Don't lose sight of the hurdles in the last lap

Between Manmohan Singh's assurances in Parliament and the changes sought by Condoleezza Rice is a big gap that is unlikely to be addressed by the "reconciled" text of the proposed U.S. legislation on nuclear cooperation with India.

6 December 2006
The Hindu

Don't lose sight of the hurdles in the last lap

Siddharth Varadarajan

ON AUGUST 17, 2006, Prime Minister Manmohan Singh made a detailed statement in Parliament on the status of the India-U.S. nuclear deal. He was responding to the misgivings expressed by MPs cutting across party lines as well as members of the country's scientific and strategic communities. Dr. Singh had before him the texts of the proposed legislation both the Senate and House of Representatives intended to pass. He admitted that these texts breached the terms of the July 18, 2005, and March 2, 2006, joint India-U.S. statements in a variety of ways, often substantially so. More importantly, he signalled his Government's intention to walk away from the deal if the U.S. offered India something less than full civil nuclear cooperation on terms more onerous than what the two sides had already agreed upon.

Since then, the full Senate has approved its version of the Bill, but not before adding more objectionable conditions. The Senate and House versions will now be reconciled by a conference of select legislators before being put to a fresh "up or down" vote with no further amendments allowed. The conferees have already started their work. As matters stand, HR 5682 — as amended in the Conference Report — will be voted upon by Congress on either December 7 or 8. Its passage is a foregone conclusion. Less certain, of course, is whether the legislation will stay within the red lines drawn by the Prime Minister.

The letter written last week by U.S. Secretary of State Condoleezza Rice to Senate Foreign Relations Committee head Richard Lugar has led to some excitement in a section of the media. In that letter, Dr. Rice has sought specific changes in nine clauses of the proposed law, besides urging a redrafting of language on the requirement for annual certification. But even if the changes she suggests are all incorporated, several vital assurances made by Dr. Singh will remain unfulfilled. In other words, even in elaborating the White House's maximalist position, Dr. Rice chose deliberately not to push for changes India says it needs. The idea clearly is to present New Delhi with a fait accompli. As well as an implicit warning that if it chooses to reject this "sweetheart deal" for which the administration has "battled hard," bilateral relations will go into a tailspin.

While the Bush administration is urging the adoption of changes that seek partially to address Indian concerns on issues like Iran and the circumstances under which the agreement can be terminated, several key problems remain unresolved.

1. Not full cooperation

In Parliament, the Prime Minister had stated: "We seek the removal of restrictions on all aspects of cooperation and technology transfers pertaining to civil nuclear energy — ranging from nuclear fuel, nuclear reactors, to re-processing spent fuel, i.e. all aspects of a complete nuclear fuel cycle... We will not agree to any dilution... "

In her letter, Dr. Rice proposes only that an explicit bar on the sale of reprocessing equipment be dropped from the Senate version of the Bill. At the same time, she confirms that it will remain U.S. policy not to sell such equipment to India. In other words, India is still to be denied full nuclear cooperation, but by executive decision alone rather than legislative fiat. Moreover, she has made no attempt to clarify the issue of reprocessing spent fuel. Since the relevant sub-clause of Section 123 of the Atomic Energy Act is not being amended, the existing prohibition on reprocessing safeguarded spent fuel produced by U.S.-supplied reactors or fuel will stay. Thus, India will not be able to reprocess that spent fuel except with the prior consent of the U.S. In the case of Tarapur, the DAE has been forced to store vast pools of spent fuel since the U.S. will neither allow India to reprocess it nor will it agree to take the waste back.

The American reluctance to change its policy on enrichment and reprocessing makes it highly unlikely that the Nuclear Suppliers Group will amend its no nuclear exports rule for India to allow the sale of these technologies.

2. No fuel supply guarantees

India agreed to place its civilian reactors under IAEA safeguards in perpetuity in exchange for assurances that those reactors would be guaranteed fuel supplies over their lifetime. In August, the Prime Minister reiterated this point. "[It] is worth emphasizing that the March 2006 Separation Plan provides for an India Specific Safeguards Agreement with the IAEA, with assurances of uninterrupted supply of fuel to reactors that would be placed under IAEA safeguards together with India's right to take corrective measures in the event fuel supplies are interrupted."

The possibility of such assurances was flatly rejected by Dr. Rice in her testimony before the House Committee on International Relations on April 5, 2006, and thus finds no legislative endorsement in either version of the Bill. She dismissed the March 2006 Separation Plan as "an Indian document that contains India's views on the fuel assurances it seeks" (original emphasis). She acknowledged the U.S. had held "exploratory" discussions with India on the subject but added a killer caveat. "Our negotiators were very clear that while the U.S. would be willing to provide reasonable fuel assurances designed to counter market imperfections, fuel assurances could not be a `condition' to any of India's commitments under the [separation] plan, including, in particular, safeguards in perpetuity."

As if the lack of fuel assurances is not violation enough of the bilateral understanding reached by India and the U.S. in March, the proposed law enjoins the administration not to help, and even hinder, the Indian quest for fuel in the event of a disruption of supply.

In her letter to Senator Lugar, Dr. Rice merely seeks to soften the language of the bill. She is also silent on the Obama amendment (Section 114), which aims to block the possibility of India stockpiling uranium as insurance against future supply disruptions. In short, as far as the Prime Minister's assurances on uninterrupted fuel supplies in exchange for `in perpetuity' safeguards is concerned, it is clear the U.S. side has no intention of keeping its side of the bargain.

These conditions — as well as the U.S. refusal to countenance an exit clause in India's safeguards agreement with the IAEA — will lead to major problems for the country both at the IAEA Board of Governors (which must endorse the India-specific safeguards agreement) as well as the NSG.

3. U.S. verification measures

In Parliament, the Prime Minister opposed Section 107 (b)(3) of the Senate bill on end-use monitoring by the U.S. He insisted that India "will not accept any verification measures regarding our safeguarded nuclear facilities beyond those contained in an India-Specific Safeguards Agreement with the IAEA... Therefore, there is no question of accepting other verification measures or third country inspectors to visit our nuclear facilities, outside the framework of the India specific safeguards agreement."

On this crucial issue, Dr. Rice's letter offers only a cosmetic solution. She asks Senator Lugar to change the offending clause but suggests two ways in which to reintroduce the same measure through the backdoor. It could either be modified "so that it merely restates the Atomic Energy Act requirement for continuity of safeguards."

Or it could be dropped, because "fall-back safeguards and end-use monitoring... are currently subject to negotiations" and there is no reason to "limit [the administration's] options on how best to meet an existing statutory requirement." Either way, bilateral verification measures — in addition to IAEA safeguards — are very much still in the works. Dr. Rice only wants its specifics to be designed by the executive rather than legislative branch.

4. Unwanted cooperation

While the proposed U.S. law denies India "full cooperation" in civil nuclear energy, it thrusts the same in areas where the country is not looking for a helping hand. A `stealth amendment' in the Senate version seeks to impose a "Scientific Cooperative Threat-Reduction Program" on India. The measure is a thinly disguised attempt to learn more about the inner workings of the Indian nuclear establishment.

In her letter, Dr. Rice merely suggests the programme's name be changed to "Scientific Non-proliferation Cooperation Program." But the thrust of the initiative would continue to be greater interaction at all levels with Indian nuclear scientists, especially those with some knowledge or experience of `non-proliferation' (i.e. weapons-related) issues.

One final area where problems remain is sequencing. Dr. Rice has suggested the Senate version scrap its patently unreasonable demand that Indian facilities come under safeguards before the U.S. (and by extension, the NSG) ends the existing embargo on nuclear sales. According to her, the President should be able to waive U.S. restrictions when India fully negotiates its safeguards agreement and places the same before the IAEA Board.

However, there are two sequencing issues where ambiguity remains. First, it is not clear when the NSG guidelines will be changed. Secondly, Indian negotiators believe the safeguards agreement with the IAEA should ideally be finalised after the U.S.-India Nuclear Cooperation Agreement (the `123 Agreement') is fully negotiated.

If the Senate-House conferees fail to act on Dr. Rice's rather tepid suggestions, especially as far as the sequencing, enrichment and reprocessing, verification and termination issues are concerned, the Government will come under pressure to reject the deal. But even if her suggestions are incorporated, it is be difficult to see how the deal will pass the gauntlet of strict conditions the Prime Minister himself laid down in Parliament.