India nuclear deal falls apart, again

Nobody is surprised the two countries did not come to terms

Negotiations to produce a landmark deal for cooperation between the US and India over nuclear energy technologies have fallen apart for a second and perhaps final time. According to the Hindustan Times, Nicholas Burns, the US lead negotiator, highlighted two issues - US insistence that India not reprocess nuclear fuel to recover plutonium and that India not conduct any further underground nuclear weapons tests. Under US law no nuclear material can be sold or transferred to a country that has conducted a nuclear weapons test and has not signed the Nuclear Non-proliferation Treaty. India checks the boxes on both counts.

India says it must have terms in the agreement that allow it to extract plutonium from reactor fuel and the flexibility to test another nuclear device without sanctions that cut it off from nuclear fuel and technology exchanges with the US. For its part India has taken a hard line saying that if Europe (Euratom) and Japan can reprocess fuel it should have the same rights. Indian government officials, speaking to wire services, said that reprocessing fuel is needed to support its fast-breeder program and to develop reactors based on thorium. India has more than 30% of the global reserves of the metal.

At the G8 summit taking place in Berlin, in a bid to break the logjam over the civil nuclear deal with the US, India offered to set up a dedicated safeguarded facility for reprocessing of spent fuel. India's Prime Minister Manmohan Singh met briefly with US president George W Bush to promote the idea. India National Security Adviser MK Narayanan and his US counterpart Stephen Hadley met to discuss the proposal to establish a separate facility in India to reprocess of spent nuclear fuel. This looks like a classic political fig leaf covering up the fact that India would still get to reprocess fuel which is contrary to US objectives for seeking the deal in the first place. Nothing was announced as a result of the meetings despite the usual diplomatic platitudes. A G8 declaration on non-proliferation called upon India to do more to make itself eligible for multilateral help with its civilian nuclear program.

India's loss is China's gain

Significantly, for India, an Australian government official said that Australia will not sell uranium to India until it signs the treaty. Australian Prime Minister John Howard effectively ruled out selling uranium to India as he headed for New Delhi on June 4th. India wants to expand its nuclear power industry but Howard indicated there would be no uranium deal as the Asian country had not signed the United Nations treaty on the non-proliferation of nuclear weapons. "We don't have any plan to change our current policy," he told reporters ahead of his departure.

Howard said a pact signed by US President George W Bush and Indian Prime Minister Manmohan Singh on the sharing of nuclear technology would not change Australia's stance. "We're certainly not going to suddenly change our policy just because the Indians and Americans have reached an agreement," he said.

Australia, which has around 40 per cent of the world's known uranium deposits, does not sell uranium to countries which are not signatories to the Non-Proliferation Treaty. Uranium mining companies in Australia have been pressuring Prime Minister John Howard to shift the government's policy and allow yellowcake to be exported to India. This latest announcement slams the door shut, but not in terms of selling uranium to other countries.

Missed opportunities and a closing window of time

The failure of the latest round of negotiations because of India's hard-line lobbying against US conditions for the deal, means China gets open invitation to buy uranium from Australia now that India is locked out out of that market. China is eligible to buy uranium from Australia. It signed the Nuclear Nonproliferation Treaty in 1992. With a clearer path to acquire uranium for nuclear fuel, China announced it is opening its nuclear industry to foreign investment. Clearly, India's loss will be an opportunity for China's gain.

Critics of the India deal point out the US has missed several opportunities to strengthen the Nuclear Nonproliferation Treaty. Writing in the Washington Post in May, Sharon Squassoni of the Carnegie Endowment said the India nuclear establishment was given an inch in the deal and took a mile.

An Indian agreement to stop production of fissile material for nuclear weapons would have strengthened the nonproliferation regime and U.S. leadership, but U.S. officials didn't press hard for that. An Indian agreement to place all of its electricity-producing reactors under international inspections would have made the Indian plan to separate its military from its civilian nuclear programs meaningful, but the U.S. retreated from that. The next phase of Indian nuclear development the construction of fast breeder reactors could take place entirely outside of international safeguards.

The window of opportunity for a deal will close in September as the US Congress races to finish funding bills and Bush's lame duck status becomes even more apparent with escalation of the 2008 presidential campaign.

The side discussions at the G8 Summit over India's nuclear ambitions were dwarfed by controversy over Iran's defiance of UN Security Council sanctions demanding it stop uranium enrichment. If India and the US are going to cut a deal, they need to realize they are on their own. As the famous comic strip character Pogo once said, "we have met the enemy and they are us." No dates have been set for the next round of negotiations.

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