American Enterprise Institute

April 8, 2008

[Edited transcript from audio tapes]

8:45 a.m.	Registration
9:00	Introduction:	Danielle Pletka, AEI
		Henry Sokolski, Nonproliferation Policy Education Center
9:15		Panel I: After Iran and North Korea: The Next Nuclear Challenges
	Panelists:	James Acton, Kings College London
		Robert J. Einhorn, Center for Strategic and International Studies
		Sharon Squassoni, Carnegie Endowment for International Peace
		Bruno Tertrais, Fondation pour la Recherche Stratégique
	Moderator:	Danielle Pletka, AEI
10:30		Panel II: The Indian Nuclear Deal: What Should Be Done in 2008?
	Panelists:	Daryl Kimball, Arms Control Association
		David Trachtenberg
		Rohit Tripathi, Young India
	Moderator:	Henry Sokolski, Nonproliferation Policy Education Center
12:00p.m.	Luncheon
1:00		Panel III: Beyond the NPT: What’s Needed?
	Panelists:	J. D. Crouch, National Institute for Public Policy
		George Perkovich, Carnegie Endowment for International Peace
		Henry Sokolski, Nonproliferation Policy Education Center
	Moderator:	Danielle Pletka, AEI
2:30	Adjournment

Proceedings:

Panel I: After Iran and North Korea: The Next Nuclear Challenges

Danielle Pletka:  Good morning, everybody.  I'm Danielle Pletka.  I'm the vice president for Foreign and Defense Policy Studies here at the American Enterprise Institute.  I'm really delighted, first of all, to see everybody here today for this all-day conference on “The Crisis in Nonproliferation and How We Can Meet the Challenge.”  I'm especially grateful to Henry Sokolski and the Nonproliferation Education Center, which arranged this conference with us and contributed so much.

What brought us to this conference were a number of things.  Among them, a creeping observation that the issue of nonproliferation, not as we addressed it specifically on the question of Iran or of North Korea or of crises of the moment, but the issue of nonproliferation in general seems to be very much on the back-burner. That not only the nonproliferation regimes that we have come to take for granted as the bulwarks of international security, such as the Nuclear Nonproliferation Treaty, have begun to crumble, and I would say worse than begun to crumble, have, in fact, become enablers for countries like Iran and others to become proliferators, to develop nuclear weapons program under the safety net, if you will, of a legal regime and then turn around and say, “Yeah, not so much.  Thank you very much.  Now we have a nuclear weapon.  Goodbye.” 

This seems to me to be a model that worked for North Korea; it may well work for Iran and, once it has worked for them, could possibly work for others.  And that we have as a nation - and I would say, also, even internationally - stood back and watched this and said, “That is a shame,” and not really done anything about it.  More specifically, however, on the question not of threats but of nuclear cooperation and the like, again, you see that the United States has really changed positions in the Bush administration and has headed in a different direction than we have been headed for many, many years. 

We have agreed in principle to a nuclear cooperation agreement with a country that is not in the NPT – India.  We have looked away as a country like Pakistan has continued its nuclear weapons program and, again, I think that that sends a very clear signal to other countries, whether it is Iran or it is Saudi Arabia or it is Egypt or Syria, that, in fact, things are different and that our view of the old rules is that they do not really matter that much anymore; they are really not relevant.  And if we like you, well, okay, we will sign a nuclear cooperation agreement with you, India.  But if we do not like you then, well, perhaps things will not go as you would hope.

This is not the way to run the world because although it would be okay if we were choosing based on who I liked, it is not necessarily okay based on, say, the next President -- who they like or who the Congress likes.  Anyway, you get a sense of the capriciousness of it.  In any case, based on all of these swirling ideas and concerns, we thought it would be worthwhile to bring together some true experts and I think that we are not here to have a sort of political debate; we are not here to talk about ‘yes sanctions’, ‘no sanctions’, ‘yes’ or ‘no’ to India 1-2-3 - although I'm certain that our panelists will have particular opinions - but, rather, to talk about the issues and how the United States ought to look forward in trying to confront these challenges - what should the regimes be.

And we have taken three different approaches to it.  I think it will be evident.  I will talk a little bit about our panelists.  I’ll sit down to moderate, but let me relinquish the dais in order to let Henry Sokolski make a brief introduction as well.  And then we will move on quickly from there.  So thank you very much for being here.  Henry?

Henry Sokolski:  Good morning.  Judging from the numbers here on a bleak Tuesday morning, it is hard to see anything but interest in these topics.  Some of the panelists are going to share a research that MPEC Commission -- and actually we had a meeting last month in Prague and so it is especially pleasant to be able to showcase their work in a broader audience.

Recapturing some of the points that Dany made, you know, I see some faces that date back to when I first came to Washington and a little before.  And I like to think that where we are right now with the spread of nuclear weapons capabilities is not that different from the ‘70s in some respects.  Like a chronic disease, every time there is a welling up of interest in nuclear power – the ‘50s, the ‘70s and now – the diplomatic community has a very hard time trying to figure out how to deal with this without making the world, frankly, a lot riskier.  And, you know, the three approaches that we have, both on the left and right, are really a celebration of half-thoughts, to be blunt; I’d like to kind of push beyond them.

Three of them that come to mind is –- one is, well, we are going to go to hell in a hand basket anyway.  Should we not just take advantage as best we can?  I call this the armed restraint view, which is no rules, just right.  What you do is you see how you can manage things by handing things out.  You say you are sort of following the rules but you do not really care about the rules so much as helping friends as you understand them and hoping that you can kind of put pressure on your adversaries.  This sort of was the approach prior to First World War.  It did not work out so well.

Another idea is, well, let’s not argue about rights; let’s just say everybody has a right to do everything, including getting right up to the edge and getting bombs.  And what we will do is we will try to bribe them.  By the way, looking at the framework and all the permutations to that on what we are going to do in Iran, all I can say on that front is: good luck, it has not been too successful so far. 

And then, I guess, there is just generally the idea that if we push nuclear power hard enough with enough subsidies, kind of like Atoms for Peace in the Eisenhower era, it will block out the bad end; this is hope against all experience.  And so today what we are going to try to do is take a look at what we see as the problem sets going forward because, obviously, it is not the ‘70s; it is much later.  Things have changed to some extent.

And then the second thing we are going to do is try to think about what kinds of approaches might make more sense than the three things I just raised.  Let me end on a happy note.  I do not think we have to fill our buckets up with kerosene and rush to the smoldering fire and try to put it out that way.  I think we can do better in a lot of respects, and the first thing is to slow down and think about what we are doing.  It is good time to do that.  We are going to get a new President and I do not know whether that is going to help or not, but it is a good time to think about what we ought to be doing differently.  On that note, I think we should begin.

Danielle Pletka:  Thank you very much, Henry.  Let us move quickly to our first panel, which is, perhaps, the most headline-grabbing of our sessions - “After Iran and North Korea:  The Next Nuclear Challenges.”  I'm expecting to hear from each of our panelists who, in fact, is next as the nuclear challenge and I await with baited breath.  I have got a couple of different contenders that I think are out there.

On our panel today -- and I'm going to go and introduce them in alphabetical order.  You do have their full biographies in your packets and I recommend those to you.  But just in brief, James Acton is a lecturer at Kings College in London in the Center for Science and Security Studies.  And he is conducting research into, and advising the government of Norway on, technical and political aspects of verification of nuclear disarmament, something about which the United States has a great interest.

Robert Einhorn is a senior advisor at the Center for Strategic and International Studies in their international security program.  He works on a broad range of issues – arms control, nonproliferation.  Of course, among them, prior to joining CSIS, he served in the U.S. for what – 20, 30, 40 years?

Robert J. Einhorn:  Twenty-nine.

Danielle Pletka:  Twenty-nine.  I felt like we have spent at least 20 of those in briefings together -- was leaving as the assistant secretary for nonproliferation at the Department of State.  We have also with us Sharon Squassoni, who is a senior associate at the Carnegie Endowment for International Peace in their nonproliferation program, and she works on - it is kind of obvious, I guess - on nonproliferation issues, arms control, and national security questions for them and has written prolifically on the questions before us today.

And finally, Bruno Tertrais is a senior research fellow at the Fondation pour la Recherche Stratégique – excuse me; it is a little early in the morning.  He is also a lecturer in world politics at the Institut d’études politiques de Paris and a well-known European expert on nonproliferation questions.  I'm not going to take up any more time in chat, having had my time before the microphone, except to advice of two housekeeping issues.

The first relating to myself - because I'm very confused about scheduling I'm going to leave in the middle of this panel without any offense to my panelists and none should be taken; at least, I’ll try not to.  But I have to go up to Capitol Hill to a hearing on Iran, and one of my colleagues will take over and take your questions.  And the second is that on our second panel, Tom Donnelly is not going to be with us today.  He had to go to Canada and we are lucky enough to be joined by Dave Trachtenberg, formerly of the Department of Defense, who will be an important and valuable addition to the second panel.  So the order that we have is Bob Einhorn, Bruno Tertrais, Sharon Squassoni, and James Acton.  Bob, thank you for being here. 

Robert J. Einhorn:  Dany, thank you very much and thanks to AEI for including me on this panel.  What this panel is supposed to do is look at nonproliferation challenges beyond North Korea and Iran.  Now, we could speculate on which country is maybe next to seek membership in the nuclear club and we can do that in discussion.  I'm not going to focus on that specifically; I would like to look at three generic proliferation challenges, I think, we are going to be facing over the next several years.

The first is impeding the acquisition by additional countries of sensitive fuel cycle capabilities, namely, uranium enrichment or plutonium reprocessing capabilities; second challenge – deterring countries that nonetheless acquire fuel cycle capabilities from turning their latent nuclear weapon capabilities into actual nuclear programs.  And the third challenge – reducing incentives for U.S. friends and allies around the world to seek their own nuclear deterrence.

First, I’ll focus on impeding the proliferation of enrichment and reprocessing facilities.  Now, such dual use facilities, as I'm sure you all know, could be used both to produce fuel for several nuclear reactors as well as to produce highly enriched uranium and separated plutonium for nuclear bombs.  And that is why the United States has tried for decades, and with some considerable success, to prevent the spread of these fuel cycle capabilities.  But if the much-predicted nuclear power renaissance actually materializes, then we are going to see a substantial increase in demand for nuclear fuel and especially for enriched uranium.  And a significant number of countries may seek the ability to produce such nuclear fuel indigenously.

Now, fortunately, the market provides disincentives for countries to get into the fuel production business.  It is much cheaper to buy fuel from foreign suppliers than to make it themselves, and this is especially true for countries now getting into the nuclear power business.  Countries considering the production of enriched uranium for export will find themselves at a huge commercial disadvantage, a huge competitive disadvantage, vis-à-vis highly efficient suppliers like Uranco, which is the German-Dutch-British consortium.  Uranco has been in the enrichment business for a long time and produces very efficient machines. 

Still, countries will do things for non-economic reasons.  For example, they may be willing to pay a high premium for their own fuel supplies to help with energy security or, less benignly, they may want their own fuel cycle capability to produce nuclear weapons or, at least, to have the option to produce nuclear weapons.

We need to take steps that reinforce the economic disincentives for acquiring fuel cycle facilities and expose the motives for countries that insist on pursuing patently uneconomic fuel cycle choices.  One of these steps is to develop a backup fuel supply arrangement that can provide assurance to countries embarking on their own nuclear power programs that as long as they are in compliance with their nonproliferation obligations, they would have reliable access to reactor fuel.  Such a fuel supply assurance -- and as most of you know, this idea is now under active consideration by the U.S., the IEA and other countries.  But such a fuel supply assurance will help undercut the energy security rationale for acquiring an indigenous enrichment capability.

In addition to reducing the incentive for countries to seek their own fuel cycle capabilities, we should also make it more difficult for them to buy sensitive technologies.  And this means strengthening the Nuclear Suppliers’ Group controls on the transfer of enrichment and reprocessing technologies by member governments.  It also means eradicating black market networks like a black market network established by Pakistani former scientist AQ Khan, which was a principal source of enriched technology for the nuclear weapons programs of Libya, Iran, and North Korea.  But despite our best efforts to reduce both supply and demand, some countries are likely to succeed in acquiring their own fuel cycle capabilities. 

And once they succeed in putting in place the necessary technical infrastructure to produce fissile material, they will have a latent nuclear weapons capability.  I see a latent nuclear weapons capability as the ability at a future time of their choosing to break out and produce nuclear weapons in a relatively short period of time.  Depending on their technical capabilities and how much preparation they do in advance, these countries with latent nuclear weapons capability could produce nuclear weapons in anywhere from 6 to 24 months after breaking out.

Now, countries could break out in two different ways.  One way would be to produce plenty of low-enriched non-weapons-usable uranium under IEA safeguards, then withdraw from the NPT, kick out the international inspectors, re-enrich the low-enriched uranium to weapons-grade highly enriched uranium and start building nuclear weapons.  The other way would be for countries to take advantage of their experience with the overt enrichment facility, overt fuel cycle facility, and then build clandestine facilities for the covert production of fissile materials and nuclear weapons.

Now a world with increasing numbers of latent nuclear weapon states would be a very unstable world, even if very few of those states actually intended to have nuclear weapons.  Anticipating a possible breakout by others, perhaps regional rivals, countries might feel compelled to acquire breakout capabilities of their own, or even to acquire nuclear weapons. And this dynamic perhaps is already underway in the Middle East.  Obviously, the best solution would be to prevent additional countries from having fuel cycle and, therefore, breakout capabilities.  But where that is not achievable, we have the second challenge I want to address, and that is deterring countries that have latent nuclear weapons capabilities from exercising their breakout potential.

Now we should try to deter both possible breakout scenarios – withdrawal from the NPT and pursuing a covert weapons program - and we should enhance deterrence by greatly increasing the political risks involved in breaking out.  The NPT allows a party to withdraw by giving 60 days’ advance notice and simply asserting that remaining in the treaty would jeopardize their supreme national interests.  To help discourage withdrawals, the U.N. Security Council or the NPT parties collectively, or, perhaps, both of them, should decide that any state providing a 90-day withdrawal notice would be required, first, to go before the Security Council to justify its withdrawal; second, to accept highly intrusive verification measures similar to those imposed on Iraq in the fall of 2002 to prove that it had not already embarked on a nuclear weapons program.  And third, to place all existing nuclear facilities and materials under IEA safeguards in perpetuity so they could not be legally used to support a nuclear weapons program.

To help deter a covert breakout scenario, it would be important to increase both the likelihood and the perceived cause of getting caught cheating.  To increase the likelihood of detection, the IEA’s verification authority should be strengthened.  And to this end the Nuclear Suppliers’ Group should require non-nuclear weapon states with fuel cycle programs to adhere to the additional protocol as a condition of nuclear supply.  But deterring a covert breakout is not just a matter of increasing the risks of detection.  Would-be cheaters must believe that they would pay a high price if cheating is detected. 

However, the mild sanctions adopted in the case of North Korea and Iran send the wrong signal to possible future violators.  The P5 should agree on an initial set of penalties that would be imposed automatically on countries that are found by the IAEA board to be in breach of their nonproliferation obligations.  Now, adopting such penalties on a country neutral basis before particular issues arise might be somewhat easier for the P5 to reach agreement.

Now, regardless of whether we can prevent countries from acquiring fuel cycle capabilities or from exercising their breakout capabilities, we will face a third challenge in coming years and that is reducing incentives for U.S. friends and allies around the world to acquire their own nuclear deterrence.  Several friends of the United States are concerned about the nuclear programs of North Korea and Iran.  In the Middle East that includes Saudi Arabia, Egypt, and Turkey; in East Asia, that, of course, includes Japan and South Korea. 

Now, we need to give high priority in the few years ahead to persuading these countries that their security can be protected without the need for them to acquire their own nuclear weapons.  That means doing what we can to reinforce the credibility of U.S. security assurances and, particularly, America’s nuclear umbrella.  In the wake of North Korea’s October 2006 nuclear test, Secretary Rice traveled to Tokyo and explicitly affirmed U.S. extended deterrent to Japan, and the Japanese were very grateful with this reaffirmation.

It also means boosting defense capabilities by transferring conventional military systems to our friends, cooperating with them in missile and air defenses, and maintaining a strong U.S. military presence in their regions.  We should also make clear to our friends that we do not want them to go nuclear.  Of course, this should be obvious.  But the Bush administration has often conveyed the impression that proliferation by hostile regimes is bad, and proliferation by friends is not-so-bad and may be even good.  The U.S.-India civil nuclear cooperation deal, in my view, tended to reinforce that impression.  As a result, some of our friends around the world may believe that we would understand or at least be tolerant if they decided to go nuclear.  I think we should disabuse them of this expectation.

In conclusion, I think there is a tendency today to assume that the North Korean and Iranian cases will trigger nuclear chain reactions in their regions and that lots of countries will start moving toward nuclear weapons, or at least hedging their bets.  Now, clearly, there are substantial risks that this may happen but acquiring nuclear weapons or even a nuclear weapons option is not so quick or easy, especially for countries that, today, lack the necessary technical infrastructure and expertise.  For several countries that may now be contemplating the nuclear option, the path ahead may look more technically challenging, politically risky, and ultimately, uncertain than we may recognize.

So in my view, nuclear cascades or nuclear chain reactions are not inevitable.  But whatever the likelihood may be of having future chain reactions, we need to do all we can to lower that likelihood even further.  And we can do so by preventing the spread of fuel cycle capabilities, by deterring breakout by countries that have latent capabilities, and by reassuring our friends and allies around the world that they do not need nuclear weapons to safeguard their security.  Thank you.

Danielle Pletka:  Thank you very much, Bob.  I think, Bruno, you are next.  Thank you.

Bruno Tertrais:  Merci, Danielle.  Okay, what is the problem?  I think the question that was posed to us –- the question that lends itself to different scenarios, that is, if you should ask yourself after Iran and North Korea, what?  How urgent and how hard would it be?  My first answer is that it depends on what we mean by “after Iran and after North Korea.”

There are several different situations in which the nonproliferation scene will be very different; that is, do we have an Iran which is under the threshold, at the threshold, or over the threshold?  You know, ‘after Iran’ means three different things in these three different scenarios.  Do we have –- well, we will have a nuclear North Korea, unfortunately.  Whether it keeps its symbolic capability or whether it proceeds with new tests and whether it gains truly operational capability mixed – the picture changes, the scenarios change.  Whether North Korea and Iran are actively providing nuclear technology to other countries is also a key parameter.

So my point is to say: when we say after Iran and North Korea, what?  And how urgent and how hard will it be – it depends on the kind of nuclear Iran and nuclear North Korea that we have.  The consequence of a nuclear Iran is a topic that has been discussed widely and intensively over the years, including here.  I want to emphasize one point, which is not always very well-understood in this city.  I mean that is the fact that the European involvement was so strong on Iran, including because it was the future and it is the future of the NPT which is at stake, and there is still, today, consensus in Europe to say that the NPT is and should remain a key political norm to make the spread of nuclear weapons more difficult.

So the fact that the Europeans are still actively engaged in the management of the Iranian nuclear crisis is not only because we view it as a potential threat to us and to the Middle East but also because the future of the NPT is at stake.  Of course, the NPT is not a barrier in itself to proliferation for everybody but it is and it will be from some of our key friends and allies, including Japan, for instance.  It would be very different where Japan would see the nuclear option very differently, whether we live in a world where the NPT remains a global norm or whether the NPT does not exist anymore.  So that was my first one – depends on what you mean by ‘after Iran and North Korea.’

My second point is something that Bob alluded to.  Frankly, I do not see any realistic scenario where the next proliferation wave is a high-speed process.  It will be a slow-motion process.  Any new nuclear proliferation wave is very likely to be a slow-motion process, and Bob has alluded to that.  A few countries -- money is going to take a lot of time for them to build the necessary infrastructures; the legal dimension and to train personnel, et cetera.  You are all familiar with that.

I would mention an additional factor.  The fact that most suppliers are primarily interested in countries which already have that nuclear infrastructure -- that is a key point.  In my country, for instance, the fact that there is an active policy of telling if your nonproliferation credentials are good, then you deserve nuclear power generators.  This, by the way, was something that President Sarkozy announced before he was elected and I think he believes strongly in that.  But Areva is not going to sell nuclear reactors everywhere in the Middle East, and I think the Emirates deal – the deal with the United Arab Emirates - is likely to be an exception rather than a norm.

By the way, it is interesting because when Sarkozy was candidate for the election, the poster child was supposed to be Algeria.  When he announced his willingness to have a big nuclear energy initiative - that was in March 2007 - he said, “You know, Algeria should be the first to benefit.”  Algeria was supposed to be the poster child.  Now, surprise, surprise! Reality takes precedence over a big concept and those who actually benefit are countries which have the money, are seen as reliable, et cetera.  The Emirates has the money and is seen as reliable.  The Algeria has less money; it is seen as less reliable.  So, again, the Emirates are likely to be, in my personal view, the exception rather than the norm.

Finally, there is a sort of technical argument.  I'm well aware of the technical discussion about weapon-grade plutonium, fuel-grade, reactor-grade, et cetera.  But, still, power reactors that will be sold will not lend themselves as easily as other types of reactors to military usage.  I know that Henry and other people are going to blast me if I say – I know the arguments.  I keep saying that I know the technical discussion but, still, some reactors and some plutonium lend itself much more easily to military hazards than other.

Still - and that would be my third point – I would worry about some research reactors.  The discussion about nonproliferation in the past five years has tended to focus on centrifugation and the potential risk by power reactors.  We should not forget – I know that experts do not forget it - but I think I would emphasize that we should keep worrying about potential military use of some research reactors.  I mean, some countries such as Egypt, Indonesia, Algeria have research reactors of a power or of a type which can under certain conditions be used for a breakout option. 

So it would be interesting to see whether Iran keeps building and it finishes early the Arak reactor because as you know, it is a bomb factory, basically.  Whether or not this is something that will once again appear as an attractive option - we are back to the ‘70s.  Well, in the ‘70s indeed, plutonium reprocessing was seen as the primary proliferation.

Okay, what do we do now?  I'm not going to agree with a lot of things that Bob has said.  I'm not going to repeat the points but I would say, first, that whatever the scenarios that I have outlined when I began, the lessons that will be drawn from the Iranian crisis and from the North Korean crisis will bear heavily on our decision making.  Let me just give you a few ideas. I will focus here on the demand side; that is, on dissuading -- not only deterring but also dissuading countries from going nuclear.

A few points on raising the costs – we will need to build on the arguably slow momentum but the momentum required in the United Nations because, over the past two years, the fact that there have been several rounds of sanctions dedicated to try to stop nuclear proliferation is something significant even though they have been too slow and not strong enough - I agree with all that.  But the fact is that the U.N. has started taking serious sanctions about nuclear proliferation issues.  So how to build on that.

The problem with sanctions is that they often work but they work much too slowly.  You know, we cannot wait 20 years for a country to give up WMD or nuclear weapons; we just do not have the time.  Generally, nuclear programs go faster than the efficiency of sanctions or the diplomatic route.  So I like the Goldschmidt proposals; I like the proposal just made by Bob Einhorn.  What do we do in case of a country found non-compliant?  They should be immediate and unfitted, access to its nuclear site.  A country withdrawing should be held accountable for its past violations.  I think these are critical ideas that need to be put into practice sooner rather than later.

On Europe’s side, I think Europe is not using its instruments or weapons as much as it could.  I'm a strong believer of a much more restrictive interpretation of what we call conditionality; the fact that we have all these trade and cooperation agreements with various countries around the world.  Well, in principle these countries are supposed to abide with the nonproliferation norm.  We should have a much more restrictive and stronger interpretation of those.  For instance, concerning the mandatory implication of the additional protocol, that is our fault, I mean that is our responsibility.  We have to also - the fact that we are a big commercial power with a lot of economic power of attraction means that we can make better use of this.

Finally, on cooperation with India - and I say India because, obviously, it is not India per se; it is the fact that it is a country outside the NPT with whom there is a lot of interest in nuclear energy cooperation, that is, not only in this country but, as you know, also in my country.  And personally, I know that India will be discussed later on but, here, this:  Iran has been looking at India very carefully.  Iran has been looking at North Korea and Iran has been looking at India.  And if I was an Iranian, the way we are dealing now with India would indicate to me as an Iranian that, hey, well, if we ride the storm 10 years from now, we would be recognized as a nuclear power with all the benefits.  They may be wrong but I cannot blame them for thinking that way. 

So I think that the Iranian perceptions of our dealings with India are an important component of the way they define their strategy.  And for me that in itself - there are other reasons to doubt the wisdom of major cooperation deal with India now, but I would defer any significant nuclear cooperation agreement with India for later talk.  I have great admiration and respect for India.  I do view it as a major strategic partner for Europe as an allied country, but it is the not the time for a major cooperation deal.

That was about the cost and benefits.  On the benefit side, there are things that we can do better and I will conclude with that.  On security guarantees I will just say two things.  First of all, that I'm not sure that Article 5 is enough to reassure Turkey of the collective Western security commitment to the safety and security of their country.  Article 5 is not in itself enough and there may be a time where we reaffirm in a stronger way our NATO security guarantee to Turkey.  It has had some reasons, good or bad, to doubt that security commitment.  It needs to be reaffirmed.

On the Gulf countries – I wonder whether it might be time at some point to do something that involves the three countries, which had already security commitments in the region; that is, the United States, the United Kingdom, and France.  I mean my own country has three security agreements; their contents are not public but they are security commitments that involve Kuwait, the Emirates, and Qatar.  There may be a point where it would be useful to have some form of not collective security guarantee - that is too strong a word - but some form of a collective statement by those Western countries, which are already heavily involved in the region to say to the effect that - to show how we care about their security in case Iran was to continue with this nuclear program.

Lastly, I would say two things.  First of all that on the status dimension of going nuclear, if we were ever to agree one day on an enlargement of the Security Council, it may make incentives for proliferation being less potent, so to say.  I doubt that we will ever agree on enlarging the Security Council.  I doubt it.  But if we were to show that you can be a major world player without nuclear weapons - that is, having permanent membership without having nuclear weapons - that may be an important step forward to prevent the incentives for going nuclear. 

And finally, I would also be in favor of at least the three if not the five -- I would like the five to do it - and, perhaps others, too - to state more strongly that we view nuclear weapons as only weapons of deterrence, well, that they could only be used in extreme circumstances but they are not weapons of prestigious status.  And the fact that we are moving in a direction where there will be less [indiscernible] in the world of nuclear weapons that I think that would be a good thing.  So let me close.  Oh, hi Danielle.  You have changed. 

Chris Griffin:  Yes, I left and got a haircut.  Sorry, my name is Chris Griffin.  I’m a research fellow here in Asian Studies and we are doing a last minute substitution. Sharon Squassoni will be our last speaker and thank you very much for your patience.

Sharon Squassoni:  Next to last.  We have got James after.  Thank you.  Thanks to AEI and also the NPEC for hosting this conference.  I’m going to do something a little different, which is to brief us.  Henry mentioned on some of the research I have been doing funded by NPEC on nuclear expansion and proliferation.  Since time is short, I’m going to stick to presenting a few maps.  This is part of a longer briefing, which is both available in the Carnegie website and on the Nonproliferation Policy Education Center’s website.

So, first, what I’m not going to do.  I’m not going to engage in a theological debate about nuclear energy in the U.S.  If you have listened to some of the radio shows and television things, usually it devolves into how many people died at Three- Mile Island and whether or not you support a plutonium economy.  I’m also not going to debate the proliferation impact or evils of light water power reactors.  But what I am going to do is look at this bigger issue of one of the many policy reversals of the Bush administration, which is to launch headlong into supporting nuclear power not just in the U.S. but globally. 

We have the Global Nuclear Energy Partnership.  We have the Bush-Putin July 2007 initiative and various statements under the G8 supporting nuclear energy in the name of climate change.  And at the same time, as both Bob and Bruno mentioned, we are stepping up efforts to restrict this sensitive nuclear technology.  So here you have basically the heart of the -- or the crux of the matter under the NPT:  How do you ensure the peaceful uses of nuclear energy? 

But it is at a great period of tension right now.  And so what I’m going to do with this briefing is if we believe there is going to be a nuclear renaissance, what is it going to look like?  And will we like that picture?  And so today I’m not going to give you projections but I’m going to show you maps of different scenarios.  And there is more information on the websites and in the longer briefings on those scenarios but, just very briefly, there are three.

The first -- I will show you what nuclear energy looks like today, nuclear power reactor capacity.  Then I’m going to show you what a realistic growth scenario is for 2030, which is based on Energy Information Administration numbers.  Then I’m going to show you what I call the wildly optimistic scenario, which is what states have said they are going to do.  And one note:  China recently revised upwards its reactor capacity figures from 40 gigawatts - basically, 40 very big reactors - to 60 by 2020.  So you can see it as a moving target. 

And the last one is akin to a global climate change scenario:  How many reactors would you need to build if you wanted to accomplish one of those Pacala-Socolow wedges, that is, to reduce 1/7th, or to provide 1/7th of the solution for global climate change? 

So, very briefly, I do not call it a renaissance or a revival because I think that is a very U.S.-centric approach; I would like to call it nuclear energy enthusiasm.  But what has happened is since 2005 more than 25 states have announced new plans for nuclear power.  And part of it lies in this idea that nuclear power is one of the solutions to global warming.  But, also, a part of it is this notion of greater energy security and you particularly see that, ironically enough, in the Middle East.  But still, nuclear energy has not resolved really or solved the four basic dilemmas; you have proliferation, cost, safety, and waste.  Although many would argue that it has made inroads in safety. 

So very briefly this is a snapshot.  Nuclear energy now provides 16% of global electricity demand.  We have about 31 countries operating over 400 reactors.  Eleven countries engage in uranium enrichment.  Five countries separate plutonium commercially; that is, they separate the spent fuel from the reactors.  And no country yet has a geologic repository for nuclear waste. 

So this is -- you can see the scenarios one, two, and three.  Even if you say that nuclear energy stays the same in terms of its market share of electricity, as you go up you are going to see more countries with reactors, more countries with enrichment.  It is an open question whether more countries will be separating plutonium, although the U.S. presently intends to do that.  And also, it is not clear how the progress on geologic repositories moves forward, although my guess is that Finland and Sweden will be before the U.S. 

All right.  So this is -- and again, this is a graphic depiction so it is not entirely to scale but we did the best we could.  Most of the nuclear energy in the world -- you can see Europe, U.S., Japan.  Enrichment -- these are the commercial enrichment capabilities and this is the reprocessing capabilities.  So, do we care where these nuclear power reactors are installed?  Well, if you care from an energy security perspective, you need to know where the oil, gas, coal, and uranium is.  If you care from a global climate change perspective, you have to ask where are the carbon emissions.  So where does it make the most sense if you are going to make the biggest impact on global climate change? 

So the industrial world leads in the total amount of carbon emissions but the developing world, particularly India and China, lead in growth in those carbon emissions.  Half of those states - I think it is 27 - that are interested in developing nuclear power capacity are in the Middle East.  Are they doing this for global climate change reasons, energy security, or hedging their bets against Iran? 

In terms of technical capabilities -- so we talked about where it might go and the maps are still to come.  Do we care if these countries develop nuclear power reactors?  Well, I think you can make an excellent case that when you have a nuclear power base and -- of course, the issue that Bruno raised about research reactors is quite critical.  But it helps develop a scientific and technological base that can be used if the country so desires a nuclear weapons program.  Plus it raises issues of security and control of nuclear material.  The question is how many power reactors do you need to have before it makes sense to engage in enrichment and reprocessing? 

I’m not even going to touch reprocessing today because that, again, is a big debate.  But an enrichment -- we look at Iran and we say, “It does not make sense.  Bushehr is not even operating.”  Will it make sense at 10 gigawatts?  Will it make sense at 20 gigawatts?  And for those of you who are not familiar with reactor lingo, one gigawatt is a thousand megawatts; it is basically the standard for reactors.  So that 20 gigawatts is about 20 power reactors. 

And the last part of this:  Do technical capabilities matter?  Our efforts right now to restrict technology transfer, I would argue, are piecemeal.  There are more states now; it is ironic that GNEP was supposed to sort of restrict the states interested in enrichment and reprocessing.  Well, actually the initial wave is that more states are interested at least in enrichment.  And you have to ask the questions:  What rules and institutions do we have?  Are they adequate for managing significant growth in nuclear energy?

Okay, so this is -- and I’m sorry if you cannot see in the back.  Again, these are in the websites.  The purple countries are the states that are now interested in nuclear energy and the key is the darker the color is, the more serious they are.  They have -- so the darkest purple is they have established some kind of baseline, some kind of -- taken steps. 

So here we get to the maps.  This is the map that you saw before - nuclear energy as it stands today.  The first scenario you will see is the conservative growth forecast for 2030.  You can see some states are growing more than others.  The red is the proposed expansion; this is what states say they want to do.  The red -- the filled-in red circles are the new states, those that do not have nuclear power now but want it.  And then the green circles are what you need for global climate change to make a small dent.

So I’m going to do that same map just for the new nuclear power states.  So here, you can get a better look.  This is a little bit more to scale for 2030 and here is the green scenario, which is roughly based on the MIT 2003 Future of Nuclear Power study.  Okay, so obviously a big increase in nuclear power has implications for enrichment.  On the left-hand side, you see millions of separative work unit capacity.  It is very difficult to translate these into numbers of plants because you just do not know.  But you can see the baseline -- the orange baseline right now.  There are about 11 countries and there are about 17 enrichment plants of various sizes.  And so as you go up to the scenarios you can see the numbers get very large and you have got to ask where is that enrichment capacity going to be developed.  

Now, also, you have to make an assumption of what kinds of reactors will be sold out there.  Ninety percent of all power reactors right now are light water reactors, which require enriched uranium.  But there is a question:  Will India decide that it wants to export pressurized heavy water reactors, CANDU-type reactors that do not require enriched uranium?  And that changes.  And also if you go in to fast -- you know, reactors that burn plutonium -- that also changes. 

Okay, so my conclusions, briefly.  The expansion plans, as I view them, are unrealistic.  I do not think that we are going to see a nuclear expansion of the type that, say, the World Nuclear Association envisions.  When you talk to U.S. nuclear industry people, when they say a renaissance they mean 4 to 8 reactors in the next, maybe, 10 years.  And I heard something on NPR that I have been dying to use it; they were talking about the stock market and saying, “The new leveling is the new up.”  So the new -- so just building some reactors in the U.S. is the new up.  That is the new renaissance. 

Electricity demand is expected to really skyrocket and so it is going to be tough for nuclear energy even to keep its current share of electricity generation.  But the context in which all of this is happening is very encouraging.  So even if you do not get a huge expansion, you may have some states in proliferation, in regions of proliferation concern in the Middle East and Asia that may go ahead with their plans.  Enrichment and reprocessing is not yet off the table and the message from the U.S. right now under the Global Nuclear Energy Partnership Program is that reprocessing is necessary for an advanced fuel cycle.  And we hear the same message from the Chinese recently on their cooperation with Areva which is, “Yes, we need reprocessing help on the backend of the fuel cycle for an independent nuclear program.” 

Bruno raises the question:  Without a solution to Iran, how far can you really progress on restricting enrichment?  There are very practical effects to a big nuclear expansion.  You could have massive flows of sensitive material; you could have new nuclear suppliers like China, South Korea, and India.  And very big IEA safeguards implications, both in terms of budget and people. 

So my bottom line is you need to manage the risks now, whether it is through government-to-government cooperation or vendor-to-vendor -- reactor-vendor -- you know, the industry cooperation.  I do not think it is enough to provide just incentives for states to forego enrichment and reprocessing.  And although there are some positive steps - for example, the UAE’s recent statement where they said they were going to forego enrichment and reprocessing - I think, probably, the only lasting solution is going to somehow get a handle on multilateral facilities.  And that is take the prestige away from these national facilities, especially in sensitive -- in this sensitive nuclear area.  Thank you. 

James Acton:  Thanks very much.  This is what I’m going to talk about is another one of these projects that Henry and MPEC is sponsoring.  So I would just like to acknowledge Henry and thank the organizers for today for bringing me out.

Like Sharon, I would like to talk about the implications of the nuclear renaissance for proliferation.  One of the -- what we have heard today from other speakers and what you hear in the broader debate is developing nuclear power technology is difficult; it is extremely difficult.  And then everybody stops talking about the difficulties of developing nuclear power technology and goes on to talk about issues of intent.  And, indeed, there was the report that was drawn up for the Senate Foreign Relations Committee that some of you may have seen that looked at proliferation drivers in the Middle East and asked:  What is likely to make these countries go nuclear and what can U.S. policy do to stop them?

What I would like to do is to focus today on the issue of capabilities; to take a look at how difficult it will be for the states that have expressed an interest in new nuclear power stations within the context of the nuclear renaissance to develop those power stations.  So I want to point out, really, there are two distinct capabilities questions, of which I’m only going to focus on one today.  The first is the question that I have already outlined:  What challenges do states that wish to develop nuclear power technology face?  How plausible, how easy is it likely to be?  And today I’m going to focus on the Middle East and I’m going to talk principally about Turkey and Saudi Arabia.  What challenges do those countries face? 

The separate capabilities question to that, which I’m not going to talk about but is an important question to at least flag up that it exists is:  To what extent does civilian nuclear technology further proliferation?  And this ties in to some fairly complicated technical questions about light water reactor technology and the plutonium produced thereof.  But, again, like everybody else I’m going to happily skip over that debate.

Because of the time limit today, I’m just going to compare Turkey and Saudi Arabia but our research also covers Egypt but I’m not going to have time to talk about that.  And then what I’m going to do at the end of the talk is give you what I believe are some of the policy implications of my observations about these state capabilities. 

I think it is worth pointing out, as a number of speakers have said, we have been here before.  Turkey, for instance, commissioned its first feasibility study into nuclear power technology in 1967 and, since then, it has had a large number of talks, which have sometimes culminated in an agreement to develop nuclear power technology.  It had its discussions with Sweden in the late 1970s.  In the mid-1980s, Turkey talked to Canada, Germany, and the United States.  In the late 1980s, Turkey was talking to Argentina.  In the late 1990s, it was talking to Canada, Germany, and France. 

So the question that I’m tapping into: is it going to be different this time around?  Is there any reason to suppose that Turkey or Saudi Arabia, which has had a much less developed power program but has nevertheless expressed interest since the 1970s - are they going to be able to develop reactor technology this time around? 

Well, for the purposes of debate let us make it as easy for these countries as it can possibly be.  Let us assume that they are going to contract with an external supplier to build a turn-key reactor; that is, literally, to say, a reactor that the external supplier is going to build, hand over the ignition key on day one and then the host country can turn it on and the electricity is going to flow into the grid.  Let us also assume that these countries are going to buy their fresh fuel from the international market, thereby not needing enrichment or reprocessing technology.  And let us also assume that the supplier of the fuel has agreed to take back the spent fuel.  This is not a prediction of what these countries are going to do and I want to be very -- I want to mark this out.  This is the model which would make it easiest for them and then let us assume that they go down this model and see how hard or easy it will be.  This is not a prediction about what these countries are going to be.

And specifically today I would like to focus on the staffing requirements and I would like to focus on the regulation requirements.  So by the way of staffing, running a nuclear reactor - and do not forget this is on a turn-key contract so we are assuming the external suppliers are going to come in and know how to pour the concrete and build the reactor and do everything else that, actually, suppliers are finding quite difficult at the moment, but that is not the host state’s problem - you are going to need between about 200 and 1000 personnel to run a one-gigawatt reactor.  You might use a lot more than that in practice, but 200 to 1000 personnel is about the right ballpark figure. 

You are going to need personnel with skills right across all of the disciplines needed for operating a nuclear reactor.  You are going to need people who are actually reactor operators, those who are trained in radiation protection and health and safety, emergency planning.  The list goes on and on and on and I’m not going to read the whole one out here today.  But on top of that, you are also going to need your personnel to have had experience.  For reactor operators, for instance, you ideally want people with three years’ experience running a reactor somewhere else in the world. 

So against that backdrop, let us ask where is Turkey today and where is Saudi today.  Well, in terms of actual -- neither country have power reactors, as we have heard from Sharon.  Turkey has one operating research reactor and that is a smallish 250 kilowatt reactor.  And that -- looking at just from what we can find in the open source literature about that, that research reactor has six staff and two operators.  Now, obviously, you can cycle staff through that facility.  But a facility that has six staff and two operators is still quite a long way below the 200-to-1,000 that you are looking for. 

The next indicator in Turkey beyond actual extant reactors is Turkey’s activities in other fuel cycle areas.  Now, I have assumed that if Turkey goes down this model, it would be buying its fuel and the supplier would be taking back the fuel.  So the fact that Turkey has some degree of conversion going on there or in the past is not directly relevant; it does not give you direct skills that will be useful for running a nuclear reactor.  But it does give you suitably skilled trained personnel who would then be suitable for retraining.  So a country that has lots of nuclear activity going on will have a generally high nuclear-skills-base and the people involved in those other activities are going to be able to be retrained. 

And Turkey actually has had some degree of activity across the whole of the rest of the fuel cycle.  Now, it has had conversion labs in the past; it has had fuel fabrication labs.  On the reprocessing side it may have just been bench-scale scientific experiments.  But there is this general level of competence with nuclear issues in Turkey that, for instance, Saudi certainly does not have. 

Turkey’s real strength, though, is probably in its university sector and its state-sponsored research center.  Turkey has -- there are 15 universities we have identified from the open source literature which have conducted significant teaching and/or research activities that are relevant to a nuclear power station.  There are nine state-sponsored nuclear research institutions in Turkey.  And, perhaps, most importantly, the Turkish Atomic Energy Authority has very strong interconnections between the universities and between these different research institutions.  And it is able to give Turkey’s nuclear research a strong central direction and a strong focus to it, which from a Turkish perspective might give you some hope that it has the capabilities of training all of the people at universities and giving them suitable experience before they can go on and run nuclear reactors. 

Saudi is rather different.  Saudi has -- it also has no research reactor.  The closest that Saudi has to people with active experience of running a nuclear reactor are computer simulations on a simulated -- they have at King Abdullah’s University there; very sketchy activity across different areas of the fuel cycle.  But, also, it has just got just three universities that have done a significant quantity of research and actually they do not compare very favorably to their Turkish counterparts.  It only has three national research institutions in contrast to Turkey’s nine.  But much more than that, there is much less of this sense of coherence.  There is much more -- Saudi has much less of a sense of direction and strategy in its nuclear activities than Turkey does. 

And just to emphasize this point that Saudi has a long way to climb before it has sufficient staff: in 2001, speaking in Arabic in an interview, the inspector general of the Atomic Energy Research Institute in Saudi said that working at the AERI there were just 15 Saudis with PhD’s in relevant areas.  And that is a very low level to start from.

Let me talk briefly about regulation because in addition to having the staff to run a nuclear power plant, you are also going to have to regulate every part of the process from putting out specifications for bids all the way through to safeguards and safety when your reactor is up and running.  One of the ironies about Turkey’s long history of failed attempts to develop nuclear power is, actually, it leaves Turkey with a relatively sophisticated regulation infrastructure, at least in terms of what is in law.  The legal basis for regulation in Turkey is relatively strong.  It is very, very hard to assess whether -- what that translates into on the ground in terms of skilled personnel who are able to inspect facilities.  But at least Turkey starts from a very strong legal framework. 

In addition, Turkey has three facilities under IEA safeguards at the moment; it has experience in implementation of safeguards, and if you look at the way it is cooperating with the IEA, it is clearly identifying areas of regulation weakness and launching very specifically targeted technical cooperation projects with the IEA to solve the problems that Turkey has identified. 

In the case of Saudi, again, because it is -- most of what it’s had until now is just the peaceful use of radioisotopes in medicine, in agriculture, its legal framework has been much weaker.  It has needed to have much less regulation and it has had much less regulation on the book.  Just two things I would point out.  Firstly, that there is evident -- and this is coming from, again, Saudi research itself -- that there is a strong lack of a safety culture within Saudi Arabia.  For instance, there was one study that found evidence that radioactive iodine was being discharged into the domestic sewerage system in Saudi Arabia.  And so that safety culture is going to have to improve very significantly before it launches a nuclear power program.  And it also does not have a safeguards agreement enforced with the IEA at the moment. 

So let me say just one minute about what kind of policy conclusions this leads you to.  I do not claim for one second that, based on an analysis of capabilities, you can draw policy conclusions.  But I think it gives you a more complete picture than just assessing intent alone.  Firstly, I think it injects a note of realism into the debate.  This is going to be hard for countries that do not have the infrastructure in place; it is going to be very hard for Saudi but even Turkey has a significant way to go. 

Secondly, it is also interesting from the point of view of identifying useful areas of leverage.  If you do believe that the U.S. ought to cooperate with these countries in developing nuclear technology -- and some of you do and some of you do not and I do not want to go into whether that is a good idea or a bad idea.  But for those people that do believe that, this identifies areas of leverage that the U.S. can give these states in return for shaping the direction of that program and making it more proliferation-friendly.  And that leverage varies on a case-by-case level. 

In Saudi, for instance, it is clearly the training and the technology and the opportunities for their people to gain experience.  In Turkey, the limiting factor might well be cash or political will.  Well, political will is not something that the U.S. can help with but cash certainly is.  And that is more likely to be the limiting factor as opposed to technology.  So what I hope this research brings is, firstly, that degree of realism and, secondly, identifies points for possible leverage.  Thank you.

Chris Griffin:  Thank you very much for an excellent set of comments.  I think we are actually reaching what was our scheduled finish time right now.  We are going to have a short period of question and answer.  We appear to have a lunchtime that will be pushed back a little bit from the scheduled noontime.  I’m apologizing in the direction of Henry Sokolski because he is going to have to clean up whatever mess I leave with regard to the schedule but I would like to take a minute to follow-up on these excellent presentations with about 15 minutes for Q&A. 

Three very quick ground rules:  We will have microphones going around the room; please wait for them to come.  As long as our speakers are on the record, we hope that you will join them.  Please also state your name and your affiliation and last, of course, please ask a question.  Up front? 

Raghubir Goyal:  Thank you.  Raghubir Goyal from India Globe and Asia Today.  My quick question is that what other than nuclear program -- transfer technology we are facing together around the globe is because of AQ Khan, which you have brought it out in your presentation.  AQ Khan is still enjoying and also as its host also, they have not been penalized.  Why?  And why the [indiscernible] or IAEA or the UN or the international community has not gone after him or the host country?  And, finally, what is the future of, you think, U.S.-India Civil Nuclear Agreement, which is stalled now in the Indian parliament by the Lefts.  Why India is not interested in this deal, which the U.S. had -- or President Bush is saying the U.S. law for India? 

Robert Einhorn:  On how come AQ Khan has not been punished more severely, a number of reasons.  One, he is a national hero in Pakistan so I think if the government penalized him too harshly that would be unpopular.  But one of the reasons I do not think the IAEA or the U.S. has been given direct access is that I think AQ Khan, based on his personal knowledge, could incriminate some high-level Pakistani civilians and military.  And I think they are very reluctant to enable him to do that. 

There is another reason:  Pakistan continues to import technology illicitly for its own nuclear weapons’ needs.  And if AQ Khan were to be interrogated and turn over his entire rolodex to the investigators, I think that might constrain Pakistan’s ability to go to the network or at least remain -- remnants of it in the future. 

In terms of prospects for the U.S.-India deal have worked on this issue as well.  I think that if it fails, it is entirely because of Indian domestic politics.  From my perspective and the perspective of many in Washington, this was a sweetheart deal for India; it was a windfall gain for India’s nuclear weapons program because it would enable them to purchase uranium for the civil program, freeing up all indigenous uranium for the weapons program.  So it is hard for us to understand why this got so hung up domestically in India. 

I think at this point time is really running out.  I think, probably, the safeguards agreement with India has to be approved very, very shortly by the IEA board and the nuclear suppliers group has to pass an exception for India; there are some concerns about that that might take a while.  Then it has to come back to the U.S. Congress that has got to affirmatively vote in both houses.  And I think that is a tall order in the time remaining. 

Bruno Tetrais:  Now just to add something to what Bob said about AQ Khan or the “AQ Khan network,” what worries me is what I do not know.  That is, I think we are going to have to live with the consequences of past Pakistani actions for the next decades and I’m almost certain that there are ramifications of what has been done in the past which are not publicly known, which does not mean that I know them.  I do not know them.  Again, what worries me is what I do not know.

That being said, I think that we should not have any worries about what -- I know of no reason to be concerned about current Pakistani actions.  I think those keeping the Pakistani nuclear infrastructure are extremely serious; that there have been behavioral, cultural, or structural changes to their nuclear management system.  So what we should worry about concerning Pakistan is the past and the distant future, not necessarily the present.

Steve O’Hearn: Yes, Steven O’Hearn with Space and Missile Defense Report.  We had Mahmoud Ahmadinejad announcing that the 3000 centrifuges that Iran has are now being augmented by 6000 more centrifuges.  Given that Russia has provided to Iran sufficient fissile material for powering an electrical generating plant, is it possible that we should not take at face value Iran’s assurance that this is only for electricity generation and that possibly they may be developing nuclear weapons?

Chris Griffin:  A stunning notion.  Would anyone --?

Robert Einhorn:  Obviously, we should not take it at face value not necessarily because of the facts you mentioned.  I think there are all kinds of reasons why we should not take it at face value.  They tried to deceive the IEA for 18 years; they were caught cheating.  I do not need to go through all the history of it.  By the way, was this a recent analysis? 

Male Voice:  [Inaudible]

Robert Einhorn:  Six thousand is incredible.  Maybe, as he said, the decent number of machines that have been newly manufactured -- presumably, they are not yet installed but maybe manufactured.  Is that what they said? 

James Acton:  I’ll just add one thing, which is I think it is today’s national nuclear technology day in Tehran so it is a traditional time for the president to make a big announcement and its connection to what happens in reality on the ground will have to be borne out over the coming months.  It is a big deal, installing 6000 centrifuges, and just because the president says it is going to happen does not necessarily mean that it will. 

Bruno Tetrais:  I was counting on James for this question but I have something to add.  I mean when they said -- when they announced last year that they were going for 3000, many people were saying they are not going to be able to go for 3000 in a short period of time.  They actually did manage to have 3000 in a relatively short period of time so I think we should take seriously this announcement that they are now going to double the capacity, although it was not clear to me because I -- I did not see the text itself.  I think they are going for 3000 IR-2s, in fact, which will be added to the P-1s. 

I do not know how you can connect them.  Maybe Sharon knows more on that.  But we should take that statement seriously and, obviously, as I think it should be obvious, 6000 almost gives you a breakout option in some -- if you can operate them in a continuous fashion without major technical glitches.  But that is another issue.  But we should take it seriously. 

Sharon Squassoni:  Right.  I would just add to what Bruno said.  I would urge people to focus less on numbers than -- because I think Iran has used to great effect this notion of, “Well, when we have 3000 centrifuges running then it will be an industrial capability and there will be no turning back.”  That is not exactly how it works for a centrifuge facility. 

And so -- then I would add to that:  You really need to distinguish between intentions and capabilities and, specifically, statements by the Iranians, which, of course, over the last few years have consistently overestimated what they were able to do.  And the one bright spot, I think, in the December 2007 National Intelligence Estimate on Iran that I think was overlooked was that Iran actually is having trouble making those centrifuges work.  When it gets an industrial capability, it will turn the centrifuge facility on and those things will operate practically forever without breaking down.  It is not there yet.

Cisipo Mayon [phonetic]:  Thank you.  My name is Cisipo Mayon and I’m from the American University.  This is a question for James Acton.  Specific to your study of Saudi Arabia’s capabilities, did you come across any handset [sounds like] past, ongoing potential contacts between Saudi, Pakistani -- Saudi Arabian-Pakistan in terms of transfer of knowledge or staffing or anything like that?

James Acton:  Not very much in terms of the specific error of civilian nuclear technology.  I’m trying to think whether we came across anything at all.  There is clearly a lot of links between Saudi and Pakistan in different fields and I’m trying to think whether the literature survey turned up anything on the specific issue of civilian nuclear technology.  Off the top of my head - and I would have to go back through the research notes for this one - I think there were rumors of it but nothing substantial; nothing that we could put our fingers on in the open source literature that made the case in anything more than just vague rumors.  But if you want to chat afterwards then I can go through some of the -- we can talk contact details and be in contact on this question. 

Robert Einhorn:  Throughout the Middle East and elsewhere, there is nearly the conventional wisdom that there is a quid pro quo in place; that the Saudis bankrolled Pakistan’s nuclear weapons program and, in exchange, Pakistan would help Saudi in its moment of need and there is some circumstantial evidence to support that.  Prince Sultan, defense minister of Saudi once visited Kahuta, which is AQ Khan’s laboratory.  And there are other circumstantial pieces of evidence suggesting that quid pro quo. 

I have asked intelligence agencies in various parts of the world who have followed this very carefully and asked, “Do you ever have really good evidence that there is a quid pro quo and what the nature of that quid pro quo may be?”  And the answer is, “No, we really do not have hard evidence.  This is supposition; it’s conjecture.  It is logical but we really do not know.”  And I think today whether or not there was some understanding between Pakistan and Saudi, I think today after the revelations of the AQ Khan network and the embarrassment that it caused for the Pakistani government, I think the Pakistanis would be less likely today than they were, say, ten years ago to make good on any quid pro quo arrangement. 

Chris Griffin:  And with that -- and with apologies that we have had -- Bruno, would you want --?

Bruno Tertrais:  Can I just add something to that?

Chris Griffin:  Please, sir.

Bruno Tertrais:  You have a former senior Pakistani government official saying almost on the record that having Pakistani nuclear weapons on Saudi soil would create a situation, which is, I quote, “worse than the Cuban missile crisis.”  It does give you an idea of the recognition that exists in some Pakistani circles, at least, that this would not exactly be a benign -- that would -- how significant, this is not any evidence for or against.  It gives you a sense of the recognition of the importance of the problem that it might create. 

Chris Griffin:  When Dany asked me to come pick up the second half of this panel, she promised it would cheer my day up and I’m afraid that she may have lied.  This has not been cheerful but it has been extremely informative.  And going into the next set of the discussion, talking about the U.S. and the India nuclear deal, and further impacts on the nonproliferation system, we will continue this discussion.  We will take a very short -- we will call it a five-minute break, actually; see what happens before Henry Sokolski takes over the next panel.  Thank you very much with your patience.  We have been a bit delayed and thanks to our speakers for their excellent remarks.  Thank you. 

Panel II: The Indian Nuclear Deal: What Should Be Done in 2008?

 Henry Sokolski:  We are going to begin.  So if you could sit down, we would appreciate it.  There will be a large lunch for those of you who are currently eating, so you are going to gain more weight than you want if you keep eating.  Sit.  Thank you.

 Well, no nonproliferation gathering would be complete without talking about India.  So we are no exception.  We are going to talk about India and how we deal with India, as you have already heard in the first panel, is something of a bellwether for the sturdiness or weakness of the nuclear rules as they are currently implemented and promoted.  Now roughly, the nuclear rules are viewed - I think incorrectly but that is okay - but they are popularly viewed as a bargain.  And the bargain roughly runs “them that’s got will not give nuclear weapons to them that’s not, and them that’s not won’t try to get.” 

However, in addition to some pledges about earnest efforts towards giving up or controlling nuclear weapons, the weapon states are somehow obliged to help promote - and we will come back to this at the last panel - the benefits of peaceful nuclear energy.  And to listen to any diplomat, American or Iranian, the view is that includes everything that you need to come within a whisker of getting a bomb.  Now in the Indian case, we have something that stirs the pot.  We have a deal with a country that never signed up to the nuclear rules.  They got a bomb that actually, to be blunt, violated some of its understandings with Canada and the United States in the early seventies, and we want to be friendly with. 

Today, what we are going to do is talk about the fate of the nuclear deal, which right now is mildly stuck for reasons which, to the relief of most people in Congress, are not their fault directly; it is Indian politics, they claimed.  But actually, in all fairness to those who were critics of this deal, mostly it is because they pass various conditions on the implementation of the deal which are obnoxious to different aspects and constituencies of Indian polity.

And so what I thought we would do today is to get current, is to get a round-up of views about -- well, given that this deal for the moment seems stuck, how will things play out this year?  And I will allow the panelists to go a little bit further.  How should it go even beyond this year because I always say any big idea, good or bad, always has legs; it kind of comes back.  And so whatever your views are, this thing is probably not going to disappear is my hunch.

The order of battle, I thought would be Daryl, whose views are well known, but we always like hearing the latest iteration.

Daryl Kimball:  That is very kind.

Henry Sokolski:  Well, it is true.  And David Trachtenberg will go second and he will perhaps give a different view, I hope, of how things should sort out.  And then we have someone who is new to the scene; maybe you have not heard before from Young India, which is an organization, the character of which you can find on the web, but basically is promoting views about democracy and development and is backed pretty much by an Indian counterpart in India.  Am I correct?

Rohit Tripathi:  Yes, it is emerging.

Henry Sokolski:  It is emerging.  Well, there you go.  You were here first.  On that note, why do we not go from right to left?

Daryl Kimball:  Well, thank you very much, Henry.  And thank you to AEI for the invitation.  This is a very interesting event.  As we approach the 40th anniversary of the signing of the NPT, I’m one of those who believe the treaty is in a great deal of trouble; not acute trouble but chronic trouble.  And one of the reasons is that leading states like the United States and others have failed to consistently enforce their own nonproliferation disarmament standards and laws.  And the case of the India and Pakistan is a good example.  And the latest example is the U.S.-India nuclear deal, specifically the July of 2005 proposal to carve out a country-specific exemption from the NPT, from the Nuclear Suppliers Group rules and from the United States’ own Nuclear Nonproliferation Act of 1978.

Now, in my view it is Orwellian to claim that the nuclear deal would bring India into the nuclear nonproliferation mainstream and the behavior expected of other responsible states.  India’s commitments under the July 2005 agreement - I will not go through those - simply do not justify making a far-reaching exception to international nonproliferation rules and norms.  The other thing, I think, that is lost upon many here in Washington is that unless the Bush administration adjusts its current policy vis-à-vis the Nuclear Suppliers Group in particular, decisions could be taken soon at the Nuclear Suppliers Group and even at the IAEA Board of Governors that could undermine the minimal but still vital conditions and restrictions that, as Henry mentioned, were put into the Henry Hyde Act of 2006, the U.S. implementing legislation that carved out this exemption from U.S. law to allow for possible nuclear trade with India, a state that has not signed the NPT and that does not allow full-scale safeguards.

Now just to remind us, it has been a couple years now.  The Hyde Act requires, among other things, the immediate termination of all trade with India if New Delhi resumes nuclear testing or violates its safeguards commitments. 

It also requires an India IAEA safeguards agreement that applies in perpetuity to all nuclear materials, equipment and technology at all civilian nuclear facilities declared as civilian by India.  It also creates a clear prohibition on the transfer of enrichment reprocessing and heavy water production technology for Indian national facilities; there are some exceptions for multi-lateral facilities.  But if the Bush administration fails to support an NSG policy with these restrictions and conditions, NSG guidelines would be less restrictive, less stringent than U.S. law or policy creating a playing field that is less than level.  Other less constrained suppliers might gain commercial advantage and undermine U.S. nonproliferation objectives and policies.

Now, as Henry said, thankfully, the deal may be doomed by internal strife within the coalition of Prime Minister Manmohan Singh.  Even if India’s Congress Party leaders can somehow overcome the stiff opposition from leftist parties - they are due to meet sometime this month to discuss the opposition of the leftist parties to the deal - the deal is still going to face, I think, principled and stiff opposition from key states in the Nuclear Suppliers Group, for 45 nations in the Nuclear Suppliers Group.  Consequently, I would argue and I believe that if the deal ever makes its way to the NSG, it is unlikely that India will obtain the clean exemption that it seeks, that is, an exemption from NSG rules without any restrictions or conditions whatsoever.

Now, clearly, there are some states that are going to be - not many states that are willing to bend the rules to help India buy new reactors and the additional fuel needed to run them; there is growing support for restrictions and conditions that are based on the Hyde Act and an interest in encouraging India to join the five original nuclear weapons states in halting fissile material production and signing the Comprehensive Nuclear-Test-Ban Treaty.

Let me just go through what I think the opposition and the objections are going to be at the NSG and what might be done by those states.  The first, with respect to the new safeguards agreements with the IAEA, which, of course, is almost purely symbolic and hardly worth the $10 million annual cost of these inspections.  The IAEA board of governors could and should reject any Indian statement or interpretation that makes the safeguards over these civilian facilities contingent on the continuation of foreign fuel supplies, which clearly runs counter to the principle of permanent safeguards.  And this kind of statement would clearly be intended to extricate India from any safeguards agreement in the event that fuel supplies are cut-off.  Why would fuel supplies be cut-off if India conducts a nuclear test or violates safeguards?

 Second, India pledged in July 2005 to conclude an additional protocol to its safeguards agreement and some NSG states are likely to insist that India and IAEA conclude or, at least, show the board of governors the outlines of what that additional protocol might look like.  Some NSG states might demand a “meaningful additional protocol,” which, if you think it through, is really difficult to obtain in a state, which has a secret nuclear weapons program going on.  So far, neither India nor the United States has been able to explain - and I would be interested in learning more about this - how the additional protocol would apply to Indian nuclear facilities or when.

 Third, the current U.S. proposal to exempt India from NSG guidelines -- and there is a pre-decisional draft that was circulated in March 2006; there will be a new one that would come before any NSG decision is taken.  But the current proposal would, in the case of a resumption of nuclear testing by India, make the suspension of nuclear trade optional for NSG members; not mandatory but optional.  In the view of a substantial number of NSG states, such an approach is an entirely unacceptable situation.  It would undercut the international norm against nuclear testing and make a mockery of NSG guidelines.

 So no matter how it interprets the ambiguous wording of the U.S.-India Nuclear Cooperation Agreement, it is highly unlikely that NSG members would agree to allow civil nuclear trade with India without clarifying that India’s exemption to NSG rules would be revoked in the event of renewed testing by New Delhi.

 Fourth, India is seeking -- and the United States has proposed an NSG guideline that would open a way for other nuclear suppliers to transfer sensitive plutonium or processing uranium enrichment or heavy-water production technology to India.  India very much wants this in order to pursue the fabled three-stage nuclear fuel cycle that Homi Bhabha outlined decades ago.  It is unnecessary for India’s energy needs but they are pursuing it, nonetheless.  This is deeply troubling to NSG states because they recognize that no IAEA safeguards could prevent such technology from being replicated and used in India’s nuclear weapons program. 

At the moment, 44 NSG member states or so, except for the United States, support a proposal for a new criteria-based NSG guideline that would bar transfers of these sensitive nuclear technologies to non-NPT members, states that have not concluded additional protocol with IAEA or states that are not in full compliance with their safeguards agreements, like Iran.  So my view -- it is highly unlikely the NSG is going to grant what India wants, which is an NSG exemption that would allow such transfers.  Almost wrapping up, Henry.  We are almost on time here.  Thank you.  All right.

 Fifth, NSG states are troubled by India’s attempts to secure nuclear fuel supply guarantees for the lifetime of their reactors, which would, of course, help them overcome the possibility that foreign suppliers might cut off nuclear trade if India decides to resume nuclear testing or violates safeguards agreements.  Some NSG states will likely seek to block such arrangements.  There are various ways they might try to do that; it will be very difficult but I think they will try to do that.  And as the Hyde Act suggests, ensure that nuclear fuel supplies are “commensurate with reasonable reactor requirements and not provide multi-year strategic fuel reserves for India.”  And I would note that that language, which is advisory in the Hyde Act on reasonable reactor requirement fuel supplies, came from none other than Senator Barack Obama in the Senate Debate on the legislation in 2006.

 So finally, there are, thankfully, a few NSG member states that take their NPT commitment seriously.  In keeping with the Article Six commitment on all NPT states to support measures to help end the arms race and pursue disarmament, some states will likely seek language in the NSG that encourages India to reconsider the CTBT, which they have not signed, of course.  In addition, a number of NSG member states recognize that the supply of nuclear fuel to India from outside could free up its existing and limited indigenous stockpile and allow it to increase the rate of production of fissile material for weapons.

And as a result, as Henry and I have noted throughout this debate, this would effectively violate the United States commitment under Article One of the NPT not to assist in any way others states’ nuclear weapons programs.  Now, Pakistan sees this scenario emerging and Pakistan is already preparing to increase the rate of its own fissile material production.  So no matter how you interpret the fissile supply situation in India, this has already exacerbated the slow-moving but ongoing fissile race in South Asia.

 So in conclusion, I mean this is the time in my view for Congress to take a close look, even though the 123 Agreement that they still have to approve is not before them, to take a close look at all of these ambiguities and to make sure that the Nuclear Suppliers’ Group guidelines are consistent with the Hyde Act.  And it is important for Congress, as well as NSG member states, to press the Bush administration to live up to the very basic but still very important restrictions and conditions that were put into the Hyde Act.

 And for those of you who are interested, I have copies of a letter that several of us, including a few individuals associated with AEI and the Arms Control Association and others, wrote to Congress about some legislation that would seek to get the United States government to pursue an NSG guideline that is consistent with the Hyde Act.  So if India’s leaders cannot abide by these minimal standards and they decide to reject the deal, so be it; that is their choice.  But I think what is clear, we have to acknowledge, is that additional concessions to India would only further compromise the already beleaguered and tattered nonproliferation system.  Henry.

 Henry Sokolski:  Well, you know you are at a radical organization when the kick-off suggestion is to implement and follow laws. 

Male Voice:  You can start at the beginning.

Henry Sokolski:  I do not know if this is time to start doing that sort of thing, but, okay.  The next speaker is David Trachtenberg, who actually is someone I first met 27 years ago; it is pretty just saying that.  If you take a look at his resume it is quite impressive.  I noted something, which I did not know, that it is legal to be a deputy assistant secretary in two places at the same time.  This is a man who is very agile, at the very least, but, more important, experienced to such an extent I think it is fair to say what he has forgotten is more than many of us know.  So on that note --

 David Trachtenberg:  Well, if it is not legal then I am in trouble, Henry.

 Henry Sokolski:  That is too late; you have done it already.

 David Trachtenberg:  Thank you for that and thanks to AEI and MPEC for the invitation to be here.  I am pleased to be here.  You know when I was invited to participate in this panel I was not specifically asked to speak as a proponent of the Nuclear Cooperation Agreement with India.  But I had a feeling that perhaps the administration’s position and rationale for that might be somewhat underrepresented here and so I took it upon myself to make that assumption and I think it would be worthwhile just perhaps to say a few words in recognition of administration policy.

I am certainly not an administration spokesperson, although in prior years I did play one on TV.  And I have stayed at a Holiday Inn Express but that is beside the point.  Since I guessed right, I feel I do not need to ask the permission of the chair to revise and extend my remarks subsequently.

 Henry Sokolski:  You have ten minutes.

 David Trachtenberg:  Thank you.  In that period of time then, let me make a three basic points.  The first point is specifically related to the Nuclear Cooperation Agreement with India, but the second two are broader points and related to nonproliferation, more generally.

Now point number one:  I think for all its shortcomings, or perceived shortcomings, I do believe that the Nuclear Cooperation Agreement with India could prove to be a very useful tool in drawing India closer to acceptance of global nonproliferation norms and U.S. nonproliferation objectives.  I think the agreement could, in fact, strengthen our relationship with India, which I would argue is a worthwhile strategy and part of the rationale for those who support this particular agreement. 

India has been called many things.  One of the things that it has been called is the world’s largest democracy and, as such, it shares many American values.  India shares the U.S. interest in combating terrorism.  I saw some reports indicating that India has suffered as many as 60,000 or more civilian casualties as a result of terrorist attacks.  India can be seen as a strategic counter-balance to an emerging China, especially if China pursues a course, as they appear to be doing, of increasing their economic and military capacity.

 India, I would argue also, understands the dangers of nuclear proliferation.  In fact, so many in India see India itself as the main victim of proliferation primarily because of the proliferation activities that have gone on between China and Pakistan and China’s relationship with Pakistan.  India is an emerging economic power with a need for additional supplies and sources of energy.  And I think India’s desire to look at nuclear energy is not illegitimate in that context. 

In short, India is an important regional power in a potentially volatile region of the world.  It is difficult; it is a tough neighborhood to be in when you have China and Tibet to the east and the north, Pakistan, Afghanistan and Iran further to the west.  It is a tough neighborhood.  So strengthening our relationship with India, I believe, makes sense.  And the Indian government has made civil nuclear cooperation a key issue in strengthening that relationship.

Now some have challenged the administration’s argument that this agreement would bring India into the nonproliferation mainstream.  Daryl mentioned that, argued that as well; he referred to that as Orwellian.  I tend to disagree; I do not think it is Orwellian at all.  And I do think that implementation of this agreement does require India to take some fairly significant nonproliferation measures that tie it tighter and would tie it tighter to existing nonproliferation norms - measures as such as clearly separating its military and civilian nuclear facilities; placing its civilian nuclear facilities under international inspection by the International Atomic Agency; developing a safeguards program for its civilian nuclear program that must be proved by the IAEA; agreeing to work to prevent the spread of nuclear enrichment and processing technologies; adopting stronger export controls and adhering to guidelines within the Nuclear Suppliers Group and the Missile Technology Control Regime, the MTCR. 

In fact, India agreed basically to move in this direction in 2005 and, as has been noted, is required to do so by a number of the provisions in the U.S.-India Peaceful Atomic Energy Cooperation Act, what has been referred to as the Henry Hyde Act that was signed by President Bush in December of 2006.  So I think on balance there are some concrete, positive steps that India can and must take in order to reap the benefits of this agreement. 

The notion that this is a bad deal for the United States, I think, in part, is belied simply by looking at the Indian domestic political situation as has been mentioned, and the fact that many in India, especially on the Indian left, see this as a surrender of sovereignty and a ruse to align India more closely with the U.S. policy.  No, the agreement that we are talking about here is not perfect, but in my view we should not let the perfect to be the enemy of the good.  The old nonproliferation approaches with respect to India frankly have not worked and I do applaud the administration for thinking creatively and seeking to develop solutions that are out-of-the-box solutions, novel and creative.

Which brings me to my second point, which is a broader point.  From my perspective, to be effective, U.S. nonproliferation policies need to be tailored to individual circumstances and countries.  I do not believe there is any one-size-fits-all or cookie-cutter approach to nonproliferation that will be equally effective in all cases.  Now there is a corollary to that and that is that U.S. nonproliferation policy should be subservient to our over-arching national security strategy and strategic goals and not vice versa. 

Too often, I sense nonproliferation advocates tend to, or appear to, stand its principle on its head as though our strategic objectives must be tailored to meet the imperatives of existing nonproliferation norms and regimes.  In my view, frankly, that puts the cart before the horse.  We have seen this kind of -- flipped this kind of inversion in the past, at work in the arms control area where, despite the end of the Cold War, Cold War-style agreements and agreements developed during the Cold War have tended to be seen by some as sacrosanct even when they no longer served or were, in fact, counter-productive to U.S. interest. 

I think we are finding similar issues in the nonproliferation world where, in fact, old constraints may actually limit our ability to meet new security challenges.  The MTCR, I think, provides several examples of this, where the law of unintended consequences may actually restrict our ability to do things we might otherwise want to do, such as cooperate with other countries, including India, on missile defense, for example, or in the area of counter-terrorism.

 And that leads me to my third and final point that I would like to leave you all with and that is, again, from my perspective, I believe all nonproliferation agreements should be continually reassessed for their effectiveness and relevance as strategic circumstances change.  The next administration, whether Republican or Democrat, should make this reassessment part of any national security review it conducts.  We reassess our national security strategy on a fairly regular basis; we adapt it to changing strategic circumstances.  The White House issues various national security strategies; the next administration, I presume, will do the same.  The Department of Defense issues a quadrennial defense review every four years, explaining how we will re-posture and rebalance our armed forces to be responsive to our changing strategies. 

What we do not have is a deliberate and comprehensive process to reassess the web of nonproliferation agreements and regimes, many originally constructed during the Cold War, and how they might be tailored to be responsive to contemporary security challenges.  We need to do that and, in my view, the next administration should make this one of its nonproliferation priorities.  And Henry, you pack a mean stopwatch and I hope I have stayed within the limit there.  So thank you very much.

Henry Sokolski:  Oh, by the way, you know we are on an important issue when it is recommended by someone in the government that there be a review of all of our policies.

David Trachtenberg:  Formerly in the government.

 Henry Sokolski:  Formerly in the government.  Well, nonproliferation, I always thought, was something dismissed as crappy arms control.  Apparently, we have run out of things to focus on so it is becoming important.  Now, I am being a little sarcastic because I have been in the field for 30 years.  In any case, it is interesting how these marginal issues are starting to become center stage when people are thinking that they have to be involved and reviewed and looked at, which is, I think, a healthy thing.

The last speaker, actually, I think, will go to what I think is a very important point that was raised by David here and that is how do we go about strengthening our ties with India.  I have not heard in any of the debates the suggestion that we really should stay away from Indians; that Indians are bad people and that we do not like them and we really should not do anything with them because we do not like them.  It is actually the case that e