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Transcript of Opening Presentations for “The Future of the Indian Nuclear Deal: Key Issues before the IAEA, NSG and US Congress”

Arms Control Association Press Briefing

Wednesday, July 30, 2008

National Press Club, Washington, D.C.

Panelists: Daryl G. Kimball, Sharon Squassoni, Ambassador Robert Grey

Daryl Kimball: Good morning everyone, my name is Daryl Kimball. I’m Executive Director of the Arms Control Association, and I’d like to welcome you to this morning’s briefing on the next steps relating to the proposal for nuclear cooperation with India. We, along with a coalition of dozens of other organizations here in the United States, more than 100 experts and organizations around the world from more than two dozen countries, have been working for months now, actually years, to try to adjust the terms of the proposal to exempt India from international safeguards governing nuclear trade in order to reduce what we see as the adverse impact of the proposal on the global non-proliferation system.

In two days, the International Atomic Energy Association Board of Governors will consider a proposal for an India specific safeguards agreement. Sometime thereafter, possibly as soon as the end of August, perhaps September, the 45-nation Nuclear Suppliers Group will consider a proposal to exempt India, which has not signed the nuclear Nonproliferation Treaty (NPT) of 1968, from its comprehensive safeguard standard of nuclear supply. That means that India has not agreed to allow international safeguards over the entirety of its nuclear infrastructure.

So, decision time for the 45 members of the Nuclear Suppliers Group as well as the 35 members of the Board of Governors of the IAEA has arrived. We’re here to highlight what we see as the key problems with the proposal and to identify steps – including restrictions and conditions – on future possible nuclear trade with India that we believe should be adopted by the Board of Governors and especially the Nuclear Suppliers Group. Many of these restrictions and conditions, I would add, have been identified and mandated in the 2006 US implementing legislation on this issue, the Henry Hyde Act.

Now, this morning we have two experts, who along with me, are going to go through these issues. First, I will discuss issues relating to the decisions and issues that the IAEA Board of Governors is going to have to consider, especially in connection with the safeguards agreement. And then we’ll hear from Sharon Squassoni who is a senior fellow at the Carnegie Endowment for International Peace who has followed this very carefully as an analyst with the Congressional Research Service in 2005, 2006 and part of 2007. She is going to address the issues that the Nuclear Suppliers Group has to face. And then we are going to hear from Ambassador Robert Grey, former U.S. Representative to the Conference on Disarmament, about the bigger issues that are at stake here so that we don’t lose sight of what this is really all about, which is the future of US. and international efforts to curb the spread of nuclear weapons and to reduce and eventually eliminate the threat posed by nuclear weapons.

So, let me begin by talking about the issues relating to the safeguards agreement that is now before the IAEA Board of Governors. The agreement that the Indian government has negotiated with the IAEA Secretariat would presumably cover only about eight additional reactors and some additional facilities. However, there is no guarantee what this agreement would actually cover because the agreement does not include a declaration of the facilities that would be covered by the agreement. This is unprecedented. This is unusual. And in our view, the Board of Governors should not be making a decision on this agreement until it’s clear which facilities will be covered by the agreement.

Now, we should also keep in mind that safeguards covering only a portion of a nation’s nuclear infrastructure are of almost no real non-proliferation value especially in India’s case because India has nuclear weapons and has very large set of facilities that are devoted to the production of fissile material for weapons and the design and production of nuclear weapons.

Even more troubling, India asserts that in the preamble and combined with certain sections of the operative portion of the agreement, the agreement allows it to withdraw certain reactors from safeguards if fuel supplies are interrupted, even if fuel supplies are interrupted because India has conducted a nuclear test explosion. But in the analysis that I wrote with Fred McGoldrick, who is a former State Department official who has negotiated most of the United States’ nuclear cooperation agreements with other countries notes, this is an incorrect interpretation of the safeguards agreement. Our co-author was Lawrence Scheinman, who was former Deputy Director of the U.S. Arms Control Disarmament Agency. (See <http://www.armscontrol.org/node/3205>.)

More importantly, this interpretation that India is asserting would be inconsistent with the principle of permanent safeguards. Before the IAEA Board takes a decision on the safeguards agreement we believe it’s essential that the IAEA, India, the United States, and other Board members to clarify what the interpretation of this agreement is with regard to the possible termination of safeguards over the facilities and materials that India will be putting under safeguards. And if necessary, the IAEA Board of Governors should insist upon amending the agreement to remove any ambiguities that do still exist.

Second, another red flag in the safeguards agreement is how fuel supply assurances have been woven in the text of this agreement. Never before has a safeguards agreement been contingent upon commercial considerations. Essentially what India has negotiated in the preamble is that the application of safeguards over these facilities is contingent upon the continuation of fuel supplies by other states for India’s fuel civil reactors.

What are they worried about? They are worried about a cut off of fuel supplies in the event that India might resume nuclear testing in the future. Now, this is extremely troubling to us because the IAEA Board and NSG countries should not be complicit in helping India find ways to evade the penalties that might occur if India does resume nuclear testing. There should be a clarification about whether the countries that might be engaging in bilateral nuclear cooperation agreements with India like the US, Russia and France intend to supply India with continuous supplies even if India resumes nuclear testing, or if they intend o help India amass a strategic fuel reserve that would help India overcome any future cut-off in nuclear testing.

And it’s also important to note in the context of this broader debate that this approach to the safeguards agreement and to this entire arrangement flatly contradicts provisions that were in the Henry Hyde Act that was passed by Congress in 2006, and specifically a provision that was championed and authored by none other than Senator Barack Obama.

The Hyde Act stipulates that U.S. fuel supplies to India be limited to reasonable reactor operating requirements. In other words, don’t supply India with multi-year fuel supplies that would allow India to overcome a fuel supply interruption if the US cuts off nuclear cooperation with India if they test. There is a copy of a very important exchange between Senator Obama and Senator Lugar, who was then the Chairman of the Senate Foreign Relations Committee from September 16, 2006 on the table in the back. It is crystal clear what Senator Obama, Senator Lugar and the rest of Congress meant in their policy language and restrictions that were put in the Henry Hyde Act.

So let me stop there. Let me turn over the podium to Sharon Squassoni who’s going to take us through the key issues that the Nuclear Suppliers Group should contemplate as the United States approaches them with the proposal to exempt India from their full-scope safeguards standard of supply. Sharon.

Sharon Squassoni: Thank you, Daryl. How many of you are familiar with the Nuclear Suppliers Group? We have an educated crowd, that’s terrific. As you know, they usually have their plenary, their main meeting, in May every year, and so what is happening right now is an effort to convene the entire Nuclear Suppliers Group at the end of August and possibly once again in September just to consider the India safeguards agreement.

You might also know that the NSG operates by consensus and so there will be tremendous pressure to lobby all the member states to agree on what the US and India want, which is a clean exemption. That is, the NSG will decide that there will be no conditions on trade with India whatsoever.

Here in the United States we tend to think, “Gee, when the nuclear cooperation agreement gets here, that’s the end-game, Congress will make a decision one way or another.” But in reality, for India, the end-game is the Nuclear Suppliers Group decision. Once the nuclear suppliers group says “yes,” India will be free to go and get mostly what it needs, which is uranium for its reactors. India will be able to trade with other states. And France and Russia will be waiting in line to supply India with nuclear trade. So that’s the end-game.

The NSG has important considerations to think about. As Daryl has pointed out, it’s in the U.S. interest and in U.S. law to cut off nuclear trade with a state that tests a nuclear weapon. But, it is also in the NSG’s interest and here’s why. India freely admits that its nuclear weapons program was born of its civilian nuclear power program. It has said this in the most recent document it gave to the IAEA. It was the 1974 nuclear test that so shocked the world that the United States lobbied to create the Nuclear Suppliers Group.

India has insisted all along that any nuclear deal not impinge on its ability to conduct future nuclear tests, even as it has promised to adhere to a unilateral test moratorium. But its emphasis on the continuity of nuclear fuel supply can only have one motivation: it does not want a repeat in the cut off of nuclear trade that it experienced in the 1970s. A nuclear test by India would prompt a response by Pakistan and thus new instability in South Asia.

NSG states really need to avoid arrangements that would enable or encourage further nuclear testing by India. Therefore, they must create a condition that would stop nuclear exports if India tests again. This is a minimum in my view.

This is analogous to a rule they adopted, I think it was two years ago, to halt countries who were not in compliance with their nuclear non-proliferation treaty obligations. Now obviously India isn’t a party to the NPT, so it needs a little further strengthening. Otherwise there are no penalties for future proliferation actions by India. They will simply be given a green light to import.

There’s another issue that the NSG should address and that is to restrict what we call sensitive nuclear technology transfers between NSG members and India. What this means is uranium enrichment and spent fuel reprocessing. India has such facilities but it has not placed them under international safeguards. It has one reprocessing facility which is already under what we call intermittent safeguards. Even if those facilities were safeguarded, there would be no way to prevent the transfer of know-how from the safeguarded facility to their military program because the safeguards don’t track know-how, they track material and equipment. This means that any nuclear weapons state that engages in such cooperation with India, that is on enrichment or reprocessing, even though it might be under safeguards, could potentially be violating Article I of the nuclear Non-Proliferation Treaty, which says you will not aid assist encourage in any way a state in acquiring or developing nuclear weapons.

This is not an idle, abstract issue. The Nuclear Suppliers Group has struggled for the past four years with new criteria for restricting enrichment or reprocessing transfers. And every time it gets close, states balk because they don’t want to be in what’s considered the “loser category,” the category of not being able to have this technology. The best step that the NSG could take now would be to draw the line first with India, which is not a party to the NPT, and should not be benefiting from any such cooperation.

There are certainly other conditions that the nuclear suppliers group might take up. For example, conditioning trade with India upon India completing an additional protocol, which is the safeguard strengthening measures that have been adopted by many states. In fact, the United States requires this as a condition of its cooperation. But I think the two on cutting off in the event of a test and no enrichment or reprocessing technology are the main ones that it needs to consider. Thank you.

Daryl Kimball: Thank you, Sharon. Bob, if you could come up to the podium to conclude our opening remarks then we will go to your questions.

Ambassador Robert Grey:
Basically what we’re dealing with here is the United States has really given India a blank check to proceed to go around all of the safeguards agreements in the NPT and other agencies. And now it seems to me we are trying to assist them in cashing that check at another bank, the Nuclear Suppliers Group. This is not a good idea.

This is still another example, and perhaps the most egregious example, of this sort of foreign policy by unilateral fiat. The NPT has a long history. It is almost as important as a UN charter in terms of protecting non-proliferation interest. We have been a leader in this for years, and now suddenly we’re taking another stance.

It’s bad for another reason too. We are walking away from a treaty that more than 180 countries have joined, just opening a huge hole, a gap in it. The argument seems to be that some people are exempt from the rules because they’re good fellows and other guys are bad fellows and have to adhere to the rules.

So it’s a selective sort of a process which really undermines the whole series of international cooperative agreements that we’ve negotiated over the years. It’s an unmitigated disaster in terms of non-proliferation policy and the so-called rule of law.

And more importantly it seems to me that if one is going to make changes like this, that it should be a function of the entire membership of the non-proliferation community, the nuclear Nonproliferation Treaty signatories, not the Nuclear Suppliers Group which is a very limited number of states.

And that is why I’m deeply concerned about the future of the non-proliferation regime if this goes through. If we say the Indians are good fellows and they should get a special exemption, what’s to keep the Chinese from pushing Pakistan or somebody else? We’re just opening up the door here to Pandora’s Box in the most outrageous and egregious manner.

And frankly, whatever the Hyde Act says, if they pull this off in the Nuclear Suppliers Group, we’re going to be faced with a fait accompli, there’s not much the Congress can do about it at this stage in the game. So, in the overall interest of the United States and the investment we’ve had in this non-proliferation regime, at a time when we are dealing with other people who are potentially trying to go nuclear, this is precisely the wrong thing to do at the wrong time.

And so, I very much hope that the Nuclear Suppliers Group and other responsible countries will prevent us creating an act of folly on the part of this administration. It would be a disaster in the long term for the United States if this were to be done. We’re just flying in the face of something we’ve worked on for thirty years.

Now, the NPT is not a perfect agreement. We have to get better safeguards for the civilian side of it. We’ve got to get additional protocols and all sorts of things. But you don’t throw out a whole system that you’ve built up painfully over thirty, forty years just on a whim because you want to establish some sort of a so-called strategic relationship with a country that, frankly, which has always been very good at protecting its own national interests. And it’s not about to do anything in the international arena in the years to come that’s going to make it an ally of the United States. The Indians have a very strong tradition of acting like the British. They have no friends but they have permanent interests. I wish sometimes the United States would act like that. Thank you.

Daryl Kimball: Thank you very much, Ambassador Grey. I hope that was clear.

Let me just conclude by bringing this together and making one overall comment and then describing what we think, among other things, the Nuclear Suppliers Group should do.

First of all, we shouldn’t lose sight, as Ambassador Grey was saying, that contrary to the claims, the Orwellian claims of the advocates of this proposal, the nuclear deal fails to bring India further into conformity with the norms and standards that are expected of other states in the international community. And just two specific examples, the Comprehensive Test Ban Treaty, which 178 countries including the United States signed, and a cut-off of fissile material for nuclear weapons. If, as Prime Minister Singh said back on July 18th 2005, India would “assume the same responsibilities and practices” as other countries with advanced nuclear capabilities, I do not see why India should not be asked, urged or required as part of this arrangement to sign the Comprehensive Test Ban Treaty or take on some other legally binding obligation not to test. Nor do I see a reason why India should not be urged, asked or required to stop the production of fissile material for nuclear weapons before the NSG agrees to engage in civil nuclear trade. India already has enough fissile material to make 60-100 nuclear bombs.

So what should the NSG do? To conclude and summarize, if NSG states should agree to supply fuel to India, they should:

First, establish a policy that if India resumes nuclear testing, or violates its safeguards agreements, trade involving nuclear items with India should be terminated and unused fuel supplies should be returned.

Second, NSG states should expressly prohibit any transfer of sensitive reprocessing, enrichment, or heavy water production items or technology whether that is inside or outside bilateral nuclear cooperation agreements.

Third, NSG states should actively oppose any arrangement that would give India any special safeguards exemptions that would in any way be inconsistent with the principle of permanent safeguards over all nuclear materials and facilities. NSG states should not take any decision unless India and the IAEA conclude a meaningful additional protocol to its “umbrella” facility specific safeguards agreement.

Fourth, before India is granted a waiver from the NSG’s full-scope safeguards standards, it should join with four of the five orgininal nuclear weapons states in declaring that it has stopped fissile material production. And NSG states should insist that India transform its nuclear test moratorium pledge into a legally binding pledge, perhaps by signing the Comprehensive Test Ban Treaty.

So, this is a time for NSG governments to stand up and be counted in order to prevent further damage to the nuclear non-proliferation system.

We will stop there and open the floor to your questions.