The ABC of the 123

Let me try and answer the most simple of questions this week: How good or bad is the Indo-US nuclear deal? I have a feeling that despite all the highfalutin analysis and loud tom-tomming of opinion this straightforward and essential question has been ignored. Yet it’s probably the only one that matters.

My answer is the deal is perhaps the best we could have got. More importantly, in all probability it will improve after India receives clearance from the Nuclear Suppliers Group (NSG). But what you need to know is how and why I’ve come to this conclusion. Well, read on.

There are three critical issues on which the deal should be judged. First, does it take away or constrain India’s sovereign right to carry out nuclear tests? The answer is an unequivocal no. The 123 Agreement doesn’t even mention the phrase ‘nuclear testing’ or the word ‘detonation’. More importantly, the Agreement explicitly says (Clause 2.4) that it doesn’t impinge upon India’s military strategic programme. Finally, Nicholas Burns has himself confirmed this. Now, tell me, would he lie?

So the next question is: Has it raised the cost of testing unacceptably? This depends on what would happen if India tests. America has a right of return, which, no doubt, it will insist upon. Of course its constrained with multi-layers of consultation and cross-cutting commitments. But even so, I have no doubt Washington will operationalise it. At that stage the critical question will be whether India has been able to immunise its strategic reserves of fuel from this right of return.

Let’s consider this carefully. There is no doubt there are many assurances in the 123 that suggest the answer could be yes. The issue is, are we sure? Frankly, as long as there are even a few informed voices saying no, there will be room for doubt. And today there are doubters. But if the NSG countries do not insist on a similar right of return then, at worst, we will lose American-supplied fuel but retain that which has been bought from them. In this eventuality India will have protected its strategic reserves from an American right of return. It therefore follows that the cost of testing will not have gone up unacceptably.

But is the NSG likely to insist on a right of return? I have three reasons for saying no. Unlike America, their domestic laws do not require it. If they want to do business with India, as France and Russia do, they will not consider it. And if they want to edge out America from this competition they won’t be tempted to follow America’s example.

The second critical issue is has India got the right to re-process spent fuel? Here, at the moment, the answer is yes and no. The right has been granted in principle, but it only becomes effective after “arrangements and procedures” are agreed upon. Although there is an 18-month deadline for deciding, what happens if agreement is not possible? The 123 doesn’t say. Delhi claims it can go ahead. Washington, no doubt, will differ. In all probability we could end up with a crippling difference of opinion.

However, once again, the NSG is the way out. If we get a clean right to re-process from them we don’t need to worry about America’s complicated permission. And will we? Well again, NSG policy on this issue is far more accommodating then America’s. If they want to sell to us — which they do — they’ll have every reason for sticking to it. And finally, individual NSG countries have already indicated that’s what they intend.

The third issue is have we got the right to buy technologies or components associated with enrichment, re-processing and heavy water? At the moment the answer is no. But equally, the 123 doesn’t deny it. The issue is postponed for a later decision. What does that mean? This answer is crucial.

To begin with, American law doesn’t permit such sales to any country, including nuclear weapon powers. So the fact that it’s not denied to us is a significant way around US law. What this also means is that hereafter NSG countries, whose domestic laws are different, are free to make such sales if they want. Had the 123 said no — which is what consistency with American law might have logically required — we would have been in trouble. But the artful veering around this has opened the way for NSG sales.

Now, will the NSG sell? Without doubt. The French and the Russians are not just keen, but anxious to do so. The only thing they need is the American 123 to clear the way. Now that they have it, they’ll be knocking on our doors.

So what does all this amount to? If you take the 123 along with the outcome we anticipate from the NSG, we have achieved full civilian nuclear co-operation (the PM’s promise), safeguarded our military strategic programme, and ensured our right to test. For me that means we have got what we want.

But what if the NSG takes us by surprise and spoils things? Well, in that unlikely event, we can walk away from the 123. Remember, the US Congress will only pass the deal after passage by the NSG (and the IAEA). We sign after that.

My advice is we should wait till the NSG has met and announced its decision. Then — if all goes well, as it should — I suggest the loudest possible ‘Thank you, George Bush’! Without him this would not have been possible.