Jul 1, 2006

The NSG’s Rio Plenary and the Indo-US nuclear agreement

The article was published in the Indian Pugwash Society's in-house newsletter Proliferation and Arms Control, Vol. 3, no. 7, July 2006, pp. 10-14.

The Plenary Session of the Nuclear Suppliers Group (NSG) that was held on 29 May 2006 in Rio de Janeiro is a crucial piece in the Indo-US nuclear deal that India and the United States are trying to piece together. The NSG’s acquiescence is crucial in order for the deal to materialise. However, each of the institutions is looking to the other player to make the first move. The NSG is looking for the US Congress to pass the required India-specific legislation before it makes a commitment. The US Congress wants that firstly, the two sides should iron out the differences that have arisen over the issue of future nuclear testing by India. And secondly, that India should move first and draw up safeguards agreements with the International Atomic Energy Commission (IAEA). The IAEA on its part wants the layout and designs of the civil-military separation to craft an India-specific inspection agreement.

The NSG Plenary was quite different from the earlier sessions held in March ’06 and October ’05, as for the first time the NSG members actually discussed the Indo-US nuclear deal unlike the March session at Vienna earlier this year where the nuclear deal was largely absent from discussions. The Rio Plenary was thus crucial for it gave both India and the US an opportunity to strengthen their position within the group and to garner more support for the deal.

The Indo-US combine did manage to do garner support from across the spectrum at the NSG meeting with only Sweden, Norway and Ireland being the three major hold outs. [1] Talking about the Rio session, the US ambassador to the IAEA, Gregory Schulte, who attended most of the confidential consultations, termed the Rio meeting as "an important step forward" in putting the deal in a broader strategic context. Though, emphasising that there was no deadline, he said, "We would like to have a decision sooner rather than later." [2] This is of immense importance because of the fact that the Group works by consensus and there are a lot of hard questions that the US will still have to answer from various member countries.
Why is the NSG so crucial to the Indo-US deal?

The Nuclear Suppliers’ Group (NSG) was established as a direct reaction to the Indian test of 1974. Though the rationale for the Indian test is another matter; the Supplier countries involved, namely the United States, Canada, Britain and several others felt that the test "demonstrated that nuclear technology transferred for peaceful purposes could be misused." [3] It was thus felt that there was a need to reduce the risk of nuclear proliferation that came with nuclear cooperation. Expanding its membership over time, the NSG today has 45 members and virtually includes all the major countries in the world that are capable of supplying any nuclear related material or technology.

Though for a long time, even after 1974, India did manage to acquire the requisite nuclear supplies needed to keep its domestic nuclear programme going, the adoption of the Warsaw Guidelines [4] in 1992, tightened the noose substantially for India. This development made India realise that it would sooner or later have to engage with the Group as now it did not possess any means to secure the materials, fuel or technology that it needed to take its domestic programme forward. That realisation on India’s part, coupled with its image of a rising power, has led to the sole superpower in the world today, engaging with India in an attempt to mould the rules of the nuclear game to suit India’s needs.

However the bottom-line remains that the NSG virtually controls all the nuclear commerce taking place in the world today and it is imperative that the Group adopts an India-specific clause that gives a permanent exception to international rules barring nuclear cooperation thus lifting the restrictions placed on transfer of any items on the trigger list, which includes nuclear fuel, dual use equipment.

The Internal Dynamics within the Group

Since the July 18th agreement was inked, the internal dynamics within the Group too have begun to crystallize on the issue. There are several members who have welcomed the deal; there are however, several fence sitters which includes a couple of European and Scandinavian countries that are traditionally supportive of the NPT and are thus are wary of the implications of the deal on the Treaty. And there is of course China which has neither supported nor opposed the deal but after maintaining a studied silence for a considerable amount of time did launch a verbal tirade of the American move, saying that it depicted American ‘double standards’.

The first grouping of states is that of the supporters of the Indo-US deal. So far, Russia, France, United Kingdom, Canada, Japan, Germany and Cyprus have reacted positively to the Indo-US deal. Within the NSG, the US, UK and France have taken the lead in pushing India’s case.

Britain, a close ally of the Bush Administration has decided to amend its nuclear policy towards India to allow contacts between scientists and academics, as well as export of technology and equipment for civilian use. [5] The relaxed sanctions took effect on August 10, 2005. The UK has said that it is prepared to consider on a ‘case by case’ basis those license applications for dual-use items that are destined for other activities but it will continue to refuse export of items when they are destined ‘for unsafeguarded nuclear fuel cycle or nuclear explosive activities, or when there is danger or unacceptable risk of diversion to such activities’. The earlier British policy was to refuse all such exports to nuclear or nuclear related end-users in India, regardless of the stated end-use of the item. [6]

Immediately after the announcement of the deal, the French Office of the Spokesperson of the Ministry of Foreign Affairs issued a statement, saying that France takes “positive note” of the important agreement between India and the US. [7] The French have taken a very proactive role since then. Along with the US and the UK, the French have taken lead in pleading the Indian case to the members of the NSG. Top French officials say open support from Germany and Italy will go a long way in getting rest of Europe on board. The two countries are "very important" for France to succeed in lobbying for India within the NSG. Besides this, senior Indian officials confirmed that France had taken up the issue of supporting India in the NSG with Beijing in its consultations as part of their bilateral strategic dialogue. Gourgault-Montagne, diplomatic advisor to the French President, met his Chinese counterpart in the second week of May and raised the issue of supporting India's case at the NSG meeting.[8] Since then, the French government has come out ,more strongly in support for the Indo-US deal with the French ambassador in New Delhi, Mr Dominique Girard saying that the “Indo-French nuclear cooperation was not predicated upon the successful passage of the India specific legislation in the US Congress.” [9]

Russia, India’s long time ally, and also an NSG member has sought exception for India in the global nuclear non-proliferation regime in view of its “impeccable and unblemished” record and welcomed its engagement with US in the field of civilian nuclear energy. The Chief of the Russian Federal Atomic Energy Agency, Alexander Rumyantsev, said that “there is a need for making exception for India in the global nuclear non-proliferation regime including the rules of Nuclear Suppliers Group (NSG) as New Delhi has an impeccable and unblemished non-proliferation record.”

Japan, a key member of the Group and one of the few countries that had expressed its reservations about the deal at the October ’05 meeting of the NSG, has recently expressed its support for the Indo-US deal at the NSG. Kisaburo Tokai, director general of the International Bureau of the Liberal Democratic Party (LDP), a key politician from Japan's ruling party has indicated that Tokyo will consider supporting the India-US nuclear deal if there is "adequate trust" between New Delhi and the international community over its nuclear programme. He was the head of a four-member delegation of MPs who were visiting India to study the country's growth story and prospects of better India-Japan relations. [10]

The recent visit of Manmohan Singh to Germany, definitely elicited a positive response to the Indian attempt to get German support on the Indo-US deal. It definitely seems that the Prime Ministerial visit has managed to assuage the ‘concerns’ on the German side. Making a more positive assessment of the Indo-US civil nuclear deal, Chancellor Angela Merkel said that Germany saw "great advantage" in the substance of the agreement and would adopt a "constructive" approach towards the issue when it comes up at the Nuclear Suppliers Group (NSG).[11] The German Foreign Minister Frank Walter Steinmeier corroborated her by saying that  Germany saw "great advantage in the deal as it will bring India closer to the International Atomic Energy Agency (IAEA)," [12]

Canadian Ministry of Foreign Affairs announced an agreement for expanded nuclear energy cooperation with India’s Ministry of External Affairs, which would allow Canadian firms to sell some services, dual use items and uranium to India. [13] The Canadian Foreign minister Pierre Pettigrew openly declared that it was India’s vote on Iran at the IAEA Board of Governors meeting that helped shape its decision on reviving nuclear cooperation with India. [14]

Apart from the above, Cyprus too has come out openly in support of the Indo-US deal. The Cyprus President, Tassos Papadopoulos has termed the cooperation as “helpful in addressing concerns related to global energy security and environmental protection.” [15]

Australia and some European and Scandinavian countries form the second group of countries within the NSG. Their support is very much necessary, but they still have some concerns which need to be addressed. Australia, the largest supplier of uranium in the world, has been supportive of the Indo-US nuclear deal but has long-standing policies that prevent it from selling uranium to any country that does not sign the NPT. This was brought out by the Australian Prime Minster John Howard during his visit to New Delhi during March 2006. As a follow up on his visit and in order to understand the contours of the Indo-US civil nuclear cooperation in a better manner, a high-level Australian official team led by David Ritchy, Deputy Secretary in Australian Foreign Ministry, and John Kalson, head of the country's nuclear department recently had detailed discussions with the Department of Atomic Energy Secretary Anil Kakodkar and officials from the External Affairs Ministry. [16] India is however hopeful that the US would be able to use its influence over Australia and persuade the John Howard administration to amend its policy.

As in Australia’s case, the main concern of the Scandinavian and other countries strongly commited to the NPT, like Sweden, Norway, Denmark, Finland and Ireland in endorsing the Indo-US civil nuclear agreement relates to the impact the deal will have on the non-proliferation regime. There is an internal debate going on in these countries as to whether the deal will strengthen or adversely impact the existing non-proliferation regime. The following statement by Richard Ekwall, an official at the Swedish Foreign Ministry's Department of Disarmament and Non-Proliferation brings out this debate very clearly. Mr. Ekwall said that, ‘Sweden hasn't made a decision. While the U.S.-India deal goes against the international framework over the past 35 years, Swedish policy-makers are also trying to take into account India's energy needs.” [17] The fact that these countries haven’t resolved their internal differences was very clear at the NSG Plenary where Norway, Sweden and Ireland were the only three countries which opposed the nuclear deal at the NSG.

India on its part did its bit to ensure that the deal gets a smooth passage in the NSG. The Indian Foreign secretary, Shyam Saran after his Washington trip hosted NSG ambassadors in a bid to assuage their concerns. The Minister of State for External Affairs, Anand Sharma visited Brazil and South Africa last month and discussed the nuclear issue with the respective governments. In the run-up the Rio Plenary, Ronen Sen, India's ambassador to the US, travelled non-stop in a bid to cover all 45 states to energize opinion in favour of the agreement. [18]

China, after its verbal tirade of the deal saying that it depicted American ‘double standards’ and that if the US made a "nuclear exception" for India other powers could do the same with their friends and weaken the global non-proliferation regime has recently welcomed Indo-US cooperation as a source of regional stability. It has however refrained from openly supporting or opposing the deal.

Shi Zhong Jun, the Chinese charge d'affaires in Vienna said that "We are studying the agreement. China and India are good neighbours and relations are developing very rapidly. We support India's development but at the same time China is against proliferation," [19] The current Chinese position is quite positive and though Beijing has been making critical noises it has given enough signals that if it comes to the crunch it will not endanger the deal. [20]

The Way Ahead
Though the Nuclear Suppliers Group is a voluntary grouping and lacks the machinery to enforce the decisions it takes, its decisions are still by and large strictly adhered to by the member nations. This is largely due to the weight that Washington throws to ensure the success of the Group. The rationale for the US doing so is not so much of concern here as against what Washington’s future strategy in the Group would be.

As the deliberations at the Rio Plenary brought out, it seems that the US would wait for the India-specific bill to be passed by both houses of the US Congress before taking up the matter in the NSG. Therefore, the mark-up scheduled for 27 and 28 June 2006, in both the houses of US Congress becomes very important in deciding the future of the Indo-US nuclear deal. The pattern of voting in the mark-up and the discussions therein would be a clear indicator of the internal differences that still exist within the Congress that are bound to hamper or facilitate the quick disposal of the nuclear deal in the Congress.

Endnotes
[1] ‘3 members still won’t back India on N-tech,’ The Times of India, 4 June, 2006 available at http://timesofindia.indiatimes.com/articleshow/1612604.cms
[2] Seema Sirohi, ‘The New Frisson,’ Outlook, 24 April, 2006, available at http://outlookindia.com/full.asp?fodname=20060424&fname=NSG+(F)&sid=1
[3] “The Nuclear Suppliers’ Group: Its Origins, Role, and Activities,” INFCIRC/539, IAEA, 13 September 1997, pg. 5.
[4] The Warsaw Guidelines came into force on 3 April 1992. they added a whole new section on Dual Use items to the NSG Guidelines commonly referred to as Part II Guidelines and also adopted ‘full-scope safeguards’ as opposed to ‘islanded’ or facility-specific safeguards for any transfer of nuclear or nuclear related materials that were mentioned in the Part I or II of the NSG Guidelines.
[5] “India back in favour”, The Statesman, 12 August 2005, available at http://www.thestatesman.net/page.arcview.php?clid=2&id=114347&usrsess=1
[6] Marshall, Pearl, ‘UK follows US in easing restrictions on India exports,’ Nucleonics Week, 18 August 2005, pg. 5.
[7] ‘Statement by the Ministry of Foreign Affairs Spokesperson’, Paris, 20 July 2005, available at www.diplomatie.gouv.fr/actu/article.gb.asp?ART=50294
[8] 'Ahead of NSG's Rio meet, India in key N-talks today,’ May 18, 2006, available at http://in.news.yahoo.com/060517/48/64bx2.html
[9] ‘France push at NSG, Indo-US deal or not,’ The Statesman, 13 June, 2006, available at http://www.thestatesman.net/page.arcview.php?clid=2&id=147382&usrsess=1
[10] ‘Japan may back nuke deal in NSG,’ May 07, 2006, available at http://timesofindia.indiatimes.com/articleshow/1519109.cms
[11] Ajay Kaul, ‘Germany's more positive about Indo-US nuclear deal ,’ available at
http://www.outlookindia.com/pti_news.asp?id=380187
[12] Ajay Kaul, ‘Germany's more positive about Indo-US nuclear deal ,’ available at
http://www.outlookindia.com/pti_news.asp?id=380187
[13] Hibbs, Mark, ‘Canadian firms pressing hard for Canada-India nuclear trade,’ Nucleonics Week, 29 September 2005, pg. 3.
[14] ‘Iran signals disappointment, but Canada has good news for India,’ September 28, 2005, available at
http://www.indianexpress.com/res/web/pIe/full_story.php?content_id=79012
[15] Amit Baruah , ‘Cyprus welcomes nuclear agreement,’ The Hindu, available at
http://www.thehindu.com/2006/04/10/stories/2006041007680100.htm
[16] ‘Nuke deal: High-level Australian team in India,’ May 5, available at http://www.outlookindia.com/pti_news.asp?id=382650
[17] ‘India Nuclear Accord May Face Opposition in U.S.-Backed Forum,’ available at
http://www.bloomberg.com/apps/news?pid=10000103&sid=aBgW6bOd_qhA&refer=us
[18] Seema Sirohi, ‘The New Frisson,’ Outlook, 24 April, 2006, available at http://outlookindia.com/full.asp?fodname=20060424&fname=NSG+(F)&sid=1
[19] Seema Sirohi, ‘The New Frisson,’ Outlook, 24 April, 2006, available at http://outlookindia.com/full.asp?fodname=20060424&fname=NSG+(F)&sid=1
[20] ‘India to brief 45 NSG countries on nuke deal,’, Indo-Asian News Service
New Delhi, May 21, 2006, available at
http://www.hindustantimes.com/onlineCDA/PFVersion.jsp?article=http://10.81.141.122/news/181_1702727,001301790001.htm
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