Friday, December 22, 2006

Episode 40

Listen to the Podcast Here

In this episode I focus on the "Henry J. Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006."

1. What's in the Agreement?
2. Who is critical of the agreement and why?
3. The politics behind President Bush's "signing agreement"
4. What it all means to the USA and India

On December 18, 2006 President Bush approved the agreement, HR-5682, which is officially called the ""Henry J. Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006". If you've been listening to my podcast for a while you'll be familiar with the background of the deal. As early as last winter there was discussion going on at diplomatic levels between India and the USA.

At the time I found it interesting that the press in India was reporting on it, while their American counterparts were totally ignoring the story. It didn't hit the radar screen in the USA until President Bush's visit to India this July, then the American media woke up and realized there was something going on. During that visit Indian Prime Minister Dr. Manmohan Singh and President Bush signed an agreement to pursue nuclear cooperation. When Bush returned the USA the proposal was sent to congress to consider and draft into legislation.

The agreement required a change to US law because of conditions in the U.S. Atomic Energy Act of 1954 that specifically banned nuclear trade and cooperation with other nations unless they have signed the International Nuclear Non-proliferation Treaty, and India never has. In fact, the USA cut off nuclear technology transfer with India in 1974 when India detonated an atomic bomb.

Here is a summary of what's in the new agreement:

  • The USA-India Nuclear Cooperation Agreement allows the USA to share civilian nuclear equipment, technology and expertise with India. This means that US companies will be able to build reactors in India, and will be able to sell nuclear fuel for civilian nuclear plants.
  • In addition, US companies will be able to provide nuclear-related services to India's nuclear energy production facilities. This could represent many billions of dollars of business for US companies. In fact, there have already been at least two groups of industry and political leaders to visit India in recent weeks scouting for potential new business. If you listened to episode 39 you heard Rudy Giuliani mention that he had recently visited India with one such group.

In exchange for opening the doors for US nuclear technology, India has agreed to several changes in the way it handles its nuclear business:

  1. India agreed to separate their military nuclear business from their civilian nuclear plants to ensure that no technology transferred makes its way to military use.
  2. India agreed to open their civilian nuclear plants to assessments and intrusive inspections by the IAEA.
  3. India will continue their moratorium on atomic weapons testing, and to strengthen the safeguards of their nuclear weapons arsenal.
  4. India and the USA both agrees to work together to establish a joint ban on production of additional fissile material for weapons.
  5. And finally, India agreed to prevent the spread of enrichment and reprocessing technologies to states that don't possess them and to support international nonproliferation efforts.

The deal is drawing fire from communist party members in India who claim that the deal will weaken India's sovereignty and make them unable to fully represent their own interests in foreign policy. Liberals in India claim the deal creates a situation that will subject them to too much intrusive US scrutiny.

In the USA, the deal is being criticized by two Democratic Party officials, Edward Markey of Mass. and Tom Harkin of Iowa who claim it undercuts international non-proliferation efforts and rewards India for failing to sign the INPT. Markey, a frequent contributor at the anti-nuclear "Nuclear Policy Research Institute" claims that President Bush's signing statement undermines congressional oversight authority and violates the separation of powers between the legislative branch and the executive branch. I'll get to that in just a minute.

Before I discuss Markey's claims, and there might actually be some truth to what he's saying, I want to talk about what happens from here on to put the agreement in motion.

Before the actual sharing of nuclear technology can take place a few things have to happen.

  1. First, the USA has to get the Nuclear Suppliers Group (NSG), a collection of nations who possess nuclear enrichment and reactor technology, to make an exception and allow trade with India. That sounds easy, but in light of the on-going tensions with Iran and North Korea about their nuclear programs the USA is already being accused of a double standard. In the end the NSG will allow the exception because those nations want a piece of the pie, too. Russia, an NSG member is in fact already supplying India with fuel for its reactors. The NSG is scheduled to meet in April to discuss the proposal.
  2. Next, India's Parliament will have an opportunity to debate the agreement. Unlike in the USA, though, it does not have to pass a vote in the parliament. The debate will give members with dissenting opinions the opportunity to air their differences which the Prime Minister will take into consideration.
  3. Finally, the IAEA has to inspect India's civilian nuclear facilities and deem them safeguarded to prevent proliferation of weapons capable materials and technologies.

I really have no idea how long all this will take, but I suspect it won't be that long - perhaps several months to a year. In the mean time I expect US and Indian companies to begin the process of negotiating deals for nuclear services, materials, and technology. Here's an interesting thought in that regard. All the focus has been on technology and materials flowing from the UA to India, but with the pending shortage of talent in the US, and the growing business of "off-shoring" services to India and elsewhere, what would prevent US companies from outsourcing engineering work for new nuclear plants to Indian companies? My guess it someone will figure out how to make that happen.

Now I want to discuss President Bush's "signing statement" and allegations by Rep. Edward Markey, but first some legal background on the situation:

When the US President signs a bill he has the opportunity to make a "signing statement." A signing statement is a written pronouncement issued by the President when signing a bill into law. Sometime they are political or rhetorical in nature, but sometimes signing statements are used by Presidents to issue interpretations of law. The first President to use a signing statement was James Monroe. So they've been around for more than a century. Prior to the first term of President Ronald Reagan there had been only 74 signing statements issued, but beginning with President Reagan and through current day the sue of signing statements has increased. There have been more than 270 issued from Presidents Reagan, Bush Sr, Clinton, and George W. Bush. President Bush has issued more than 130 signing statements with challenges or interpretations to more than 800 federal laws.

When President Bush signed HR-5682 he issued a signing statement that made specific mention of several conditions that Congress added to the bill to strengthen congressional oversight. By the way, I have a copy of the President's signing statement on my web site, and there's a link to that in the show notes, so you can take a look at it yourself. It's less than a page long, so it's not tough get to get through.

  1. If you read section 103 of the bill, you'll find that it's titled "Statements of Policy" and it consists of about two pages of US foreign policy statements related nuclear energy and non-proliferation. In his signing statement, The President stated that his approval of the bill did not construe adoption of policies described in section 103. The reason: constitutionally the responsibility and authority to develop and implement foreign policy rests in the executive branch of government and not with Congress. I'm not a constitutional attorney, but the President does seem to have a point.
  2. Next the bill makes the USA/India deal contingent on approval by the 45-member Nuclear Suppliers Group, and the President took expectation to that statement. His basis for disagreeing is that provision would in effect turn foreign policy decisions of the USA over to an International Group, something that is contrary to the constitution. Again, foreign policy is the responsibility of the executive branch of government. As such the President said he would consider that provision of the bill to be "advisory" in nature.
  3. Finally, the bill contains several sections that require the President to regularly report specific information to Congress regarding India's compliance to terms of the agreement. The President stated that because he has the constitutional responsibility to protect information that could damage national security, he would take the release of that information under consideration of the constitutional authority he has to protect and control information that could impair foreign relations, national security, the deliberative processes of the Executive, or the performance of the Executive's constitutional duties. That means he may choose not to provide Congress with that information if he deems it would impair foreign relations or national security.

So it's easy to understand why Rep. Markey takes exception to the President's signing statement. He and Tom Harkin worked to place those conditions in the bill to strengthen their ability to oversee foreign policy and monitor India's compliance with the agreement, and the President has stated he does not necessarily need to comply with those terms. As I mentioned before, this is nothing new between the President and Congress, but it might open the door to legal challenges in the future if the President deviates from the letter of the law.

So why all the fuss? India, like China has a rapidly growing economy that is starving for energy. If predictions are right, then India's market for new nuclear plants could be on the order of 20 to 30 new units in the next 25 years. That's a $60 billion market! US companies want to be at the front of the line. There are also 14 civilian nuclear plants in India that need fuel, parts, and nuclear services, and that could add billions more in business. From a political perspective, India and the USA are the world's two largest democracies, and the US wants to do everything possible to strengthen relations and help India be successful Also, you've heard me say it before, if the USA doesn't supply these goods and services then some one else will. Russia, Germany, France,Japan, and others are all competing for India's energy market.

India has a lot to offer, as well; an educated workforce, a well-established nuclear program, and huge deposits of thorium. One company, Thorium Power Ltd. is already exploring potential business ventures and collaboration with partners in India.

I want to remind you that you can leave me a voice mail at (206) 984-3654, and you can listen to the podcast by cell phone by calling (510) 248-0360.These are free services in that you only pay what you normally would for the calls. I'd really like to play some voice mails on the air so if you're thinking about sending me an email how about trying the voice mail line instead!

Have a Happy Hanukah, a Merry Christmas, and a peaceful and prosperous New Year!


Links: President Bush's Signing Agreement, HR-5682, full version,

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