domestic authority to do the same. Indeed, Russia already has negotiated an agreement to build four more reactors in India in the event that the NSG gives the green light to nuclear exports to India. Berman wrote the administration that it should not rush an NSG decision that "would give other countries an unacceptable head-start."

The sweeping effort to expand nuclear commerce with India by rescinding roughly three decades of U.S. and NSG constraints began with a July 2005 agreement between President George W. Bush and Indian Prime Minister Manmohan Singh. The swath of restrictions were erected incrementally in response to India refusing to join the 1968 nuclear Nonproliferation Treaty (NPT), exploding its first nuclear device in 1974 using Canadian and U.S. imports designated for peaceful purposes, and denying international oversight of its full nuclear complex.

Bush, seeking to bolster U.S. ties to the rising Asian power, pledged that the United States would work to roll back the trade constraints if India took certain steps to align its nuclear behavior more closely with that of other states. Above all, India was supposed to grant the International Atomic Energy Agency (IAEA) greater access to India's nuclear operations.

India and the IAEA

Singh in March 2006 vowed to eventually put 14 Indian thermal power reactors under the IAEA safeguards network, while leaving another eight unsupervised. He also elected to withhold from safeguards two fast breeder reactors, which yield more nuclear material suited for bomb-making than they consume as fuel. (See ACT, April 2006. ) Safeguards measures, such as inspections and remote monitoring, are supposed to deter and detect misuses of civilian nuclear facilities and materials to build nuclear weapons.

Indian negotiators in March 2008 completed talks on a draft IAEA safeguards agreement, but Indian Communist parties and their allies objected to finalizing it because of their general opposition to improving relations with the United States. Singh for months unsuccessfully attempted to win over the leftist parties, who had been crucial in helping his coalition government maintain power against its chief opposition, the Hindu-nationalist Bharatiya Janata Party (BJP). Meanwhile, BJP politicians railed against the U.S.-Indian deal as potentially crippling to India's nuclear weapons program and hindering its freedom to conduct future nuclear tests.

With the Bush administration pressing him to act or risk time running out on it being around to drive the deal through the NSG, Singh ignored leftist parties' protests and sent the draft safeguards agreement to the IAEA for approval by its 35-member Board of Governors. The move triggered a legislative debate and confidence vote on the Singh government that also was seen as a referendum on the U.S.-Indian initiative. Winning over the previously hostile Samajwadi party, Singh prevailed 275-256, with 10 abstentions, in an unruly July 22 vote marred by bribery allegations and the release of six lawmakers from jail to cast their ballots.

Preceding and during the debate, the BJP contended that the Singh government was "purveying untruths" about its draft IAEA safeguards agreement. Government officials described it as "India specific," suggesting that it was distinct from standard agreements. A key aspect touted by government officials included India's right to take "corrective actions" if foreign supplies of fuel ended. Anil Kakodkar, chairman of India's Atomic Energy Commission, and other Indian officials stressed that India had agreed to "permanent safeguards" on the basis of "permanent supplies," suggesting that if supplies stopped, so did safeguards.

The corrective actions referred to by the Singh government, however, were not defined in the agreement and appear only in its preamble and not the operative section. An IAEA source July 14 told Arms Control Today that a preamble contains "no rights or obligations." The source also said India would not be able to terminate safeguards on its own, pointing out that the agreement states that withdrawing a facility from safeguards requires a joint Indian and IAEA determination that it is no longer safeguards "relevant," meaning that nuclear material is no longer there or is unusable.

The IAEA source also said safeguards are "not time bound." Similarly, IAEA Director-General Mohamed ElBaradei said Aug. 1 that the agency safeguards are of "indefinite duration" and can only be terminated in accordance with the specific terms contained in the agreement. Still, the Indian government and the IAEA never publicly stated a common position on the duration of safeguards or their potential termination, leaving open the possibility for future misunderstandings.

The Indian-IAEA safeguards agreement is unique in that it is the first so-called umbrella agreement. When safeguarding facilities in the three non-NPT states-parties (India, Israel, and Pakistan), the IAEA typically negotiates one INFCIRC/66 agreement per facility, but this new arrangement will apply to as many facilities as India chooses to add incrementally over time. In addition, New Delhi can agree to have the terms of the new agreement apply to the six thermal power reactors that are already under safeguards from earlier arrangements. The Pakistani government complained in a July 15 letter to ElBaradei that the Board of Governors was being asked to approve a safeguards agreement unaware of the facilities it covered.

India 10 days later circulated a list of facilities that it claimed would be put under safeguards by 2014. In its safeguards preamble, India indicates it will only subject facilities to safeguards after negotiating agreements for "reliable, uninterrupted and continuous access to fuel supplies from companies in several nations."

Moreover, India reiterated its intent to build up a "strategic reserve of nuclear fuel" to ensure that its reactors could operate for their lifetimes if outside supplies ever ceased. The Bush administration pledged to help India acquire fuel reserves, but U.S. lawmakers through language in the Hyde Act supported only assisting India in procuring sufficient fuel for "reasonable reactor operating requirements." Critics fear a large reserve of fuel might lead India to calculate that it could risk nuclear tests and escape serious penalties.

Despite concerns raised by Pakistan and other states, the IAEA board Aug. 1 approved the Indian safeguards measure by consensus. The safeguards agreement will not enter into force, however, until India specifically notifies the agency that it is ready to bring the agreement into effect. New Delhi is not expected to do so until it secures what it considers to be a satisfactory NSG decision and negotiates contracts to lock in fuel supplies and develop its strategic reserve.

The NSG's Turn

Abiding by India's pleas for a "clean" NSG approval, the United States submitted a proposal Aug. 6 to the group that would not set any conditions for India to engage in nuclear trade. New Zealand's prime minister, Helen Clark, indicated just days before the meeting's Aug. 21 start that such a stripped-down approach was not going to be readily accepted, saying that her country was looking at "conditionalities" and speaking with "like-minded countries."

Meanwhile, some Democratic U.S. lawmakers also weighed in. In his Aug. 5 letter to Rice, Berman noted that an unconditional NSG approval "would be inconsistent with U.S. law, place American firms at a severe competitive disadvantage, and undermine critical U.S. nonproliferation objectives." In an Aug. 20 op-ed in The New York Times, Reps. Edward Markey (D-Mass.) and Ellen Tauscher (D-Calif.), who chairs the strategic forces subcommittee of the House Armed Services Committee, argued that the NSG "would vote itself out of existence if it allowed India to have nuclear technology with no strings attached." Their underlying concern is that India's import of nuclear fuel would enable it to devote more of its own domestic resources to building nuclear arms, spurring Pakistan to ratchet up its weapons programs.

NSG meetings are supposed to be confidential, but reports leaked that more than 50 proposed amendments were offered by several countries on the conclave's first day. Austria, Ireland, Norway, and Switzerland reportedly joined New Zealand in raising the most serious challenges to the proposal; but other countries, such as Canada and Japan, also reportedly supported possible amendments.

Proposals other than those pertaining to nuclear testing reportedly focused on requiring India to negotiate an additional protocol with the IAEA to give the agency greater inspection authority inside India. There also was support for prohibiting exports to India of enrichment and reprocessing technologies, which can be used to produce nuclear fuel as well as nuclear bombs. Another approach called for periodically reviewing India's compliance with certain standards of nonproliferation behavior in order to maintain its eligibility for trade.

At the close of the two-day meeting, the group issued a one-sentence description that participants "exchanged views in a constructive manner." The United States is expected to prepare a revised proposal for the group to consider at its upcoming meeting.