Mark HibbsCondi Rice & FRG on Sino-Pak deal

The German federal government has published in its journal of record its answer to questions submitted a month ago by lawmakers concerning the then-upcoming 2011 plenary meeting of the Nuclear Suppliers Group (NSG).

Particularly interesting is what Germany had to say about China’s plans to export two power reactors to Pakistan as Chashma-3 and -4.

As many blog readers know, I have focused a certain amount of my attention on this issue since we were able in March 2010 to get confirmation from China that this transaction was for real. Because Pakistan does not apply IAEA full-scope safeguards to its nuclear activities, barring further information substantiating that China had made previous commercial arrangements with Pakistan for the export of these two reactors, many NSG members last year considered that, if China supplied the two reactors, that would violate NSG guidelines.

During the 2010 NSG plenary meeting held in New Zealand last June, the U.S. government expressed the view that, based on its information, China could not claim that the new exports to Pakistan could be “grandfathered” under previous agreements binding China and Pakistan. Instead, the U.S. elaborated last spring, China should seek an exemption from NSG trade rules conditioning exports of trigger list items to states without FSS, should it want to export more PWRs to Pakistan. (China had exported Chashma-1 and -2 before it joined NSG in 2004)

Assuming that what the German government told lawmakers represents the whole truth and nothing but the truth, the new German statement to parliament on NSG-related issues would suggest that the U.S. government last year and as early as 2004 had been grossly misinformed about the status of China’s pending export to Pakistan.

That’s what I would conclude from Germany’s answer to question 8, which asks: “Does the federal government share the Chinese view that supply [of Chashma-3 and -4] is covered (grandfathered) by a bilateral trade agreement concluded before [sic] China’s entry in the NSG in 2004?”

Germany’s answer:

There was a “Chinese government declaration” on September 21, 2010 which stated that a “bilateral agreement” in 2003 between Pakistan and China covered the export of Chashma-3 and -4 to Pakistan. For this reason, Germany told MPs, the export of the new reactors to Pakistan by China represents an “old case” and that “China can therefore supply [the reactors] without violating NSG guidelines.”

Really?

Was Germany not aware of what transpired during closed-door NSG meetings in 2004 when, on the occasion of China joining the NSG, NSG participating governments requested clarification from China about the contents of China’s pre-2004 bilateral nuclear cooperation agreement with Pakistan?

Germany was aware of this. In answering question 10, the German government last month told lawmakers that “when it joined the NSG, China made a statement regarding existing supply contracts” with Pakistan. “In this matter—as in all NSG matters—it was agreed that this would be held confidential.”

Confidential or not, I’m now a little confused by Germany’s answer, since then-Secretary of State Condoleezza Rice specified to the U.S. Senate Foreign Relations Committee back in April, 2005—about a year after the U.S. government during NSG consultations requested clarification from China about its Pakistan trade—precisely that existing agreements between China and Pakistan did not include the export of two more PWRs from China.

I’ve talked to people who were on hand during that interaction between NSG PGs and China back in 2004. They told me the same story that Ms Rice told the U.S. Senate.

Condi said namely:

“We are not aware at this time of any plans on the part of China to seek additional reactor exports to Pakistan… As part of its joining NSG in 2004, China disclosed its intention to continue its cooperation with Pakistan under the grandfathering to the NSG guideline provisions requiring FSS as a condition of nuclear supply.”

What did the Secretary of State say that China had told NSG participating governments was actually covered by the Sino-Pakistan nuclear agreement?

“This cooperation would include lifetime support and fuel supply for the safeguarded Chashma-1 and -2 power plants, supply of heavy water and operational safety service for the safeguarded Karachi nuclear power plant, and supply of fuel and operational safety service to the two safeguarded research reactors at PINSTECH.”

The bottom line:

“China has pledged—and is expected—to abide by the NSG guidelines on the transfers of nuclear equipment, technology, and material…If China did seek to provide additional reactors to Pakistan, it would need NSG accommodation… We do not believe that the 45 member states of the NSG would agree to such an accommodation…”

During last month’s 2011 NSG plenary meeting, the NSG’s participating governments did not agree on whether China’s export to Pakistan should be permitted to be grandfathered. It wasn’t even close.

With all due consideration for Germany’s resolve to keep secret China’s statement from 2004, what gives? If China’s explanation was watertight and substantiated—and if Condi Rice was wrong—China’s assertion that the commerce with Pakistan should be grandfathered should have been compelling for all PGs at last month’s NSG annual meeting. But it wasn’t.

Comments

  1. guelphite (History)

    just wondering how much right the US has to complain when it supplied India to spite China

  2. ataune (History)

    I can implie from what you are saying that:

    1- Condy can not be trusted in the matters regarding confitential relationships between states, which I believe has been proven to be the case in other occasions;

    2- German government is lying to its own people in a case related to the foundation of the post WWII international order. Which is completely probable in my opinion;

    3- All this non-proliferation business and the so-called western solidarity is fading away challenged by the rise of the asian powerhouses.

  3. Sukhjinder (History)

    NSG the club of the pure, even countries like germany are lying to its own people now. so in the end human rights, nuclear proliferation all goes out of the window at the expense of commercial ties. hey how about giving some nuclear reactors to Vietnam.

  4. masoud (History)

    Forgive my naivete, but does anyone want to clarify for me the difference, in legal status, between the Sino-Pakistani and the Amerian-Inidan transfers in technology? Is it that the US already got the green light from the NSG?

  5. mark (History)

    Sino-German trade ambitions was making news when Germany answered those parliamentary questions:

    http://www.chinadaily.com.cn/china/2011weneurope/2011-06/28/content_12796913.htm

    and

    http://english.aljazeera.net/news/europe/2011/06/2011628152426820673.html

  6. Ben (History)

    Another great piece Mark, I read recently on the World Nuclear Association website that China has long term plans to export ACPR-1000 reactors to Pakistan, possibly around 2013. Assuming not all of these are going to be located in Chashma, I think you can already see a shift in policy in some NSG members to giving an unoffical waiver to Chinese exports, which will end up hurting the NSG long term. The US is partly to blame here by refusing to begin any kind of an agreement with Pakistan, it makes the NSG look irrelevant.

    China, wia wikileaks, also seems to be increasingly emphasising it’s far reaching 1986 Sino-Pak nuclear agreement to export a limitless number of reactors, unrestricted to location.

    http://www.cablegatesearch.net/cable.php?id=06BEIJING18547

    One thing that has really puzzled me though – how is Pakistan completing its partially french built reprocessing plant? where is it getting all the equipment?the fuel cutting machines etc? Mark, can you shed light on this?

  7. mark (History)

    Ben, it is logical that China will want to export bigger reactors. That in fact–as I and two other Carnegie colleagues have argued and posted on the blog a couple weeks ago–presents NSG PGs an opportunity to incentivize China to rebalance its nuclear trade relationship with Pakistan and defer the C-3/4 export to permit further commerce with Pakistan to go forward under terms which would be endorsed by the NSG.

    China’s nuclear industry wants to emancipate itself from intellectual property rights restrictions which, so far and indefinitely into the future, would prevent them from exporting their bigger PWR designs, including the 1,000-MW version of the technology they have been building at Chashma. IPR issues in fact prevented China from exporting a 650-MW version of this reactor to Pakistan, according to Pakistan officials themselves.

    The reprocessing plant project is a separate issue and, as far as I can tell so far, does not involve further transfers of technology or equipment from China to Pakistan, under terms of an understanding between Washington and Beijing prior to the EIF of their bilateral nuclear cooperation agreement.

  8. Tariq Mufti (History)

    I believe ACPR-1000 replaces Areva’s IPR-restricted components with indigenous design, and is therefore IPR-unrestricted.

    The first two ACPR-1000 units for Pakistan are likely to be in the Karachi area, near the existing KANUPP. Preliminary site studies should begin later this year.

    But, much may happen between the cup and the lip!

  9. Oliver Meier (History)

    I am coming late into this discussion because of the holiday season here in Berlin but did want to address the interesting question why the German government decides to oppose the United States (http://armscontrolnow.org/2011/06/21/germany-opposes-united-states-on-china-pakistan-nuclear-deal/) at a time when Berlin is being strongly criticized for its lack of transatlantic loyalty over Libya. The decision to ignore the United States on this important nonproliferation issue is particularly puzzling because Foreign Minister Westerwelle views disarmament, arms control and nonproliferation as trademarks of his policy.

    Of all the apparent explanations – ignorance, fatalism, and opportunism – the latter unfortunately seems to be the most plausible, given the fact that it is highly unlikely that the German government was really unaware of U.S. position on the issue, as Mark points out. While some Foreign Office officials feel that, at the end of the day, they will not be able to prevent the Sino-Pak nuclear deal, this is an issue where the government at the very least could have maintained an ambivalent public position. In the same set of answers, for example, the government leaves open its position on full Indian membership in the NSG.

    This leaves one explanation: By openly supporting China’s position on the permissibility of nuclear cooperation with Pakistan, Berlin hopes to score some points with Beijing. As Mark has pointed out in the replies, Chancellor Merkel was expecting Chinese premier Wen Jiabao for a state visit in Berlin when the answers to Parliamentarians were published. During that visit, both sides signed trade contracts worth US$ 15 billion. When economic interests intersect with nonproliferation rules, the German government seems to take the view of Groucho Marx : “Those are my principles, and if you don’t like them… well, I have others.”

  10. mark (History)

    Oliver, thanks for that link to your piece and for raising the question about Westerwelle pivotal role in this.

    While the FRG was willing to go out on a limb endorsing China’s view on what NSG guidelines permit Beijing to export even before the NSG annual meeting in Noordwijk, others in the NSG, while the annual meeting was underway, expressed the diplomatic view–as in 2010 in Christchurch–that China “had not provided [NSG]participating governments enough information” to come to a conclusion about the matter. That was also the view of some EU PGs. They certainly had their reasons, including rules and procedures previously adopted by consensus for considering claims such as this assertion by China.

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