September 4, 1997

President William Jefferson Clinton
The White House
Washington, D.C.

Nuclear Cooperation Agreement with China

Dear Mr. President:

I am writing on behalf of Nuclear Control Institute to express our concern over a number of deeply troubling issues that have a direct bearing on the possible establishment of U.S. nuclear cooperation with China. We believe you must resolve each of these issues satisfactorily before you can submit to Congress the Presidential non-proliferation certifications needed to bring the U.S.-China Nuclear Cooperation Agreement of 1985 into force. This agreement can take effect only after current prohibitions on U.S. nuclear trade with China are lifted. These prohibitions, enacted by Congress in the joint resolution approving but suspending implementation of the agreement, and further elaborated in the Tiananmen Square legislation five years later, were intended to ensure that U.S. nuclear exports to China will not commence until China has provided real assurances that it is not assisting and will not assist other nations, directly or indirectly, to acquire the means to make nuclear weapons.

We appreciate the effort you are now making to obtain these assurances from China. Your upcoming summit with President Jiang Zemin and the negotiations preceding it present the best opportunity yet to persuade China of the importance you assign to halting the further spread of nuclear weapons and of the importance of China's full acceptance of global non-proliferation standards to making such a halt possible. On the other hand, were you to allow China access to U.S. commercial nuclear power reactors and fuel before China provides convincing evidence that it is now prepared to adhere to those global standards, a singular opportunity to bind China to the non-proliferation community of nations will be lost, at great potential risk to U.S. supreme interests if China remains a major nuclear supplier to such proliferating states as Iran and Pakistan.

Our concerns apply to the following urgent issues:

China's New Export Control System



In May 1996, China made a commitment to the United States to halt exports to unsafeguarded nuclear installations and to develop a national system of export controls, following public disclosure of its export of 5,000 specialized ring magnets to Pakistan's unsafeguarded uranium-enrichment program. According to recent press accounts, China now has approved a new export-control law, although the contents of the law have not been made public. Nor is it publicly known what China has done to implement the law.

In light of China's long history of violating or inadequately enforcing non-proliferation commitments, and of recent press accounts of the Chinese nuclear industry's strong resistance to export controls, it is not satisfactory for China to put a symbolic or superficial export-control system into place. We are concerned by a trade press report that your administration is prepared to allow U.S. nuclear exports to China to proceed once China has demonstrated simply that an export control system is in place.

To ensure that its non-proliferation pledges are now meaningful, China must actually put in place an effective, enforceable export control system---one that requires any significant nuclear-related exports to be duly noticed to and specifically approved by the central government prior to transfer from China. In this way, the Chinese government would place itself in a position of no longer being able to plead ignorance of dangerous nuclear-related transfers, as it did regarding the transfer of ring magnets to Pakistan, for example.

To be effective, the Chinese export-control system must cover "dual-use" as well as nuclear-specific exports. In Senate testimony in April, Deputy Assistant Secretary of State Robert Einhorn cited this area as a particularly weak element of Chinese export-control efforts. To be effective, the system China puts in place also must have sufficient technical and financial resources and political authority to engage in effective monitoring and real control of nuclear-related exports.

Until you can find that China's development and implementation of such a system are complete, U.S. export prohibitions should remain in effect. Beyond the Presidential certifications required by law, the President is also required to submit to Congress "a report detailing the history and current developments in the non-proliferation policies and practices" of China. We do not believe that any certification of China's cessation of assistance to other countries to acquire nuclear weapons can be credible without a report citing clear evidence that China's establishment of an effective, enforceable export-control system, as described above, is complete.

Safeguards

We have two serious concerns regarding safeguards understandings with China. The first applies to the ability of the United States to enter into safeguards or other "reciprocal arrangements" with China to ensure that U.S. nuclear assistance is utilized solely for peaceful purposes---a certification you must make to Congress to bring the agreement into force. Our second concern applies to China's refusal to require nations to which it sends nuclear-related items to accept safeguards on all their nuclear facilities---so called "full-scope safeguards."

Given China's record of diverting U.S. non-nuclear exports to military applications---specifically machine tools and a supercomputer---there is a real basis for concern that China might violate the peaceful-use requirements for U.S. nuclear exports as well. It is troubling, therefore, that China refuses to accept the application of "safeguards" per se on U.S. nuclear transfers, especially since U.S. agreements with other nuclear- weapon states expressly provide for the application of safeguards, and China itself has consented to the application of safeguards under nuclear agreements with Japan, Argentina and Brazil and recently in connection with its purchase of two power reactors from Canada.

While the U.S.-China agreement does not mandate the application of "safeguards," there is no provision that would preclude a Chinese commitment to the application of safeguards. Safeguards could readily be deemed to fall within the "mutually acceptable arrangements" provided for in the agreement or the "reciprocal arrangements" required by Congress for Presidential certification. Since the agreement was negotiated in 1985, China has joined the Nuclear Non-Proliferation Treaty (NPT) and should now be asked to embrace the NPT safeguards regime or at least to accept comparable nuclear materials accounting and control arrangements for facilities and fuel transferred pursuant to the U.S.-China agreement.

The other matter of concern is China's refusal to require full-scope safeguards as a condition of its nuclear transfers to other nations. In the declaration of "Principles and Objectives for Nuclear Non-Proliferation and Disarmament" that accompanied the indefinite extension of the NPT in 1995, all parties to the Treaty, including China, agreed on the importance of acceptance of "IAEA [International Atomic Energy Agency] full-scope safeguards and internationally legally binding commitments not to acquire nuclear weapons or other nuclear explosive devices" by non-nuclear-weapon states receiving nuclear fuel, reactors, and other major goods.

We are concerned, therefore, that your administration may be prepared to open the door to large-scale nuclear commerce with China before China has agreed to require full-scope safeguards as a condition of supply. Such a step by the United States could undercut this essential commitment to universal acceptance of full-scope safeguards and thereby devalue the overall NPT Principles and Objectives agreement. Furthermore, China would become the only U.S. nuclear trading partner that refuses to require full-scope safeguards for its nuclear-related exports.

We understand that China may at last be prepared to join the NPT's Zangger Committee on export controls and that the Committee is now preparing to conform to the Principles and Objectives agreement by requiring its members to embrace full-scope safeguards by the year 2000. However, we are concerned that once China joins the Committee it will block consensus on the full-scope safeguards requirement---an outcome that would present a serious setback for U.S. non-proliferation policy and the NPT/IAEA safeguards regime.

Furthermore, the export-control standards of the Zangger Committee are far less stringent than the ones accepted by the Nuclear Suppliers Group, whose membership includes the world's leading nuclear-supplier nations and all the nuclear-weapon states, except China. In addition to requiring full-scope safeguards as a condition of supply of nuclear reactors, fuel and major components, the Nuclear Suppliers Group also has agreed to common export controls on an extensive list of dual-use items that could make a major contribution to the development of nuclear weapons. We believe that U.S. nuclear cooperation with China should not be implemented until China agrees to join the Nuclear Suppliers Group or at least to adhere to its export-control standards.

Exports to Pakistan

In May 1996, after disclosure of its transfer of ring magnets to Pakistan, China pledged not to engage in further exports to unsafeguarded nuclear facilities (after refusing to require full-scope safeguards). We are frankly concerned about the verifiability of even this lesser pledge and about the possibility of diversion of Chinese exports from safeguarded to unsafeguarded facilities in Pakistan---for example, a transfer of Chinese-supplied heavy water from the safeguarded Kanupp electrical-power reactor to the unsafeguarded Khushab plutonium-production reactor.

The situation with regard to the Kanupp and Khushab reactors is particularly troubling. We understand that a shortage of heavy water is the principal obstacle to start-up of the nearly complete unsafeguarded Khushab reactor, which Pakistan has built with Chinese assistance. Authoritative reports in the McGraw-Hill Nuclear Publications indicate that China is supplying heavy water to the safeguarded Kanupp reactor at a rate to make up heavy-water losses of 2 to 4 percent a year. Although the Kanupp reactor had large reported losses of heavy water in its early years of operation, the facility was recently upgraded through an international assistance program intended to bring this Candu reactor into conformity with current industry operating standards---including a heavy- water loss rate of only one percent a year. Thus, China may now be supplying Pakistan with up to nearly four metric tons more heavy water per year than it needs for its safeguarded power reactor, leaving open the possibility of diversion of surplus heavy water to Pakistan's unsafeguarded plutonium-production reactor. We understand this reactor may need only 5 tons of heavy water to start up and 15 tons to operate at full power.

Before proceeding with Presidential non-proliferation certification of China, your administration must independently establish the current heavy-water requirements for the Kanupp reactor to ensure against the supply of a diversion-prone surplus, as well as determine whether IAEA safeguards are in fact adequate to detect diversions of heavy water from safeguarded to unsafeguarded reactors in Pakistan. It would be a serious embarrassment to the United States, and a major blow to U.S. non-proliferation leadership, if the U.S.-China agreement were brought into force and subsequently a Pakistani weapons-production reactor were started up through the use of Chinese- supplied heavy water.

Our concern is prompted in part by the following response by then-Assistant Secretary Winston Lord to questions last year from the Senate Foreign Relations Committee: "We have concerns about China's nuclear cooperation with Pakistan beyond the ring magnet transfer, including concerns related to both weapons development and production of unsafeguarded nuclear materials. We have made our concerns known to the Chinese government." (Emphasis supplied.) Any report by you to Congress in support of a Presidential certification should include China's response to the concerns expressed by the United States, and the current status of China's involvement in Pakistan's nuclear weapons program.

Exports to Iran

China's past nuclear exports to Iran have included a research reactor and a calutron, the latter being the same type of machine used by Saddam Hussein as the principal means of enriching uranium for Iraq's atom-bomb program. Currently, there are conflicting reports about whether China has agreed to supply Iran with two nuclear power reactors and whether China has begun to provide Pakistan a plant to convert enriched uranium from gaseous to metallic form. In our view, given the U.S. position that Iran is embarked on a nuclear weapons program, it would not be possible for you to certify that China is not providing direct or indirect assistance to countries to develop nuclear weapons if China has entered into a major nuclear-supply arrangement of any kind with Iran.

It is imperative, therefore, that China agree to suspend all major nuclear-supply commitments to Iran, especially since the United States now requires other countries to commit not to supply Iran, as a condition of their receiving U.S. nuclear assistance.

Reprocessing

When Congress approved the proposed U.S.-China nuclear-cooperation agreement in 1985, it expressed clear reservations about a provision obligating the United States "to consider favorably" a request by China to engage in certain nuclear fuel-cycle activities, including reprocessing of U.S.-supplied nuclear fuel to extract plutonium. The Congressional resolution of approval specified that this obligation "shall not prejudice the decision of the United States to approve or disapprove such a request."

In 1993, you issued a Nonproliferation and Export Control Policy pledging that the United States "does not encourage the civil use of plutonium...." and "will seek to eliminate where possible the accumulation of stockpiles of highly enriched uranium or plutonium...." Because China has thus far made no formal commitment to reprocess spent fuel or utilize recycled plutonium in its civil power program, obtaining a Chinese pledge not to reprocess and recycle would be an important accomplishment of U.S. policy. An express commitment by China to a "once- through" nuclear fuel cycle would put it in the forefront of nations opposed to civil reliance on weapons-usable nuclear materials and also establish it as a role model for nations that might otherwise be prepared to embark on plutonium reprocessing and recycle programs. Therefore, while a Chinese commitment to forgo reprocessing and use of plutonium is not a stipulated requirement to bring the agreement into force, it is well worth pursuing given the present level of development of China's civilian program and the powerful non-proliferation precedent such a commitment would set.

In addition, the United States should engage China in discussions of its plans to reprocess and re-use highly enriched uranium (HEU) for its research-reactor program. According to press accounts, China is constructing a plant at Lanzhou to reprocess HEU fuel from research reactors, although China will have no clear need for recycling this weapons-usable fuel if it converts its research reactors to use low-enriched fuel unsuitable for weapons. By reprocessing HEU and continuing to operate HEU-fueled research reactors, China would seriously undermine the 20-year international effort led by the United States to end civilian use of HEU.

Finally, we understand from press accounts that during the ongoing negotiations with China, Deputy Assistant Secretary of State Einhorn, the lead U.S. negotiator on nuclear cooperation with China, has been in close and regular contact with high-ranking representatives of U.S. nuclear vendors. In the absence of corresponding meetings with non-proliferation and arms-control advocates who are concerned about engaging in nuclear trade with China, these extensive contacts with the nuclear industry create the perception that your administration's efforts are being driven by industry interests, to the exclusion of other interests. To dispel that impression, we request a meeting with White House and State Department officials to discuss the urgent issues outlined above.

The Nuclear Control Institute appreciates your attention to these urgent matters, and we look forward to receiving your administration's response.

Sincerely,

Paul Leventhal
President

cc:

Madeleine Albright, Secretary of State
Samuel Berger, Assistant to the President for National Security Affairs
William Cohen, Secretary of Defense
Federico Pea, Secretary of Energy
George Tenet, Director of Central Intelligence
John Holum, Director, Arms Control and Disarmament Agency
Senator Jesse Helms, Chairman, Committee on Foreign Relations
Senator Joseph Biden, Ranking Minority Member, Committee on Foreign Relations
Rep. Benjamin Gilman, Chairman, Committee on International Relations
Rep. Lee Hamilton, Ranking Minority Member, Committee on International Relations
Senator Strom Thurmond, Chairman, Committee on Armed Services
Senator Carl Levin, Ranking Minority Member, Committee on Armed Services
Rep. Floyd Spence, Chairman, Committee on National Security
Rep. Ronald Dellums, Ranking Minority Member, Committee on National Security
Senator Richard Shelby, Chairman, Select Committee on Intelligence
Senator Robert Kerrey, Ranking Minority Member, Select Committee on Intelligence
Rep. Porter Goss, Chairman, Select Committee on Intelligence
Rep. Norman Dicks, Ranking Minority Member, Select Committee on Intelligence
Senator Fred Thompson, Chairman, Committee on Governmental Affairs
Senator John Glenn, Ranking Minority Member, Committee on Governmental Affairs
Rep. Edward Markey
Rep. Gerald Solomon

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