Commentary

The False Promise of the Civil Nuclear Deal

in Program

By Michael Krepon – Six years ago, President George W. Bush and Prime Minister Manmohan Singh
announced their commitment to a civil nuclear energy cooperation agreement at
the White House. The Bush administration pledged to take the lead in persuading
the 46-member Nuclear Suppliers Group to make an exception to its restrictive
rules to permit nuclear commerce with India. In return, the deal’s backers
in the United States expected
profits, jobs and a transformed U.S.-India partnership to help counter
China’s rise. 

Prior
U.S. administrations had worked hard
to beef up the NSG by persuading its members to operate by consensus and by
trying to condition nuclear commerce to the acceptance of full-scope safeguards
and tougher inspections. India couldn’t possibly meet these
tests, given its nuclear weapon programs. The Bush administration judged that
the potential benefits of making an exception for India were worth
the risks to the Nonproliferation Treaty and the NSG, the only cartel ever
designed to prevent profit-taking. 

Skeptics of the deal argued that by
giving India preferential treatment, it
would become harder to strengthen nonproliferation norms for everybody else. Another perceived risk was that the two other outliers, Pakistan and Israel, would also seek exceptions which, if
granted, would further weaken the treaty, given the illicit nuclear dealings by
Pakistani authorities and the sensitivity of Israel’s nuclear program elsewhere in the
Middle East. A third risk was that, by
granting Indian demands for transfers to enrich and reprocess spent fuel under
safeguards, it would make it harder to put the brakes on national enrichment and
reprocessing programs elsewhere. A fourth perceived risk had to do with
granting Indian demands for fuel supply reserves. Fuel supplies were suspended
after India carried out nuclear tests. If
abundant fuel were on hand, New
Delhi might find it easier to resume nuclear
testing.

These arguments fell on deaf ears. Skeptics were
mostly confined to “nonproliferation ayatollahs,” to use the parlance of Indian
pundits. The irony of this epithet was lost to those who could see no connection
whatever between trying to tighten nonproliferation screws for
Iran while loosening them for
India. Industry and geo-political
thinkers backed the proposed deal. During President Bush’s second term, helping
a friendly country trumped proliferation concerns. Administration officials
were, in any event, deeply unenthusiastic about convincing New Delhi to sign the Comprehensive Test Ban Treaty and to
accept a voluntary cessation of new fissile material production for weapons –
the two steps that could best dampen down-side risks and compensate for the
exceptional treatment they proposed to grant India. The Bush
administration’s facile talking point was that the nuclear deal would bring
India into the “nonproliferation
mainstream.”

The Bush administration was very adept at creating a sense
of political inevitability behind the deal. The U.S.-India Business Council at
the U.S. Chamber of Commerce, a collection of heavyweight companies including
AIG and defense contractors like Boeing, Northrup Grumman and Lockheed, rallied
in support of the deal’s door-opening possibilities. The nuclear deal alone was
projected by Ron Sommers of the U.S.-India Business Council to produce 27,000
“high-quality” jobs. The House and Senate voted overwhelmingly to endorse the
deal.

What has happened since? In May 2009, Pakistan began
to block negotiations on a fissile material production cutoff treaty. At the
May 2010 review of the Nonproliferation Treaty, Brazil, Egypt and South Africa
refused to endorse tougher inspections as a condition of nuclear commerce. In
August, 2010, the Indian Parliament passed liability legislation for nuclear
plant builders and suppliers in the event of accidents. With the gruesome 1984
Union Carbide accident at Bhopal very much in
mind, parliamentarians chose to impose liability provisions that will make it
exceedingly difficult for U.S. firms to build or supply nuclear power
plants in India.

In September 2010,
China confirmed that it would
sell Pakistan two additional nuclear power
plants at concessionary rates, without regard for the rules and procedures of
the Nuclear Suppliers Group. In March, 2011, India, a rotating member of the U.N. Security
Council, abstained from voting on a resolution approving “all necessary
measures,” including imposition of a no-fly zone over Libya. In April
2011, the Indian Government decided against purchasing fighter planes from
Boeing and Lockheed Martin in its $9 billion Medium Multi-Role Combat Aircraft
competition. European firms will win this jackpot. In the June meeting of the
IAEA Board of Governors, India voted to abstain on referring Syrian
noncompliance to the UN Security Council.

Six years later, what do the
costs and benefits of the U.S.-India civil nuclear deal look
like?

First, even with the positive outcome of the 2010 NPT Review
Conference, nonproliferation norms have been weakened and, at best, will take
time to reinforce. The deal has added to the IAEA’s woes and has made the NSG a
weaker institution.    

Second, negative nuclear trend lines within
Pakistan have grown steeper and will
be harder to reverse.

Third, the arc of U.S.-Indian relations has
improved, but with far less loft than the Bush administration’s deal makers
conceived. Trade and investment will grow, as will defense sales and cooperation
in some areas. This would have been the case whether or not the Bush
administration had decided to pursue the civil nuclear deal. Indeed, these
advances were delayed because it took five years of high-level attention to
close this deal.

Fourth, the notion of India joining
the “nonproliferation mainstream,” as advocates of the deal predicted, has been
a mirage. Instead, New Delhi has closed ranks
with NAM states balking at stronger
nonproliferation norms. India remains in limbo on the CTBT,
seemingly far from ready to sign or to resume underground tests. Fissile
material production for nuclear weapons continues; India, like Pakistan, may
have doubled its inventory of nuclear weapons over the past
decade.

Fifth, New Delhi continues to
titrate improved strategic cooperation with the United States, especially given domestic
political sensitivities about U.S. infringements on Indian
sovereignty. New Delhi also continues to improve
ties with Beijing. It is folly to presume that
Washington can leverage New
Delhi’s dealings with Beijing. The civil nuclear deal was a poor
choice to help India become a
stronger counterweight to China.

Why, then, did the
Bush administration make this deal the centerpiece of bilateral relations during
its second term? Why tackle the toughest nut first, incurring unnecessary and
perhaps long-lasting damage to nonproliferation norms? It’s obvious why
New Delhi
embraced the Bush administration’s gift horse of a civil nuclear deal. Those in
India who argued that it was a Trojan
horse have been proven wrong on every count. So far, U.S. backers of
the deal have also been wrong on every count.

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