Saturday, September 6, 2008

Nuclear Suppliers Group approves India deal

A breakthrough comes in Vienna after three days of tough negotiations

[Updated Sunday 09/07/08 with summaries of coverage from major U.S. newspapers. See below]

The BBC reports the group of nations which regulates the global nuclear trade has approved a US proposal to lift restrictions on selling nuclear technology to India. The controversial deal now needs to be ratified by the US Congress.

The approval came after India pledged to keep its nuclear non-proliferation commitments and to uphold a voluntary moratorium on testing atomic weapons.

It took the 45-nation Nuclear Suppliers Group (NSG) nearly three days of protracted negotiations in Vienna to reach agreement. Austria, New Zealand, and Ireland, were the last three countries holding out on approval due to strong reservations about granting a waiver to India because it has not signed the Nuclear Proliferation Treaty. The breakthrough reportedly came after US President George W Bush lobbied members of the NSG.

Austria, New Zealand and Ireland lifted their objection to the US proposal after India made a formal pledge to not share sensitive nuclear technology or material and to uphold its moratorium on testing nuclear weapons. The technologies in question include uranium enrichment and spent nuclear fuel reprocessing.

US and Indian officials hailed the agreement as one that would help limit the unregulated spread of nuclear technology and material while allowing India to meet its energy demands with a "clean and reliable" supply. Under the terms of the deal, India would open 14 civilian nuclear facilities to inspection, but its nuclear weapons sites would remain off-limits.

Indian Prime Minister Manmohan Singh said the NSG decision "marks the end of India's decades-long isolation from the nuclear mainstream and of the technology denial regime".

"This is a critically important moment for meeting the energy needs in India, and indeed dealing with the global need for clean and reliable energy supplies," said John Rood, acting US undersecretary of state for arms control.

Critics weigh in

Critics of the deal say it creates a dangerous precedent. They claim it will allow India to expand its nuclear power industry without requiring it to sign the Non-Proliferation Treaty. They also say the deal would undermine the arguments for isolating Iran over its nuclear program and be a disaster for international non-proliferation efforts.

Supporters and critics of the deal will find there is a lot of useful information, including the NSG's final text, at the Arms Control Association website. At the blog Arms Control Wonk, analyst Jeffrey Lewis asks what the U.S. had to give up to gain China's cooperation and support for the deal?

The current deal is the center piece of US efforts to bolster ties with India. Bush administration must now push it through Congress before legislators break for the November elections.

Full extent of the waiver noted

Siddharth Varadarajan, Deputy Editor of the Hindu, reports direct from Vienna,

The waiver allows India to enter into full civil nuclear cooperation with members of the NSG. A major new change is a reference to the External Affairs minister's statement yesterday reiterating India's nonproliferation commitments, including to its unilateral, voluntary moratorium.

There are no post-conditions providing for automatic termination of supply if some member state feels India is not living up to its non-proliferation commitments. The NSG always has the right to consult and convene in case members feel this has happened but a decision to cut off supplies will have to be adopted by consensus. There are no separate restrictions on enrichment and reprocessing technology exports.

More updates from Siddarth here.

Congressional approval is the next challenge

Bloomberg wire service has additional details. It reported that India has won the right to buy nuclear fuel, technologies, and equipment after the NSG lifted a three-decade ban on exports to the country.

"This constitutes a major landmark in our quest for energy security," Indian Foreign Minister Pranab Mukherjee said in televised comments. "This decision will open a new chapter in India's cooperation with other countries in the peaceful use of nuclear energy."

"It's really a very big step forward for the nonproliferation framework," U.S. Secretary of State Condoleezza Rice told reporters during a trip to Tunisia and Algeria. Rice said she spoke to Chinese officials this morning as well as negotiators from Ireland and Austria, the last holdout at the three-day meeting in Vienna.

The waiver means that companies including France's Areva, Russia's Rosatom, and Japan's Toshiba (Westinghouse) will be able to export nuclear equipment to India. General Electric Co. and other companies in the U.S. will have to wait until Congress ratifies the NSG deal.

Bloomberg reported that General Electric, the world's biggest maker of energy- generation equipment, said Aug. 25 that it may lose contracts in India to French, Russian and Japanese rivals if Congress doesn't ratify a U.S.-India nuclear deal soon after the agreement wins approval from the Suppliers Group. Rice said the U.S. has talked to India about the potential competitive disadvantage. According to Bloomberg she said,

"I think they recognize and appreciate American leadership on this issue. Because of that I think we'll have ways to talk them about not disadvantaging American companies."

Congress, starts its next session on Sept. 8, but it may not be able to approve the U.S.-India nuclear cooperation agreement. House Foreign Affiars Committee Chairman Howard Berman, (D-Calif), who opposes the deal, reportedly told Rice he will work to block it. Approval may have to wait until a new Congress, shaped by the November election, meets in 2009.

Economic impact will include private sector investment

The Economic Times of India reports reaction from India's business community. India's top corporations feel that the country can now attract over $40 billion in foreign investment over the next 10-15 years as the result of private sector entry into India's nuclear power generation.

"The go-ahead to the nuclear deal will signal the building of scores of nuclear plants in India on assured fuel supply," said Amit Mitra, the secretary general of the Federation of Indian Chambers of Commerce and Industry.

Today's development is a major confidence-building move for the international community to engage with India especially in high technology trade," said Chandrajit Banerjee, director general of the Confederation of Indian Industry.

"It will provide opportunity for Indian manufacturers to supply spares and components to the global manufacturers of nuclear power plants besides providing business opportunities for Indian power plant construction companies."

An overwhelming 85 percent of the 300 chief executives polled held the view that modifications to India's Atomic Energy Act of 1962 could help the country to generate some 20,000 MWe by 2020.

The modification is necessary to allow entry of the private sector in nuclear power generation. The act and the decades of India's nuclear isolation had resulted in capping the country's nuclear power generation capacities to an extent of just 3,900 MWe in over 60 years of independence.

As a result, out of a total installed generation capacity of about 145,000 MW of electricity, 70 is accounted for through thermal fuel and 20 percent by hydro, with nuclear energy contributing to just two percent. The remaining capacities come by tapping the various sources of non-conventional energy such as solar, wind, biomass and tidal waves.

U.S. Defense industries may also benefit

At WhirledView, Cheryl Rofer has these observations about the nuclear deal

The Indian government has proved extremely skillful in negotiating throughout this long saga. Although one of the objectives has been touted as bringing India into the nonproliferation regime, every attempt in that direction has been blunted by that Indian skill. We can hope that a new American administration and Congress would now use the agreement in that direction. Congress must still grant its approval, and it is not clear whether that can happen during the current session.

If the waiver opens nuclear trade to all nations and Congress does not approve, the United States will be left out of the great Indian nuclear rush. However, because the US-India deal also includes conventional military assistance, we can count on the defense lobby to help India (and itself) out.

Late breaking news media coverage in the U.S.

NYT - The New York Times, in late coverage available Saturday on the newspaper's web site, also provided an estimate of the economic benefits of the nuclear deal with India.

India plans to import at least eight 1,000 megawatt nuclear reactors by 2012, according to the US State Department. Even if the United States wins bids for just two of these reactors, the deals would create 3,000 to 5,000 direct jobs and 10,000 to 15,000 indirect jobs in the United States, the State Department has said.

The New York Times follows up on Sunday with a second story. In addition to details about the deal itself, the Times offers readers a review of the congressional landscape and the prospects for approval. The Times, like everyone else, reads the calendar and asks whether there is enough time for Congress to act. More ominously, for supporters, the Times singles out the Democrats in the House as the primary barrier to approval.

Representative Howard L. Berman, a California Democrat who is chairman of the House Foreign Affairs Committee, said in an interview on Saturday that he would not consider any expedited timetable for considering the agreement until the Bush administration provides him with more information about the negotiations in Vienna.

A potentially more significant hurdle for the White House is that a Democratic Congress might not want to give President Bush a significant victory during his waning days in office. White House officials have long hoped that the deal could be part of Mr. Bush’s foreign policy legacy.

There is some measure of political reality in the larger picture. The Times points out that a lot is riding on the deal, and the House did previously indicate its support for India's nuclear deal even if the majority was with the republicans at the time.

Representative Ellen O. Tauscher, a California Democrat, said by telephone [to the NYT] on Saturday that the nuclear agreement was a “very, very bad deal,” but said that since the 2006 vote indicated that a large part of the House of Representatives was inclined to approve the pact and that it would be difficult to scuttle the deal at this point.

WSJ - The Wall Street Journal was alone among the U.S. mainstream media to have complete coverage of the negotiations and response to the completion of the deal. In coverage published on the newspaper's website on Saturday 9/6 the WSJ reported that the Bush Administration is worried there won't be enough time for Congress to approve the deal.

U.S. lawmakers have indicated that Congress might not have enough time to fully vet and pass the India nuclear agreement before the current legislative session ends this month. This holds out the possibility that the nuclear accord could be passed on to a new U.S. administration and Congress next year.

WaPo - The Washington Post finally weighs in on Sunday with coverage of the NSG's historic meeting that approved India's nuclear deal. The Post focuses on the political significance and economic value of the deal. Also, there is a great photo slide show on the Post's web site of the principals involved in the negotiations.

Supporters called the deal a foreign policy triumph that would position India as a strategic counter to China's rising power. The deal will open the door for American companies to build reactors in and supply fuel to India, generating business worth more than $100 billion.

The Post's coverage confirms what was reported on this blog late last Friday, and that is that 'Elvis,' aka, China, left the building in Vienna where the meeting was being held to send a signal of disapproval without having to cast a "no" vote.
The Washington Post's coverage is also notable for citing some of the news media cover taking place in India.

Finally, it is worth noting, like the old adage about Operas and fat ladies singing, that critics of the deal feel there is still debate about it to be had in the future. Congress will surely be the center of these debates in the next few weeks. Advocates and critics will try to get the short attention span of both the House and Senate who are trying to get out of Washington by the end of the month for the November elections.

The lead critic in the U.S., Daryl G. Kimball, who has aligned himself with Rep Howard Berman (D-Calif), the chairman of the House Foreign Affairs Committee, told the Washington Post it ain't over until the fat lady sings. She'll come on stage this week. Here's the pull quote from the newspaper's coverage.

"We were hoping for far clearer and unambiguous language on nuclear testing. Instead, it is mushy. That is a grave mistake, and there are going to be far-reaching consequences," Daryl G. Kimball, executive director of the Arms Control Association, said in a telephone interview from Washington. "Because the negotiations were tough and the real differences not fully resolved, there will likely be serious differences . . . about the interpretations of what the guidelines allow and don't allow and what the consequences of any violation of India's nonproliferation and disarmament commitments would be."

Finally, the Post lists links to its prior recent coverage of India's nuclear deal. It will save time for those of you who might have missed coverage by the newspaper of Rep. Berman's hardball pitch with a "secret letter" from the State Department that nearly sank the entire process. Really.

* * *

Separately, Secretary of State
Condoleezza Rice picked up a a hockey stick and with a wicked slap shot said that a similar nuclear cooperation pact Washington was pursing with Russia would not pass during President Bush's second term. Rice said the White House would formally announce it is pulling out of support for the deal, given Moscow's military occupation of Georgia. "The time isn't right for the Russia deal," Rice said.

& & &

  • A complete chronology of India's nuclear history and the run up to the NSG decision is available from the Times of India.
  • For details on the run up since Friday to the agreement see prior coverage on this blog.
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Flagg707 said...

Thanks for your ongoing coverage, Dan. Here's hoping that taking this chance on India pays off down the road both for civilian nuclear power and for non-proliferation concerns.

Carl said...

This is a great service to look into this huge undertaking. It appeared several days ago that the negotiations were doomed, but they pushed it through to completion. For nuclear, this pact is HUGE. I've always been a fan of India's three stage closed fuel cycle design using fast reactors and thorium.
Now may be there can be some honest debate on these timely issues.

Dr. Amit K. Maitra said...

It has been refreshing to read the U.S. foreign policy establishment’s recent statements, which urged China, Ireland, Austria, Switzerland, the Netherlands, and New Zealand to support the U.S.-India Nuclear Deal. The U.S.-India Nuclear Deal is one of the most notable instances of a foreign policy initiative based on factual, rational, and pragmatic geopolitical considerations. President Bush and Secretary of State Condoleezza Rice single-mindedly pursued this deal and refused to be influenced by the arguments put forth by emotional hysterics whose views are not only far removed from reality, but also lack strategic insight.

The deal has been developed with careful consideration given to the history, political tradition, and the energy-environment-political policy choices of the Indian leadership. In recent days, President Bush’s foreign policy advisors have repeatedly asserted that the biggest threats to the international anti-proliferation regime have actually come from NPT signatories—Iraq, Iran, North Korea, and Libya—in collaboration with another non-signatory, Pakistan. Those opposing the U.S.-India Nuclear Deal often write as though India is actively engaged in proliferating nuclear technology by collaborating with rogue states. For example, articles such as “Time to Decide,” the blather published in the print edition of the Economist, August 28, 2008 and/or “Put the Brakes on India’s Nukes” by Kingston Reif of the Center for Arms Control and Non-Proliferation, published August 30, 2008, are not only short-sighted, but are also based on faulty logic and erroneous and misleading socio-political-economic rationale. Such articles often deliberately and intentionally portray India as a country that is not honorable and trustworthy as a strategic partner.

The differentiating factor between these journalists and so-called policy experts on one hand and Bush-Rice on the other hand is that the latter are strategic thinkers. They can take the high road, look far into the future, and bring dissenting partners into their fold to create a world order that is stable, sustainable, and harmonious. That is the mark of their leadership. American foreign policy advisors’ oft quoted point, “Having India as a member of the weapons club strengthens diplomatic opposition to Iran and other miscreants. Refusing to recognize her as such keeps her out in the cold, and does nothing to address the Irans of the world“ is right on the mark.

By far, the U.S.-India Nuclear Deal is one of the best orchestrated foreign policy initiatives of our time. I join the rest of India and the world in applauding President Bush and Secretary Rice for their honest, straightforward, and far-sighted political-economic-strategic insight. I also applaud Indian Prime Minister Manmohan Singh, Congress Chairperson Sonya Gandhi, and Foreign Minister Pranab Mukherjee for their fundamental belief that this deal is good for India and for their steadfastness in seeing the deal through, despite serious opposition from leftist parties. The different between the members of Indian leftist parties and Prime Minister Singh is that the former always talk about doing things to improve the condition of the country, whereas Manmohan Singh and his government actually do things that promise peace, prosperity, jobs, and security for Indians and Americans alike. I offer them my heartiest congratulations for a job well done.

The work is not yet done. The deal, as Dan Yurman stated in the above article, has to be approved by the U.S. Congress before it is operationalized. Once it is operationalized, there is a need to increase the awareness of its beneficial aspects among the Indian masses. That is a formidable challenge. Hopefully, the new administrations in both countries along with their industry partners will again do a thorough and convincing job.