U.S.-India nuclear deal’s future cloudy

Rice does not Hyde the truth

The US secretary of state has laid bare the centrality of the controversial Hyde Act. The Nuclear Suppliers’ Group, like the U.S., is likely to grant India, at best, only a narrow, conditional waiver from its rules.

Brahma Chellaney

Asian Age, February 18, 2008

However inadvertently, US Secretary of State Condoleezza Rice, in one stroke, has deflated New Delhi’s public claims through her unequivocal assurance to Congress that any exemption for India from the Nuclear Suppliers’ Group rules will be “completely consistent with the obligations of the Hyde Act.” As Rice put it, “We will support nothing with India in the NSG that is in contradiction to the Hyde Act.”

The reality is that no administration in Washington can ignore the Hyde Act, a 41-page omnibus of assorted India-specific conditions, several of them unrelated to civil nuclear matters. Even the bilateral 123 Agreement India has concluded with the U.S. complies with the provisions of the Hyde Act, with Undersecretary Nicholas Burns publicly complimenting New Delhi for being “good enough to negotiate on this basis — that anything we did had to fall within and respect the legal guidelines that Congress had set forth”.

Yet, to deflect rising criticism at home, New Delhi resourcefully came up with a variety of explanations — from the assertion that Hyde Act has binding and non-binding sections to the claim that the 123 Agreement, once ratified, will override all other laws. It was beguilingly stated that the Hyde Act, as an American law, cannot bind India, leaving out the more-relevant point that it binds the supplier-state to enforce tough, legislatively decreed conditions on the recipient.

What Rice has stated is just a reiteration of what the Hyde Act obligates Washington to do in the NSG — to ensure that the 45-nation, US-led cartel does not in any way dilute the India-directed conditions prescribed by the Act. But because few have read that long, intricate legislation, her words serve as a much-needed reality check for India.

Long before the Hyde Act was passed, the Bush administration submitted to the NSG in March 2006 a draft “pre-decisional” proposal to carve out an India-related exemption. Even that draft, mirroring the terms of the official bill the administration had submitted days earlier to Congress for an India waiver, sought to subject New Delhi to a lasting test ban.

Section 4 of the US draft to the NSG proposed that civil trade with New Delhi be allowed “as long as the participating government intending to make the transfer is satisfied that India continues to fully meet all of the aforementioned non-proliferation and safeguards commitments, and all other requirements of the NSG guidelines.” One of the commitments specified was for India to indefinitely “continue its moratorium on nuclear testing.” Another commitment was for India to embrace international inspections “in perpetuity,” leaving no room for corrective measures if India was faced with a Tarapur-style fuel cut-off.

Once the Hyde Act was enacted, the US draft to the NSG, of course, got overtaken by that legislation and its grating stipulations, including a clear prohibition on the transfer of enrichment, reprocessing and heavy-water equipment or technology even under safeguards, an immediate termination of all nuclear trade with India if it tested, and the US enforcement of additional “end-use” and “fallback” safeguards.

As a result, Washington is now obliged to ensure that any NSG rule-change for India is consistent with those congressionally mandated conditions. One of the Hyde Act prerequisites for the nuclear deal to win congressional ratification is that any NSG rule-change mirror the scope and rigour of the India-specific standards of compliance the legislation has set. The law indeed demands that an NSG exemption for India neither be less stringent than what it has prescribed nor take effect before the US Congress has given its final consent to the deal.

The legislation’s clause-by-clause explanatory notes state that no NSG decision should “disadvantage US industry by setting less strict conditions … than those embodied in the conditions and requirements of this Act.” The concern is that if the NSG fails to set US-style conditions for civil nuclear commerce with India, New Delhi could do an end-run around Washington and buy reactors from Russia and France, which are overly eager to bag lucrative contracts. The Act asserts the US “possesses the necessary leverage” in the NSG to “ensure a favourable outcome.”

So, as and when the NSG takes up the India case, the US is certain to back an exemption soaked in Hyde Act-style conditions. As Rice acknowledged, “We’ll have to be consistent with the Hyde Act or I don’t believe we can count on the Congress to make the next step.” But it will be virtually impossible for an NSG exemption to replicate all the Hyde Act stipulations. That Act, a unique, country-specific nuclear law, comes not only with preconditions but also post-conditions.

The Act mandates that after the deal passes congressional muster and takes effect, the post-implementation conditions will become operational — from an annual presidential certification to ensuring India’s “full compliance” with a non-nuclear cartel like the Missile Technology Control Regime. The president, besides having to submit a comprehensive “implementation and compliance report” within 180 days of the deal’s entry-into-force, is required to cyclically certify that India is continuing to meet all the stipulated conditions.

As a large, unwieldy association that meets behind closed doors, the NSG is in no position to emulate the procedures set by the Hyde Act, whose intent is to keep India on good behaviour by subjecting continued civil commerce to congressional oversight and overtly hanging the Damocles’ sword of cessation of cooperation. But the NSG, under American persuasion, is likely to grant New Delhi an exemption that, like the US waiver, is conditional and partial, meeting the supplier-states’ commercial interest to win multibillion-dollar reactor contracts, yet without giving India access to civil fuel-cycle technology or equipment.

If New Delhi presses ahead with the deal, the poorly-negotiated 123 Agreement is going to come to haunt it. The outcome of the NSG deliberations would be influenced by the several conditions India has willingly embraced in that accord.

These include: (i) the supplier’s right to seek the return of transferred material and items if it determines the recipient is in breach of any non-proliferation commitment; (ii) New Delhi’s grant of an open-ended right to the supplier to suspend supplies forthwith simply by issuing a one-year termination notice; (iii) India’s agreement to route not just spent fuel of US-origin but all “foreign nuclear material” through a new dedicated reprocessing facility that will take years to complete; (iv) instead of securing the right to reprocess upfront, India is to negotiate a separate agreement with the US on reprocessing-related “arrangements and procedures” after the new facility has been built; (v) in the absence of an enforceable link between perpetual international inspections and perpetual fuel supply, India’s much-touted right to “corrective measures” has been rendered cosmetic, with the accord forbidding the lifting of safeguards in any situation, even if the supplier cut off fuel supply; and (vi) the recipient placing itself at the mercy of the supplier also by not insisting on a provision, as in the Japan-US 123 Agreement, for an international arbitral tribunal to deal with any dispute.

It is because of the flawed 123 Agreement that India finds itself on the back-foot in the negotiations with the International Atomic Energy Agency. Having failed in the 123 Agreement to secure a binding fuel-supply assurance or a spelled-out right to corrective steps, New Delhi has sought ornamental concessions from the IAEA in the safeguards accord so as to be able to play to the public gallery at home. These include a cosmetic reference to assured fuel supply in the preamble and a dubious right to take corrective measures short of withdrawal from safeguards.

The pressure now is to get India to speedily conclude a perpetual safeguards accord with the IAEA on the terms the Agency is seeking to dictate. Once that happens, India will have little role, other than as a bystander, in the NSG and congressional processes.

© Asian Age, 2008

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