The U.S.-India Nuclear Deal: Haste makes $$

In July of 2005, the United States and India announced their cooperative agreement on nuclear proliferation. Policy analysts see this development as a realist move by the United States in balancing an increasingly competitive China. As a legal matter, this agreement raises compelling issues about the United States’ compliance with the 1968 Nuclear Non-Proliferation Treaty (NPT) and India’s status as a legally “unrecognized” nuclear weapons state. Interestingly, by the terms of the NPT and pursuant to statutory law of the United States, “non-nuclear weapon states” as recipients of nuclear transfers need not be parties to the NPT or other arms control agreements. Under U.S. law, pursuant to the Atomic Energy Act of 1954, the main requirement for allowing nuclear exports is that the recipient state brings all its peaceful nuclear activities under International Atomic Energy Agency (IAEA) safeguards. Otherwise known as full-scope safeguards (FSS), any non-nuclear weapons state that wishes to have a nuclear energy program must allow for inspections of all its nuclear facilities. India is technically a non-nuclear weapons state given that it tested its first nuclear explosive after 1967, the cut-off year according to the NPT.

The US-India agreement must be read in the context of the yet-to-be-resolved conflict between India and its bitter rival, Pakistan. In the context of the current agreement, being that Pakistan is likewise a non-signatory of any international non-proliferation treaties and that China is widely recognized for having furthered proliferation in Pakistan, there is no reason to believe that a similar cooperative agreement could not emerge between Pakistan and China to balance the U.S-India alignment. Alternatively, even if such a formal agreement were implausible, the very existence of a U.S.-India partnership gives Pakistan a substantial incentive to surreptitiously pursue illicit proliferation measures to assuage its security concerns. This would certainly not be uncharacteristic of Pakistani behavior in the realm of nuclear arms given that A.Q. Khan was infamously enabled by the Pakistani government in engineering his illicit nuclear arms smuggling ring.

On July 27, 2006, the United States House of Representatives supported the U.S.-India civil nuclear cooperation agreement by a majority of 359 to 68. On November 16, 2006 the Senate passed the bill with several amendments but the overall effect of the act is to amend the aforementioned 1954 Atomic Energy Act to exempt India from applying full-scope safeguards (FSS) on all its nuclear facilities. The significant bi-partisan support this bill has enjoyed can, in part, be explained by the prospect that the contemplated partnership is slated to generate $100 billion in energy sales for U.S. companies.

 

At this juncture it would be beneficial to clarify the legal standing of the proposed agreement. The agreement is not a treaty but rather a “strategic partnership”. In order for the terms to be carried out the U.S. must first amend the 1954 Atomic Energy Act excepting India from full-scope safeguard restrictions. This has virtually been accomplished as the bill awaits the President’s signature. Once amended, the United States and India would enter into what is known as a “123 cooperative agreement” under Section 123 of the Atomic Energy Act which would embody the actual terms of the deal. Even after domestic legislation has been amended, the Nuclear Suppliers Group (NSG), a forty-five state consortium dedicated to the cessation of the spread of nuclear weapons would have to, by consensus, except India from its policy that disapproves of transferring atomic fuel and other nuclear technologies to states that are not party to the NPT or other non-proliferation instruments and have not adopted full-scope safeguards. Currently India is engaged in a vigorous campaign designed to coax the NSG into a favorable outcome by asking citizens of Indian origin of the various NSG states to lobby their government in support of the deal. In the same breath, on January 11^th, India refused to agree to a nuclear test-ban as a part of agreement. In what is essentially an exchange of illusory promises that has marginal standing as compared to a treaty under International Law, if not a nuclear test-ban, what are the legal obligations binding India?

 

According to Esther Pan of the Council on Foreign Relations, the agreement consists of the following terms:

· India agrees to allow inspectors from the International Atomic Energy Association (IAEA), the United Nations’ nuclear watchdog group, access to its civilian nuclear program. But India would decide which of its many nuclear facilities to classify as civilian. Teresita Schaffer, director of the South Asia program at the Center for Strategic and International Studies, says these will now include domestically built plants, which India has not been willing to safeguard before now. Military facilities—and stockpiles of nuclear fuel that India has produced up to now—will be exempt from inspections or safeguards.

· India commits to signing an Additional Protocol—which allows more intrusive IAEA inspections—of its civilian facilities.

· India agrees to continue its unilateral moratorium on nuclear weapons testing. (It is worth mentioning that under international law this is a quasi-legal obligation but leans more towards a voluntary policy choice rather than conduct arising out of a sense of duty. In other words, remaining states, including the U.S. would have little success under international law supporting a claim that India would breach its international legal obligations by testing nuclear weapons).

· India commits to strengthening the security of its nuclear arsenals.

· India works toward negotiating a Fissile Material Cutoff Treaty (FMCT) with the United States banning the production of fissile material for weapons purposes. India agrees to prevent the spread of enrichment and reprocessing technologies to states that don’t possess them and to support international nonproliferation efforts.

· U.S. companies will be allowed to build nuclear reactors in India and provide nuclear fuel for its civilian energy program.

In order to understand the irony of the U.S. proposed nuclear partnership with India, it is important to recall that the Nuclear Suppliers Group (NSG) must, by consensus, approve the deal thereby excepting India from its policy requiring recipient states to apply full-scope IAEA safeguards, i.e. oversight on all its nuclear activities. The NSG was created following the “peaceful nuclear explosion” conducted by India in 1974 when it became apparent that nuclear materials transferred for peaceful purposes could be invidiously diverted for use in weapons production. Essentially India, the impetus for founding the NSG, is now seeking exception from its long-standing policies.

The muddy waters surrounding the U.S.-India proposal raises the question: why force such a sweeping exception through a fragile control system that is just recently becoming enmeshed in international law? One obvious albeit simplistic response is money. The U.S. Chamber of Commerce has estimated that the deal can generate $100 billion in energy sales for U.S. companies. Ron Somers, president of the U.S. Chamber of Commerce’s U.S.-India Business Council fears that if the United States does not feed India’s growing demand for nuclear energy, competitors such as France, Canada, and Germany will capture that market resulting in major losses for U.S. companies. If the NSG itself approves the exception for India and allows the U.S.-India deal to go through, it would implicitly endorse the troubling behavior of pursuing economic gains at the expense of ensuring non-proliferation. Even now, while NSG’s stamp of approval is pending, the moral hazard that the deal presents to the rest of the nuclear-capable states is palpable. China, for its part, has already voiced its intention to “grandfather” certain technology transfer agreements it made with Pakistan.

Let us frame the U.S.-India nuclear partnership within the seemingly intractable discord between the India and Pakistan. Since there is no binding regional pact that obliges the states to abstain from nuclear weapons proliferation and since no agreement subjects Pakistan’s nuclear facilities to IAEA safeguards, history counsels that the most probable outcome is increased proliferation by Pakistan. Therefore, absent a broader arrangement which brings Pakistan’s facilities under safeguards, the U.S.-India deal will more than likely have the unintended effect of accelerating proliferation in the region.

For its part, India recently passed a bill promulgating guidelines for nuclear transfers amending its own Atomic Energy Act of 1962. It generally adopts a principle of non-proliferation, prohibits export of nuclear technology directed towards development of nuclear weapons, requires IAEA safeguards to apply to any recipient of its exports and reserves the right to place special controls on sensitive exports as a matter of national policy. As reassuring as this piece of domestic legislation may be, it is no guarantee that the U.S.-India partnership will avoid the proliferation of nuclear weapons in the sub-continent. Furthermore, it is no substitute for legal obligations that emanate from the well established multilateral non-proliferation regime. Therefore, the foregoing legal considerations taken together, lead to the inescapable conclusion that the U.S.-India Strategic Nuclear Partnership deals a debilitating blow to the non-proliferation regime.

This post is an abridged version of Kesav Wable’s article slated to be published in the 2007-08 Brooklyn Journal of International Law.

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