On September 6, 2008, the Nuclear Suppliers Group (NSG) agreed to exempt India from the group’s ban on nuclear exports to countries that do not have International Atomic Energy Agency (IAEA) full scope safeguards in place. The 45-member group reached its consensus decision after several nonproliferation and disarmament powerhouses, such as Australia, Canada, Japan, and Sweden, either actively supported the waiver or tacitly agreed to it.

The NSG consensus was one of the final roadblocks to the U.S.-India Civil Nuclear Cooperation Initiative, or the U.S.-India deal. The process, which took over three years, included measures such as altering U.S. law, negotiating an agreement between the United States and India outlining the parameters for cooperation concerning peaceful uses of nuclear energy (123 Agreement), and approval by the IAEA Board of Governors of an India-specific Safeguards Agreement. The NSG waiver made it possible for President George W. Bush to send the 123 Agreement to the U.S. Congress for its approval, which he did on September 10. The House of Representatives voted in favor of the agreement on September 27 and the Senate followed suit on
October 1.

Through the U.S.-India deal, the Bush administration looks to strengthen relations with India, increasing that state’s power in the region and curtailing China’s influence in South Asia and beyond. The Bush White House argues that India is a responsible nuclear weapons state, and that the deal will bring the country into the nonproliferation mainstream by placing 14 out of India’s 22 nuclear reactors under IAEA safeguards. Opponents say the deal will undermine the nonproliferation regime by de facto recognizing India as a nuclear weapons state and agreeing to nuclear sales despite the fact that India is not a state party to the nuclear Nonproliferation Treaty (NPT) and does not accept full scope safeguards.

Possible Undisclosed Agreements During NSG Negotiations
During NSG deliberations on September 4-6, as well as during a previous meeting in August, a small number of states, including Austria, Ireland, the Netherlands, New Zealand, Norway, and Switzerland, proposed amendments to the Indian exemption. These amendments included termination of nuclear exports to India in the case of a nuclear weapons test, and prohibition of the export of items to India related to uranium enrichment, spent fuel reprocessing, and production of heavy water. [1]

What ultimately made some of the six states mentioned above drop their reservations and join the consensus was a September 5 statement from India’s External Affairs Minister, Pranab Mukherjee, declaring, inter alia, India’s indefinite adherence to a unilateral moratorium on nuclear testing. Some countries, such as New Zealand, interpreted India’s statement to mean that if India conducted a nuclear test, the exemption would be cancelled. [2]

In the week following the granting of the NSG waiver, reports surfaced that the group’s member countries had agreed not to sell any items related to uranium enrichment, spent fuel reprocessing, and production of heavy water to India. [3] This qualification of the exemption satisfies one of the key amendments that had been proposed and leads to speculation as to whether other undisclosed NSG agreements were made, perhaps regarding nuclear testing. It was reported, for example, that “at the eleventh hour [of the NSG meeting] U.S. diplomats had assured NSG members that India’s commerce with NSG states would be terminated in the case of a test by India.” [4]

Strong supporters of the deal included France, Germany, Russia, and the United Kingdom, all of which are expected to fight over profitable contracts that India will seek in order to reach its goal of generating 40,000 megawatts of nuclear power by 2020 (today India generates 3,500 megawatts). [5] To reach that goal, one estimate concludes that the South Asia giant will have to make investments worth $100 billion in its nuclear power infrastructure. [6]

South Africa and Brazil, two states that had to give up their nuclear weapons program in order to benefit from the type of nuclear trade that New Delhi will now enjoy, also supported the exemption. In the case of Brazil, economic incentives seemed to have been the reason for joining the consensus. On September 3, the Brazilian news agency Estado reported that, “With a cooperation accord practically finalized with India, the Brazilian Government is also awaiting the NSG’s decision to inaugurate its partnership with India in the nuclear sector and to take a bite out of this market.” [7] The Brasilia-New Delhi accord will include the joint construction of a nuclear plant as well as exports of nuclear technology benefiting medical, agricultural and industrial applications in India. With regard to South Africa’s decision, one commentator in the South African press suggested that Pretoria faced a dilemma in choosing “between its non-proliferation principles and its firm friendship with India – and solidarity with a fellow [non-aligned movement (NAM)] member.” [8] On one hand South Africa has been a fervent advocate of the NPT, particularly Article VI regarding nuclear disarmament. On the other, both South Africa and India are members of the NAM – a group with a membership of over 100 states from mainly developing regions in the world. South Africa is one of two NSG members that is also a member of the NAM (the other is Belarus). Notwithstanding the potential for competing priorities, the South African government made up its mind early about Pretoria’s position on the issue in the NSG. In October 2006, South African President Thabo Mbeki said with regard to the Indian exemption in the NSG: “[South Africa] has absolutely no problem with that. So when the matter has to be formally decided, surely SA will support that.” [9]

Four NSG countries – Australia, Canada, Japan, and Sweden – despite being considered “White Knights” because of their admirable record on nonproliferation and disarmament, did not join the six countries that asked for amendments to the exemption. Their inaction and their reasoning for joining the NSG consensus came under close scrutiny and were fiercely criticized by domestic political opposition, foreign and local observers, and nonproliferation and disarmament groups in their respective countries.

Australia Favors Exemption, But Uranium Export Ban Remains
A few days after the NSG waiver was granted, Australia’s Foreign Minister Stephen Smith told The Hindu that his country “adopted a positive and constructive approach” toward forming the NSG consensus and that Australia did not “put any reservations or support any changes to the arrangement…” [10] Smith, however, reiterated unequivocally that his Labor party government does not sell uranium to countries that are not NPT states and that this position was not negotiable.

Australia’s Prime Minister Kevin Rudd, upon winning office in November 2007, overturned a decision by his predecessor, John Howard, who had approved uranium sales to India if the NSG granted New Delhi an exemption. Rudd’s decision angered many Indians. Immediately after the NSG waiver, senior Indian officials challenged the reasoning behind Australia’s decision to call on all states to treat India as a nuclear export equal and yet refuse to sell it uranium. Said one senior Indian official: “Australia’s stand does not make sense now as the waiver which [Australia] helped us acquire doesn’t deny us the right to buy uranium from other countries. In any case, now that we have the waiver, we are not desperate. It would be as big a loss for [Australia] because we can import from countries like Canada and South Africa.” [11]

During a trip to India immediately following the NSG decision, the Australian foreign minister sought to address India’s concerns by noting that Australian-Indian relations go far beyond their disagreement over uranium sales. He highlighted in particular his government’s support for India’s efforts to become a major international player. Smith reiterated, for example, Australia’s backing for India’s efforts to secure a seat as a permanent member of the United Nations Security Council and said of the NSG waiver that, “As time unfolds I think it will be regarded as a decision which crystallized the emergence of a great power this century.” [12]

The Australian political opposition wasted no time pointing out what they portrayed as an inconsistent and hypocritical policy by the Rudd government. “For Mr. Smith to say he wants to advance the relationship with India while saying at the same time that Australia will never sell uranium to them is a massive contradiction and an insult,” said Opposition trade spokesman, Andrew Robb. [13] Considering that the opposition appears to be in favor of uranium sales to India, it is not inconceivable that Australian uranium will reach Indian shores if the Liberal Party wins the next federal election due to be held on or before April 16, 2011.

Canadian-Indian Reconciliation Begins in NSG After Over 30 Years of Chilly Relations
Canada was also not part of the group of states that forcefully pressed for conditions on the Indian exemption. To the contrary, according to one report from the August NSG meeting, Canadian diplomats played somewhat of a brokering role between the United States and other NSG states in trying to “identify compromise language that would be politically acceptable to both India and NSG parties.” [14] On September 6, after the consensus had been reached, Canadian Foreign Affairs Minister David Emerson welcomed the NSG decision, saying that “Canada’s decision to join the [NSG] consensus marks a turning point in our relations with India and will help to facilitate a more comprehensive and robust bilateral relationship.” [15]

India and Canada’s nuclear relations have been chilly since New Delhi used Canadian technology to carry out its 1974 nuclear weapons test. [16] As a result of the test, Canada froze its nuclear sales to India, and India’s nuclear weapons program has since been a contentious issue between the two countries. When India conducted its 1998 nuclear test, for example, Canada was one of its fiercest critics. However, on August 2, 2008, the day after the IAEA Board of Governors convened and agreed to India’s nuclear safeguards agreement, Canada’s top diplomat said that the reason for Canada’s change in policy with regard to nuclear sales to India was that “you can’t keep somebody in the penalty box forever.” [17]

In the last few years, Canadian Prime Minister Stephen Harper has made no secret of the fact that he would like Canada, the world’s largest supplier of uranium, to strengthen its ties with India. The day before the NSG met for its September meeting, The Toronto Sun quoted Harper as saying, “[Canada] cannot afford to miss out on the Indian economic phenomenon (and) that’s why our government is putting such emphasis on improving trade and investment between our countries.” [18]

Members of the Canadian media were divided about Canada’s role in the NSG. One editorial appearing in The Toronto Star hoped that Canada and the NSG would force India to make a legally binding commitment not to test a nuclear weapon in the future, in contrast to India’s self-imposed moratorium. Another analyst, however, agreed with the government and thought that it was time to reevaluate the Canadian-Indian relationship and seize the economic opportunities that the Indian economy presents. [19]

Hiroshima and Nagasaki Victims Reject Tokyo’s Decision to Join NSG Consensus
Japan joined the NSG consensus citing as reasons for its decision India’s energy supply demands and the environmental benefits – i.e. fighting global warming – that would come from India beginning to rely more on nuclear energy in contrast to fossil fuels. Increased Indian reliance on nuclear energy “would be a tool to prevent the emission of a huge volume of greenhouse gas as this emerging country of a billion people continues its rapid growth,” said Nobutaka Machimura, Japan’s Chief Cabinet Secretary. [20] According to a senior official, however, Japan did not at the time “plan to start negotiations for a civil nuclear [energy] cooperation agreement with India.” [21] Also, while agreeing to the waiver, Machimura emphasized that Tokyo would continue to push for New Delhi’s ratification of the Comprehensive Test Ban Treaty (CTBT) because the Japanese government “still has concern that the U.S.-India nuclear agreement may have adverse effect on [the] international nuclear disarmament and nonproliferation regime.” [22] The 1996 CTBT has yet to go into effect, and India’s signature and ratification are required for that to happen.

Given its history as the only country to have been a victim of nuclear weapon attacks, Japan has supported actions to strengthen the nonproliferation regime and forcefully protested those events that jeopardize the NPT. For example, in the wake of India’s 1998 nuclear test Japan suspended loans to that country (although it lifted those sanctions in 2001). [23]

Before the September NSG meeting, the mayors of Hiroshima and Nagasaki urged the Japanese government to block the exemption. [24] After the NSG consensus, victims of the 1945 nuclear attacks harshly criticized Japan’s decision. A coalition of groups representing Nagasaki bomb victims, for example, called Japan’s decisions “folly” and another group released a statement saying: “The international community’s trust in Japan has completely crumbled.” [25]

The Japanese media also did not hold back in disagreeing with the government’s decision. One editorial charged that the NSG consensus “defies comprehension.” [26] Another editorial published before the September NSG meeting stated that if Japan agreed to the consensus, it would “hurt [the country’s] moral authority in the movement to convince the U.S. and other nuclear powers to greatly reduce their nuclear arsenals.”[27] The media also expressed concerns over whether Japan’s decision in the NSG would compromise its opposition to the nuclear weapons possessed by the Democratic People’s Republic of Korea (DPRK), especially after reports surfaced that the DPRK intended to resume the reprocessing of plutonium in defiance of an agreement reached during the Six-Party talks. [28] Does Japan have “the leeway to approve of India’s nuclear weapons?” one editorial rhetorically asked on September 8. [29] “If North Korea brings up the fact that ‘Japan approved of India’s nuclear weapons,’ the Japanese government would be placed in a difficult position,” it continued. Japan’s foreign ministry, however, said that India’s nuclear weapons could not be “discussed in the same company as North Korea.” [30]

Silence Marks Sweden’s Out-of-Character Stand in NSG
Sweden is known for a foreign policy based on neutrality and enjoys a strong nonproliferation and disarmament record gained since it scrapped its nuclear weapons program in the 1960s. Observers were therefore surprised to see Sweden join the consensus without a fight. [31] Ahead of the August NSG meeting, one of Sweden’s major newspapers asked Foreign Minister Carl Bildt about Sweden’s role in the NSG negotiations. The former Prime Minister said the negotiations were secret and as a result he did not want to comment. [32] On his blog in early August, however, Bildt said that, with regard to the U.S.-India deal, he fundamentally agreed with IAEA Director General Dr. Mohamed ElBaradei, a long time supporter of the agreement. [33]

The major Swedish opposition party, the Social Democratic Party, while recognizing that this is an intricate issue, criticized Bildt for not being forthcoming on Sweden’s official position in the NSG. [34] The Social Democrats, who have governed Sweden for a majority of years since the 1930s, also criticized Bildt for not holding a debate on the issue. [35] Prior to the NSG meeting, Swedish and foreign commentators tried to stimulate a national debate and convince the government to block the consensus. [36] As noted above, Bildt remained largely silent, and when he spoke he referred to critics of the U.S.-India deal as being “populists.” [37]

The Swedish government has not issued a press release or statement following the meeting to explain its position, and the Swedish media have not forcefully questioned the government’s decision to join the consensus. It is difficult to say with certainty, therefore, why Sweden joined the consensus without a fight. What is known, however, is that the relatively new center-right coalition government, voted into office in 2006, is on the record saying that India is one of three countries whose relationship is most valued by the nation (outside of the European Union). [38] Coincidentally, the United States is another country on that list (China is the third). It is reasonable to believe, therefore, that Sweden kept a low profile in the NSG in order to not upset what it considers to be its top priorities outside of the European Union.

The NSG Exemption: A Milestone Political Achievement or a Pyrrhic Victory?
Among the states discussed above, France, Germany, Russia, the UK, and Brazil appear to have prioritized economic benefits over costs to the nonproliferation regime when supporting the Indian NSG waiver. South Africa’s allegiance to its fellow NAM member seems to have trumped its commitment to the NPT. Insofar as Austria, Ireland, the Netherlands, New Zealand, Norway, and Switzerland are concerned, these countries apparently could not withstand the Bush and Singh administrations’ onslaught of pressure and maneuvering over an extended period of time, including lobbying visits, letter-writing, and last minute phone calls. These six states would have needed the support from other White Knights in order to influence the outcome in the NSG. It is possible, however, that these countries’ resistance led to the agreements that were initially beyond public knowledge.

The White Knights – Australia, Canada, Japan, and Sweden – wrestled with competing priorities, including balancing relations and responsibilities toward allies, economic interests, foreign policy goals, and long-held nonproliferation and disarmament ideals. In the end, the latter did not triumph, which provided an opportunity for domestic political opposition and other groups to point out the foreign policy inconsistencies that their stands represented. Future decisions on nonproliferation and disarmament will tell if these four countries’ inaction in the NSG represent a fundamental change in their views on these subjects. At least for now, these four states’ credibility and ability to speak up against proliferation and for disarmament have diminished.

The NSG exemption is admittedly a landmark victory for both Prime Minister Singh and President Bush. Considering the potential damage the exemption and the U.S.-India deal could do to the nonproliferation regime, however, and especially its flagship treaty, it might turn out that in the longer run Washington and New Delhi have achieved – with the active support, tacit agreement, and reluctant approval of other NSG states – a Pyrrhic victory.

Johan Bergenäs – James Martin Center for Nonproliferation Studies