17 February 2007

India to hand over draft 123 agreement to U.S. next week

Given the stony silence that has greeted Indian queries and requests for clarification on certain provisions of the Hyde Act, major differences remain on testing, fuel guarantees and reprocessing rights. The Indian side is preparing itself for protracted, difficult and "messy" negotiations on the final phase of the Indo-U.S. nuclear deal.

17 February 2007
The Hindu

Draft 123 text to be given to U.S.

Siddharth Varadarajan

New Delhi: With major differences persisting on lifetime fuel guarantees for safeguarded reactors, the reprocessing of spent fuel and a reference to a future Indian nuclear test as a condition for the United States to cut off nuclear cooperation, India has drafted its own 14-clause version of the crucial bilateral nuclear agreement with the U.S. which will be handed over to American officials in Washington next Monday by Foreign Secretary Shivshankar Menon.

The draft peaceful nuclear cooperation agreement — known as the `123 agreement' after the numbered clause of the U.S. Atomic Energy Act from which it is derived — has emerged as the latest battleground over the terms and conditions under which the July 2005 India-U.S. nuclear agreement will be implemented.

Responding to criticisms about certain provisions of the Henry Hyde Act passed last December by the U.S. Congress, Prime Minister Manmohan Singh told Parliament that the Indian Government would be bound only by the bilateral agreement it signed with the U.S. and not by domestic American laws authorising nuclear commerce with India. He acknowledged that there were areas which "cause us concern," but said clarifications had been sought from the United States.

With negotiations over the bilateral agreement now slipping into high gear, however, the Indian side is finding its American interlocutors less than forthcoming.

Saran's visit

Highly placed sources told The Hindu that the visit the Prime Minister's special envoy, Shyam Saran, paid to Washington in January did not yield the expected clarifications and that major conceptual differences remained.

One official wryly noted that all the U.S. side has been prepared to grant so far is the correction of a typo in the Hyde Act. In the definitions section as passed, a nuclear detonation was defined in terms of the equivalent energy released by "one point of TNT." On India's insistence, this was corrected subsequently to "one pound". But other Indian queries on more substantive issues have drawn a stony silence.

Providing an account of the talks held so far on the 123 agreement, the sources said the first U.S. draft was handed over to India in March 2006. India provided its response in July, following which another U.S. draft was handed over in August. India then suggested that the negotiations be put on hold till the U.S. Congress actually enacted the proposed waiver legislation placed before it. But on American insistence, a discussion on "concepts" rather than "clauses" was held last November.

Once the Indian draft is handed over and U.S. officials have had time to study it, a team of American negotiators will travel to Delhi to take the process forward some time in the next two months.

With the Hyde Act full of provisions running counter to the letter and spirit of the July 2005 agreement, the Indian Government sought and obtained a statement by President George W. Bush on December 19 that he would not be bound by some of the law's provisions. Notwithstanding this assurance, U.S. officials are now insisting that the 123 agreement cannot deviate from the language prescribed as far as prohibiting any nuclear detonation by India is concerned. Nor are they prepared to provide India fuel guarantees over and above reactor "operating requirements" as specified by the Obama amendment in the Hyde Act.

Continuation of story on inside page

Senior officials told The Hindu that India was prepared to undertake never to detonate a nuclear weapon using U.S.-supplied materials or technology but could not accept a general reference to its unilateral, voluntary moratorium in a bilateral agreement. The American proposal to replace an explicit reference to a nuclear test with language terminating cooperation if an event occurs that "jeopardises supreme U.S. national interests" is being seen by Indian officials as something even more dangerous. "Tomorrow, somebody in Washington may say the arrival in an Indian port of a tanker carrying Iranian LNG jeopardises U.S. national interests," said one official. "That is why none of these references are acceptable to us".

On nuclear fuel assurances, India wants the 123 agreement to explicitly provide a legal guarantee of uninterrupted supplies for up to 40 years, or the operating life of a reactor, rather than one extra "core" that the U.S. side says would be consistent with the Hyde Act.

"We are insisting that the triangular arrangement we reached in March 2006 be respected, in which India agreed to place its reactors under safeguards in perpetuity in exchange for lifetime fuel guarantees," said an official. "In March, they agreed these two assurances were interlocking — that if fuel supplies are denied, we reserve the right to take measures in our national interest. But now they want to walk away."

On the right to reprocess spent fuel, the U.S. side earlier suggested it might be willing to build into the 123 agreement the explicit permissions mandated by the Atomic Energy Act. But indications from Washington now are that U.S. negotiators want to leave the reprocessing issue to a subsequent agreement, even though the Hyde Act does not explicitly prohibit the granting of reprocessing rights to India. This, say Indian officials, is a strategy fraught with danger given the experience of Tarapur, where India has been unable to reprocess to the U.S. the spent fuel that has accumulated over the lifetime of the U.S.-supplied reactor.

The Indian side is puzzled by the American refusal to clarify so far the reference made to "42 USC 2153" in the Hyde Act whenever Article 123 of the Atomic Energy Act is mentioned. In the printed version of the AEA, there are several U.S. code numbers listed after Article 123 but 2153 does not figure. The Indian side wanted to know whether this was also a typographical error. But so far no answer has been provided.

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