A jarring note in fast-growing India-Australia ties

Rudd’s rudderless reversal


Australia’s new government needs to deal pragmatically with India after its ideologically driven policy reversal on uranium exports


Brahma Chellaney

Asian Age, March 1, 2008

The rapidly developing India-Australia relationship has been underscored by the various agreements reached in recent years — from a trade and economic framework to cooperation on defence and counterterrorism. India has emerged as Australia’s fastest-growing merchandise export market, even as an increasing number of Indian students enrol in Australian educational institutions (more than 65,000 last year alone).


Amid a growing convergence of strategic interests, however, new Australian Prime Minister Kevin Rudd has struck a jarring note. Rudd, the free world’s first Mandarin-speaking head of government, has made public his intent to cosy up to the world’s largest autocracy, China, while nullifying an important decision his predecessor took to help build a closer rapport with the world’s largest democracy.


Before he was voted out of office last November after 11 years as prime minister, John Howard had agreed to sell uranium ore to both China and India. Rudd has no problem with uranium exports to Beijing but, in one of his first actions in office, scrapped Howard’s decision to sell yellowcake to New Delhi, although such transfers (unlike to China) were to be covered by stringent international and bilateral safeguards.

Rudd’s reversal — egged on by the anti-uranium export lobby within his Labour Party — closes the door on India even if the 45-nation Nuclear Suppliers’ Group carves out an exemption for India from its rules. Considering that Australia holds the world’s largest uranium reserves and annually exports more than 10,000 metric tonnes of processed ore, the action undercuts India’s endeavour to prise open international civil nuclear trade. It thus represents a major setback to Indian diplomacy.

On some issues, Rudd has taken welcome steps — from ratifying the Kyoto Protocol on global warming (an action that leaves the United States isolated as the only industrialized country not to have done so) to seeking to open a new chapter in Australia’s troubled relations with its indigenous, still-marginalized peoples by offering a national apology for past wrongs, albeit without addressing the issue of compensation (which led one newspaper writer to say it meant, “Blackfellas get the words, the whitefellas keep the money”).

On India, however, Rudd’s approach hasn’t been forward-looking. Indeed, his justification for disallowing uranium exports has been notably regressive. Consider the following:

Rudd has linked Australia’s U-turn on uranium exports to India’s non-membership in the Nuclear Non-Proliferation Treaty, although the NPT carries no prohibition on civil nuclear cooperation under safeguards with a state outside its fold.

While it is true the Labour Party had pledged to scrap uranium exports to India if voted to power, election rhetoric often gives way to sober judgement when in office. Given that the Labour’s hostility to exports was founded on a legally untenable argument — India’s staying out of the NPT — Rudd, as PM, ought to have reviewed that opposition in the context of Australia’s geopolitical interests.

Instead, driven by misplaced non-proliferation zealotry, Rudd not only went ahead with cancelling Howard’s decision, but his government also continues to parrot the same lame excuse, as if it has not read the NPT text. In the words of Foreign Minister Stephen Smith, “The current government … will not authorize the export of uranium to a country which is not a party to the NPT.”


In touting its ideological resolve to uphold the NPT, the Rudd government wants to be more Catholic than the Pope. Far from the NPT forbidding civil exports to a non-signatory, the treaty indeed encourages the peaceful use of nuclear technology among all states. All it requires is safeguards application, which its Article III (3) stipulates shall not hamper “international cooperation in the field of peaceful nuclear activities, including the international exchange of nuclear material and equipment for the processing, use of production of nuclear material for peaceful purposes in accordance with the provisions of this Article and the principle of safeguarding set forth in the Preamble of the Treaty.”


The NPT has no explicit or implicit injunction against civil cooperation with a non-signatory. Rather, it enjoins its parties to positively facilitate “the fullest possible exchange of equipment, materials and scientific and technological information for the peaceful uses of nuclear energy” (Article IV) so long as safeguards are in place on all peaceful nuclear activity.


Any restriction on civil cooperation with a country like India is not in the NPT but in the revised 1992 rules of a US-led cartel, the NSG. The NSG has amended its rules more than once since it was secretly formed in 1974, and today its founder, America, has come full circle by conditionally proposing that the group exempt India from its no-military-facility rule intended for non-nuclear-weapons states.

The Rudd government has opened itself to accusations of hypocrisy by deciding not to sell Australian uranium but at the same time saying it could back an NSG exemption that would allow other suppliers to export yellowcake to India.


Canberra has been at pains to clarify that its policy reversal does not mean it will oppose an NSG rule-change for India. On that issue, in Smith’s words, “the Australian government has not come to a concluded view on those matters. We will give consideration to those matters and will do that in an orderly way, having listened to the views of the Indian government … and the U.S. government.” Canberra, in fact, has hinted it won’t obstruct an NSG waiver.


However, in rushing to abandon uranium exports to India — that too on the pretext of wishing to defend the NPT — the Rudd government made no similar effort to go through “an orderly way” and solicit the views of others.

More significantly, how can Canberra justify its policy reversal and yet hold out the promise of backing an NSG waiver? Strange as it seems, Canberra won’t export uranium to India but may end up backing an NSG exemption that would encourage other potential suppliers to do business with New Delhi and “weaken” Rudd’s much-loved NPT.

While emphasizing an internationalist approach in foreign policy, Rudd has sought to plough a lonely furrow on India.

In promoting Australia’s greater participation in multilateral institutions and agreements, Rudd’s foreign-policy catchwords have been inclusion and internationalism. He moved quickly to ratify the Kyoto Protocol and announce the withdrawal of Australia’s 550 combat troops in Iraq by mid-2008.

Yet the policy reversal on India stresses exclusion and embargo as the key words. Worse, it puts Australia in the unenviable position of having taken the lead to isolate a rising India at a time when all other powers are courting New Delhi.

The Rudd government’s justification, inopportunely, comes out as a red herring to not reconcile with India’s decade-old status as a nuclear-armed state. Rudd sees no contradiction in keeping Australia ensconced under American nuclear and conventional deterrence while refusing to accept India’s sovereign right to build nuclear security in a highly troubled neighbourhood without any breach of its legal commitments. In that sense, he unflatteringly presents himself in holier-than-thou colours.

Australia has derived important security and other benefits from its alliance with Washington, and Australian public opinion strongly supports the so-called Anzus pact. Pragmatic considerations have prompted Rudd, despite his party’s left-wing support base, to affirm the centrality of the alliance with the US and to keep the roughly 1,000 Australian troops in Afghanistan. He could have taken an equally practical view of India’s security dynamics.

Rudd has no qualms about selling uranium to China but will not export to India, even though the latter is accepting what the former will not brook — stringent, internationally verifiable safeguards against diversion of material to weapons use.

Howard sought to boost uranium exports, declaring in 2006 that Australia, with its abundant natural resources, “had the makings of an energy superpower” — a point highlighted by the fact that it already is the world’s largest coal exporter and is set to become the second-largest supplier of liquefied natural gas. As Howard put it, “With close to 40 per cent of the world’s known low-cost uranium deposits, for Australia to bury its head in the sand on nuclear energy is akin to Saudi Arabia turning her back on global oil developments.” At present, uranium makes up two-fifths of Australia’s energy exports in thermal terms.

Before it decided to export yellowcake to India, the Howard government finalized its uranium deal with China through two accords in 2006 — one a civil nuclear cooperation agreement and the other setting out the transfer terms. The uranium deal with India would have involved similar accords but on far more stringent terms because New Delhi has pledged to accept a host of legally irrevocable obligations that Beijing will not consider, including permanent international inspections on all civilian nuclear facilities.

While in China the civilian and military nuclear programmes overlap, India has, under the nuclear deal with the US, announced a watertight segregation of its civil and military parts. For Washington, the deal indeed has been a means to try and build, in the words of Australian analyst Robert Ayson, “a de facto NPT around India,” with the Howard government conditioning exports to New Delhi’s implementation of the various elements of the Indo-US deal. By contrast, exports to China will carry “zero real controls,” as the Australian Financial Review put it.

Yet the Rudd government has reversed policy on India while displaying the same zealousness as its predecessor to sell uranium ore to China. Canberra has turned a blind eye to the fact that, in contrast to New Delhi’s squeaky-clean record in not proliferating nuclear technology to other states, Beijing for long has played proliferation as a strategic card, with US intelligence identifying it as the “most significant supplier” of items and technology related to weapons of mass destruction (WMD).

Given that Beijing is rapidly modernizing its nuclear arsenal and maintaining an opaque nuclear posture, Howard and now Rudd have overlooked concerns that uranium exports are likely to result in the diversion of more resources for China’s nuclear-weapons programme. Rather than insist that the International Atomic Energy Agency verifiably ensure that Australian uranium is used for nuclear-power generation, not for weapons purposes, Canberra has merely gone by the peaceful-use promise of a country that stands out for its egregious WMD record.

This is manifest from the two accords — one titled, “Agreement Between the Government of Australia and the Government of the People’s Republic of China on the Transfer of Nuclear Material,” and the other headlined, “Agreement Between the Government of Australia and the Government of the People’s Republic of China for Cooperation in the Peaceful Uses of Nuclear Energy.”

The accords do not require Beijing to go beyond the largely-symbolic inspections it accepts under a “voluntary safeguards” agreement with the IAEA. The facilities under “voluntary safeguards” can be withdrawn from inspection at any time of Beijing’s choosing. Also, Australian uranium will first go to Chinese fuel-fabrication facilities, which remain outside IAEA safeguards. As Annex B of the transfer accord states, it is only after “conversion to uranium hexafluoride” that China will use Australian-origin material in designated plants that may be subject to token IAEA inspections.

The new Rudd-introduced duality in export policy unfortunately signals that Canberra is more concerned about India’s rudimentary nuclear-weapons capability than with the growing sophistication and reach of China’s nuclear arsenal.

Indo-Australian cooperation can be elevated to close strategic bonds through forward-thinking pragmatism. Abstruse, retrograde ideology, as manifest in the uranium-exports reversal, can hardly aid Australian interests with a country that will remain a significant power in the Indian Ocean and a fast-growing market for Australian minerals and fuels. Rudd, with the China fixation he carries from his diplomatic career, needs to demonstrate a more-balanced appreciation of Australia’s long-term interests in an Asia that is unlikely to countenance any power’s hegemonic ambitions. Before long, he will have to deal pragmatically with the realities of Indian power without his NPT reflexes.

© Asian Age, 2008

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