Nuclear Suppliers in New Zealand: Global Trade Rules at the Crossroads

From June 21–25, the 46 nuclear exporting countries that form the Nuclear Suppliers Group (NSG) gathered in Christchurch, New Zealand, for its annual meeting to discuss the future of global nuclear trade rules. Carnegie’s Mark Hibbs described the principle issues discussed there with Carnegie’s George Perkovich.

China-Pakistan nuclear commerce

One highly anticipated issue was the expected announcement of China’s plans to export two nuclear power reactors to Pakistan, an act that would be in violation of international protocols governing the trade of nuclear equipment and material.

The export plans: Earlier this year, the China National Nuclear Corporation (CNNC) and China Nuclear Industry Fifth Construction Company made known they had negotiated contracts to provide two new reactors at Pakistan’s Chashma nuclear power plant.
The announcement: Chinese officials did not announce or confirm the deal during the NSG meeting , Hibbs explained. Rather, they read a short statement stating that all current and future nuclear commerce would be in compliance with China’s commitments to the Nuclear Non-proliferation Treaty (NPT) and the NSG. China thereby left all its options open concerning its longstanding nuclear trade ties with Pakistan, including the option of indefinitely not exporting these reactors.
The need for reactors: Pakistan’s total electrical generating capacity is under 20,000 megawatts. There has been no real increase in generating capacity in the past decade. However, Pakistan is adding one million new connections to the electricity grid per year. Brownouts are frequent and expanding, and Pakistani officials view electricity supply as a national security issue. But no new reactors would likely be ready to operate until near the end of this decade. Pakistan has better options to quickly improve its electricity production and distribution system, Hibbs explained.

Options for decision makers

According to Hibbs, China has four options should it choose to proceed with the deal:

Delay: Delay export of the reactors indefinitely
Grandfather claim: Export the reactors, asserting that the transaction is grandfathered by a pre-2004 Sino-Pakistan nuclear cooperation agreement. Should China decide to export the reactors, some NSG members would support this option, since it would avoid a protracted debate about the application of NSG guidelines as well as bilateral Chinese pressure on individual members.
Exemption: Export the reactors and seek an exemption from the NSG on the basis of the exemption awarded to India in 2008 on behalf of the United States, France, and Russia. Prior to the meeting, the United States urged China to seek an exemption should it want to export the reactors.
Ignore guidelines: Export the reactors, asserting China’s sovereign right to ignore voluntary guidelines.

Because the guidelines are voluntary, the United States and other NSG states cannot prevent China from exporting the reactors. Absent a credible and clear demonstration by China that the commerce is grandfathered under the pre-2004 agreement, if China insists on going through with the deal, the United States and other NSG members should condition any express exemption of these specific exports from NSG guidelines on firm nonproliferation and nuclear security commitments from China and Pakistan. These might include:

Pakistan’s cooperation with international efforts to encourage nuclear transparency and nuclear security and counteract nuclear terrorism;
A declared moratorium on nuclear weapons testing;
Pakistan’s participation in global negotiations to halt the production of nuclear material for weapons;
China’s participation, alongside the United States, in efforts to improve the security of Pakistan’s nuclear assets.

China could also participate, alongside the United States, in efforts to improve the security of Pakistan’s nuclear assets.

Limits on enrichment and reprocessing

Participants at the meeting also discussed new export guidelines for controlling the transfer to new states of sensitive equipment, technology, and technical expertise relating to uranium enrichment and spent fuel reprocessing (E&R)— techniques that can be used to produce nuclear material for nuclear weapons.

Additional Protocol: A central point of contention is whether the NSG should mandate that states wishing to obtain E&R technology must first implement an Additional Protocol as part of their International Atomic Energy Agency (IAEA) safeguards commitments. This would give the IAEA greater authority to verify that a country’s nuclear facilities and material are not being used to develop weapons. Hibbs noted that during the 2010 Nuclear Non-proliferation Treaty (NPT) Review Conference held in May, the NPT’s 189 parties underscored that the decision to conclude an Additional Protocol was voluntary, not a safeguards requirement .
Strong resistance: South Africa and Turkey objected strongly to new restrictions on E&R technology transfers, Hibbs said. While Turkey expressed an “almost ideological position against further restrictions,” Hibbs believes South Africa’s position against making the Additional Protocol a requirement for E&R transfers may be subject to future compromise.
A nonstarter: NSG members vowed to continue negotiations on terms for E&R transfers, but Hibbs suggested that some NSG state leaders do not think further discussions in the near future would be productive. Turkey’s opposition, Hibbs stated, constitutes a “shot across the bow” intended to signal that further discussion to restrict access to nuclear technology is a “nonstarter.”

Carnegie does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.