SPECIAL ENVOY SARAN SAYS NUCLEAR SUPPLIERS

UNCLAS SECTION 01 OF 04 NEW DELHI 002297 SENSITIVE SIPDIS E.O. 12958: N/A TAGS: PREL PARM TSPL KNNP ETTC ENRG TRGY IN SUBJECT: SPECIAL ENVOY SARAN SAYS NUCLEAR SUPPLIERS EXCEPTION SHOULD STAY WITHIN EXISTING AGREEMENTS ¶1. (U) Assistant Secretary Richard Boucher cleared this report. ¶2. (SBU) SUMMARY. The Prime Minister's Special Envoy for the Civil Nuclear Initiative Shyam Saran reviewed with visiting Assistant Secretary Richard Boucher and Ambassador Mulford progress toward an India-specific exception in the Nuclear Suppliers Group and fulfilling India's commitments pursuant to a Presidential Determination of the conditions in the Hyde Act. Boucher and Mulford pushed for flexibility on the exception and early implementation of India's non-proliferation commitments. Saran made a pitch for a clean exception and said that a review mechanism could be phrased positively in the sense of a partnership with the Nuclear Suppliers Group "to advance non-proliferation goals." He cited India's commitment not to share enrichment and reprocessing technology, that already went beyond a number of Group members. He said countries with concerns about testing have every right to cease cooperation in the event of a test and added that existing Nuclear Suppliers rules already address this issue. He allowed that countries could express their concerns in the Chairman's Summary or in bilateral agreements negotiated by those countries that hope to engage in cooperation with India. ¶3. (SBU) SUMMARY CONTINUED. Responding to Boucher's push, Saran understood that progress on the Hyde Act Presidential Determination items would help Supplier countries feel more comfortable with India's nonproliferation commitments in advance of an anticipated vote at the second Suppliers Group plenary on September 4-5. But, he gave little ground. He agreed that how IAEA Director General El Baradei characterizes India's progress on negotiating an Additional Protocol is most important, but was vague on India's plans to continue discussions. Saran said incorporating some forward-looking formulation in the Indian-drafted letter on adherence could be possible in principle, but not necessarily before the Suppliers Group approves that draft text that contains a consultation mechanism. Saran was disinclined to re-engage with reluctant Supply Group members at the political level, saying, "We have already conveyed what we thought was important." END SUMMARY. Nuclear Suppliers Group Plenary Airs Concerns - - - ¶4. (SBU) The Prime Minister's Special Envoy for the Civil Nuclear Initiative Shyam Saran characterized the August 21-22 Nuclear Suppliers Group extraordinary plenary in Vienna to consider an India-specific exception to the Group's full-scope safeguards requirement to engage in civil nuclear trade as useful "if you take the positive view" to display "the universe of concerns." Saran characterized the proposed amendments to the exception text as falling into three categories: (1) clarifications of language in the text, mostly of a technical nature, which Saran thought could be addressed; (2) "killer amendments" that were known to be impossible for India to accept and, if accepted, would be inconsistent with NSG member claims that they support the Initiative (he mentioned the Comprehensive Test Ban Treaty or accepting the non-nuclear weapon state designation derived from the Nuclear Non-Proliferation Treaty); and (3) implementation requirements added to the operative portion (paragraph 3) of the text. This third group is most difficult, according to Saran, because the proposed amendments go beyond what Prime Minister Singh has already agreed in the July 2005 Joint Declaration, the May 2006 Indian Separation Plan, the agreed 123 Agreement text, and the IAEA Safeguards Agreement. ¶5. (SBU) Saran shared that during India's outreach, capitals had expressed concerns, but not to anything approaching this level of specificity. He also said that some countries, such as Ireland, felt they had to air some positions that they knew would be regarded as killer amendments because they are official positions. New Zealand said the amendments they proposed were hand-written by Prime Minister Helen Clark and had to be regarded by their delegation as "set in stone." Others (Austria, Switzerland) said their guidance was issued in cabinet decisions, and any change would require new guidance. Saran was clear that, when India pointed out what it regarded as killer amendments, "no one contested" that NEW DELHI 00002297 002 OF 004 point. Worrisome Exception Amendments - - - ¶6. (SBU) Saran said he was "worried" about the third category of amendments, which included a mechanism to review India's sustained nonproliferation commitment, a prohibition on the transfers of enrichment and reprocessing technology (ENR), and a response to a possible future Indian nuclear test. Boucher pressed for flexibility, saying that on each item political leaders will need something to point to, showing that their concerns had been considered. On a review mechanism, Saran said uncertainty about the "longevity" of India's exception would inhibit commercial relationships. Saran suggested that a review might be made acceptable if phrased "positively" in the sense of "a partnership with the NSG to advance nonproliferation objectives through a process of dialogue." Treating India like a "reformed criminal on probation," however, "was not sellable" domestically. ¶7. (SBU) On enrichment and reprocessing technology, Saran observed that India has already committed in the July 2005 Joint Declaration not to transfer this technology itself and to support global efforts to prevent its transfer by others. Saran said the IAEA Safeguards Agreement recognized that India already developed this technology indigenously, so limiting its transfer to India "does not serve any nonproliferation objective." He also observed that the Nuclear Suppliers Group has not yet reached a consensus on a prohibition on the transfer of this technology as a common objective, observing that members such as Brazil and South Africa remain opposed to such a prohibition. India's commitment therefore goes beyond that of many Nuclear Suppliers Group members on this issue. Boucher said that might be a start, but leaders would need to see some reference to this area in the text. Saran said that the India-specific exception should not be the place to hash out the Group's on-going deliberations. Saran observed that if the Group were to come to such a decision in the future, India's exception text includes a consultation mechanism to discuss it with India. ¶8. (SBU) The response to a possible future nuclear test by India is "difficult," according to Saran. There is nothing to stop any country from halting cooperation immediately on a bilateral basis in the event of a nuclear test if they so choose, according to Sara, but India could not accept a condition making such a response "automatic." He said Nuclear Suppliers guidelines already mandate meetings and action if a nation tests, and said this provision was not being waived. Boucher proposed that perhaps this could be explicitly acknowledged in the exception text. Saran allowed that concerns about testing could "perhaps" be addressed by a reference "in national statements or the Chairman's Summary." Presidential Determination: Need Progress Before Second Plenary - - - ¶9. (SBU) Boucher pressed Saran on the importance of rapid progress on the Presidential Determination items listed in Section 104b of the Hyde Act not only to satisfy U.S. Congressional requirements, but also to address doubts in Vienna about India's commitment to nonproliferation prior to the next Suppliers Group plenary. Saran said he clearly understood that progress on these items would help Supplier countries in their vote at the second plenary on September 4-5. ¶10. (SBU) Department of Atomic Energy Chairman Dr. Anil Kakodkar will be in touch with International Atomic Energy Agency Director General El Baradei next week to make further progress on the Additional Protocol, according to Saran, but he was vague about whether Kakodkar would hold a meeting or talk about a text. Saran agreed that how El Baradei characterizes India's progress matters to the U.S. Congress and to Nuclear Suppliers Group members. Saran justified lack of further progress by explaining the phased approach to populating the annex of the IAEA Safeguards Agreement and the complexities of transitioning reactors under existing bilateral safeguards arrangements to the new umbrella NEW DELHI 00002297 003 OF 004 safeguards. India circulated its Separation Plan as an official IAEA document (INFCIRC/731) because "you needed it sooner, and that should be sufficient." Boucher pressed that Congress will need to hear that India has called it a "declaration" of some sort. Saran replied, "We do not see why your administration cannot certify that we have complied, but we will see what we can do." Saran was reluctant to discuss India's commitment to file an IAEA Separation Plan Declaration because he had not yet received a full read-out from the August 25 meeting between Menon and Burns. ¶11. (SBU) Boucher pressed for some kind of forward-looking commitment on adherence to Nuclear Suppliers Group and Missile Technology Control Regime export control guidelines in addition to the list of India's existing export control mechanisms. Saran replied that the draft Suppliers Group exception text includes a provision for consultation with India. Boucher said we need a forward-looking formulation be included in the Indian-drafted letter on adherence indicating a desire to work with these groups and keep up to date. Saran said this may be possible in principle as it is covered in the exception. But it would be hard to include before the Suppliers Group approves that draft text. Saran also stressed that India's export control lists are already broader than Nuclear Suppliers guidelines. ¶12. (SBU) Boucher said the current version of India's letter of intent makes the application of the 123 Agreement conditional on the prior negotiation of a separate reprocessing agreement. Boucher said the U.S. is willing to reference this requirement as described in Article 6, Section 3 of the 123 Agreement, but not accept that such an arrangement is a precondition of inking deals on nuclear commerce with India. Saran signaled his understanding and seemed to lack an answer for why the latest version of the letter that Foreign Secretary Shiv Shankar Menon shared with Under Secretary Burns in Washington on August 25 preserved this conditionality. Indians Reluctant to Engage Further At Political Level - - - ¶13. (SBU) Boucher stressed the need to engage again at political levels while giving the politicians adequate cover. Saran expressed appreciation for U.S. efforts, calling the Initiative a "major enterprise." The Indian Government had no plans to gear up high level approaches to reluctant governments, according to Saran, but he explicitly rejected the thesis proffered in recent articles in The Hindu newspaper that moving the exception through the Nuclear Suppliers Group is solely the responsibility of the U.S. Boucher and Ambassador Mulford stressed that "there is still work to do" and pressed Saran on the importance of India making another push at political levels to stress how important the Initiative is to those country's relationships with India. The Ambassador observed that the "Group of 6" countries that proposed most of the new conditions for India's exception would be harder to break as long as Japan and Canada remain supportive of their amendments. Saran replied, "We have already conveyed what we thought was important." (Note: Tarun Das later told Boucher that in fact governments were being reminded that the bigger political and economic relationships would be affected by whether countries offered their support.) ¶14. (SBU) In a prior meeting with Foreign Ministry Joint Secretary (Americas) Gaitri Kumar, Boucher went point-by-point through the Presidential determination items, stressing the importance of completing each one quickly, not only for the purpose of delivery to the U.S. Congress, but also in order to persuade Nuclear Suppliers Group members that India is pursuing key non-proliferation goals. Boucher stressed in particular the importance of making substantial progress on an Additional Protocol, stating that a text must be on the table. Kumar maintained that each of India's special envoys, deployed to Nuclear Suppliers Group and International Atomic Energy Agency member capitals, carried a brief explaining how India would complete the seven required Presidential Determination items. Boucher assured her that, while member countries appreciated India's overall policy stance, it was critical to act on each item before the September 4-5 meeting of the Nuclear Suppliers Group to give NEW DELHI 00002297 004 OF 004 countries recent actions to cite in justifying their support. MULFORD