BASIC Getting to Zero Papers, No. 8
The Nuclear Suppliers Group Waiver
30 September 2008
Siddharth Ramana, BASIC*
This Paper is also available in pdf
format.
Introduction
After hectic parleys in a highly divisive
environment, the Indo-US civil nuclear deal received a shot
in the arm, after the 45 member Nuclear Suppliers Group (NSG)
eventually reached a consensus in favor of granting India
a waiver
on 6 September 2008. This paved the way for the deal to move
towards its final hurdle at the American Congress. As expected,
the NSG presented a much tougher task for the Indian and American
interlocutors than the IAEA.
Indian Atomic Energy Chairman, Anil Kakodkar, said
that India's nuclear export controls were harmonized to reflect
the workings of the NSG, and that India demanded a "clean
and unconditional waiver" and would oppose any changes to
the IAEA safeguard agreements. Indian Foreign Secretary, Shiv
Shankar Menon, explaining
India's desire for clarity, explained that civilian nuclear
trade by its very nature involves long-term investment of
time and money, requiring solid confidence on the part of
investors.
However, NSG members expressed strong reservations against
the Indian position, believing an unconditional waiver would
strongly undermine the non-proliferation regime. Some
members feared India's nuclear arsenal would get a fillip,
replenishing its scarce domestic stockpile of nuclear fuel,
and others decried the hypocritical stance of the United States
in pushing for the deal. To some members, the United States
has done precious little to comply with its disarmament obligations,
and pushing forward for an exemption for a non-NPT signatory
was unacceptable.
India's unflinching stance on an 'unconditional
waiver' was viewed even by its allies as stubbornness and
an impediment to a consensus. Arguing for a softening of the
Indian position, US Ambassador to India David Mulford told
India, that the term 'unconditional waiver' was "provocative".
He suggested instead "a clean exemption" to sit alongside
many of the riders specified by the Separation plan, the 123
agreement and the IAEA safeguards agreement which were yet
to be discussed. Daryl Kimball, Director of the Arms Control
Association, even described the possibility of the NSG agreeing
to India's demands as a "fantasy".
NSG meeting
At the NSG meeting, those
in favor of the deal included the United States, United
Kingdom, Brazil, Russia and South Africa; skeptical supporters
included Australia, Spain and Norway; and those in opposition
were led by Ireland and New Zealand.
Key states like Japan were actively wooed by India
for the NSG vote. Japan's foreign minister Masshiko Koumura,
said Tokyo understood India's energy needs but wanted reassurance
that the deal would not undermine non-proliferation. Japan
initially insisted on automatically cutting off cooperation
if India conducts another nuclear test. This would have been
a "killer" amendment as far as India is concerned, and was
not agreed, but Japan nevertheless did not oppose the deal.
Both the mayors
of Hiroshima and Nagasaki, with heavy symbolism, lobbied against
government approval, but their concerns were outweighed by
the increasingly close economic and political relationship
with India.
Japan's chief cabinet secretary Nobutaka Machimura
said, "It may be biased to view the deal as going against
nuclear non-proliferation efforts. For example, the issue
of global warming has been getting serious in recent years
and CO2 emissions from emerging nations such as China and
India are becoming a problem. It is important that India proceeds
with nuclear power generation as clean energy."
A significant boost to the deal came from Australia,
despite strong domestic opposition a divided
leadership on the deal (Prime Minister Kevin Rudd himself
was said to be strongly opposed). The recently elected government
has prioritized nuclear non-proliferation in its foreign policy,
and has refused to sell uranium to non-signatories of the
NPT. However, both the Americans and Indians applied significant
pressure. According to a political commentator,
who heralded Australia's decision to vote in favor of India
wrote, "If Australia is to be an influential player in Asia,
it needs a good relationship with India. To have opposed the
US-India nuclear deal would have been to take the strongest
strategic action available to us to thwart India's growth
and development. The results for the Australia-India relationship
would have been calamitous."
Germany, chair at the NSG, gave grudging approval
to the nuclear deal, under strong pressure from the United
States. Foreign ministry spokesman Jens Ploetner said
Germany had tried to balance conflicting interests during
tense negotiations that led to the agreement. "There were
several countries that put critical questions to India, but
also the US, about how this arrangement is compatible with
the common goal of nuclear non-proliferation… It is not an
ideal solution. The negotiations were very difficult and we
cannot say that we could not have imagined something better."
The strongest opponents included Austria, Ireland, New Zealand,
Netherlands, Switzerland and Norway. It was the combined efforts
of these six countries with the tacit support of China, which
forced a significant number of reviews and extended debate.
The first three were reported as the last holdouts.
New Zealand has a strong
anti-nuclear record, with significant domestic support for
its non-proliferation and anti-nuclear activities. Despite
being a close US ally, it does not allow American naval warships
to pass through its waters as the Americans refuse to guarantee
they do not carry nuclear warheads. Significantly, NZ Ambassador
Jennifer MacMillan, warned at the IAEA in August that while
New Zealand would not oppose the deal at that point, they
would express opposition at the NSG.
However, as with the other countries, the Indian and American
pressure on New Zealand had been unrelenting.
In the days before the final NSG vote, Both US President Bush
and Indian PM Manmohan Singh called Prime Minister Helen Clarke
prior to the vote to communicate the consequences of explicit
opposition. The relationship with India appeared to be at
stake. After the vote NZ disarmament minister Phil Goff claimed
the NSG discussions were "robust and constructive". NZ high
commissioner Rupert Holborow, explained
that his country had acted in "good faith" at NSG, and that
it was "in the nature of international affairs, that there
is never only one relationship, or one issue at play. Countries
are always seeking to balance several issues and relationships".
Austria which along with New Zealand was about to
go to the polls
soon after the NSG vote, also had to cater to its domestic
non-proliferation constituency, but the pressure from the
United States, and the need to remain onside, killed any effective
opposition.
Operating at a more strategically competitive position, China
attempted more subtle tactics to delay consensus at the NSG
behind an exceptional treatment for India. Analysts have referred
to the desire to develop a critical US-Indian relationship
with an eye to contain the Chinese influence in the region
as a key motive for the deal, so Chinese opposition would
be expected, but it pursued a more subtle agenda. China demanded
the Nuclear Suppliers Group (NSG) give equal concessions in
supply of nuclear technology to Pakistan. Though Beijing largely
remained non-committal on the waiver, Chinese President Hu
and Premier Wen Jiabao had told Prime Minister Singh that
China would play a supportive
role. However, this support
was ambiguous; the government mouthpiece, People's Daily,
described the deal in advance of negotiations as a "blow to
the international non-proliferation regime".
Chinese officials expressed their concern over the speed
of the process and threatened to walk out at a crucial juncture
unhappy that opposition from other countries was being ignored.
Heavy
diplomacy by the US and India turned Chinese doubts, and
they agreed to an extended meeting and finally rallied behind
others in the NSG. One Chinese diplomat was reported to have
admitted
that Beijing had blocked the deal till the last moment, "because
the Pakistanis were on our back". He pointed out that India
"must realize" that Beijing, ultimately, did not come in the
way of the special waiver because China "wants to promote
a partnership between Asia's big powers". Indian National
Security Advisor M K Narayanan had made the government's views
public that New Delhi was "surprised" at Beijing's behavior
and would express "disappointment" with Yang.
Economic considerations
Canada, France and Russia played significant supporting roles
for the deal. Canada, for instance, reversed decades
of mistrust with India on non-proliferation issues to support
the deal. Canadian foreign affairs parliamentary secretary
Deepak Obhrai blamed
the previous government for a frosty relationship: "Former
Liberal Party Prime Minister Jean Chretien and his foreign
minister Lloyd Axworthy froze relationship with India after
the 1998 nuclear blasts by New Delhi." He articulated the
economic importance of India when he spoke about the opportunities
lost during the period India was under nuclear related sanctions.
Canada's moves to establish a free trade agreement in the
aftermath of the NSG waiver is a reflection of how economic
considerations played a decisive role in the decision.
Four key companies: Westinghouse and General Electric (US),
Areva (France) and Rosatom (Russia) have been jockeying for
a slice of India's lucrative
civilian nuclear technology market and more are poised to
join the fray. India state-owned Nuclear Power Corporation,
the monopoly nuclear power generator, is readying to place
orders that will form the first phase of the country's plan
to build 40,000 megawatts of nuclear capacity by 2020/ U.S.
forecasts indicate India will import at least eight nuclear
reactors by 2012.
David Bohigian, Assistant Secretary of State in the Department
of Commerce said
"We will ensure that U.S. companies play a big role in the
Indian nuclear energy market estimated to be $100 billion…
When you look at the energy map of 2020 and beyond, certainly
nuclear energy has a key role to play in India's growth, which
we welcome."
Armed with a NSG waiver, India is under no obligation to
restrict its nuclear trade to the United States, or to await
approval from the US Congress before importing technology
from elsewhere. However, Foreign Minister Mukherjee has indicated
that India will await US ratification, and that negotiations
on importing nuclear reactors will start only after
the conclusion of the 123 agreement. In response to the NSG
decision, global uranium prices rose
along with the Indian stock exchange. Industry lobby group,
the Confederation of Indian Industry said it expected about
$27 billion in investment in 18-20 new nuclear power plants
over the next 15 years.
The waiver
The Indian government had risked its very existence on pushing
the deal towards negotiations at the IAEA. Strong domestic
opposition from left and right left little political space
for negotiation or concession on the international scene,
and the risk of major embarrassment for Prime Minister Singh
and President Bush if the deal floundered. At such a late
stage, the waiver was imperative for the political image of
both the Indian and US governments.
The United States government saw
a necessity in demonstrating consistency with the Hyde Act.
Ambassador Mulford said "I still expect that the NSG countries
are going to insist upon some commonsense restrictions on
nuclear trade with India and conditions that are roughly similar
to the major requirements set forth in the Hyde Act". India
had strong reservations
against portions in the earliest draft format. The NSG's export
restrictions require the recipient country to have a comprehensive
safeguards agreement with the IAEA allowing for inspection
of all its nuclear installations unless there are safety considerations
or the supply agreement was drawn up prior to 1992. The waiver
deal relaxes this requirement for India as long as NSG members
are satisfied India is not exporting its technology and is
honoring its safeguards obligations to the IAEA and the July
2005 agreement with the U.S. This requires India to:
- honor its testing moratorium;
- maintain an effective system of export control;
- work towards a fissile material cut-off treaty; and
- negotiate an additional protocol with the IAEA.
But the draft also reiterates language from paragraph 4(d)
of the NSG guidelines requiring India to work towards comprehensive
safeguards, something that is anathema to New Delhi.
There are different interpretations of the Deal over the
right of withdrawal, testing and transfer of technology. According
to Henry Sokolski, executive director of the Non-proliferation
Policy Education Center, "The Bush administration has tried
to convince congress that the enabling US legislation for
the nuclear deal, the Hyde Act, has mechanisms to check India's
nuclear weapons ambitions. However, the Indian Government
is indicating the opposite."
Striking a more diplomatic overture, Mulford said
that India had a sovereign right to test and the United States
had a right to respond. That the Hyde Act has affected India's
strategic policy can be shadow traced to the Indian decision
against Iran in the IAEA, first, in March 2006 and later in
September 2006.
This has riled Indian critics of the deal, including Professor
Bharat Karnad of the Center of Policy Research. According
to Karnad, owing to India signing the 1963 Partial Test Ban
Treaty (PTBT) prohibiting atmospheric tests, underground testing
is the only medium left to India for validating existing and
future advanced weapons designs. He argues that India should
not have surrendered its right to test a nuclear weapon, especially
considering that scientists believe that the May 1998 tests
conducted by India had fizzled. According to him, dissenting
scientists are convinced that most of the yield came from
the boosted fission trigger (the 'primary') and that there
was virtually no thermonuclear burn from the 'secondary'.
If true, India's ability to have any confidence at all in
its arsenal would be extremely doubtful.
For
Professor Brahma Chellany, the leaked letter
from Congressman Howard Berman elucidates the restrictions
which would be imposed on the Indian nuclear program. The
letter indicates that there would be no US transfer of civil
reprocessing and enrichment equipment or technologies to India
even under safeguards, and block Indian reprocessing of spent
fuel even with indigenous technology. On one issue, the 123
Agreement had held out hope for India in the future by stating
in its Article 5(2) that, 'Sensitive nuclear technology, heavy
water production technology, sensitive nuclear facilities,
heavy water production facilities and major critical components
of such facilities may be transferred under this Agreement
pursuant to an amendment to this Agreement.' But the Bush
administration's letter to Congress states that the US government
had no plan to seek to amend the deal to allow any sensitive
transfers in the near future.
In contrast, Prime Minister Singh told the Indian parliament
August 3, 2005, when he told the Indian Parliament that he
had received 'an explicit commitment from the United States
that India would get the same benefits of civilian cooperation
as (an) advanced country like the United States enjoys.'
National Security Advisor M K Narayanan said
that India rejected the inclusion of any clause on testing,
periodic review or denial of enrichment and reprocessing technology
in the text of the NSG waiver. "On red lines we cannot, that's
what we told our Parliament - these are sacrosanct and if
these are not met we cannot endorse the agreement." The provision
to terminate the deal if India tested was also opposed
by France and Russia, looking for flexibility. It was only
after intense diplomatic negotiations that an acceptable wording
was achieved, allowing for independent national decisions
and termination by consensus.
Proliferation concerns
Foreign Minister Mukherjee's statement outlined
India's strong stance against proliferation, and his reiteration
of India's self moratorium on nuclear testing, and its commitment
to no-first-use of nuclear weapons and concluding the Fissile
Material Cut off Treaty (FMCT) was a major factor in clinching
the waiver for India. Speaking at the end of the NSG session
German Foreign Minister Jens Ploetner said
the NSG's decision underscored the goal of non-proliferation.
However, skeptics see significant damage to the NPT. For
the Japanese Asahi Shimbun daily, the waiver is "a historic
mistake". "After North Korea, there are now strong proliferation
concerns about Iran".
For former Indian ambassador Arundhati Ghosh, who championed
India's dissent against the CTBT, the nuclear deal is an acceptable
entry into the non-proliferation mainstream for India. Describing
it as a "front
door entry", she said "We are not going to sign the NPT
under any circumstances, but we are willing to follow the
objectives of the NPT, which in fact forms the non-proliferation
regime".
The deal did not include a periodic review of India's adherence
to the grouping's guidelines opposed by New Delhi. The revised
draft provides for the NSG chair "to confer and consult" with
India and keep the plenary informed of these consultations
with a view to intensifying dialogue and partnership with
New Delhi. If India were to be made a NSG partner as envisaged
by the United States, it would certainly complicate matters
at the NSG meetings to censure India, as the Group operates
on the basis of consensus.
US Under-Secretary of State William Burns believes
that the steps taken would strengthen the global non-proliferation
regime, by bringing India into the mainstream. Disagreeing
with the notion that the non-proliferation regime is being
strengthened, Professor P.R. Chari of the Institute of Peace
and Conflict Studies said, "It does set a precedent for similar
deals, and a China-Pakistan nuclear deal could be in the offing.
So could a North Korea-China nuclear deal. China could argue
that, since an exception has been made for India, there is
no reason why Pakistan or North Korea or, for that matter,
Iran, should be discriminated against."
Conclusion
The Indo-US nuclear deal is an economic windfall to western
companies, witnessed in the immediate increase
in value of stocks of private nuclear companies and companies
dealing with dual use technologies. For India, the main hopes
lie in the increase in its energy production from its nuclear
reactors. Owing to fuel shortages, many reactors in the country
are not operating at their peak and are therefore loss making
entities. However, as Prof. Karnad of CPR points
out, this increased production will come at a high price
- from liability and risk insurance, construction and operating
delays, and reactor efficiency and performance penalties.
The United States has made clear their belief that there
will be no benefit to the Indian strategic military program
under the deal. While the waiver does not exclude enrichment
and reprocessing equipment, the United States is highly
unlikely to supply this technology, and it has not been
included in others' nuclear agreements with India. The end-use
for any such transfers would be subject to intense international
scrutiny. And while India continues to have the right to test
further nuclear weapons, it would in all probability attract
sanctions and widespread opprobrium. With immense economic
and diplomatic weight behind the deal, there are few who believe
India would risk another nuclear test unless China initiates
one itself.
The United States and India are using differing interpretations
of the deal in selling it to their constituencies. The US
state department has attempted to reassure domestic critics
by saying
that fuel supply assurances do not insulate India against
the consequences of a nuclear explosive test or a violation
of non-proliferation commitments. Furthermore, the US has
rejected any possibility of a similar deal with other nations.
According
to Kakodkar, talking of the Berman letter that contained US
assurances on the limits to technology transfer, "India had
no idea about the contents of the letter". Mulford countered
by calling such allegations "misplaced".
The deal clearly opens a backdoor for India into the broader
non-proliferation regime, while allowing India to publicly
distance itself from treaties it deems discriminatory. Only
time will tell whether it also weakens the non-proliferation
regime as a result. The waiver also includes a commitment
from India to work towards the conclusion of a FMCT, though
Karnad is of the opinion
that India is likely to face a tough choice between this commitment
and its desire to augment its nuclear fissile material holdings.
The deal has been criticized by parties of the left for subordinating
India to American geo-strategic interests, in containing China.
Some point to India's vote against Iran at the IAEA as an
indication of this. Nevertheless, Dr. Harsh Pant speaks
for many when he points out that India, unlike Iran, is
not a signatory to the NPT, and that having signed the treaty,
Iran must fully comply with its international commitments.
The United States, in its rush to ratify the deal in a lame
duck session of Congress, used all its diplomatic might in
bullying
opposing countries. "No other country could have pulled this
off", a key Indian official involved in the deliberations
acknowledged.
One European diplomat complained, "for the first time in my
experience of international diplomatic negotiations, a consensus
decision was followed by complete silence in the room. No
clapping, nothing. It showed how a lot of us felt pressured
to some extent into a decision by the Americans and few were
totally satisfied." The US Congress is now in the process
of voting on the deal, and it appears just a matter of time
before it is finally inked.
* Siddharth Ramana is an Msc (Econ) graduate in Intelligence
and Strategic Studies. He is presently pursuing a M.A in Peace
and Conflict Studies from Malmo University. He has worked
as a research assistant for the Institute of Peace and Conflict
Studies, New Delhi and is a contributor to Worldanalysis.net.
His areas of research include the Indo-US nuclear deal, terrorism
in the Middle East and South Asia and strategic affairs in
the Sub-continent.
The views expressed in this paper do not necessarily reflect
those of BASIC.
|
