A/USTR HARTWICK DISCUSSES WAY FORWARD ON CSLA

UNCLAS SECTION 01 OF 03 NEW DELHI 002655

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SUBJECT: A/USTR HARTWICK DISCUSSES WAY FORWARD ON CSLA

REF: NEW DELHI 1220


1. (SBU) Summary: Awsistant US Trade Representative Doug
Hartwick heard Indian objections to the draft Commercial
Space Launch Agreement (CSLA) and explained USG reasoning
behind the draft in a meeting with MEA and Indian Space
Research Organization (ISRO) interlocutors on April 18.
Ambassador Hartwick noted that the market oriented US draft
CSLA was much more forward-looking and non-proscriptive than
the Russia/Ukraine type of CSLA originally envisaged as part
of NSSP. The GOI requested USG consideration of an interim
agreement to allow immediate launch of third party satellites
containing US components, with negotiations to conclude a
broader CSLA to follow, and underline that this would
facilitate further progress and help to preserve a positive
atmosphere around our revived space relationship. Ambassador
Hartwick agreed to consider Indian suggestion but urged
Indian side to re-examine U.S. draft in light of these
discussions. End Summary.

INDIAN OBJECTIONS TO CSLA
--------------


2. (SBU) MEA Joint Secretary (Americas) S. Jaishankar
started the discussion by outlining two Indian concerns about
the CSLA. First, India does not understand the need for a
CSLA, as the Technical Safeguards Agreement (TSA) should
resolve any security concerns related to space launch.
Second, the US has launch arrangements without agreements
with other countries including Japan and the EU, and India
believes that it should be treated as those countries. He
also questioned why commercial satellite services should be
linked to the space launch provisions, as satellite services
were not specified as part of the Next Steps in Strategic
Partnership (NSSP) plan.

US IS TREATING INDIA BETTER THAN IT DID OTHER COUNTRIES
-------------- --------------


3. (SBU) Ambassador Hartwick explained that while the NSSP
originally prescribed a CSLA along the lines of the
agreements negotiated with Russia or Ukraine, USTR's January
2006 draft was much simpler and clearer: rather than an
"intrusive" text detailing authorized numbers, charges, and
types of launches, the current proposal would simply agree on
market principles, creating a favorable climate for trade and
investment in space launch. However, because India's space
sector consists only of a single parastatal organization,
some sort of market oriented agreement would be necessary as
specified by the NSSP. If India preferred to stick to the
letter of NSSP, USTR would be prepared to negotiate a
prescriptive text such as the agreements worked out with
Russia and Ukraine, Ambassador Hartwick offered, but USTR
believes that the growing positive US-India space
relationship would be better served with a simpler agreement.


4. (SBU) In response to GOI concerns that satellite services
were not part of the original scope for launch agreements,
Ambassador Hartwick explained USTR's responsibility to
encourage trade broadly, and noted that while US space launch
companies with heavier load capability would not compete
directly with ISRO or ISRO's commercial spinoff Antrix for
launch services, other US satellite services firms would like
to enter India's satellite services market, which is largely
closed to foreign service providers and controlled by ISRO.
The USG would like to use this CSLA to point the direction
for a new, collaborative relationship between the US and

NEW DELHI 00002655 002 OF 003


India in space which would grow the satellite use market,
Ambassador Hartwick concluded. As this relationship matured
and as confidence grew, a CSLA might become redundant,
perhaps as soon as three of four years from now.

GOI: MOVE AHEAD ON SATELLITES WITH US COMPONENTS?
-------------- --------------


5. (SBU) ISRO Scientific Secretary V Sunderamaiah and Antrix
Executive Director Sridhara Murthi pointed out that India's
immediate concern was to allow Indian launches of foreign
satellites containing US components. One objective of NSSP
from ISRO's standpoint was to make this possible,
Sunderamaiah claimed, and ISRO was concerned by proposals
that a satisfactory CSLA could take one to two years of
discussions. Even though it had agreed to the TSA, India had
already recently lost launch contracts because the payloads
contained US components. He proposed reaching quickly some
sort of interim understanding that would allow only the
launch of third party satellites with US components, pending
completion of a full CSLA agreement. Murthi emphasized that
commercial opportunities would accrue to US electronic
component manufacturers through a quick agreement. He
pointed out that Anthrix had spent two years trying to work
out a viable deal to jointly market a satellite bus with
Boeing, but was stymied by US export and launch restrictions.
Anthrix later decided to work with a European satellite
builder instead and has already made two sales, he reported.

LOOKING FOR A WAY TO MOVE FORWARD
--------------


6. (SBU) After Deputy Scientific Secretary Rajiv Lochan
objected that US commercial interests should not become a new
factor in CSLA discussions two years after the NSSP process
was put in motion, Ambassador Hartwick assured the GOI
interlocutors that while he understood that ISRO would prefer
to move ahead on space launches without any agreement, the
NSSP and the nature of India's state-run space sector
required some agreement to start off and ensure a fair
commercial playing field. He welcomed further Indian
proposals for a workable CSLA, and promised to consider the
ISRO suggestions with the goal of blending the two sides'
positions to create a forward-looking document to enable
useful commercial space cooperation. Eventually, he
reiterated, the relationship may stabilize to the point where
the CSLA would no longer be required.


7. (SBU) Jaishankar welcomed Ambassador Hartwick's
presentation of USTR's perspective, but noted he intended to
raise again with State Department interlocutors New Delhi's
judgment that satellite services were beyond the scope of
NSSP and we had shifted the goal posts. He requested
Ambassador Hartwick to prepare a response to the GOI concerns
raised in the meeting in time for Jaishankar's planned May
8-9 visit to Washington. Jaishankar also noted that with the
anticipated May 8-11 visit of NASA Administrator Griffin, the
Indian press would likely ask the status of progress on
commercial space launch. From a "political management"
perspective, it was important to show some progress, and at a
minimum avoid any appearance of a reversal in the process, he
emphasized. He proposed that an agreement to allow Indian
launch of third party satellites with US components would
demonstrate interim progress while the full CSLA was being
finalized. Ambassador Hartwick agreed to consider
Jaishankar's suggestions, but noted that the press should be
told we were pursuing active discussions to reach a

NEW DELHI 00002655 003 OF 003


satisfactory agreement. He cautioned that it was more
important to work out a good CSLA than to meet an
artificially imposed deadline to show progress.

COMMENT: LOOKS MORE FEASIBLE NOW
--------------


8. (SBU) Ambassador Hartwick's interaction with ISRO gave a
much-needed push to break the logjam that had stalled any
forward progress on the CSLA (reftel). Having begun the
process of narrowing our respective starting points, we
anticipate we will be able to resume discussions in the
coming weeks with a much better (if still uncertain) prospect
for reaching speedy agreement.

Participants
--------------


9. (U) US participants were:

-- Ambassador Hartwick
-- Geoff Pyatt, PolCouns
-- Jai Nair, Poloff (notetaker)


10. (U) Indian participants were:

-- V. Sunderamaiah, Scientific Secretary, ISRO
-- S. Jaishankar, Joint Secretary (Americas),MEA
-- Ashutosh Jindal, Joint Secretary (Foreign Trade),MEA
-- Rajeev Lochan, Deputy Scientific Secretary, ISRO
-- Jacob Ninan, Head of International Affairs, ISRO
-- Santosh Jha, Deputy Secretary (Americas),MEA
-- Jayant Khobargade, Under Secretary (Disarmament and
International Security Affairs),MEA
-- K. R. Sridhara Murthi, Executive Director, Antrix
Corporation Limited, Department of Space
-- Viraj Singh, Under Secretary (Americas),MEA (notetaker)


11. (U) Ambassador Hartwick has cleared this message.


12. (U) Visit New Delhi's Classified Website:
(http://www.state.sgov.gov/p/sa/newdelhi/)
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