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– General John Shalikashvili,
former Chairman of the Joint Chiefs of Staff
Nuclear Suppliers Group

Revised U.S. Proposal for India-Specific Exemption from Nuclear Suppliers Group Is Inadequate and Irresponsible

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Today, the Arms Control Association (ACA) obtained a copy of the revised U.S. proposal to exempt India from existing nuclear trade restrictions maintained by the 45-member Nuclear Suppliers Group (NSG). The proposed rule change would allow India to acquire nuclear technology and material previously off limits to it because of India’s misuse of past nuclear imports designated for peaceful purposes to conduct a nuclear explosion in 1974 and refusal to allow full-scope international safeguards on its nuclear complex. (Continue)

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Note for Reporters by Daryl G. Kimball (202-463-8270 x107)
September 3, 2008

Today, the Arms Control Association (ACA) obtained a copy of the revised U.S. proposal to exempt India from existing nuclear trade restrictions maintained by the 45-member Nuclear Suppliers Group (NSG). The proposed rule change would allow India to acquire nuclear technology and material previously off limits to it because of India’s misuse of past nuclear imports designated for peaceful purposes to conduct a nuclear explosion in 1974 and refusal to allow full-scope international safeguards on its nuclear complex.

The text of the revised proposal is available here. ACA’s preliminary analysis follows below.

Background

At a special Aug. 21-22 meeting of the NSG, the Bush administration proposed an India-specific exemption from NSG guidelines, which currently require full-scope IAEA safeguards as a condition of nuclear supply. Bowing to Indian demands, the Bush team called for a “clean” and “unconditional” waiver that would have allowed unrestricted nuclear trade with India at the discretion of each NSG member state. See here the text of the earlier proposal .

To their credit, many NSG states essentially said “no thanks” and proposed more than 50 amendments and modifications to the U.S. proposal. Those recommendations aimed to establish some basic but vitally important restrictions and conditions on nuclear trade with India. Many of those amendments track with the restrictions and conditions established in 2006 U.S. legislation regulating U.S. nuclear trade with India, including the termination of nuclear trade if India resumes testing. That U.S. law also significantly restricts transfers of uranium-enrichment and spent fuel reprocessing technologies, which can be used to produce both nuclear fuel for reactors and nuclear material for bombs.

U.S. and Indian officials responded Aug. 31 with a new draft waiver. The NSG is due to reconvene Sept. 4-5 in Vienna to discuss the revised U.S. proposal. Traditionally, the group makes decisions by consensus. See here the NSG’s existing guidelines for the export of nuclear material, equipment, and technology.

The Revised Proposal Is Irresponsible and Should Be Rejected

The revised U.S. proposal does not incorporate any meaningful adjustments or concessions and is essentially the same as the earlier draft proposal.

Apparently, New Delhi and Washington expect that the 15 plus states who are seeking meaningful restrictions and conditions and a regular review mechanism on nuclear trade with India to be satisfied with a “statement from the chair” to substitute for a rationale NSG policy on key issues. The revised proposal also contains the following two cosmetic adjustments:

  • a new paragraph that says all governments participating in the NSG shall inform each other on what bilateral cooperation they are pursuing with India after the exemption is approved. This is being presented as an alternative to several proposals from NSG states for a regular review mechanism for nuclear trade with India. This would be mildly useful ahead of an NSG decision, but adds nothing to what the NSG is already authorized to do and would do nothing to help hold India accountable to nonproliferation and disarmament commitments.
  • a paragraph that says participating governments can call an extraordinary consultation within the NSG “if circumstances have arisen which require consultations.” This is being pitched as a response to a possible Indian nuclear test. But in reality, this doesn’t do anything more than what is already in the NSG guidelines (paragraph 16) that allow for a special meeting of NSG states in the event of extraordinary events, including a nuclear test.


Given that the Indian government has shown so little flexibility and given that the revised proposal was distributed only days before the next NSG meeting, it is highly unlikely the NSG will reach a decision this week.

Although acknowledging India’s legitimate interest in diversifying its energy options, responsible, like-minded countries, including Austria, Ireland, Japan, the Netherlands, New Zealand, Norway, and Switzerland, correctly recognize that the Bush approach is deeply flawed and would effectively end the NSG as a meaningful entity. It is vital that these and other states stand their ground.

Why? Any India-specific exemption from NSG guidelines would erode the credibility of NSG efforts to ensure that access to peaceful nuclear trade and technology is available only to those states that meet global nuclear nonproliferation and disarmament standards.

Contrary to the Orwellian claims of its proponents, the deal would not bring India into the nonproliferation mainstream. Unlike 179 other countries, India has not signed the Comprehensive Test Ban Treaty. It also continues to produce fissile material and expand its nuclear arsenal. As one of only three states never to have signed the nuclear Nonproliferation Treaty (NPT), it has not made a legally binding commitment to pursue nuclear disarmament.

The most recent U.S. proposal should be flatly rejected as unsound and irresponsible. To be effective, NSG guidelines must establish clear and unambiguous terms and conditions for the initiation and possible termination of nuclear trade.

At a minimum, NSG states should:

  • establish a policy that if India resumes nuclear testing or violates its safeguards agreements, trade involving nuclear items with India shall be terminated and unused fuel supplies returned;
  • expressly prohibit any transfer of reprocessing, enrichment, or heavy-water production items or technology;
  • regularly review India’s compliance with its nonproliferation obligations and commitments; and
  • require as a condition for nuclear trade that India join with four of the five original nuclear-weapon states in declaring that it has stopped fissile material production and require that India to transform its nuclear test moratorium pledge into a legally binding commitment. Unfortunately, India has rejected previous calls to take these important nuclear restraint measures.

Some Indian officials have threatened they may walk away from the deal if the NSG establishes even these most basic requirements. If that occurs, so be it.

The Indian nuclear deal would be a nonproliferation disaster, especially now. The current U.S. proposal threatens to further undermine the NPT, the nuclear safeguards system, and efforts to prevent the proliferation of sensitive fuel-cycle technologies. Absent curbs on Indian nuclear testing and fissile material production, it would also indirectly contribute to the expansion of India’s nuclear arsenal with adverse consequences for the nuclear arms race in Asia.

For those world leaders who are serious about advancing nuclear disarmament, holding all states to their international commitments, and strengthening the NPT, it is time to stand up and be counted.

Congress, the NSG, and the U.S.-Indian Nuclear Cooperation Agreement

Several Democratic and Republican members of Congress have urged the Bush administration not to support any NSG exemption for India that does not conform to the restrictions and conditions on nuclear trade established by the 2006 legislation, known as the Hyde Act. Even if the NSG allows civil nuclear trade with India, Congress must still approve the proposed U.S.-Indian nuclear cooperation agreement and it may seek to amend or attach conditions on its implementation.

On August 5, the Chair of the House Committee on Foreign Affairs, Rep. Howard Berman (D-Calif.) wrote U.S. Secretary of State Condoleezza Rice urging “the President should withhold support from any proposed exemption from India in the NSG guidelines that is not fully consistent with the Hyde Act and that does not incorporate a number of other key provisions, including: the immediate termination of all nuclear commerce by NSG states if India detonates a nuclear explosive device or if the IAEA determines that India has violated its safeguards commitments …” (The full text of the Berman letter is available from here. )

Berman goes on to warn Rice that “any effort to consider the [U.S.-Indian nuclear cooperation] agreement outside of the requirements of current law will be impossible if the Administration accepts an NSG exemption that fails to include the Hyde Act conditions.”

It is clear that the current U.S. proposal to exempt India from NSG guidelines fails to include the Hyde Act conditions and restrictions.

Country Resources:

Averting a Nuclear Nonproliferation Disaster: Where States Should Draw the Line in the U.S.-Indian Nuclear Deal Endgame

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Event transcript of a discussion between Henry Sokolski and Sharon Squassoni moderated by Daryl G. Kimball.
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WELCOME AND MODERATOR:
DARYL KIMBALL,
EXECUTIVE DIRECTOR,
ARMS CONTROL ASSOCIATION

SPEAKERS:
HENRY SOKOLSKI,
EXECUTIVE DIRECTOR,
NONPROLIFERATION POLICY EDUCATION CENTER

SHARON SQUASSONI,
SENIOR ASSOCIATE, NONPROLIFERATION PROGRAM,
CARNEGIE ENDOWMENT FOR INTERNATIONAL PEACE

TUESDAY, SEPTEMBER 2, 2008

Transcript by
Federal News Service
Washington, D.C.

Edited by the Arms Control Association

DARYL KIMBALL: All right. If everybody could take their seats, turn off their cell phones and other electronic devices. Good afternoon. My name is Daryl Kimball. I’m the executive director of the Arms Control Association and I want to welcome you to our briefing this afternoon about the Nuclear Suppliers Group (NSG) discussion and debate regarding the proposal to exempt India from long-standing NSG guidelines that restrict nuclear trade with states that don’t agree to full-scope IAEA safeguards. This has blocked nuclear cooperation with India since its 1974 nuclear test explosion. [Editor’s note: The NSG did not adopt the full-scope safeguards requirement until 1992, although it had been previously instituted in 1978 in U.S. law.]

We, the Arms Control Association and my two colleagues here, are part of a loose, but diverse coalition around the world here in the United States and in over 24 countries that have been working for months now to try to adjust the terms of the proposed arrangement to exempt India from these international nuclear trade guidelines and, as we see it, to minimize the adverse impacts of this arrangement on the global nuclear nonproliferation system.

Now, in a mere two-and-a-half days, the 45-member Nuclear Suppliers Group will reconvene to consider a revised draft proposal from the United States to the NSG. This is a revised proposal because, on August 21 and 22, the group met to consider the Bush administration’s earlier proposal, which I think can be characterized as a clean and unconditional exemption for India. That proposal was rejected by NSG member states.  Approximately 20 countries put forward some 50 [amendments] and suggestions regarding that proposal. Those suggestions and proposals numbered some 50 in number. So in the last few days, India and the United States have been negotiating a revision to that proposal that was transmitted to NSG member states some time this past weekend. As I understand it, countries are evaluating that new proposal.

But it is unlikely, in my view, that this new, revised version is going to be accepted by the Nuclear Suppliers Group at their meeting on the 4th and the 5th. I’ll be talking about that later in my presentation, which will come up last. Now, why is there an impasse?

Well, there are a number of states, not just the six, so-called likeminded states that have put forward proposed restrictions and conditions, but several other states that are concerned about giving India a clean and unconditional exemption from NSG guidelines. In our view, our basic message today is that it’s extraordinarily important for these states to stand their ground to protect the tattered nuclear nonproliferation system.

What we’re going to be doing today is to highlight what we see as the key problems with the overall arrangement. We’re going to be identifying steps, many of which have been put forward by these likeminded states and their allies, that could restrict and condition future nuclear trade with India to minimize the impact on the nonproliferation system. Then, we’re also going to be providing a summary analysis of responses that have come from the State Department to a set of questions that the House Committee on Foreign Affairs asked in October of 2007, which are just being released this afternoon by the House Committee on Foreign Affairs. These questions relate to the U.S.-Indian 123 Agreement, the agreement for nuclear cooperation between the United States and India.

Sharon Squassoni, who is a senior analyst here at the Carnegie Endowment for International Peace and a former Congressional Research Service analyst, is going to be describing her perspective on the State Department’s responses to the Congress’ questions. Henry Sokolski, who is the executive director of the Nonproliferation Policy Education Center, is going to review what is at stake and what might happen if the NSG grants India a so-called clean and unconditional waiver. I should also add that Henry is a member of the Congressional Commission on Preventing WMD Proliferation and Terrorism. So I’m going to conclude after they speak to review the status of the NSG debate and the rationale behind the proposed conditions and restrictions that a number of responsible NSG members are putting forward.

So, to begin, Henry, if you could come up here to the podium so the camera can catch your visage, Henry is going to talk about why this deal is not a good idea.

HENRY SOKOLSKI: Well, it might be a good idea, but there’s a lot at stake. I think what I would like to focus on is what’s at stake.

You know, former Secretary of Defense Harold Brown was once told that there was a problem with a sale that he was thinking of making on nonproliferation grounds and that, in fact, there needed to be much more staff work done on the nonproliferation issues. He said, staff work? Well, actually, you only need two people to do all of the work related to nonproliferation: one to count the number of countries and another person to wring their hands.

Now, I think that comment is a little inaccurate now because we have countless hundreds if not thousands of people in our government and in other governments counting the numbers and wringing their hands. So the numbers are bigger. But it does highlight why it would be useful to recap why anyone should care about this deal. I think it’s somehow taken for granted that either you don’t care or you do care; you don’t have to explain yourself.

First, roughly, is it September 4th and 5th that this meeting [will occur]? Remember those dates. They have the potential to be the 9/11 of nonproliferation, if you will. Georgia now has a date where we rediscovered history; 9/11 is very important for the war on terrorism.  September 4th and 5th, potentially, could be a turning point dealing with nonproliferation, and I mean a negative one.

A friend of mine describes this problem with the India deal as roughly [the 1968 nuclear Nonproliferation Treaty] NPT RIP. There certainly are people in India that like to see this deal as just that. They talk about promoting the nonproliferation norms and the mainstream. They do not like the NPT though and they’d rather see that pushed aside. Now, it’s hard to see how going ahead with this deal, unless it’s conditioned more appropriately than it has been, how it can be anything but an engine of destruction of the nuclear rules that are based on the NPT. After all, what it is that the Nuclear Suppliers Group is being asked to do is to supply nuclear fuel and fuel-making to a state that did not have a nuclear weapon in 1967 and therefore is not recognized by the United States, formally, to be a weapons state.

Now, that sounds like a lot of technicalities, but what it means is this; that group was established after the first Indian test in 1974 to make sure that they didn’t get nuclear fuel-making technology. They’re now being asked to approve a deal that roughly would authorize just such transfers, if not from the U.S., and we’ll get into that in a moment, certainly for other countries like Russia and France. Certainly this is how India sees it. If you take a look at the deal, you take a look at the exemption that they’re seeking, it’s hard to see how that wouldn’t in fact be the case.

Essentially, the suppliers that are supposed to show restraint to prevent non-weapons states from getting the means to make weapons are being asked to send fuel, roughly uranium, lightly enriched or otherwise, which India critically needs because, while it has plenty of uranium in the ground, it’s lousy ore; it’s very poor-quality ore. It’s in the ground. They can only produce a certain number of hundreds of tons and it’s less than what they need and want to run all of the reactors they want to run for power and all of the reactors they want to run to make bombs.

This deal is the fix. It supplies everything they need for their power reactors. It therefore leaves all of the other fuel that’s indigenous available to make bombs. Now, roughly then, if you say the NSG should go ahead and supply this reprocessing and enrichment technology needed to make bomb-usable material, you have roughly the mother of all rule-breakers. You eliminate, essentially, the Nuclear Suppliers Group.

Now, why should we care about any of this? You can say, well, so what? Pakistan has been pretty vocal. It claims that this deal will lead to an arms race. They’ve already increased their reprocessing and enrichment and their plans to deploy power reactors. They want China to supply a 20-fold increase in power capacity in their country by 2030. India, meanwhile, has people who are experts in weapons and enthusiasts for weapons saying, well, maybe they need 400 weapons. I’m not saying they’re going to get it, but there are people who are fairly serious who think that’s the number they need. They have less than 100 now.

And then, what is China to make of all of this? One of the free [book] giveaways at the desk [outside the conference room], has a chapter in it describing how Pakistan and India might compete after the deal. It is very detailed. I recommend it. It’s depressing. It’s not something we should be encouraging.

Now, why? Well, as these three countries amble up or, god forbid, race up, what are we trying to do? Climb down. You can go to many of Daryl’s events and they talk about climbing down. Well, if you climb down to let’s say 1,000 weapons in the U.S. stockpile, which is one of the favorite numbers I hear, you’re going to be very close to where people are racing up. That is not a comfortable world to live in. You want everyone to come down, not just us or the Russians or the French and the British. By the way, who knows what the Russians will do now?

So that crowded space also becomes a space in which having civil programs and particularly in places like India, China, and Pakistan start to take on military significance in a way that we have never thought about before. That also isn’t great because there are a lot of people in this city and in Paris and in Moscow that think promoting “Atoms for Peace” and civil and nuclear energy is a great idea. It’s an intensely more complex, competitive, and unstable world without at least some of these fig leaves being preserved.

Finally, I think U.S. credibility is at stake here with this deal. You’re going to hear more from Sharon about these questions for the record, but, roughly, what Daryl and others—I think I signed onto one of the letters—said is, the executive branch, the State Department and the White House, is telling Congress what it wants to hear, that we would never sell them, the Indians, the means to make nuclear fuel because that could help their weapons program. Of course we would suspend assistance if they tested nuclear weapons. By the way, that’s exactly what these questions for the record indicate that we told Congress.

But we tried to keep it quiet, keep it from the public, because we didn’t want the Indians to see this. More important, I think we didn’t want the members of the NSG to know about this because they’d say, well, if America doesn’t want to do these things, maybe we should even insist on it not happening. We’re kind of hoping the release of these questions for the record will prompt that result.

In fact, finally, you’ll see a letter; it’s very obscure: Harmon, Wilmot, and Brown. It’s out there on the table. The idea that we’ve been pushing that this deal is about reactor sales, at least from the U.S., is nonsense. This letter clarifies why it is: liability insurance. The Indians don’t have it. I’m not sure I blame them for not having it after the terrible experience of Bhopal. But because of that, the law firm that represents the U.S. nuclear industries says we can’t do business with India until that changes. It’s not about the change.

So the United States is saying lots of things to different audiences. It needs to get its story together. Daryl will conclude with what we need to do to condition the deal with regard to testing and what sanction or what restraint should be placed on supply after that and about nuclear fuel-making. There are many variants. I mean, I’m sure Daryl has once said, the key thing is to do something in these areas. I think, with that, I’ll hand it over to Sharon.

KIMBALL: Thank you very much, Henry. Sharon Squassoni.

SHARON SQUASSONI: Thank you, all. Daryl’s asked me to talk a little bit about the answers to the questions for the record that are being released even as we speak from the House Foreign Affairs Committee. Chairman Lantos, last year, submitted 45 questions in October of 2007 [to the State Department]. However, the State Department reportedly requested that the answers be held in confidence and I’m not sure whether they gave a reason for why that was. But I think when you take a look at some of the answers to these questions for the record, you’ll see that the likely reason is that some of the answers are very clear-cut in terms of U.S. responses to certain Indian actions. The [State Department’s] response came in February 2008. So it took them several months for them to put this together.

I think that part of the negotiation all along has been this dance of different perspectives or different interpretations. We saw that in the negotiation of the Peaceful Nuclear Cooperation Agreement [the 123 agreement]. We’ve even seen that a little bit in the negotiation of India’s safeguards agreement.

One thing that I would say as a former diplomat that you need to do is make sure that everyone’s expectations are the same going in. I think that these answers to the questions for the record will help that. Many of the questions are very technical in nature. I’m going to highlight just a few of what I thought were some of the interesting answers. The good news is that the administration’s interpretation of what we call the 123 agreement, the Peaceful Nuclear Cooperation Agreement, does reflect the requirement in U.S. law under the Atomic Energy Act to cut off supplies if India tests.

The agreement itself doesn’t say that very specifically. But in these answers to the questions for the record, the administration says unequivocally, yes, you know, we will cut off [supplies]. The bad news is that it’s doubtful that the Indian government agrees with that interpretation, and I’ll provide a few details there.

The implication of this is that it’s very important that the Nuclear Suppliers Group write this restriction—by restriction, I mean, if India tests again, nuclear supply should be cut off—into any decision that it takes in the coming weeks or months if the U.S. expects other nations to follow suit. The U.S. is bound by law to stop supply. There is a presidential wavier, but my guess is that’d be tough to implement. If the U.S. wants other nations to follow suit, it’s got to do this through the NSG.

Okay, so I’m just going to touch on a few issues. One is full cooperation. Indian officials have stated time and time again that full nuclear cooperation means cooperation in enrichment and reprocessing. This is uranium enrichment to make fuel for reactors. It can also be used to make bomb-grade material and reprocessing of spent fuel, which can also be used to recycle fuel and make more fuel or for plutonium bombs.

The U.S. answers in this area, and I quote, “As a matter of policy, the U.S. does not transfer dual-use items for use in sensitive nuclear facilities. The U.S. will not assist India in the design, construction, or operation of sensitive nuclear technology through the transfer of dual-use items, and the administration does not plan to negotiate an amendment to the proposed agreement.” An amendment would be required if we were actually to engage in this cooperation. So at least in three different areas, the U.S. said, we’re not going to do this. That may be news to the Indians.

On termination for nuclear testing, Indian officials have stressed that the U.S. nuclear cooperation agreement does not, and I quote Prime Minister Singh from last year, “does not in any way affect India’s right to undertake future nuclear tests, if that’s necessary.” The foreign minister also told the parliament last year, there’s nothing in the bilateral agreement that would tie the hands of the future government or legally constrain its options.

In these answers to the questions for the record, the U.S. government stated quite clearly, we have a clear right for the U.S. to terminate nuclear cooperation and a right to require the return of our stuff—it didn’t say that [exactly] but I’m shortening it for you—in all circumstances required under the Atomic Energy Act, including if India detonates a nuclear explosive device. It talks about ceasing cooperation immediately and it also mentions that, in addition to ceasing cooperation immediately, it would also affect the supply of fuel and the right of return.

A related issue is fuel-supply assurances. Both in the nuclear cooperation agreement and in India’s safeguards agreement, there are several places, I guess in the preamble, where it mentions that India wants assured fuel supply, including what they call a strategic reserve of fuel for the lifetime of their reactors. Indian officials have stated, in many ways, their interpretation is that if that fuel supply is cut off, they have the right to take corrective measures. These corrective measures have never been defined and it’s funny, in the answers to the questions for the record, because these were done last year, the U.S. says, well, once these corrective measures, once that’s clarified, you know, we’ll be able to comment on this. Well, a year later, it’s still not clarified.

But the U.S. responses clearly indicate that the fuel assurances that the U.S. is undertaking are not legally binding and they are not meant to insulate India against the consequences of a nuclear test. So, number one, the U.S. says, well, these are important presidential commitments that we intend to uphold. Number two, the agreement itself doesn’t compel any specific cooperation. In other words, we wouldn’t have to make these fuel assurances or assured fuel supply.

Third, and probably the most important thing here, the question was asked to [the State Department], well, what is disruption of fuel supplies? The answer was, well, by that, we mean a trade war resulting in the cut off of supply, market disruptions, or potentially a failure of an American company to fulfill its contracts, not a nuclear test. In other words, the fuel supply is only good for those other kinds of disturbances in supply. If India tested, fuel supply would be cut off.

There are several other items, but I’m going to leave them for the Q’s and A’s once you have a chance to look at the actual questions. But I think the bottom line here is that there still exists a gap in the expectations or the interpretations of this deal, both from the Indian side and the U.S. side. One of the useful activities that the NSG can take up is to clarify what the Indians really do expect and nail down some of these things so that nuclear cooperation, if it does happen, can go forward in a stable and reasonable way.  Thank you.

KIMBALL: Thank you very much, Sharon. We’ll be able to go back through some of those issues in the Q’s and A’s. I know that’s pretty complicated, but I think Sharon did a good job of summarizing. For those reporters out there, we can make some copies of these responses to the questions available to you.

Let me describe a little bit of our understanding, our analysis, of what is likely to happen later this week at the Nuclear Suppliers Group meeting and outline what we hope and think several responsible Nuclear Supplier Group countries are going to do. As I mentioned in the opening, on the 4th and the 5th, the Nuclear Suppliers Group is going to reconvene in Vienna, Austria, at the Japanese mission where they traditionally meet. They are going to be asked to approve a revised proposal from the United States that was negotiated last week with India.

According to my sources and a few press reports that are out there, it remains essentially unchanged from the clean and unconditional version that was presented and discussed at the August 21 and 22 meeting of the Nuclear Suppliers Group. It appears as though the Indian government and the United States government are hoping what will happen is that the Nuclear Suppliers Group countries will be satisfied with cosmetic changes and a statement from the chair that would substitute for a rational policy from the Nuclear Suppliers Group on future possible trade with India.

In addition, there seem to be two cosmetic adjustments that have been put into this revised proposal which, by the way, I have not seen, nor am I aware of anyone outside of the NSG government’s seeing this revised proposal. The first is a paragraph that states to the effect that all governments participating in the NSG shall inform one another on what kind of bilateral nuclear cooperation they are pursuing with India after the exemption is granted.

The United States, for instance, has made its nuclear cooperation agreement public. That came out in August 2007. Those are the issues that Sharon was just discussing. We’ve not seen any details about proposed Russian-Indian nuclear cooperation or French-Indian nuclear cooperation. So to some extent, this would be mildly useful, especially ahead of an NSG decision. But it does nothing to hold India accountable to any nonproliferation or disarmament commitments that it’s making.

The second cosmetic adjustment that I understand is in the revised proposal is a paragraph that states that governments participating at the NSG can call for an extraordinary consultation within the NSG on India “should circumstances require it.” Now, this is being characterized by the proponents of the revised proposal as a response to the call from several NSG states for a regular review mechanism of India’s nonproliferation record to assess to what extent it is meeting its safeguards requirements and other commitments that it has made.

However, this doesn’t do anything more than what’s already in the Nuclear Suppliers Group guidelines. There’s something called Paragraph 16 in the NSG guidelines that already allows for a special meeting of NSG states in the event that extraordinary events warrant. So this is not a concession of any kind; this is simply a restatement of something that’s already in the NSG guidelines.

In my view, given that the government of India has shown so little flexibility and given that the revised proposal was distributed only a couple of days before this next NSG meeting, it is highly unlikely that the NSG will reach a decision at this week’s meeting.

Now, let me just explain a little bit my understanding of the perspective of the several NSG states that have raised objections and put forward counterproposals on this exemption. Many states acknowledge India’s legitimate interest in diversifying its energy options, but several likeminded states, which is what they call themselves, including Austria, Ireland, the Netherlands, New Zealand, Norway, and Switzerland, as well as countries including Japan and possibly others—or I know others; I’m just not sure who—correctly recognize that the Bush approach is deeply flawed and, as Henry said earlier, would effectively end the NSG as a meaningful entity.

What’s behind their rationale? I think many of them understand correctly that any India-specific exemption from NSG guidelines would erode the credibility of NSG efforts to ensure that access to peaceful nuclear trade and technology is available only to those states that meet global nuclear nonproliferation and disarmament standards. So let’s look at India. Contrary to what I think can only be called the Orwellian claims of proponents, this deal would not bring India into the nuclear nonproliferation mainstream. A couple points: unlike 179 other countries, including the United States, who have signed the Comprehensive Test Ban Treaty, India refuses to sign the Comprehensive Nuclear Test Ban Treaty or enter into any other parallel, legally binding test moratorium.

India also continues to produce fissile material, unlike at least four of the five original nuclear weapons states, and probably also China. India continues to expand its nuclear arsenal. As Henry said, India continues to go up while most other nuclear-weapon states are going down or are maintaining their current status.

In order to maintain its option to resume nuclear testing, as Sharon was describing, India is seeking bilateral nuclear cooperation agreements to help provide it with strategic fuel reserves and lifetime fuel guarantees. Now, this is not only a problem as far as the NSG is concerned. But I should point out, it flatly contradicts a provision in the Henry Hyde Act, the U.S. legislation of 2006 that regulates U.S. trade with India, that was included in that bill by none other than Senator Barack Obama. That provision stipulates that U.S fuel supplies to India should be limited to “reasonable reactor operating requirements.” The idea there is not to provide India with a multi-year fuel supply that could be used to overcome a cutoff in nuclear trade that might result from renewed nuclear testing.

In our view, the current proposal is still unsound.  It’s still irresponsible and should be rejected. To summarize what some of the things are that could be done to minimize the adverse implications and that are being apparently advanced by several of these likeminded and other countries, the NSG states should, at a minimum, establish a policy that if India resumes nuclear testing or violates its safeguards agreements, trade involving nuclear items with India shall be terminated and unused fuel supplies returned.

Another one should expressly prohibit any transfer of reprocessing, enrichment, or heavy-water-related items or technology, which can be used to make bomb material. Third, regularly review India’s compliance with its nonproliferation obligations and commitments. Call on India to join with four of the five original nuclear-weapon states in declaring that it has stopped fissile material production and to call on India to transform its test moratorium pledge into a legally binding commitment.

These are the very conditions and restrictions that are in one form or another embedded in the Henry Hyde Act. From our perspective, if U.S. nuclear trade is going to be limited by these kinds of conditions and restrictions, it only makes common sense for the Nuclear Suppliers Group to adopt the same or very similar conditions and restrictions so that U.S. nonproliferation policies are not undercut by the Russians or the French or Malta or Japan or whomever. In addition, if the U.S. nuclear trading rules are significantly different from that of AREVA or some nuclear vendor in Russia, U.S. companies are going to be at a distinct disadvantage in addition to the fact that, as Henry pointed out, India has not yet agreed to this international nuclear liability convention.

Now, some Indian officials have said that they may walk away from the deal if the NSG establishes even these most basic requirements. From my perspective, if that’s what they want to do, so be it. This would still be a very generous proposal, given India’s nuclear history and its current policies.

We are urging and calling upon those NSG countries that I mentioned and others to stand their ground and to make sure that the NSG does not capitulate at this very sensitive time in the struggle against the spread of nuclear weapons. We’ll take your questions on any of these subjects that we’ve just discussed. If you’d just wait for the microphone to come to you and announce your name before you ask your question.

QUESTION: Thank you. Paul Eckert of Reuters News Agency. Primarily to Sharon Squassoni, not having seen the State Department responses yet, but in and of themselves, do these State Department answers pass muster with you in the sense that they clear up concerns you have about how the agreement was going to be implemented? You seemed to say at the outset that they were very frank in the sense that they were held back to avoid offense to India during their delicate negotiations there. But how about from the point of view of disarmament experts? Are they complete and compliant with U.S. law?  Thanks.

SQUASSONI: Great question. In some areas, yes; in some areas, no. I think that this issue of corrective measures, which they could not resolve a year ago is still unresolved. And the IAEA safeguards agreement that India just negotiated doesn’t clarify matters at all.  In general, however, though, I mean, the U.S. administration, has to follow the U.S. law. So it’s very important. I think it’s very good that they put these answers down on paper to clarify. I think it’s likely that the Indians will not be very happy with such frank answers.

There are a few areas, one on a strategic reserve of supply, that I think they kind of were a little circuitous in their answer. Basically, they said, well, I guess the Hyde act language was “reasonable operating requirements.” Their response was, well, nobody discussed what “reasonable operating requirements” were and, you know, this might change. And, you know, a strategic reserve will depend on all kinds of commercial issues and, for example, how much storage capacity does India have to put this fuel. You need a lot of storage capacity. So it’s a mixed bag, I think. But at least on the testing issue, I find myself satisfied.

KIMBALL: Yeah, I think Henry has a response. Let me just also remind everybody that these questions were sent, as I understand it, to the State Department in October 2007. That was three months after the U.S.-India nuclear cooperation agreement was concluded in [late July]. They were delivered in February so I think there are going to be many more questions that Congress is going to ask. These were questions that were written basically a year ago. I think it’s not unexpected that they don’t, as Sharon said, fully answer all the questions that are still out there. Henry?

SOKOLSKI: I have a slightly different take. I did have a chance to look at these things over the weekend as well. I think the operative phrase that rings loudest in what Sharon shared with us is, “as a matter of policy.” [I’ve] spent a fair amount of time with the history of the previous deals that we’ve cut, which were very instructive. And Robert Zarate has worked with me and is taking a lead in writing a history of some of the Wohlstetter’s work. One of them is called “Buddha Smiles.” I recommend it. It’s on our website. It is a history of the prevarications, vagueness, and confusion associated with the first set of nuclear deals. It’s not a pretty picture. Some of the arguments will rhyme with the kinds of debates we’re having now. So from an experience standpoint from history, I think we need to be worried about what any administration thinks, since it goes away and there are other administrations after it.

Second of all, as someone who has worked in the government, I have to tell you, I don’t think that any of the answers suggest they would like to be held to what they are saying in print. In other words, they don’t want a law that tells them that they have to see things a certain way. It’s the reason they’re fighting these rules in the NSG. That suggests that things could be subject to change.

I leave you only with this other additional thought: there is no way that this deal could be approved by Congress in its current form without violating the Hyde Act. Once you violate a law, you’re on your way to interpreting and reinterpreting all sorts of things willy-nilly. It’s the desire for Congress to uphold the law that it passed that animates a good deal of the effort on this panel and many other people. I’m pretty sure that Mr. Berman sent his note to Secretary Rice precisely because he took his pledge to uphold the laws of the land and the Constitution seriously. But you cannot go ahead with this deal unless it is conditioned more without it violating the Hyde Act. So I wouldn’t take the say-so of these Q’s and A’s even when they’re good until you have something in print that is binding.

KIMBALL: All right, any other questions? Yes, sir?

QUESTION: Thank you. Mike Miyazawa. What is the real objective of the administration? Is it nuclear business or to bring India into the U.S camp as a counterweight against China? What is the single biggest, most important objective of the administration?

KIMBALL: That’s a very good question. I’ve been asked that question for about three years. I still don’t really know the full answer. There are a lot of, I think, theories about why. I think there are different reasons, depending on which part of the administration you’re talking about. I mean, Sharon and Henry could talk about this as knowledgeably as I can. I think there are multiple things going on here. One is simply that the Bush administration is looking for a foreign policy “victory.” Another is that the Bush administration wants to establish stronger strategic ties with India. But the U.S. already has very good strategic ties with India, even without this deal. Maybe they would be even better without the deal.

There is also a strong interest in increasing U.S. defense sales to India. One of the unspoken reasons is that it might help counter Chinese influence in Asia. But personally, I think that that is an extremely flawed theory, given that India is a very independent country that is not going to compromise its foreign policy in order to help Washington on some particular issue vis-à-vis China.

Those are all some of the reasons that have been put forward. Some of the other reasons, such as hoping to reduce the amount of carbon emissions in the atmosphere, I think, have been wildly inflated given that India’s nuclear industry has barely performed in the last four decades. I don’t think it’s going to meet its projections to build all the reactors it is projecting. India’s carbon emissions could be reduced much more significantly through other means other than building a large number of nuclear reactors.

But that’s just a quick review. Do you all have anything else? Henry?

SOKOLSKI: The answer is they asked for it. Clearly, the answer is the Indians asked for it. They like reactors and they like rockets. They like reactors and rockets. I used to work for an assistant secretary that had to travel to India occasionally. He said, whenever I get on these topics with Indians, I try to change the subject to computers or something else because it’s neuralgic. I mean, they just simply love talking about getting more of these things.

We actually bargained to try to get the Indians to send troops to Iraq and then reconstruction funds. They said reactors, rockets. They didn’t send anyone to Iraq and they didn’t give any money for reconstruction. But they kept asking for reactors and rockets. It was thought that if we gave them reactors and rockets, somehow things would improve and that indeed there would be a strategic partnership that would be built on—if not American sales of these things, at least Russian and French sales. And that would be good enough to promote better commercial, military ties with India and the U.S.

I think it was a mistake. The reason it’s a mistake is I remember when they did this, the administration really did not want to hear what the staff had to say. The people, you know, at the director level who actually knew something about nuclear and space cooperation. They would have said, hey, don’t go in here. The reason why is there is so much history of misunderstanding that relations have gotten worse when you focus on these topics. Roughly, I think that’s where we’re headed here.

Make no mistake, there are better ways to cooperate. I would suggest without getting into anything at length, the place I would start is perhaps an ironic place. If you go to the law that the United States passed in reaction literally to the first Indian test, it’s called the Nuclear Nonproliferation Act of 1978. There is a Title V in there. It says we should promote and work with other countries to develop non-fossil fuel, non-nuclear fueled energy sources. It has never been enforced, not by Democrats, not by Republicans; even though I think there are quite a number of programs that we have with other countries in these areas.

It might be time to start thinking about implementing that law, because I can assure you there are many, many more cost-beneficial ways of promoting energy development than nuclear power in India. That’s for sure.

SQUASSONI: I would just add one brief point that there are two questions in these answers that relate to what are the economic benefits that the U.S. expects to get from this deal. The answer is very little. Both because of the issue of liability and, when asked, India has made no commitment to buy reactors from the U.S. They are very interested in uranium to fuel their heavy water reactors. They’re interested in French and Russian reactors.

I know your question wasn’t, you know, was it U.S. nuclear business? I’m sure the global nuclear industry is looking at India and China and salivating for all the reactors they might be able to sell, but not for the U.S. As a matter of fact, in India, at one point, this agreement was called the 126 agreement not the 123 agreement. That was for the 126 fighter aircraft that India would at some point purchase from some lucky defense contractor.

KIMBALL: Any other questions? Yes, we’ve got a couple here. Why don’t we go to the person in the middle?

QUESTION: Thank you. Joanne Thornton with the Stanford Group Company. And I wondered what happens on Capitol Hill in the unlikely event that the Nuclear Suppliers Group can come to a consensus this week. I’ve seen so many different renditions of how many legislative days are required for the package to lay over before the Congress. Can you clarify that? Thanks.

KIMBALL: Yeah, before Sharon clarifies that, let me just also just put one other important piece of information on the table, which is that we mentioned Howard Berman, who is the chairman of the House Committee on Foreign Affairs, wrote an Aug. 5 letter to Secretary of State Condoleezza Rice about his interest in seeing the Hyde act restrictions and conditions written into the NSG guidelines. He also said that even if the NSG makes its waiver and the U.S.-Indian 123 agreement is sent to Congress, immediately after we reconvene on September 8th, it is not likely that Congress will have sufficient time to fully consider all the issues and details surrounding the agreement.

He goes on to say that any effort to consider the agreement outside the requirements of current law—as Henry said the current proposal at the NSG is not consistent with the requirements of U.S. law in that it does not contain the same restrictions and conditions—will be “impossible” if the administration’s NSG exemption fails to include the Hyde act conditions. So we have at least one key member of the Congress saying that. It will be impossible. You can interpret what that means if the NSG decision does not meet or is not parallel with the Hyde act.

In addition to that, the clock is ticking. And for that, Sharon?

SQUASSONI: The clock is ticking. The most optimistic counting of the days if this agreement were to be presented to Congress on Monday the 8th, that would only give 19 days until September 26th. It’s not out of the question that we’ll have a lame-duck session, probably unlikely; 19 days is not enough time because the agreement must, by law—no way around it unless they pass another law—must sit before the committees for 30 days, no less than 30 days. So what happens then is if there aren’t 30 days in the session, next year, we have a new Congress. The agreement has to be resubmitted.

But that assumes that all the ducks are in a row. Quite frankly, they’re not, because there are, I think, seven requirements that the Hyde act says the whole package has to meet. One of them is that India has made substantial progress toward negotiating an additional protocol with the IAEA. Now, this is a safeguard agreement strengthening—the U.S. has one, although I don’t think it’s in force yet—additional [IAEA] access and information; all the things that the IAEA inspectors now get in this new agreement. [Indian and IAEA negotiators] met maybe once. They’re not going to make that by next Monday. I don’t even think that particular one can be finessed. Some of the other requirements can be finessed a little bit.

Really, this is not going to be taken up by this Congress. It will have to wait until the next Congress.

SOKOLSKI: Looking forward, a lot of people in the United States like to think about, well, what happens if Mr. Obama becomes president or Mr. McCain becomes president?  We can talk about that. What Americans don’t like to think about is what happens in India? They’re going to get a new government.

Now, the people that are opposing the current government say they want to renegotiate the agreement. I have to tell you, my hunch is it isn’t to include all these conditions. I think this thing is very much in play. It suggests to me that when the Indians say, well, we can’t possibly do this and we can’t possibly do that, it kind of suggests either they’re not that interested in getting this deal or they’re still bargaining. If there are any Indians that are out there that are in favor of this deal, I would urge them to actually think long and hard about maybe agreeing to some conditions because these are not that onerous. They really aren’t. If they don’t, well, the new administration they have to worry about probably isn’t Obama or McCain, it’s a non-Congress-led government in India. My hunch is that that’s the reason why these dates, 4th and 5th of September, are going to be remembered at least by people who write histories of nonproliferation.

KIMBALL: I agree with Henry. One other point that I think is important to emphasize that I’ve been talking about for several days is that the conditions and restrictions that the like-minded responsible NSG countries are talking about, I don’t think they can be addressed through creative language, through wordsmithing. These have to be clear, meaningful guidelines in the NSG policies that apply to all of the NSG states. They can’t be interpreted differently by one state or another. They have to clearly apply to all these states. Otherwise, these like-minded states, I don’t believe, are going to be satisfied and are going to continue to block agreement on anything less than what they’re looking for.

Are there any other final questions before we adjourn this afternoon? Yes?

QUESTION: (Inaudible), Voice of America. You just said that there will be a new government in America and there will be one in India as well very soon. So what do you say to the fact that if at all, India just goes ahead and tries a deal with Russia or France and they have been really positive about that? So what do you say to that?

KIMBALL: Well, the rules are quite clear. The Russians and the French have said publicly that they’re not going to enter into bilateral agreements with India on nuclear cooperation until and unless the NSG approves a waiver that allows them to do so.

In addition, India still has to sign the safeguards agreement that was approved on August 1st. Russia has, in the past, violated NSG rules by supplying India with nuclear fuel even though the NSG guidelines have up to this point barred that. So theoretically, it’s possible that Russia may simply chuck the NSG rules and go ahead. But I don’t believe that will be the case. In fact, I think Russia may in fact be supportive of some of these restrictions and conditions that are proposed by Ireland, New Zealand, and others. So I don’t really think that’s a realistic possibility. I think the Indian government fully understands that.  Henry?

SOKOLSKI: I don’t know. I’m not as sure. I do know this. The French are not quite as keen to put their nuclear thumbs in America’s eye. The Russians? That’s a special case, always a special case. The Indians, however, and the Russians, need to be careful. You can do this a little. But you have relations not just with America but you have relations with Pakistan.  You have relations with China. And what these countries do matters a lot to a sensible peaceful prosperous Southwest Asia as well. They will game it. You can count on that. They will game it.

So, one of the reasons these rules are helpful—I know many Indians find them nothing but meddlesome—is it reduces the need to keep looking over your shoulder and people gaming all these things for possible military purposes.

Finally, I can only urge one other thing. America’s relations with India depend primarily on the movement of people, money, and trade. There is so much that can and needs to be done in this area. Yes, energy technology as well, but probably not nuclear; I can’t imagine making a dime investing in that.

But it seems to me that there is plenty of work and plenty in the original agreement that does not pertain to rockets and reactors that is pretty important to pursue. I would think it would be a big mistake if we forgot what else we agreed to.

KIMBALL: All right, yes, sir? Microphone, please, so we can record this for all time. This better be good, Eric. (Laughter.)

QUESTION: Today, in the People’s Daily in China, the Chinese government is coming out against the India NSG exemption. What do you make of that? Several of you mentioned the role of China in all this. Is this really a doorstop for this?

SOKOLSKI: This gets to the point of gaming. I don’t think the Chinese want to be the primary spoilers for this deal. On the other hand, if they see others that are willing to at least condition it, I don’t think they want to hold back. I mean, they would prefer a world in which the rules make it easier for them to know what to do with regard to nuclear trade for India and Pakistan, which is a real nasty brew of trouble for them. Oddly enough, I’m not sure the Chinese are totally against these rules. They could see how they might help them.

But I would say that they are at least cheering for one side right now, which is interesting. Don’t expect that to stop if people come to the conclusion to push the rules aside and start doing deals with this country or that country. China will continue to try to maneuver.  That China agreed to sell nuclear items not just to Pakistan but India tells you just how playful they can be. They’re easy to underestimate. That’s a mistake to do.

KIMBALL: I’m not quite sure what it means. But I think it’s possibly a sign that the deal is in deeper trouble than the government in New Delhi thinks it is. Any other questions?

Well, I want to thank everyone for attending. I want to just underscore our basic message today, which is that, as Henry said, [this deal is] a potential nuclear nonproliferation 9/11.  It’s very important for world leaders who are serious about the nuclear Nonproliferation Treaty and the rules and standards that govern nuclear trade and commerce to stand up and stick to some core principles to make sure that this is not a further dent in the already damaged nuclear nonproliferation system. Thank you very much. (Applause.)

END

Country Resources:

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.

Reforming the Nuclear Fuel Cycle: Time Is Running Out

Revelations earlier this decade about Iran's clandestine nuclear activities reignited global concerns that the spread of such sensitive fuel-cycle technology would lead to nuclear weapons proliferation. In a 2003 Economist op-ed, International Atomic Energy Agency (IAEA) Director-General Mohamed ElBaradei proposed that the time was right to re-examine multilateral approaches to the nuclear fuel cycle. (Continue)

Fiona Simpson

Revelations earlier this decade about Iran's clandestine nuclear activities reignited global concerns that the spread of such sensitive fuel-cycle technology would lead to nuclear weapons proliferation. In a 2003 Economist op-ed, International Atomic Energy Agency (IAEA) Director-General Mohamed ElBaradei proposed that the time was right to re-examine multilateral approaches to the nuclear fuel cycle.[1]

Similar studies had already been undertaken in the 1970s and 1980s but had not produced concrete results.[2] Nonetheless, states responded with a plethora of proposals aimed at thwarting the unchecked spread of uranium-enrichment and spent fuel reprocessing technologies, for example, by suggesting means of assuring nuclear fuel supplies and establishing international nuclear fuel-cycle centers.

In June 2007, ElBaradei catalogued these proposals in the report "Possible New Framework for the Utilization of Nuclear Energy," delivered to the agency's Board of Governors. The report, which remains restricted, was designed to be of help to the board in considering the issue at a subsequent meeting, and ElBaradei later indicated that he was turning over the responsibility for leading the discussion to the IAEA's member states.[3] Subsequently, the Board of Governors has apparently not formally discussed any of the proposals, although about a half dozen of them have been refined during the year that followed. ElBaradei himself sees attaining credible assurance of supply as part of an ambitious multilateral effort that would culminate in all new, and then all existing, enrichment and reprocessing facilities being placed under multilateral control.

The next six months are likely to prove critical in determining whether any of these proposals becomes a genuine blueprint for a new approach to this issue or whether, like similar efforts three decades ago, they simply gather dust.

A Dozen Proposals

Twelve proposals were put forward by the time of the 2007 IAEA board report. They have been summarized elsewhere, including in a list extracted from the board report,[4] and are recapped briefly below before turning to focus on those proposals that have been developed further. In addition, another possible new framework is noted that attempts to include, or to lend itself to incorporation by, many of the existing proposals.

As they stood in June 2007, the proposals varied widely. They included plans to establish a fuel bank, a fuel cycle center, or fuel services program; to initiate a mechanism providing different levels of supply assurances, a concept that also, in practice, incorporated the fuel bank idea; or to support these other proposals.

The creation of an independent fuel bank not linked to any particular fuel-cycle center option or other assurance of supply mechanism characterized two of the proposals, one made by the United States and the other by the nongovernmental Nuclear Threat Initiative (NTI). The U.S. proposal, as announced in September 2005, committed the United States to downblend 17.4 metric tons of highly enriched uranium (HEU) to low-enriched uranium (LEU), which would be made available to qualifying countries, i.e., those not presently pursuing indigenous enrichment or reprocessing technologies.[5] The NTI proposal, put forward a year later, comprised an offer of $50 million to allow the IAEA to create an LEU stockpile, which would be owned and managed by the agency. The release of the NTI funds would occur providing that, within two years, i.e., by the end of September 2008, the IAEA had taken the necessary steps to establish the reserve and an additional $100 million had been provided by member states, whether in funds or in an equivalent value of LEU.

A slightly different interpretation of the nuclear fuel bank idea was contained in the proposal by Austria in May 2007, which was more conceptual in nature and less of a "fuel reserve" than those envisioned by the NTI and the United States. Rather than establishing a bank simply as a storage site for a reserve of fuel, Austria suggested a two-track mechanism. The first would see states declare, to the IAEA and to each other, all existing nuclear programs, development plans, and activities and all transfers of nuclear material, equipment, and related technologies. The second track would place all nuclear fuel transactions and, eventually, enrichment and reprocessing facilities and nuclear fuel supply under the auspices of a Nuclear Fuel Bank.[6] ElBaradei himself has long believed and frequently stated that credible assurances of fuel supply should be the first step of an ambitious multilateralization effort, which would culminate in all enrichment and reprocessing being placed under multilateral control.

Broader efforts to establish a fuel cycle center or a consortium for fuel services lay at the heart of a U.S. proposal for the Global Nuclear Energy Partnership (GNEP); a Russian plan for a system of international enrichment centers, the first example being the International Uranium Enrichment Center at Angarsk; and a German proposal for a Multilateral Enrichment Sanctuary Project (MESP).

The GNEP idea was perhaps the most ambitious. As initially proposed, it contained both domestic and international components and technological as well as policy dimensions. Internationally, the program focused on the provision of reliable fuel services, especially the possibility of fuel leasing, where providers would be responsible for dealing with spent fuel. Technologically, the program emphasized the development and deployment of more advanced nuclear power reactors and, more controversially, the use of new spent fuel reprocessing technologies said to be more "proliferation resistant" than current methods because they would not produce pure separated plutonium.[7]

The Angarsk concept, like GNEP, was already well on the way to being realized by the time of the June 2007 board report. The proposal itself existed in two parts: a fuel cycle (enrichment) center and a fuel bank. By the time of the 2007 report, the Russian Duma had already approved enabling legislation that would grant participating countries the right to partake financially in the facility. In addition, Russia was also exploring a means through which a separate LEU stockpile could be set aside under IAEA safeguards and for the use of IAEA member states.

The German proposal favored the creation of a multilateral enrichment center under IAEA control and supervision and on a site that had been granted extraterritorial status. Under the MESP framework, the center would be a new entrant into the enrichment services market and could be established by a group of interested states.

The tiered approach to multilateralizing the fuel cycle characterized the ideas put forward by the World Nuclear Association (WNA), the industry trade group, and the Concept for a Multilateral Mechanism for Reliable Access to Nuclear Fuel, often known as the RANF proposal or the Six-Country Concept.[8] Both proposals envisioned the first, or "basic," assurance of supply mechanism as being the existing and normally operating market. The WNA proposal suggested that a second level of assurance could be provided by "collective guarantees by enrichers, supported by governmental and IAEA commitments."[9] Similarly, the RANF mechanism envisioned a second layer of assurance being offered by suppliers of enriched uranium agreeing to substitute for each other to cover certain supply interruptions.[10] A final, third layer of assurance in both proposals incorporated the fuel bank concept by suggesting governmental creation of enriched uranium stocks, either virtual or physical.

Finally, several of the proposals were intended to be supplementary to other efforts. The British proposal for an enrichment bond suggested a means of assuring states that if they met certain IAEA-determined criteria, they would be guaranteed enrichment services by national providers and would be provided with prior consent for export assurances.[11] The Japanese proposed increased transparency by way of an database, managed and dispersed by the IAEA and comprising information voluntarily provided by states on capacities for uranium ore, reserves, conversion, enrichment, and fuel fabrication.[12] In addition, the European Union submitted a nonpaper to the IAEA Secretariat and the 2007 nuclear Nonproliferation Treaty (NPT) Preparatory Committee (PrepCom) meeting.[13] Its inclusion among the other proposals is something of a misnomer, however, because rather than proposing a stand-alone mechanism, the nonpaper instead offered a list of criteria by which such mechanisms could be evaluated.

Refining the Proposals

Several of the proposals have undergone substantial further development since the June 2007 ElBaradei report. U.S. contractors have begun downblending the 17.4 tons of former military HEU, which Washington had pledged. This process is expected to yield 290 tons of LEU by the time the effort is completed in 2010. In addition, the potential consumer base for the fuel has been broadened, with U.S. companies also being permitted to buy fuel in the event of supply disruption, rather than it only being available internationally and to countries that are not pursuing enrichment or reprocessing. The United States would make the fuel available at the prevailing market price.[14]

The NTI offer of $50 million to establish an LEU reserve under IAEA auspices has made some notable progress over the past year. Although the required full amount of $100 million has not yet been raised, Congress pledged one-half ($50 million) to be allotted to this fuel bank and, as of August 4, 2008, had issued a letter officially donating the funds.[15] In addition, Norway has made a $5 million contribution, and it was recently announced that the United Arab Emirates (UAE) had pledged a further $10 million.[16] This leaves $35 million dollars still to be raised in order to meet the first of the NTI's conditions and, in turn, leaves the IAEA not yet able to meet the second condition and take the steps necessary to establish the reserve. ElBaradei has decided not to approach the IAEA Board of Governors for a decision until all funding has been pledged.[17] At that point and given that the NTI has indicated that it expects the IAEA to agree on a set of release criteria for the material, the fuel bank would become part of a broader and yet more complicated discussion in the board on terms and conditions for use.

The NTI proposal is the only one made in the context of an official deadline, originally requiring that both conditions be met by the end of September 2008. At the request of the IAEA director-general and with the consent of the NTI, the deadline has now been extended to September 2009, which provides something of a cushion. Still, it is difficult to imagine that the money would be indefinitely earmarked, either by the NTI or by donor states, in the absence of other funds being raised, and thus some pressure would need to be brought to bear on other states to contribute funds toward the bank as soon as possible.

The GNEP proposal has also forged ahead, although not without setbacks and changes. GNEP was to be a consortium of nations with advanced nuclear technologies that would establish supply arrangements to provide nuclear fuel to and take back spent fuel from other participants. The GNEP International Partnership was established in September 2007, and GNEP countries soon thereafter established a steering group. That group then established two working groups, one of which was tasked with exploring reliable nuclear fuel services and making recommendations on practical measures in this regard.[18] The first meeting of this working group took place in April 2008. The proposed measures and the summary of work undertaken were to be summarized in a report to the GNEP Steering Group in May 2008 and to the partnership's ministerial-level Executive Committee in October 2008.

However, GNEP has encountered difficulties internationally and domestically. Internationally, the United States shelved initial plans to require countries that joined the partnership to forswear enrichment and reprocessing. Instead, the United States has chosen to rely on a set of other bilateral incentives, such as help with financing, infrastructure, and workforce issues, as levers to convince countries to sign a bilateral memorandum of understanding (MOU) pledging to rely on the global nuclear fuel market instead of developing sensitive technology. For example, during the first half of 2008, three of the six states of the Gulf Cooperation Council (Bahrain, Saudi Arabia, and the UAE) signed MOUs with the United States. A draft MOU between the United States and Qatar, presumably with a similar undertaking on the part of Qatar, is currently under consideration. Although U.S. officials express hope that other suppliers, such as France, will follow their lead, Paris has made no explicit commitment to do so.

Domestically, since the Democrats gained control of Congress in 2007, the program has seen its funding cut on Capitol Hill and its effort limited to research. At the end of June, the House Appropriations Committee expressed its skepticism of GNEP in a very visible fashion, by "zeroing out" international fiscal year 2009 funding for the program and sharply curtailing funding for domestic research. In its report, the panel stated that the "initiative to reprocess spent nuclear fuel...undermines our Nation's nuclear non-proliferation policy."[19] With the Bush administration only months away from leaving office and the future of GNEP under a new administration by no means assured, GNEP is, as one recent article has observed, in "limbo."[20]

Nonetheless and almost contradictorily, efforts at expanding GNEP are continuing, with invitations soon to be extended to 25 countries to join the partnership. To be sure, joining GNEP merely requires a state to sign the partnership's Statement of Principles, which is not legally binding. Nor are any sort of financial "dues" required to join the club, so a simple expansion of the membership is less indicative of GNEP's health than it might otherwise appear.

Russia's proposed international enrichment center at Angarsk was legally established in September 2007 as a joint stock company. By the time shares were issued in November 2007, a deal had already been signed with Kazakhstan, which purchased 10 percent of the shares. At that time, Armenia indicated its interest in joining, a step that was taken through an exchange of notes in February 2008. In order to address concerns regarding the spread of technology, the International Uranium Enrichment Center (IUEC) will be structured ("black-boxed") in such a way that no access to enrichment technology or classified knowledge will be accessible to the foreign participants. Traditionally, black-boxed technology has been in place in cases where the host state is to be prevented from accessing the technology. Russia, for instance, constructed a black-box centrifuge plant for China in 1995. In such cases, the obvious concern stems from a possible takeover of the facility by the host state. The fact that the host state is, in this case, also the technology holder allows this concern to be assuaged, although it still remains to ensure that physical access to the technology and know-how is nonetheless restricted and that the black box is indeed opaque. Any IAEA member state that also meets "the established nonproliferation criteria" is eligible to participate in the IUEC, although it has previously been indicated that members should also not be "envisaging the development of indigenous sensitive nuclear technology."[21]

In December 2007, the Russian government took the decision to include the nuclear material in the enrichment center in the list of facilities it is willing to submit to IAEA safeguards. Safeguards are also to be applied to the 120-ton LEU stockpile that is to be set aside, separately, as a fuel bank in the event of a supply disruption for political reasons unrelated to nonproliferation. Although an agreement between the IAEA and Russia on the safeguards arrangements was originally expected to be concluded in the first half of 2008,[22] such an agreement has not yet been finalized and appears likely to be held up for at least another few months. It is therefore likely to land on the board's plate while the future of the NTI proposal and GNEP are likewise coming to a head.

The German proposal for a multilateral enrichment center is also being actively pursued. Such efforts followed an initial delay, which was apparently the consequence of internal disagreements. Germany made a presentation at the IAEA in February 2008, which gave further details regarding the proposal, and the German government also initiated and ultimately co-hosted a conference in Berlin in April 2008 with the Netherlands and the United Kingdom on nuclear fuel assurances. At that time, it was noted that the three states also stood ready to undertake further development of the enrichment bond concept.

The proposal, as developed thus far, has recommended that the host country for such a center should not already possess enrichment capabilities. Although the IAEA would have responsibility for oversight of such a center, the MESP idea also wisely confers responsibility for day-to-day management and operation of the center to a private firm rather than to an international organization. The IAEA also would not have any other means of access to sensitive technology or know-how.

One of the most difficult aspects of the MESP idea is finding a host country. In addition to requiring that the country is not already a current supplier of enrichment services, the MESP proposal also notes the need for the host country to have a suitable infrastructure and political stability, adhere to safeguards agreement, and be in good standing with the NPT. It is not yet clear how difficult it will be to find a willing host and, once found, how acceptable that host country will be to possible participants in the center.

Of all the proposals made, however, the MESP concept is perhaps the most explicitly welcoming to all interested parties, including those who might wish to develop an indigenous enrichment technology, by noting that they would "remain free" to do so if they so chose "and circumstances require."[23] This inclusiveness is sure to increase the appeal of the MESP idea, particularly to states who have long been concerned that participation in multilateral ventures was dependent on not pursuing indigenous enrichment and reprocessing activities. It remains unclear, however, whether the "circumstances required" for states to explore their own capabilities while participating in the center will be identified or formalized in any way. If so, this might be viewed as limiting the MESP's apparent inclusiveness. If not, such inclusiveness might then come at the expense of the proposal's nonproliferation value.

A working paper, providing still more detail on the MESP idea and suggesting next steps for this and other proposals, may be presented by Germany to ElBaradei in September 2008. This would serve to provide an interesting backdrop to the NTI-GNEP-Angarsk developments.

Another Possible Framework

Finally, another framework that makes use of the three-layer approach contained in the WNA proposal and Six-Country Concept has been noted. Like the others, the first level of such a mechanism is simply the current market and its existing supply arrangements. The second level, again much like that suggested by the WNA and in the Six-Country Concept, would be based on the existence of backup commitments that would be undertaken by suppliers and the relevant governments of enrichment services and of fuel fabrication. In the event of any failure in the current market and assuming that the IAEA director-general considered that certain predetermined criteria were met, this second layer of assurance would be enacted. As a final guarantee, a third level consisting of a physical or, more likely, a virtual LEU fuel bank could be created. Under this framework, which would be open to all IAEA member states, the LEU reserve would be stored "in one or several separate locations and made available to consumer states through a set of arrangements and agreements, involving the IAEA and supplier states and companies."[24]

Selected Remaining Issues

Several of the proposals made on fuel assurances foresee the IAEA's involvement in deciding when services may be supplied or fuel from a fuel bank released. It is often assumed that criteria would be agreed on in advance by the Board of Governors and that the director-general would therefore, at the time of the request, need only to approve it on the basis of whether it met or failed to meet these criteria. This would seem to be the only way that potential recipients could have confidence that the supply they require would be timely and would not be waylaid by debate in the board. It follows that, as ElBaradei has stated, such criteria would have to be "non-political" and "applied in a consistent and objective manner."[25] This would allow the director-general to check the request against the list of conditions for release, which would proceed as a last-resort supply in the event of denial of services for political reasons not related to proliferation concerns.

Conditions agreed to in advance would likely require that the consumer state be in good standing with its IAEA safeguards obligations, as indicated in the agency's Safeguards Implementation Report. Whether the state would have to have been in good standing for only the most recent year or for a predetermined number of previous years would also need to be agreed. Naturally, safeguards would be applied to the material supplied.

Those safeguards, however, would almost certainly not include the 1997 Model Additional Protocol, which provides further legal authority beyond the required NPT safeguards agreement, allowing the IAEA to draw conclusions regarding the absence of undeclared nuclear materials and activities. After all, the additional protocol remains voluntary, and until the Board of Governors takes a decision to the contrary, many states feel strongly that the protocol should not be required as a criterion for supply. This does not sit well with some other states, who not only support the universalization of the protocol, but who may have domestic legislation in place requiring a recipient state to have an additional protocol in place as a condition of bilateral supply. Whatever conditions are proposed, perhaps the only sure conclusion is that the agreement of nonpolitical advance criteria in a forum that has become increasingly political over the past few years will be a difficult task.

Such politicization has been reflected in the concerns and suspicions regarding eligibility criteria. The questions of which states are able to participate and what, if anything, those states would have to give up in order to do so have been a running theme in the discussions. As initially introduced, several of the proposals, such as the Six-Country Concept and GNEP, were understood to place requirements on potential consumers not to pursue indigenous enrichment or reprocessing activities. This triggered fears that the current supplier countries were attempting in effect to establish a cartel, despite the fact that, as stated by South Africa, some nonsupplier states "might choose to pursue sensitive fuel cycle activities in a limited way or only for research activities."[26] Although efforts have been taken by the supplier states to assuage these concerns, many other states, some of whom, Brazil and Japan, for instance, have expressed interest in eventually being suppliers themselves, retain their misgivings and continue to be concerned that multilateral approaches to the fuel cycle might serve to curtail their Article IV rights under the NPT to the research, development, production, and use of nuclear energy for peaceful purposes. It remains to be seen whether this skepticism can be overcome.

The ability of fuel assurance mechanisms to address the back end of the fuel cycle and, in particular, to resolve the issue of spent fuel is also a cause for concern. The return of spent fuel is traditionally a controversial idea, being politically and often legally difficult. Accordingly, the establishment of regional or international spent fuel storage or disposal facilities has proved to be a tough sell. A mechanism that provides for a take-back of spent fuel, however, would certainly hold greater appeal to states whose nuclear power programs are in their early stages. It would also provide greater nonproliferation assurance against the possibility of reprocessing the spent fuel for plutonium. The taking back of spent fuel to the country of origin is actually envisioned under GNEP, and unsurprisingly, this aspect of the proposal has proven to be one of its more controversial elements among such GNEP members as Australia and Canada, its nonproliferation benefits notwithstanding.

Conclusion

More than a year has now passed since the report to the Board of Governors. Although the likelihood of successfully implementing a multilateral approach to the nuclear fuel cycle is by no means assured, recent events have indicated that greater progress to this end has already been made than was possible during the 1970s and 1980s. In terms of assurance of supply, however, it appears that the remaining months of 2008 will be indicative of how much the proposed mechanisms will be able to accomplish in practice.

The ultimate goal of the exercise envisioned by the director-general, of all enrichment and reprocessing activities being under multilateral control one day, seems a longer-term prospect to say the least and remains deeply unpalatable to many states for the time being. Although the complementarity of the proposals is often noted, the MESP and NTI ideas (and supported by the enrichment bond principle), hold a vision of an IAEA-administered fuel-cycle center or fuel bank that, of all the proposals that have been refined over the past year, is perhaps the most in keeping with the spirit ElBaradei's long-term vision. If attained, they would serve as an important departure from the traditional approach to enrichment and reprocessing.

Nonetheless, several significant hurdles remain. The sponsors of these proposals currently appear to have the necessary political will to push them forward, although this will be not be sufficient without the concomitant political will on the part of other IAEA member states. The momentum that has been generated on fuel assurances and on multilateral approaches to the nuclear fuel cycle cannot be sustained indefinitely. The recent UAE contribution of $10 million to the NTI fuel bank is an encouraging sign, as is the extension of the deadline. The safeguards approach to Angarsk is apparently soon to be agreed, albeit nearly a year later than originally expected. There are indications that the MESP proposal may soon be put forward for formal discussion.

Still, GNEP is suffering from funding difficulties. The director-general who revived and argued in favor of the new fuel-cycle arrangements will soon head into the final year of his tenure. More than a year has now passed since the June 2007 report to the Board of Governors identified the board as the appropriate forum for the next considerations of the issue. If the board does not take up the discussion soon, whether because sufficient funding has been raised for the fuel bank or on the basis of draft agreements or release criteria suggested by member states, it seems increasingly possible that the project will go the way of those that preceded it, 30 or so years ago.


Fiona Simpson is a research associate at the Center on International Cooperation at New York University. Previously she worked at the Weapons of Mass Destruction Branch of the UN Office for Disarmament Affairs. From 2003 to 2005, she served at the International Atomic Energy Agency in the Office of External Relations and Policy Coordination.


ENDNOTES

1. Mohamed ElBaradei, "Towards a Safer World," The Economist, October 16, 2003.

2. For an overview of past efforts, see Tariq Rauf and Fiona Simpson, "The Nuclear Fuel Cycle: Is It Time for a Multilateral Approach?" Arms Control Today, December 2004, pp. 17-21.

3. Mohamed ElBaradei, "Introductory Statement to the Board of Governors," IAEA, March 3, 2008. In March 2008, the director-general stated that he expected the authors of the proposals to initiate the related discussions in the board, much as he himself would undertake to seek board consideration of an IAEA fuel bank when the necessary funds became available.

4. Tariq Rauf and Zoryana Vovchok, "Fuel for Thought," IAEA Bulletin, Vol. 49, No .2 (March 2008).

5. IAEA, "Communication Dated 28 September 2005 From the Permanent Mission of the United States of America to the Agency," INFCIRC/659, September 2005; National Nuclear Security Administration (NNSA), Department of Energy, "NNSA Awards Contract for Reliable Fuel Supply Program," June 29, 2007 (press release).

6. IAEA, "Communication Received From the Federal Minister for European and International Affairs of Austria With Regards to the Austrian Proposal on the Multilateralization of the Nuclear Fuel Cycle," INFCIRC/706, May 31, 2007.

7. For a discussion, see Edwin Lyman and Frank von Hippel, "Reprocessing Revisited: The International Dimensions of the Global Nuclear Energy Partnership," Arms Control Today, April 2008, pp. 6-14.

8. The six countries for which the proposal was named are those six states primarily involved in the supply of enrichment services: France, Germany, the Netherlands, Russia, the United Kingdom, and the United States.

9. World Nuclear Association, "Ensuring Security of Supply in the International Nuclear Fuel Cycle," May 2006.

10. See "Concept for a Multilateral Mechanism for Reliable Access to Nuclear Fuel," June 2006.

11. IAEA, "Communication Dated 30 May 2007 From the Permanent Mission of the United Kingdom of Great Britain and Northern Ireland to the IAEA Concerning Enrichment Bonds," INFCIRC/707, May 30, 2007.

12. IAEA, "Communication Received on 12 September 2006 From the Permanent Mission of Japan to the Agency Concerning Arrangements for the Assurance of Nuclear Fuel Supply," INFCIRC/683, September 12, 2006.

13. "Multilateralization of the Nuclear Fuel Cycle: Guarantees of Access to the Peaceful Uses of Nuclear Energy," NPT/CONF.2010/PC.I/WP.61, May 9, 2007 (EU working paper).

14. Miles A. Pomper, "Congress Alters Bush's Fuel Cycle Plans," Arms Control Today, January/February 2008, pp. 40-41.

15. NNSA, "U.S. Donates $50 Million for the IAEA International Fuel Bank," August 4, 2008 (press release).

16. "UAE Commits $10 Million to Nuclear Fuel Reserve Proposal; September Deadline Extended for Matching Donations," IAEA, August 7, 2008.

17. IAEA, "Introductory Statement to the Board of Governors," March 3, 2008, www.iaea.org/NewsCenter/Statements/2008/ebsp2008n003.html.

18. GNEP, "GNEP Working Group on Reliable Fuel Services: Terms of Reference," December 12, 2007. The other GNEP international working group was tasked with examining infrastructure development.

19. U.S. House Committee on Appropriations, "Summary: 2009 Energy and Water Appropriations," p. 3, http://appropriations.house.gov/pdf/EWFY09FCSummary06-08.pdf.

20. Leonor Tomero, "The Future of GNEP: The International Partners," Bulletin of the Atomic Scientists: The Bulletin Online, July 31, 2008.

21. S.V. Ruchkin and V.Y. Loginov, "Securing the Nuclear Fuel Cycle: What Next?" IAEA Bulletin, Vol.48, No.1, September 2006, p.25.

22. "IAEA May Consider in 1H08 Russia's Nuclear Fuel Plans" Ria Novosti, September 18, 2007.

23. "To Ensure Access to Nuclear Fuel Supply and Services: Multilateral Enrichment Sanctuary Project," NPT Working Paper, NPT/CONF.2010/PC.II/WP.32, May 6, 2008.

24. Rauf and Vovchok, "Fuel for Thought."

25. Mohamed ElBaradei, "Nuclear Energy: The Need for a New Framework," Statement at the International Conference on Nuclear Fuel Supply: Challenges and Opportunities, Berlin, April 17, 2008.

26. Oliver Meier, "News Analysis: The Growing Nuclear Fuel Cycle Debate," Arms Control Today, November 2006, pp. 40-44.

Averting a Nonproliferation Disaster

Decision time has arrived on the controversial proposal to roll back three decades of nuclear trade restrictions on India, which violated peaceful nuclear cooperation agreements by detonating its first nuclear bomb in 1974.

As early as Sept. 4-5, the Nuclear Suppliers Group (NSG) will reconvene to consider a revised U.S. proposal to permit nuclear trade with India. At a special meeting of the 45-member group last month, the Bush administration proposed an India-specific exemption from NSG guidelines, which currently require full-scope IAEA safeguards as a condition of supply. Bowing to Indian demands, the Bush team called for a “clean” and “unconditional” waiver that would have allowed unrestricted nuclear trade with India at the discretion of each NSG member state. (Continue)

Daryl G. Kimball

Decision time has arrived on the controversial proposal to roll back three decades of nuclear trade restrictions on India, which violated peaceful nuclear cooperation agreements by detonating its first nuclear bomb in 1974.

As early as Sept. 4-5, the Nuclear Suppliers Group (NSG) will reconvene to consider a revised U.S. proposal to permit nuclear trade with India. At a special meeting of the 45-member group last month, the Bush administration proposed an India-specific exemption from NSG guidelines, which currently require full-scope IAEA safeguards as a condition of supply. Bowing to Indian demands, the Bush team called for a “clean” and “unconditional” waiver that would have allowed unrestricted nuclear trade with India at the discretion of each NSG member state.

To their credit, more than 20 states essentially said “no thanks” and proposed more than 50 amendments and modifications that would establish some basic but vitally important restrictions and conditions on nuclear trade with India. Many of these amendments track with the restrictions and conditions established in 2006 U.S. legislation regulating U.S. nuclear trade with India, which include the termination of nuclear trade if India resumes testing and a ban on the transfer of uranium-enrichment and spent fuel reprocessing technology.

Incredibly, U.S. officials are resisting even these most basic measures. As the Department of State’s Richard Boucher said in an Aug. 19 interview, “[S]ome would like to see all the provisions of the Hyde Act legislated in some international fashion. We don’t think that is the right way.”

Although acknowledging India’s legitimate interest in diversifying its energy options, like-minded countries, including Austria, Ireland, Japan, the Netherlands, New Zealand, Norway, and Switzerland, correctly recognize that the Bush approach is deeply flawed and would effectively end the NSG as a meaningful entity. It is vital that these and other responsible states stand their ground.

Why? Any India-specific exemption from NSG guidelines would erode the credibility of NSG efforts to ensure that access to peaceful nuclear trade and technology is available only to those states that meet global nuclear nonproliferation and disarmament standards.

Contrary to the Orwellian claims of its proponents, the deal would not bring India into the nonproliferation mainstream. Unlike 179 other countries, India has not signed the Comprehensive Test Ban Treaty. It continues to produce fissile material and expand its nuclear arsenal. As one of only three states never to have signed the nuclear Nonproliferation Treaty (NPT), it has not made a legally binding commitment to achieve nuclear disarmament.

In order to maintain its option to resume nuclear testing, India is seeking bilateral nuclear cooperation agreements that help provide it with strategic fuel reserves and lifetime fuel guarantees. This flatly contradicts a provision in U.S. law championed by Sen. Barack Obama (D-Ill.) that stipulates that fuel supplies be limited to reasonable reactor operating requirements.

Given India’s demands, the revised U.S. proposal will likely only pay lip service to the other NSG states’ concerns. Any such proposal should be flatly rejected as unsound and irresponsible. To be effective, NSG guidelines must establish clear and unambiguous terms and conditions for the initiation of nuclear trade and possible termination of nuclear trade.

If NSG states agree under pressure from an outgoing U.S. administration to blow a hole in NSG guidelines in order to allow a few states to profit from nuclear trade with India, they should at a minimum:

  • establish a policy that if India resumes nuclear testing or violates its safeguards agreements, trade involving nuclear items with India shall be terminated and unused fuel supplies returned;
  • expressly prohibit any transfer of reprocessing, enrichment, or heavy-water production items or technology, which can be used to make bomb material;
  • regularly review India’s compliance with its nonproliferation obligations and commitments; and
  • call on India to join with four of the five original nuclear-weapon states in declaring that it has stopped fissile material production and call on India to transform its nuclear test moratorium pledge into a legally binding commitment.

Some Indian officials have threatened they may walk away from the deal if the NSG establishes even these most basic requirements. If that occurs, so be it.

The Indian nuclear deal would be a nonproliferation disaster, especially now. The current U.S. proposal threatens to further undermine the NPT, the nuclear safeguards system, and efforts to prevent the proliferation of sensitive fuel-cycle technologies. Absent curbs on Indian nuclear testing and fissile material production, it would also indirectly contribute to the expansion of India’s nuclear arsenal with adverse consequences for the nuclear arms race in Asia.

For those world leaders who are serious about advancing nuclear disarmament, holding all states to their international commitments, and strengthening the NPT, it is time to stand up and be counted.

Conflict of Interest Shadows Germany in Upcoming Controversial India Nuclear Trade Decision, Report Shows

Sections:

Body: 

For Immediate Release: August 20, 2008


Contacts: Daryl G. Kimball, Executive Director, 1-202-463-8270 x107 and Oliver Meier, International Representative (Berlin), +49 171 359 2410.

(Washington): A respected nuclear journal this week reported that Germany's position on a controversial proposal to lift global nuclear trade restrictions on India might have been influenced by a private German firm's joint venture with the French nuclear conglomerate Areva. France is supportive of a U.S. drive to exempt India from existing nuclear trade rules, while many other countries have expressed opposition or concerns.

Previously, Germany had been more critical of the proposal, but now, under pressure from the United States and France, Germany has agreed to support the exemption for India, according to an Aug. 19 report in Platts Nuclear News Flash. That report notes that during German government discussions on the proposal to exempt India from the NSG rule in 2007 and 2008, "participants had expressed concern that Germany's reluctance to support granting India the exemption might impact a pending decision by French President Nicolas Sarkozy whether to make changes in the ownership structure of Areva NP that would replace the German Siemens with a French firm. Siemens currently holds a one-third share in Areva NP."

Germany's position on the issue matters greatly because it is currently the chair of the 45-member Nuclear Suppliers Group (NSG). The voluntary group is scheduled to meet Aug. 21-22 to discuss the U.S. proposal to exempt India from an NSG trade rule that nuclear importers must have international safeguards on all of their nuclear facilities and materials, which India does not. In its role as the NSG chair, Germany has a vital role in arbitrating the discussion and helping the NSG reach a decision by consensus.

"The report is deeply troubling because it suggests that Germany's role as the chair of the NSG is compromised given that it clearly has a conflict of interest that has affected its nonproliferation policy at the NSG. It is also clear that France is in a position to exert undue political influence over Germany's behavior," said Daryl G. Kimball, the executive director of the Arms Control Association. "Germany has a special responsibility to consider and take into account the position of NSG states that do not support the proposed exemption for India and to incorporate their proposed restrictions and conditions on trade with India," Kimball suggested.

According to an Aug. 19 report by Platts Nuclear News Flash publication, during German interagency discussions on the proposal to exempt India from the NSG rule in 2007 and 2008, "participants had expressed concern that Germany's reluctance to support granting India the exemption might impact a pending decision by French President Nicolas Sarkozy whether to make changes in the ownership structure of Areva NP that would replace the German Siemens with a French firm. Siemens currently holds a one-third share in Areva NP."

Areva, along with other nuclear vendors in Russia, the United States, and Japan hope to sell nuclear power plants and technology to India if the restrictions on such trade with India are lifted. According to the report in the industry newsletter, "During 2008, German leaders have urged Sarkozy to retain Siemens in Areva NP, in the interest of assuring the German company's future as a global nuclear power vendor."

"It is highly ironic that the German government and its foreign minister, which support a policy to phase out the use of nuclear power in Germany, are now seeking to facilitate a change in NSG policies to help a German company profit from nuclear business in other countries," noted Kimball.

The proposed NSG rule exemption would allow India to acquire nuclear technology and material previously off limits to it because of India's misuse of past nuclear imports for peaceful purposes to conduct a nuclear explosion in 1974 and refusal to allow full-scope international safeguards.

Several NSG members have raised questions about rewarding India with greater opportunities to engage in international nuclear trade while India continues to refuse to constrain its nuclear weapons program.

ACA and a wide-range of other NGOs and experts have called the proposal a "nonproliferation disaster" in an Aug. 15 letter to Germany and other NSG participants. They are recommending that at a minimum, the NSG establish a policy banning the transfer of enrichment and reprocessing technology to India and an immediate suspension of all NSG trade if India resumes nuclear testing. (See http://www.armscontrol.org/node/3287)

A copy of the text of the U.S. proposal to exempt India from NSG rules and ACA's analysis is available online at http://www.armscontrol.org/node/3274

# # #
The Arms Control Association is a private research and policy advocacy organization established in 1971 to promote effective arms control and nonproliferation solutions.

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Experts and Organizations from 24 Countries Call on Nuclear Suppliers Group to “Avoid a Nonproliferation Disaster”

Sections:

Body: 

For Immediate Release: August 15, 2008

Contacts: Daryl G. Kimball, Exec. Director, Arms Control Association 1-202-463-8270 x107; Philip White, Citizens’ Nuclear Information Center, Tokyo, and Coordinator, Abolition 2000 U.S.-India Deal Working Group 81-3-3357-3800

(Washington, D.C.-Tokyo, Japan): In a letter sent this week to the foreign ministers of the participants in the 45-member Nuclear Suppliers Group, a prestigious and broad array of more than 150 experts and nongovernmental organizations from 24 countries urged that they reject a George W. Bush administration proposal to exempt India from longstanding global nuclear trade standards.

The experts and NGOs argue in the August 15 letter that “India's commitments under the current terms of the proposed arrangement do not justify making far-reaching exceptions to international nonproliferation rules and norms.”

The Nuclear Suppliers Group will convene on August 21-22 in Vienna to discuss a U.S. proposal to relax longstanding NSG restrictions on trade with states, such as India, that refuse to allow comprehensive international nuclear safeguards. (For the text and an analysis of the U.S. proposal see < http://www.armscontrol.org/node/3274>.) Opposition from several countries is expected.

The appeal is part of a global NGO campaign to influence governments’ views about the controversial nuclear trade proposal.

“Unlike 178 other countries, India has not signed the Comprehensive Test Ban Treaty. It continues to produce fissile material and expand its nuclear arsenal. As one of only three states never to have signed the nuclear Nonproliferation Treaty (NPT), it has not made a legally-binding commitment to achieve nuclear disarmament,” the letter notes.

“Yet the arrangement would give India rights and privileges of civil nuclear trade that have been reserved only for members in good standing under the NPT. It creates a dangerous distinction between ‘good’ proliferators and ‘bad’ proliferators and sends out misleading signals to the international community with regard to NPT norms,” according to the letter.

“In the absence of a suspension of fissile material production for weapons by India, foreign nuclear fuel supplies would free up India’s relatively limited domestic supplies to be used exclusively in its military nuclear sector, thereby indirectly contributing to the potential expansion of India’s nuclear arsenal,” the signatories warn.

The NGOs and experts call upon NSG participant countries “to support measures that would avert further damage to the already beleaguered global nonproliferation and disarmament regime.”

Among the former government officials and experts endorsing the letter is Amb. Jayantha Dhanapala, the former UN Undersecretary General for Disarmament Affairs and President of the 1995 Nuclear Nonproliferation Treaty Review and Extension Conference. Other notable signatories include the mayors of Hiroshima and Nagasaki, former U.S., Canadian, and Australian ambassadors, and the former U.S. official responsible for civilian nuclear trade negotiations.

NGOs from Australia, Austria, Belgium, Canada, Finland, Germany, India, Italy, Ireland, Japan, Malaysia, Mexico, the Netherlands, New Zealand, Norway, South Korea, South Africa, Sweden, the United Kingdom, the United States, and elsewhere endorsed the letter, which was organized by the Tokyo-based Citizens’ Nuclear Information Center and the Washington-based Arms Control Association.

Given that the IAEA Board and the NSG traditionally operate by consensus, the signatories point out that each member state “has a pivotal role to play.” If the NSG is to allow nuclear trade with India, the experts and NGOs urge NSG participants to establish meaningful and common sense conditions and restrictions on nuclear trade with India, including:

  • Terminating nuclear trade with India if it resumes testing;
  • Prohibiting any transfer of sensitive plutonium reprocessing, uranium enrichment, or heavy water production items to India, which can be used to make bomb material;
  • Before India is granted a waiver from the NSG’s full-scope safeguards standard, it should join the other original nuclear weapon states by declaring it has stopped fissile material production for weapons purposes and transform its nuclear test moratorium into a meaningful, legally-binding commitment.

Unfortunately, Indian officials are demanding a so-called “clean” and “unconditional” exemption from NSG guidelines and are seeking bilateral nuclear cooperation agreements that help provide India with strategic fuel reserves and/or lifetime fuel guarantees in order to allow it to resume nuclear testing in the future without fear of a fuel supply cut off.

The August 15 letter warns the foreign ministers of the NSG countries that “if nuclear testing is to be deterred, meaningful penalties must be available. If NSG states do agree to supply fuel for India’s ‘civilian’ nuclear sector, they must avoid arrangements that would enable or encourage future nuclear testing by India. Otherwise, you and your government may become complicit in the facilitation of a new round of destabilizing nuclear tests.”

For the full list of endorsers and the text of the letter, see < http://www.armscontrol.org/system/files/NSGLetterGermanyAug15.pdf >.

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Letter from Congressman Howard Berman to Secretary of State Condoleezza Rice on the U.S. Indian Nuclear Deal

Description: 
PDF Document of Chairman Howard Berman's Letter to Secretary Condoleezza Rice
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PDF Document of Chairman Howard Berman's letter to Secretary Condoleezza Rice on the U.S.-Indian nuclear deal and exemptions from the Nuclear Suppliers Group dated August 5, 2008.

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GOV/1620 IAEA Document on Duration and Termination of Safeguards

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Item l(b) of the provisional agenda
(GOV/1620)

SAFEGUARDS
(b) THE FORMULATION OF CERTAIN PROVISIONS IN AGREEMENTS UNDER THE
AGENCY'S SAFEGUARDS SYSTEM (1965, AS PROVISIONALLY EXTENDED IN
1966 AND 1968)
Memorandum by the Director General

Document published 20 August 1973. 

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Nuclear Export Criteria Lacks Consensus

Wade Boese

Leading nuclear exporters at a recent Berlin meeting apparently failed to reach consensus on adopting new criteria to regulate certain sensitive nuclear technology transfers. Meanwhile, India's effort to win an exemption from that group's current trade restrictions remains stalled by Indian domestic politics.

Heading into their annual plenary May 22-23, the 45 members of the voluntary Nuclear Suppliers Group (NSG ) were debating criteria to limit which countries would be eligible to acquire uranium-enrichment and plutonium reprocessing technologies, which can be used to make nuclear fuel for reactors as well as the key material for nuclear weapons. (See ACT, May 2008 .) The group's sparse post-meeting statement made no mention of the criteria, indicating the NSG did not find the required consensus to adopt them.

France introduced the criteria concept to the group in 2004, and the possible criteria have been evolving ever since. They include requirements that potential recipients be states-parties to the nuclear Nonproliferation Treaty (NPT) and have no outstanding breaches of International Atomic Energy Agency (IAEA) safeguards intended to prevent diversions of nuclear technologies from peaceful purposes to weapons activities. The first criterion would rule out India, Israel, North Korea, and Pakistan, while Iran would be excluded by the second criterion.

The proposed criteria is intended to bolster the NSG guidelines, which vaguely state that group members "should exercise restraint" in exporting "sensitive facilities, technologies, and material usable for nuclear weapons." The Bush administration had been pushing the group to ban enrichment and reprocessing exports to countries lacking operational facilities for those purposes, but some members resisted that approach as too severe. President George W. Bush argued in a February 2004 speech that enrichment and reprocessing were unnecessary for peaceful nuclear programs. (See ACT, March 2004 .)

The Bush administration recently signaled a change in course by offering its own criteria ideas. It also proposed that permissible enrichment and reprocessing exports be conducted in ways to impede recipients from replicating the technologies or building their own indigenous facilities.

This later proposal triggered objections from Canada as well as reportedly from fellow NSG member South Africa. Both countries have large uranium deposits but no current enrichment capabilities. Exporters can profit more from selling enriched uranium than just uranium, a consideration that has been assuming greater significance in Ottawa and Pretoria as a growing number of countries eye starting or increasing nuclear energy operations.

India is one of those countries, but its nuclear expansion efforts have been constrained by an NSG rule that limits nuclear trade with non-nuclear-weapon states lacking comprehensive IAEA safeguards on their entire nuclear complex. Although India is estimated to possess up to 100 nuclear warheads, it is classified as a non-nuclear-weapon state by the NPT, which India has not signed.

The Bush administration agreed in July 2005 to help India win an exemption from the NSG rule (see ACT, September 2005 ), but that effort appears to be faltering. The United States had wanted the process advanced far enough to enable the NSG to exempt India at the Berlin meeting. India, however, has yet to finalize a new IAEA safeguards agreement for select Indian nuclear facilities, a precondition for a possible NSG decision.

Although negotiations with the IAEA have produced a draft agreement, the coalition government of Prime Minister Manmohan Singh has been unable to persuade India's leftist parties to support finalizing the agreement with the agency. Those parties have threatened to withdraw their support for Singh's coalition if it moves ahead with the IAEA agreement without their approval, raising the risk of early elections that could topple the coalition. The leftist parties' opposition stems from their broader hostility to closer relations with the United States.

After a failed May 6 meeting, Singh's coalition postponed a May 28 meeting to win over the leftist parties. Unless it is willing to risk the leftist parties following through on their threats, the government's move ensures that the draft safeguards agreement will not be submitted for the necessary approval of the IAEA Board of Governors at its June 2-6 meeting. The next scheduled board meeting is Sept. 22-26, and the next NSG plenary will be in 2009.

Those dates are well past the time frame that U.S. officials envisioned for action by both bodies. U.S. lawmakers and Bush administration officials months ago indicated that the IAEA and NSG processes had to be finished by June for Congress to have sufficient time to vote this year on a bilateral U.S.-Indian nuclear trade agreement negotiated last July. (See ACT, September 2007 .) Bush administration officials have warned Singh's government that the next U.S. administration may amend or drop support for the U.S.-Indian initiative if it is not completed before 2009.

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