RONALD ZAK/AP

William burns, U.S. Under Secretary for Political Affairs: "The Indian government has provided the U.S. with a strong Letter of Intent, stating its intention to purchase reactors with at least 10,000 MWe worth of new power generation capacity from U.S. firms."

THE move towards reviving India-United States civil nuclear cooperation after a gap of over 30 years, a process that began with the Joint Statement by President George W. Bush and Prime Minister Manmohan Singh on July 18, 2005, entered its last lap on September 11 when Bush transmitted the 123 Agreement for the mandatory approval by the U.S. Congress. “The conclusion of this agreement, which completes the U.S.-India Civil Nuclear Cooperation Initiative,” said a White House release that accompanied the transmittal, “has been a priority for both President Bush and Prime Minister Singh, and strengthens the U.S.-India Strategic Partnership. The historic achievement will bolster international non-proliferation efforts, provide economic and business opportunities in both countries …”

Indeed, this has been very much in evidence in the manner in which the United Progressive Alliance government has put the deal above all else that concern the government. It is most unfortunate that India-U.S. nuclear cooperation has become the centrepiece of the government’s perspectives on foreign policy and domestic policy matters. From the U.S. perspective, the importance of the agreement lies primarily in the opportunities it would open up for U.S. nuclear companies. This was articulated most succinctly in the replies that the State Department gave in January to queries on the agreement from Congress, which became public recently (Frontline, September 26).

The very first of the 45 questions posed by Congress was on the administration’s expectation regarding the likely economic benefits of the partnership, including India’s purchase of U.S. nuclear fuel, reactors and technology. The State Department’s reply was that if American vendors won just two reactor contracts (of the minimum eight that India plans to import by 2012), it would add 3,000-5,000 new direct jobs and 10,000-15,000 indirect jobs in the U.S. and that India had conveyed its commitment to enable full U.S. participation in the planned nuclear power expansion. “In addition,” the reply added, “access to Indian nuclear infrastructure will allow U.S. companies to build reactors more competitively here and in rest of the world – not just India.”

Most recently, on September 18, at the Senate Foreign Relations Committee hearing on the 123 Agreement, Under Secretary for Political Affairs William Burns revealed what was always suspected (Frontline, August 12, 2005) but was never openly stated by the government. He said: “The Indian government has provided the U.S. with a strong Letter of Intent, stating its intention to purchase reactors with at least 10,000 Mega Watts (MWe) worth of new power generation capacity from U.S. firms. India has committed to devote at least two sites to U.S. firms.” Clearly, with the imminent revival of nuclear power all over the world, the U.S. is looking at India as a test bed for reviving its hitherto dormant nuclear industry and nuclear technology development.

That the issue of non-proliferation was only secondary is evident from the extraordinary manner in which the U.S. pulled out all the stops to counter the strong opposition from some Nuclear Suppliers Group (NSG) member-countries to the “clean and unconditional” waiver that India sought and in the way in which it secured an exemption for India by consensus in a form with which the Indian government seems to have no regrets. There is, however, continued, widespread concern within the U.S., both inside and outside Congress, that the deal actually weakens the non-proliferation regime. Therefore, the passage of the agreement may not seem an easy proposition at first. But Congress would find itself in a serious dilemma to block the agreement’s passage on the grounds that it does not meet the desired non-proliferation objectives. The apprehension that Congressman Howard Berman had expressed in a letter to Secretary of State Condoleezza Rice on August 5 has actually turned out to be true. That is, the NSG waiver preceding Congressional approval of the 123 Agreement, as required by the Hyde Act, has actually put American companies, which can begin to transact with India only after the passage of the agreement, at a disadvantage. The waiver now enables India to source nuclear fuel, reactors, equipment and technology from other potential nuclear suppliers, such as Russia, France and Canada, and gives non-U.S. suppliers a head start. Unless Congress passes the agreement soon, it would be seen as putting a hurdle in the way of American business opportunities with India. This consideration would certainly have the effect of weakening the opposition within Congress.

Also, given Bush’s keenness to see the agreement through during his regime itself, the administration is bound to go all out to lobby with Congress for it. The White House release, in fact, said: “The President also looks forward to working with the Congress to ensure passage on the agreement this year.” The statement added, “The President looked forward to welcoming Prime Minister Singh to the White House on September 25, 2008, to strengthen Strategic Partnership and build upon our progress in other areas of cooperation…” This has the implication that Bush would like the agreement passed before Manmohan Singh’s visit so that the document can be signed during the visit. It must, however, be pointed out that, given the awkward sequencing of steps to Congressional approval, there seemed to be a tacit understanding with the Indian government – as the State Department’s reply quoted above would suggest – that India would not proceed to transact with other suppliers before the 123 Agreement is passed.

This was, in fact, reiterated by the U.S. Ambassador to India, David Mulford, in an interview to an Indian news channel after the NSG waiver was obtained. External Affairs Minister Pranab Mukherjee, too, initially remarked that India would not begin negotiations with other supplier-countries before the 123 Agreement was passed. But when the Presidential Determination and transmittal of the agreement to Congress were released, the Indian government threw diplomatic niceties aside and quickly changed its position to say that it would go ahead with negotiations with Russia and France. The Ministry of External Affairs was obviously miffed and unhappy with Bush’s remarks that fuel supply assurances were not legally binding (see article on page 12).

Notwithstanding the potentially damaging differences that have surfaced now in the interpretation of the 123 Agreement between the two countries and the consequent stance taken by India, it must be noted that the NSG waiver will become effective only if the waiver text is issued as an INFCIRC document of the International Atomic Energy Agency (IAEA). Given the clout that the U.S. has with the NSG – witness how the U.S. coerced all opponents to the proposed waiver text to fall in line and approve it by consensus – one can expect it to exercise the same influence on the NSG Secretariat to see that the waiver is not issued as an IAEA document until 123 is passed by Congress.

But, irrespective of the above, how do the prospects look for Congress per se purely in terms of meeting the legislative requirements for such an agreement? This is the final session of the U.S. Congress, which opened on September 8 and will adjourn on September 26 for recess before the presidential election scheduled for November 4, and will actually have only 15 days’ continuous session.

This falls short of the consecutive legislative days required under the U.S. Atomic Energy Act (AEA) of 1954 and the Hyde Act of 2006 for its consideration of the agreement’s consistency with the above Acts and consequent approval. According to Section 123b of the AEA (this requirement is included in the Hyde Act as well), the agreement must lie before the House Committee on Foreign Affairs and Senate Foreign Relations Committee for consultations of no fewer than 30 consecutive days.

RAJEEV BHATT

Atomic Energy Commission Chairman Anil Kakodkar (right) and Chairman and CEO, Commissariat a L'Energie Atomique (CEA), Alain Bugat, exchange documents of an agreement in the field of nuclear research, in the presence of Prime Minister Manmohan Singh and French President Nicholas Sarkozy in New Delhi on January 25. The NSG waiver preceding Congressional approval of the 123 Agreement has actually put American companies at a disadvantage. It enables India to source nuclear fuel, reactors, equipment and technology from other potential nuclear suppliers such as Russia, France and Canada.

Section 123d of the AEA also requires that the agreement plus Presidential Determination (which was sent a day earlier on September 10) should lie before the entire Congress for 60 days (after the initial 30 days of consultations are over). As required by Section 123b of the AEA and Section 104(c) of the Hyde Act, along with the text of the agreement, Bush has also sent to Congress the unclassified Non-Proliferation Assessment Statement (NPAS) by the Secretary of State as well as the report on the consistency of the provisions of the agreement with the Hyde Act, in particular the requirement that the seven conditions set out in the Act have been met before the President submitted the agreement to Congress (see article on page 12). If the agreement is not adopted by a joint resolution of approval this year, the entire process must begin afresh when a new Congress sits.

Can the legislative provisions be circumvented and passage of the agreement expedited? There is provision under Section 130i(5) of the AEA for expediting the joint resolution for agreements submitted under 123d of the AEA, which means the 60-day period for consideration of the Presidential Determination can be waived by referring the matter to the Committee on Rules of the House of Representatives.

However, the 30-day presidential consultation period with the House and Senate Committees does not have an automatic waiver provision within the AEA.

There have been suggestions made in the U.S. that legislation could be introduced to circumvent the above requirement of the AEA so that it can be approved this year itself. However, this may not be so simple because, given the already crowded agenda of Congress, moving a new piece of legislation and having it passed may be difficult.

It has also been suggested that the Chairman of the legislative committee, in consultation with the respective Speakers of the Chambers, has sufficient powers to bypass the rules. But here Berman’s dilemma will come into play. On the one hand, as the present Chairman of the House Committee of Foreign Affairs, is his strong opposition to the agreement and the NSG waiver in its present form, and on the other is his concern for a level playing field for American business.

The final possibility is the summoning by the present Congress of a lame-duck session in December to fulfil the mandatory requirement of a continuous 30-day consultation period. This, in fact, appears to be a distinct possibility as was indicated by House Minority leader John Boehner. This means that Congress could get a lease of life after November 4 and, thereby, the 123 Agreement, too. But the contentious interpretations of its provisions, fuel supply assurances and the right to reprocess, in particular, will perhaps continue to simmer. Former Foreign Secretary Lalit Man Singh has, in fact, suggested that this is reason enough for the Prime Minister to reject the 123 Agreement and not sign it when he visits the U.S. later in September.

But does Manmohan Singh also subscribe to this view?